Day Trade Emini S&P 500 NASDAQ 100

Hi,

The market opened with a 8 point gap down and went furiously down in the first 5 minutes. It is not advisable to enter the market now, as we still do not have any idea what the situation is. While you can take a plunge and play momentum by going short, you have to get out quickly. And if you encounter the sharp rebound, you will have nowhere to run. It is extremely risky to enter during the first 15 minutes of market open and I strictly advice against it.

Instead, what I recommend is to wait for a rebound and access the situation, whether market will close the gap. Well, my chance came at 9:45 am, I longed 1 contract at 1717.25, I immediately put my stop loss at 1714. When price retraced to 1716.5, I longed another 2 contracts. The trade is basically done, after I set my profit target to 1726 which yesterday's close. All I have to do now is sit back and relax. It's either being stopped out or hitting my profit target. At 10:15 am, my targets were hit and $555 just went into my account. Just like that. No Fuss.

Posted by Michael Taylor at 5:46 PM | Permalink | Comments (0) | TrackBacks (0)

The first half of the market was a downtrend. However at around 1300, a double bottom pattern started to develop. It's quite dangerous to plunge right in since this can turn out to be false alarm. What I usually do is long 1 contract first, wait for the pattern to develop further then long another few contracts.

Trade Mechanics
Long 1 at 1706.75, long another 2 at 1709.75 and profit target at 1715.
cut loss at 1704.
Trade lasted for around 2 hours and resulted in $460.

Posted by Michael Taylor at 4:58 PM | Permalink | Comments (0) | TrackBacks (0)

From Briefing.com:
Indices spike lower and now trade at their lowest levels of the morning, trading in sympathy with a sell-off in the Treasury market following economic data. While an unexpected rise in April Consumer Confidence to 109.6 -- the highest level since May 2002, and an unforeseen 0.3% rise in March existing home sales to 6.92 mln typically bode well for the equity markets, stronger than expected data lately have fueled concerns that the Fed will remain inclined to stay on its tightening path.

Hi,
Consumer Confidence report was released at 10:00am. If you know what that means, it means literally free money if you know how to trade it. I had my CNBC turned on and basically figures were better than expected. Read the briefing.com comment above, even home sales figures rose 0.3%. So what's the big deal about this? Economy is doing well. But thats the long term perspective and as daytraders we don't want to cloud our judgement because of some fundamental economic news. Price reacted almost immediately to the consumer confidence report release. Sharp 2 point down candlesticks in the 1 min chart is almost like yelling to you, "SHORT ME!". It's really quite obvious. I shorted one contract at 1718 and another three contracts at 1716. The difficult part is where to set the profit target. Remember the double bottom yesterday? It makes sense to set your profit target near the support line of the double bottom. I set it at 1708.5. The trade lasted less than 30 minutes with $630 profits.

Posted by Michael Taylor at 11:03 AM | Permalink | Comments (0) | TrackBacks (0)

Hi,

How's your trading lately? I made a classic trade today, a clear double bottom pattern, it was simple as that; a classic textbook pattern that you can profit from if you identified it. Well, I am not trying to play down the risks involved here. Basically, when the double bottom is developing, you have to take a chance that price is going up. If price turned around, you've got to cut loss at the the low of the double bottom. There's a trade off here -- the sooner you enter the pattern, the more uncertainty there is and you might not be sure that it is a double bottom. On the other hand, if you end slightly later when the pattern is more developed, you risk having a wider stop loss and earning less profits.

There are no hard and fast rules here, What I tell my students is to base your judgement on support and resistance lines. If the low of the double bottom is at the support line, this gives you additional signal to go long. Watch how price rebounce from the support line too. A stronger candlestick is a good sign. For full discussion, please refer to Day Trade Emini For Regular Profits.

Mechanics of today's trade.
I longed one contract at 1710, and another two contracts at 1713.5 at around the neckline. Profit target was at 1720 and cut loss was at 1707. The trade lasted around an hour and hit my profit target, put $460 in my pockets.

Posted by Michael Taylor at 1:27 PM | Permalink | Comments (0) | TrackBacks (0)

The past two days had been a range bound session with price hoving around multi-year highs of 1750. Common sense tells us that this is a very precarious situation. If there is some bad news coming into the market, price will rebound away from the multi-year resistance. Our job as day trader is to wait patiently for such a move, we can't predict what bad news might hit the market, but what we can do is to wait and strike at the right moment.

