Conflicting signals

I came back today usual time! The market was a down day, so the idea is to sell at the pullbacks. When the market had bounced off 135175 at around 6pm GMT, the market went high and made a doji candlestick pattern. The doji candlestick could signify a reversal and it could have potentially been a good idea to short it.

However, I didn’t as the stochastics were moving upwards in the 5 mins. The 15 mins were showing the chart in oversold territory which made me cautious about trading it. Therefore, conflicting signals in the pattern of the charts here with the indicators.. it’s best to stay out when this happens.

Just so happens that the stochastics were the winners in predicting where the market was heading. The market made a choppy move upwards.. it may reach a certain level and then fall but until it agrees also with the 15 mins, I don’t want to take the risk.

As I write the market has hit 135775 and is bouncing off it.. this is also the top of the bollinger band in the 5 mins and also the 50 day MA line.. these will serve as resistance levels and could be the level in which the market turns and heads lower… ok, the market has now moved lower, the stochastics have now crossed and issuing a sell signal… I would enter here if the 15 min stochastics were not in oversold territory and expecting a pullback at some stage.

 I am following the charts here and if I had shorted where I mentioned, I would have done well! There was another entry when the market broke below the day low..

Ok, the market broke lower and then bounced upwards, I put in a short entry at 135150 and this got taken. My stop was 135300 with a target of 134825. Unfortunately, my stop got hit for -6.

After this move, I still felt that the markets were going lower and I shorted again near here at 135175 with a stop at 135350 and target 134800. I was purely trading on the fact that the market had fallen below the intraday low and I was expecting that this was the pullback before further moves downwards. I had not taken stochastics into consideration at this point… disappointingly, my stop was once again hit for -7.

The stochastics told the way and I failed to listen. The 5 mins and finally the 15 mins charts are showing a buy signal now.

I have ended up -13 down.. I need to keep objective and trade what I am seeing.. the stochastics have worked well for me in the past, I shouldn’t override their value.


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Category: Emini futures, money, Trading