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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 Monday, June 11th, 2012.
The market opened up this morning at 1329 represented by this white dotted line. We generally don’t trade the first 15 minutes of the day. We have an opening range. In this particular case, coming out of the no trade zone we did have a nice hook pattern setup to the downside. We had a total of 18 ticks. Target 1 and target 2 were hit. Nice little pullback up to the moving average and continuation to the downside.
We had several other opportunities that we talked about in the room and none of them were really nice, clean setups. If you got in on this first trade, you probably could have had a full stop out. If you got in on this second trade, you would have had a full profit target, T1 and T2. If you get in on this third entry, T1 and T2. Now I did not take any of these trades, so I’m not going to go ahead and show them right now.
Then we had a cross above our moving average. Nice little pullback with an opportunity to get long and I didn’t even have a first stop. I was very cautious with the amount of downside pressure to taking any long opportunities. But I did, and I brought my stop up real tight in this case. I took a full stop out of minus 8 ticks.
Anytime you take a full stop out immediately look in the opposite direction for a continuation to the downside which we had right here. It just happened too fast. Again, when they’re in yellow arrows it means I did not get an opportunity to take advantage of it. And this is for training purposed for those of you in the Shark Den to review where you could have entered a trade.
We then had another opportunity right here at around, just before 11:00. An opportunity to go short. Target 1 and target 2 were hit for a total of 10 ticks. You really had to stay in this trade until it materialized out to the full 1312.25 area, which also was out Globex range low. At 1315 we had the hourly range low and that’s why you had this sideways consolidation. Okay. A lot of traders may have missed this trade for example because the hourly range low is there holding us up.
In the meantime we went into a no trade zone from 11:30 until 1:15 Eastern Standard Time. Coming out of the no trade zone we had an opportunity to get short. Again, there’s different profit targets. Now if you’re doing static targets, which would be, you know, plus 2 ticks, plus 6, plus 8, then that’s fine. That’s the easiest, probably the least effective way. If you have a trailing stop then your target 1, target 2, target 3 would have gotten hit for a total of 13 ticks in this particular trade. For counting purposes I only use the basic static stops.
Now here as price action continues to the downside, your stop would have remained above the previous swing high. Price action broke the most recent swing low for a continuation to the downside and then you would have gotten stopped out here. Only to see another opportunity to get in short for another 10 ticks. Again if you had trailer, you could have got as many as 16 ticks on this particular trade prior to this mild reversal.
After a mild bounce off of Thursday’s low. Now do we have any other reasons to be bouncing here. We also had last month’s high. But the bounce does not mean that the downside move is over. In the meantime we were stuck in the middle of a couple Shark bands. And I’ll show you that in one moment.
Final trade going into the 3:00 timeframe. An opportunity to get short. Now this is, notice how our momentum indicator dropped in below into the oversold territory. This is one rare opportunity where you can actually throw in a market order and go with the trend and keep a tight stop. Ran it all the way down, if anybody was able to take advantage of this, they had about a 24 tick potential on that particular trade.
Now when we talk about a Shark band I want you to see that right here at around the 1305 level is where we had our first initial bounce and then the final selloff worked its way all the way down to the next Shark band around 1300.
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.