Emini Trade Setup -- Rebound and support line!
How's your trading going? The market sure is tough recently eh?
You might be wondering why I trade only 1 contract recently. Reason ---> it is a ranging market! There is no real trend. It's simply not worth the risk to trade so many lots when market direction is unclear. Price went down heavily in a 17point move. I missed the boat and I didn't want to chase the price down. Furthermore, I didn't know how far this decline will go. Remember PATIENCE, basically this is a ranging market and experience tells me that price will rebound right up after a sharp fall. I resisted the temptation to short.... I waited for it to rebound and entered! Take note of the support line drawn at 1681.5. This is the support line which I drawn from the lows of these few days. I placed my stop loss there. However, I did not set a price target, although mentally I was telling myself it should be somewhere around 1696. Yup, price did went up to 1696 and dropped a little, I exited on the first sight of weakness at 1695.5. Not a bad trade at all in this market condition. A $170 profit.
Comments
Michael' I've been looking for anything that loks real to me in trading. I[ve lost or 'paid' $100,000 tolearn options and 0 to show for it(thats zero $). E-minis lok easy enough-where did you start and how much did you need to trade with?
Regards, Ty
Posted by: Ty Broussard | January 31, 2006 12:14 AM
Hi Ty,
If you have lost $100,000 by trading options, I have a hunch that you are not using stop losses effectively. That was what happened to me when I started trading. One TABOO of day trading is think only about the PROFIT and forget about the POTENTIAL LOSS. Stop loss techniques are the same whether you are trading eminis, options or stocks. Try improving on your stop loss.
Posted by: Michael Taylor | January 31, 2006 12:40 AM