10 Point Short! 2 point stop!

3/27/2010

In todays post i want to look at the ES 10 min chart. This chart shows 3/23 to 3/25. On 3/23 you can see the indicator was low and we had blue bars this means get ready a big move is starting and since the symetry is up on the bigger time frames the odds are we are going to go up plus you can see the line of the indicator is green. From there the ES went up 7.00 points to close at the high. The night before we emailed our members that our upper target on the day was 1168 which the ES went above our target 2 points to close at the high of the day.

The following day the ES corrected the prior days move up and we had 2 short signals that produced 10 points of combined profits.

The next day the market gapped up and the bars stayed red all the way up then once the green bars turned to red that was the high of the day as we fell 15.00 points from the high to the close. That night we emailed our memebrs saying the 1168 was a shortable level with 1157.75 being our lower target of the day and the ES went 1 point lower on the day through our lower target.

The thing to note on fridays session is we had a 1168 short zone the night before then on friday the bars turned blue at out short level to start a big 10 point drop down and that was the trade of the day!

When we first built these indicators it was to visually tell us what NOT to do first and we can tell that in a matter of seconds meaning; if the bars are green DONT short. The indicators are there to confirm the pattern and to give us the entry. The key is to always confirm the pattern to the larger pattern and only trade in the bigger pattern or the "trend" direction. The patterns and indicators give us odds and we only want to trade high odd trade set up's and skip the low odd counter-trend "cant lose" trade set up's. Most people are trading counter-trend but they dont know they are trading counter-trend which is very dangerous.

It takes time to learn to trade with the trend while avoiding going long at the top of the trend. Everyone has heard the saying " if i only would have done the opposite i would have made money!" This is true in the fact that most people are trading counter-trend and it takes time to learn how to get into the trend trade.

The question when you are trading should not be "should i be long or should i be short" you should know the direction and the only question is " where do i enter the trade" and our methods and indicators answer that question for you in real-time.

Happy Trading,
http://www.eminischool.com/

ES Update!

3-21-10

Hello Traders,
Looking at the ES daily chart we have broken out from the last high of 1148.00. From there we made the first push to 1165.50 and as i write this article (Sunday Night) the ES just came down and retested the 1148 breakout level.

Thursday the ES closed a Doji then friday we took that Doji out to the downside or "bear engulfed" the Doji from Thursday. This is a sign of weakness but since we are holding above the 1148 there is still strength in the market. This could change fast once the market opens tomorrow.

The bigger outlook level we have for this leg to complete is the 1228-1238 zone. Does that mean we are going to go up to that level in a straight line? No, but that is our upper target on this leg. Once we have our Daily and Weekly upper target we break it down day by day with the nightly emails to keep our members trading with the symetry of the markets.

Thusday night we had our target of 1152 for fridays predicted low. We did trade down through that a couple of points but then closed back above that level. On the shorter term outlook we are looking for 1174 to complete the smaller wave IF 1152 holds tomorrow.

The Key in trading the patterns is to have a multiple time frame outlook and for that we use a 60 min, 10 min and 3 min chart. The 3 minute is for our entries using the Kill Zone #2 indicator to confirm the pattenrs and to give us the entry and exits.

The reason we use a 60,10 and 3 is so you have a 3X6 view on the markets. When day trading we are making it harder than it is suppose to be meaning; if we were just swing trading it would be a heck of allot eaiser becasue all we would have to look at is the Weekly and Daily charts. When we break down a daily bar into intraday bars we are throwing confusion into the situation and there are so many intraday intervals we can use , which one is the right one? The answer is there is bigger waves and smaller waves within the bigger waves so knowing that we do not want to have too many time frames up to confuse us, especailly a 1 min chart. For this reason we like to keep our charts clean without allot of conflicitng indicators and keep the daily bar broken down into only 3 time frames or 3 different views on the market to keep us always trading the 3 and 10 min in the direction of the 60 min trend and pattern.

If you find yourself confused during the day slow the market down by using a bigger time frame and remeber the bigger time frame always prevails.

To learn more with how we appoach the markets simple email us at trade@eminischool.com and we can set up a time to talk and look at the charts together in real-time.

Have a great trading week!
www.eMiniSchool.com