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Thursday 11 January 2007

Trade summary Jan 11 2007

My main goal everyday is to trade my setups the first 2 hours of market open and be done for the day. Today, I knew we were going to breakout, but I was unprepared for the type of scenario that the market played out. Although I had a positive P/L, I didn't take my signals and I ended up trading like a moron. I wanted to see a market low around the first 30-60min off of support from the previous day so that I could buy at these levels, but that didn't happen. Instead we ran up the first 30min, paused for a second, and then rallied for the next 60min. I was hesistant to go long on my signal because ER2 was already near volume resistance, and ES hadn't broke through 1327 resistance. Right after the 30min mark, ES broke and the market rallied. I knew that if ES broke through this area we would rally to but I had a conflict because I didn't know where ER2's next resistance point was, so I let the trade go, because I was unprepared. This type of trading day I've seen before, but I'm just now starting to recognize its pattern. The first 15min and 30min are the times I need to start analyzing more. When the market opens up, and at the 30min mark it hasn't made a lower price then the open, and we are above good support with resistance in the far distance, look to see what happens in the next 30min. I would bet a rally, especially after a 3-4 day period of consolidation. But what if the market was reversing and making a lower price for the day after the 30min mark? I would think more in favor of a range day, in which I would want to look to buy the previous days LVA and sell the previous days UVA. (LVA=low value area, UVA=Upper value area)
What do I do if i miss a breakout in the morning? look for the market to return to the middle value area for the day and be a buyer near this area. If it is a trending breakout day, the price shouldn't reatrace much lower than this area. On range days, look to sell the UVA, and buy the LVA. I have a lot more work to do on my research of market profile, volume profile, and the time periods in which to look for patterns in. I have much to learn about the markets and myself.

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