Today, there was no real movement in the first half of the market. I had to wait until around 1400 when I saw an short opportunity. When price broke the support line of 1732, I got ready. I shorted one contract at 1731 and another at 1727.75. Price momentum seemed strong and I did not set a price target. I took my cue for exiting from the MACD and stochastics as shown by the circles (figure above). I managed to get out at 1715.25. A total profit of $815. A price worth my patience.

Posted by Michael Taylor at 5:15 PM | Permalink | Comments (0) | TrackBacks (0)

Hi,

The market finally started to move at around 12:00, I did not plunge right in as I was still not convinced that this is a real movement. Finally when it crossed yesterday's low, I shorted one contract at 1718, and another 2 contracts at 1714. I had my profit target at 1701, 1 point above 1700. The market seems poised for a large movement and it did. Don't ask me the reason for this movement, I don't know. All that I am doing here is reacting to the market movement and trying to profit from it. Each trade is a risk in itself, but a calculated one. I ended the day with $860 in profits.. not bad for a 1 hour trade. But, I was there tracking the market from opening bell. Trading is like fishing, you stay dormant until an opportunity strikes and you prey on it!

Posted by Michael Taylor at 6:09 PM | Permalink | Comments (0) | TrackBacks (0)

Hi,

Oil prices jumped nearly to US $70 per barrel and logically this should weigh on market sentiments. That's the market analysis I got from CNBC, and other internet sources. Well, fundamentals do move markets; But, it's a question of when. Market needs time to digest the information and sometimes it takes days, weeks or even months before market adjusts. What this means for day traders like us, is, we should never let fundamentals cloud our judgement. It is better to be in tune with the market, trading the trend, rather than base your trading on some preconceived notion that markets must react in a certain way due to a certain news. While this might work for investing, it does not work for trading. I would describe trading on a preconceived notion as suicidal action.

Market is pretty flat today with no obvious trend, I couldnt feel where the market is going and even the MACD are showing no symmetry at all. Stochastics however is giving a relatively good signal, but I am still too uncomfortable with price action to enter a trade.
For a full discussion about when to use Stochastics and when to use MACD, please refer to Day Trade Emini for Regular Profits

Posted by Michael Taylor at 11:24 AM | Permalink | Comments (0) | TrackBacks (0)

Hi,

Seems like the uptrend is still in tact. How do I know this? Basically, you look at the moving averages and it's pretty obvious that they are all sloping upwards. Then you take a look at your MACD, again you realize that most of the time they are above the zero line. I didn't have much chance to trade at the start of the market, market was choppy, and I had to wait until 12:30 am when price rebounded from the moving average, I like this kind of trades because I can place a tight stop loss immediately below the moving average. I longed 1 contract at 1742.5 and another 2 contracts at 1748 when there was a slight pullback. My stop loss and profit target at 1741 and 1754 respectively.
Well, a simple calculation will show you that for the first contract, my maximum loss is $30 and my maximum profit is $230. This is an almost 8 to 1 risk reward ratio. So can you see why I like this trade set up so much?

Posted by Michael Taylor at 8:08 PM | Permalink | Comments (0) | TrackBacks (0)

Posted by Michael Taylor at 11:26 AM | Permalink | Comments (0) | TrackBacks (0)

From Briefing.com :
The market continues to advance in the wake of the ISM Index at 10:00 ET. The national gauge of manufacturing activity checked in at 55.2. That was slightly below the consensus estimate of 57.7, but it is at a level that is still indicative of expansion. Following the data, bonds eased a little bit. However, the 10-year is still pushing 4.90% - a level not seen in almost four years. Separately, the February Construction Spending report was released at the same time, and it came in at a stronger than expected 0.8% (consensus 0.5%).

Well, I don't know if the ISM index being lower than consensus is good news or bad news, but market sure reacted in a positive way to the news and after being range bound for the past two days, it seems poised for some action. I wasn't particularly bullish, but nevertheless, my training as a day trader just told me to go long, reasons ---> 1 price is above moving average and gapped open this morning. 2 you can see that the mid-term MACD is trending beautifully upwards, 3 market has a slight bullish bias since last week. Immediately after the ISM announcement, I bought one contract at 1730.5, price went up to 1732 and suddenly plunged down to 1728... but when it rose back to 1730, I bought another contract. I set my stop loss at 1725 and my profit target at 1736 ( exactly 10 points from today's low of 1726 at 9:45 am) I can sense that market is still weak but a ten point movement was still possible and I was not going to get greedy by setting my profit target higher. At 10:45 my target was hit and I was out with $230 in profits.

Posted by Michael Taylor at 11:09 AM | Permalink | Comments (0) | TrackBacks (0)