Monday, November 18, 2013

Pre Market Thoughts Tuesday

ES and NQ Five Day 30 minute charts
 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 down. Preparing the night before takes out all the emotion of possibly considering a trade when the markets open. 

White Lines show the ES Price Level areas I will be paying attention to when considering a trade:
  • 1798
  • 1789
  • 1776.25
  • 1770
  • 1761.50
Day Trading Pre Market Thoughts
Trend Thoughts: Trend and bias for trading is still long. Will  not consider a trend change until a solid close below the low of last Wednesday. Finally hit the 1800 area today and sold off.  Dont chase the market down with the red candle today.

Trading Day of the Month: Day 13

 Reports: none

Special Day or Thoughts: 

Gap Fill Thoughts:   Up Gap: If price is below the PP or R1 pivot and considered resistance will consider the short.  Down Gap: If price is above the S2 on the ES or YM or above the S1 pivot on the NQ will consider the long at the open off support. Notes: If sitting at support/resistance check pre-market to see if price is considered support or Resistance. 

Gap and Go Thoughts: Up Gap: If price is above the PP pivot my consider a long if consider support as there is room to run to the R1 pivot. If price opens in no names land will let it go to see which way the market trades and possible fade.  Down Gap: Will not chase. I may consider shorting with a gap down under the lows of Monday if I have solid resistance. Will keep an eye on support below and pass if support is in the way of an exit goal. I want the indexes in agreement or will pass.  Notes: Overnight action is key if going with a gap and go down.

Thoughts on Long or Short Setups after the first 30 Minutes of Trading
(Always evaluate market after 30 minutes unless noted)
LONGS
Breakout thoughts for a 15, 30 or 60 minute breakout: May consider a BO or pullbacks with a flat or modest gap up that holds its strength after 15 minutes for a run to the R1 pivot. Will consider Bo's or pullbacks with a large down gap that has traded bullish with volume off support. Notes:

Fading Long thoughts: In staying with the trend looking for fades off support (false breakdowns) near the price points stated above. Minimum 30 minute wait. As always don't fade run away trains if bearish early, let the run play out. Always want to go long with the indexes at support and monitoring the components of the indexes to see if they are in agreement. Notes:

SHORTS
Breakdown thoughts for a 15, 30 or 60 minute breakdown:  Will not consider any breakdowns unless bearish and trading under yesterdays lows after 30 minutes. Indexes must be working together and room to support. Notes: Be careful shorting with a trending market 

Fading Short thoughts: Unless its a very weak bounce, (not coming off support on strong volume) and at resistance I will pass on fading shorts. Trend is still up and bounce back day is possibly in the cards. I want the 3 indexes in agreement. Always want to short with the indexes at resistance and monitoring the components of the indexes to see if they are in agreement. Notes: none 

Always mark Support/Resistance and confluence zones that could be used for targets, fading and breakout/breakdowns.

* 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.

1 comment:

Daniel Efosa Uyi said...

hey nice post mehn. I love your style of blogging here. The way you writes reminds me of an equally interesting post that I read some time ago on Daniel Uyi's blog: Skills To Impress People .
keep up the good work.

Regards

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