By Request from readers feedback I have expanded my pre market thoughts to focus on one setup, the 15 minute Range trade.
I hope this gives more insight to new traders on how to plan for a setup. I thank those who have sent positive comments about the daily blog and whose feedback given me the idea to expand my daily trading thoughts.
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ES/NQ Ten Day 60 minute chart
Support and Resistance Key. White Lines: multi price levels and trend lines, Yellow Lines: daily chart major price points, Solid Green/Red Lines: prior day high and lows, Dotted Green/Red lines: pivot points, Light Blue Lines: prior unfilled gaps. Does not include overnight highs and lows. Price Points to watch.
Pre Market Thoughts - 15 Minute Daily Range TradeThe 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 emotion considering a trade. To be successful in trading master ONE setup before tackling another. Study it, own it and turn off the computer after the trade. To help traders I will give my thoughts on the 15 minute range. To fade the High/Low of the range or go with the break.
15 Minute Range Goal: One trade a day on the first break of the 15 minute range. 2 point stop and 2 point target if fading against the trend and 2.25 target if going with the trend. If price trades 1.75 points automatically move stop to entry. With study, discipline and devotion to one setup you can build your success rate to 65% plus over time.
How to succeed:
- One day at a time devoting yourself to the same setup day after day.Think, sleep and eat your setup.
- Skill is developed by hours and hours of working on your craft. Small advantages hammered out day by day.
- Everyday write 3 things you learned from your setup.
- An oak tree will not fall by hitting it at 20 different locations but by hitting it at the same spot day after day.
- Dont be afraid to make a decision. Dont be afraid to fail and have a losing trade. You will not be perfect.
- Previous Day Price: Closed above, below or between the five minute 5 and 60 SMA
- Was the previous day a Breakout day, continuation day or flat
- Volume Today: is the early volume strong pushing through a support and resistance zone. Is volume average and price bumping up to a support or resistance zone.
- Early Trading pattern: Is the trend strong or weak. Is the first 5 minute candle red or green. What is the volume on that candle.
- Ticks Today: Strong, weak, supporting a BO/BD or diverging supporting a fade.
- Support / Resistance points.
- Longer Term remains in a bullish up trend
- ES - 15 MINUTE RANGE THOUGHTS(SV-Strong Volume through Support or Resistance, V-Volume, Negative/Positive=opening price)
Break of the 15 minute Range HIGHAverage VFavorStrong VFavorUp Gap Positive & filled gap:FadeBOUp Gap Positive & gap not filled:-Consolidation with 5sma support favor BOFadeBOUp Gap Negative & filled gap:FadeFadeUp Gap Negative & gap not filled:FadeFadeUp Gap Straight Up, 3 green 5 minute candles with SV: Long on break of 30 minute range or break of Narrow range candle long.3 Green 5 minute candles with Average Volume into Resistance = FadeFlat opening & positive:FadeBOFlat opening & negative:FadeFadeDown Gap Positive & filled gap:-Strong V bounce off support favor BOFadeFadeDown Gap Positive & gap not filled:-Strong V bounce off support favor BOFadeFadeDown Gap Negative & filled gap:-Strong V bounce off support favor BOFadeFadeDown Gap Negative & gap not filled:-Strong V bounce off support favor BOFadeFade
Break of the 15 minute Range LOWAverage VFavorStrong VFavorUp Gap Positive & filled gap:FadeFadeUp Gap Positive & gap not filled:FadeFadeUp Gap Negative & filled gap:-Super Strong V & 15 minute full red down candle BDFadeFadeUp Gap Negative & gap not filled:-Super Strong V & 15 minute full red down candle BDFadeFadeDown Gap Straight Down, 3 red 5 minute candles with SV: Short on break of 30 range break or short narrow range bar3 Red 5 minute candles with Average Volume into Resistance = FadeFlat opening & positive:FadeFadeFlat opening & negative:-If at support and not tested fade, if tested BD-Ticks make new low with a break - BDBDBD/fadeDown Gap Positive & filled gap:-Strong Tick divergence FadeFadeFadeDown Gap Positive & gap not filled:-Strong Tick divergence Fade-Ticks make new low with a break - BD-If support and not tested FadeFadeFadeDown Gap Negative & filled gap:-Ticks make new low with a break - BD-Strong Tick divergence FadeBDBDDown Gap Negative & gap not filled:-If at support Light V - Fade-If consolidating near the low – BD-Ticks make new low with a break - BDBDBD
ES - GAP THOUGHTS
(2 point Stop with a 2.25 exit goal. Stop to even at 1.75 points, enter in first 5 minutes or pass)
- Gap Fade Short: Fade off 1880/81 Area
- Gap Fade Long: Fade off 1870 area
- Gap GO Long: Over 1883 area out before resistance
- Gap GO Short: Under 1865 area out before support
* 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.