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This is for educational purposes only. It was designed to show a few of our trade plan setups to help reinforce your daily trade plan review.
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Good evening traders, this is Brian with TraderShark.com, an educational website to learn how to trade the emini S&P futures. Today is Thursday, June 14th, 2012.
The market opened up this morning at 1311. We generally don’t trade the first 15 minutes of the day. Our opening range, we generally don’t know what direction the market’s going to push. Once we had a break to the upside we found overhead resistance at our initial Shark band. And by 10:10 we did not have a full reversal, nor did we have a break of our significant level. At that point I told everybody, watch for the accumulation of sellers. Not selling pressure. We got the buying pressure. But we had an accumulation of sellers, so that they could eventually rip it against them and take them long. That’s exactly what we saw.
Pushed up in here to the weekly pivot level around 1318. And went higher. Once we saw this go higher we started to watch for this. This is the first shoulder pattern. Broke our next significant level here. Notice our little blue circle. And then we hit yesterday’s high. At that point, as this started to selloff, I said, you know what, watch for a head and shoulder’s pattern. You can see the shoulder, head, shoulder. If it breaks the neckline, notice the high to the neckline. As soon as you get a break, worked its way down to the target pattern completion, as well as it happened to be a Shark line. This is a nice strong confirmation.
From our higher timeframe chart we also noticed that it was hitting out hourly range high. Nice clean pullback to two different Fibonacci clusters. Okay. So with that strength here, we knew we were going to have a bounce. We didn’t know we were going to have this kind of bounce. I mean we had a 12 tick 5-minute candle.
And with that we immediately went to our tick chart and from the lower timeframe chart, we had our initial burst. The only way to really get on that would be what’s called an extended wave trade and we saw our indicator in well into overbought territory. I did not get on that myself, but then I waited, we had a nice clean pullback here. Look at this. Clean, perfect wave trade indication. Double green dots for a long opportunity. Run up. And then scaling out here at 1325. Why 1325? 1325 is a natural number. And a lot of people would probably fade that 1325 number. In this case you want to wait until you get a nice clean indication or if nothing else, a reversal of a Heikin-Ashi candle, which you have right there. And when did it occur? Two points through the natural number. So it went all the way up to here the 1327, 1327.5 before you saw a reversal.
The market was moving awful fast, awful violently. If you don’t get in on a trade like that, that’s perfectly fine. If you want to wait for the market to settle. Price action fell through the moving average, and then they were just doing shake around here until we had another clean opportunity to get long. If you got in long here, you probably get your target 1 off and get stopped out for a minus 2 ticks, which would be a reduced risk stop out. But if you had your stop placement, proper location would be underneath this moving average or below this 61.8% Fibonacci level. So with that target 1 and target 2 would have been hit with nice clean completion.
To learn more about these and more advanced trade setups, or to get a copy of the Trader Shark trading manual, please visit TraderShark.com. Thank you. Have a great evening and I’ll talk to you tomorrow morning in the Shark Den.
Link to video and Transcription
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not an indication of future results.