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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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TraderShark
Good evening traders, this is Brian with TraderShark.com, an educational website to learn how to trade the emini S&P futures. Today is Tuesday, June 12th, 2012.
The market opened up this morning at 1305.25 right in the middle of our opening range. I want you to notice as the market opened up, when we’re within this opening range, it really tends to be choppy. So I’m going to shift to a different screen here very shortly. I just want you to see how we really didn’t take many trades today. Not until the later part of the day.
We had a nice little breakout of our range. Nice hook pattern. Did not complete, so it was kind of a fake out breakout. Worked our way to the opposite end of the range. Another hook pattern. Didn’t really fall within our rules because we have a limitation as to how many candles this can strike before continuation. But I want you to see as we went into the close, look at how that hook pattern materialized right to the last part of the day.
So now let’s go to a lower timeframe chart. And you’ll notice from the opening price at around 9:30 at 1305.25, we generally do no trade from 9:30 until 9:45. However, if we had a setup in the direction of our gap fill, which is down here at 1302.5 we will take the trade. And in this case we did. Target 1 and target 2 were hit for a total of 7 ticks.
Coming out of the no trade zone, like I showed you in the previous screens, we did a lot of sideways motion in the middle of that opening range. There really wasn’t any major news reports. And here’s that head fake, where they tried to work their way outside of the opening range. And then did not materialize. So we really didn’t have any trades this morning. We didn’t have any indications inside that were giving us confirmation for a downside continuation. And then price action came right back into the opening range again. So with that we really did a lot of sitting on our hands today.
And then coming out of the opening range another opportunity to get long. Target 1 and target 2 hit for a total of 7 ticks. Sometimes people ask me, you know, don’t you get out too early. Well we scale out. And some of the traders are more advanced traders, they hold on a little longer because we do have upside target potentials, such as the hourly range and the Globex range highs that we show in the Shark Den.
Another pullback here. Another opportunity to get in. Target 1, target 2 for a total of 8 ticks. Now could you have held this trade on longer for a higher potential? Sure, but in this case a more conservative trader ended up paying twice the amount for commissions. Not a big deal.
Going into the no trade zone, this is for lunchtime from 11:30 until 1:15 Eastern Standard Time. We had a nice pullback to the moving average. Take off. Now here we had a double top. This posed a little bit of resistance. We weren’t 100% sure what was holding us down, so we scaled out. Target 1 and target 2 for a total of 10 ticks. Some people did not quite make it out for a total of 1312.25 and scaled out at 1310, they would have only made 9 ticks on this particular trade.
Notice the sideways consolidation. Again there was no confirmation. There was no news. Nothing was moving this market. Continued to move on lower volume. Had a nice clean pullback. An opportunity, we had what’s called a trendline wave trade. Target 1 and target 2 hit for a total of 10 ticks. And then again if you wanted to hold on a little longer up into the 1314 level, you could have made onwards of 18 ticks.
So I’m going to let you in on a little secret here. How do we know whether to hold on beyond the 10 ticks or the static targets? Got a nice clean ADX setting here. And what we do is as this ADX stays in between the directional indicators, nice clean opportunity for a continuation. And what you’ll notice is this section right in through here, this blue section I just colored, is an opportunity for you to stay on that trade until you get a cross to the other side of the directional indicator on the ADX. Nice, clean way to hold onto a trade a little longer.
Here we did have a nice clean setup. Look at our wave trade indicator. Gave us a nice setup to the downside. When you’re going countertrend, you know, be grateful for getting 2 ticks, or 4 ticks or 6 ticks, whatever you’re trying. In this particular case got us 6 ticks. I did not take this trade. It was a nice clean setup.
Going into the close, again we had another opportunity to get long. Each one of these pullbacks were met with buying opportunities. There wasn’t a whole lot of volume at this time. In the meantime we saw a push up into the close, up there around the 1370 level, the Globex range high.
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 and I’ll see you in the Shark Den in the morning.
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.