Tuesday, November 16, 2010

11/16/2010 Highlighting some set-ups

Good evening traders,

I just wanted to highlight some simple setups on the ES that occurred today. These are as much for my reference as they are for yours.

The first trade marked on the chart was a nice short trade that you had to be quick to catch in real time. Price rebounded off support early but was unable to continue higher. The cumulative delta showed buyers drying up and then sellers taking the reigns.

The next marked trade is a long. You can see the big spike down in sellers and then buyers begin to enter the market again. This would have been an aggressive trade considering the steep down-trend at the time. If you waited you got a safer entry the second time around.

The third marked trade showed divergence on the delta and some strength showing up in the Stochastic. This was a textbook trade. If only I wasn't at the dentist, I would have been a few $100 richer!

The fourth marker isn't as obvious as the last three. Sellers did enter the market but that wasn't as clear on the Delta. I took this trade because the entry at the time was a low volume node and the stochastic was overbought. The volume point of control was below us and this area had been support earlier in the day.

The fifth and final marker was pretty straightforward. Divergence on the delta and stochastic. I tweeted my entry at 1173.50 live. It was a sloppy entry and the trade moved against me 4 ticks right off the start. As a result my confidence was a little shaken and I cashed out for 6 ticks. Stupid move in hindsight. I left 4 points on the table. I don't feel bad about it though because my trade plan is to be finished by 3:30 EST. So, that's 6 ticks I wouldn't have otherwise gotten.

Sometimes its OK to break the rules, as long as you know you are doing it and adjust your risk accordingly.

I hope these set-ups help you in your trading. Thanks for reading the blog and following on Twitter. I like getting emails from people and don't mind helping out other traders. If you need an indicator for NinjaTrader, or something explained just shoot me a message or Skype me. I'll do the best I can. I don't consider myself a pro by any means, but I believe communicating with other traders is a great way to learn. Do you agree?


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