Thursday, October 31, 2013

ES Pre Market Thoughts Friday


 ES PRE MARKET THOUGHTS
This a sample of how I do my market preparation. The night before I form a hypothesis of how I will approach the day if the market gaps up or gaps down. Preparing the night before takes out all the emotion and once I see the morning gaps I then refer to my plan for the day. 

White Lines show the Price Levels I will be paying attention to tomorrow along with the Highs and lows of the day and pivots:
  • 1764
  • 1750.25
  • 1742.50
Trend and Trades I May Consider

Trend: Staying Long unless there is a gap below the lows. NQ and ES in a channel. May look to fade false breakouts of the channel's until out. First of the month can be a bullish day.

Gap Fill or Gap and Go: Will look for Gap Fills on an up gap below the Yesterdays Highs/ R1 pivot or a down gap that is above yesterdays lows using support. If the index's gap solidly over the highs (which I would then consider support) I will consider running with the index long at the open. If the 3 index's have a bearish gap down, under yesterdays lows, will look for support long unless extremely bearish. I don't like gong short on the first day of the month.

Long: looking for false breakdowns off support levels.Will consider a BO with a modest down gap with the goal to retest the highs.  Would need all three index's in agreement to attempt a BO over the highs of the channel and would lean towards the NQ. 

Short: No short fades unless at the highs of the channel. I don't like going short on the first day of the month unless the open is extremely bearish.

* You don't have to trade everyday. If the conditions don't feel right or if you're unsure of the current days trading environment then PASS on the trade. Missed money is better than lost money.  Day trading and the stock market is not a "war" that you must win at all cost. Trading should be fun, wait for only the good setups. Follow your rules, stick to your stops, and know that everyday the market presents a new chess board.





 

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