6/26/2010We have been doing allot of updates on the TF so today i want to show a chart of the ES. This is a 3 minute chart. So the bigger picture was we had a lower target of 631 on the TF and that was hit Friday so we were not looking for shorts at that point. We wanted to wait for the smaller pattern to change so we could have a reason to go long instead of just trying to go long off the bigger support.
The key is knowing the bigger support but then you must break it down on the smaller chart and wait for that support to turn the market into a positive pattern that is repeatable to actually enter the trade, why? Because even though the lower target on the TF was hit that does not mean the market will go straight up. It very rarely will do that so we need to smaller time frame to base and give us a reason to get in.
The blue bars gave us a high odds reading that a big move was about to start. Aggressive traders could jump in on the blue bars but again that is aggressive. So what do we do? We wait for a certain pattern to complete off the bigger support then we wait for a pullback that is RED. We then get ready to go long once the bars go back to green which was at 1070.00 and our stop was 1068 or 2 points.
So the risk is 2 points and we are always going for 6-9 points with that kind of risk. So if we follow the trade up you will then see the blue bars came in to tell us to trail the stop to the low of the prior blue bar. The exit on the trade was 1077.50 or +7.50 on this trade. Looking at the chart you can see that is the trade of the day and that is what we are going for with dynamic stop rules to protect the position along the way. In this example no stop condition were meet until we got the blue bars to we can Sell Into The Strength of the move!
It is 1st know the bigger pattern then you break that down into smaller time frames then you get odds on when and where to enter. Stop making trading harder than it is! Just follow the patterns and add the tools to take it 1 step further. Then learn how to manage the trade with visual things that happen on the chart in real time.
Stop Trading For Ticks! If you learn one thing today make it the fact that there is no long term success in scalping the markets for ticks. It is no that easy, it is actually the hardest way to trade but most people will spend years searching for a scalping method that works consistently instead of spending the time just mastering what is proven to work.
Happy Trading,
www.eMiniSchool.com
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