I made one trade today, long 141225 when the 4 min stoch and MACD were looking like they were heading up. The 15 min stoch also was heading up…  I was cautious as the MACD was still in a sell state.

I bought in and the market moved quickly upwards, it reached my 10 prices and I moved stop to breakeven. However, soon after this market fell and stop got hit. I ended up with no loss or win…

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Our trading mentor informed us not to trade until his say so after Bernanke said his thing. Bernanke took over from Alan Greenspan and is currently the Chairman of the US Federal Reserve… when he has something to say, the markets can move and when I came home, I saw that the market had shot up and generally looked rather choppy. I wasn’t sure I’d be able to find an opportunity today but I did.

I shorted the market as it reached the previous high of the day at around 142900. I got in at 142875 and rode it for 10 prices to 142650. I was a bit careful with it as it had been in an upward trend for the 30 mins and even though the 5 min stochastics and MACD were in overbought territory, the 15 min charts still had room to manoeuver.

At some point, it did look like it could have moved lower but I’m glad I made the decision I did as it has shot up since and making new highs for the day.

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I thought I would take a look at the S&P chart today… I know in my previous blog entry, I said that I would probably leave it until next week before I start trading but there’s no harm in having a look. If there are no opportunities, then that is fine!

Over the Xmas period, I was able to dedicate time to reviewing my trades over the last 6 months. Having all my trade entries and exits along with my faults in the blog allow me to do this and be objective about things.

I found that I was always too eager to take a profit when I got 10 prices. There were times when the market moved significantly further meaning that I had left a lot on the table. Obviously, when I can trade in multiple lots, I can scale in and out but for the time being, the trading academy only want us to trade with 1 contract.

I have refined my trade positioning after an entry. What I will do is to move the stoploss to entry (or nearabouts entry if there is a support/resistance/round number level) when the price action has moved 10 prices. This means that should the price action move beyond 10 prices, I would at least have secured a no risk trade. Should the price action move further away then fantastic.. I would have a target limit at the next obvious level.

I tried this tactic today on the S&P emini. At approximately 17:00 GMT, the price action on the 5 min chart hit the 5 day MA line and was looking to go higher above the previous swing high at 143400. I went long above this level at 143425. It got to 10 prices and then I moved my stop to just below the 143400 mark. My risk was therefore -2 prices. The only thing which made me cautious above this trade was the fact that the stochastics on this chart were already in overbought territory. Otherwise, in the 15 min chart, both stochastics and MACD looked like were in oversold territory and could go up.

Anyway, price action didn’t get any further and fell away. I also feel that there is weakness if the price action gets below the previous swing high. Not only this, but the price action fell through the 5 day MA line.

I then went short at 143275. The logical target was 142850. Anyway, the market started to move down as anticipated. I moved my stop to entry when it reach +10 prices at around 143000. However, it bounced around this region and then up and I was thinking to myself that I should have taken the +10. A system is a system and for me to give it a chance to prove itself, I need to stick to the rules. I left it and after a while, it hit the limit for +17.

Phew… overall for the day is +15.

 (click for larger picture)

I’m stopping here for the day, got a few things to do but a good start nonetheless!

As I speak the market is may hit the low of the day again at 142625.. this could be a bounce up higher from here as it has been a previous support on the 21st November. If it falls beyond here, next target is 141575.

Tags: contracts, daytrade, daytrading, divergence, dow, dow jones, emini, futures, macd, pips, prices, s&p, stoch, stochastics, technical analysis, Trading