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Posts tagged “ES

A Lesson on Gaps And Homework

It is good to be blogging again. I miss doing it because it is a great way to keep a trading journal. The market has been very difficult to trade this year as we all know. However the opportunities are there if you have patience to wait for the set ups and the fortitude to pull the trigger when the trade set up in your favor. Today was especially difficult being the day that we rolled out of the September contracts into the December. Usually around noon we will see the new month get the majority of the volume but today was not normal due to the fact that the trading was thin all day.

I just wanted to stress the importance of doing your homework every night. Your homework is so important you have to know where we are so you can plan your trades accordingly. If the ES or any other trading instrument for that matter is trading at the bottom of a range or at support and it gaps off of that level, that can be a positive. It shows there are more buyers then sellers and the buyers drove the ES higher right out of the gate. If the gap holds, all the better. That happened two times at the bottom of our range just recently. However Thursday am we gapped up into resistance and reversed immediately.  You have to know where we are so you can give yourself the best opportunity to make smart trades.

Right before the open the pre-market ES December contract hit a high of 1107.  Monday ES put in a double top high of 1106.50. On the open the ES open high was 1106.50. This is the area I wanted to short because it has been 60min RTH (Real Time Trading Hours) and Globex resistance all week. Could price continue up, sure it could, but the probabilities up there favor the short.

I am basically documenting my trading here for my own benefit but I hope it may help new traders realize that you can succeed in this business if you have good risk management and discipline. Also you will blow up accounts it is part of your tuition and it has happened to the best traders out there. I try to keep it simple because I only work off of 1 monitor and I wear my mouse out. Every night I take a look at the markets form the outside in. Meaning longer term into shorter term charts. I Look for the support and resistance areas noticing what price has done at these levels and if the indicators line up for me I have confidence in my system and pull the trigger.

Trade well my friends.