May 15 Trade Summary Update $3,129

Well I missed 2 easy setups, 1 being the morning pop (I actually was long at 822 off of a buy stop I placed, but I only took at 6 tick scalp off of it, I didn't think we were going to pop a full 8pts, so I missed the trade due to hesitation and thinking WOW, I'm not chasing this type of volatility, I'll wait for a pullback), and the other setup I missed was when I was typing my my afternoon blog entry (I guess I shouldn't have lost focus). I think I should have made double what I made today, but I got a little less confident as the day progressed because my mind frame switched to capital preservation mode. I did push myself a little in the afternoon and put on trades to get to the 3k mark because I was already over 2k and I still had another 3 hours to go to make that extra 1k. I pretty much just watched the trading into the close, missing another 2 setups, but I didn't want to screw up a good day by trading the last 30 min chopp.

P/L= $3,129

No trade log today, only a summary. (Reason: the trade log is too long, like 3 pages)

Charts Time:
YM/ER2 Divergence



NYSE A/D bearish divergence setup (also NQ A/D more bearish setup, -100 AMEX reversal at 11:45am TOO!)



NYSE A/D trend lines helps keep you on the right side of the trade-



NYSE A/D vs NYSE TICK



Market Observations-
Today was a good momentum day where adding to winners payed off.
NYSE A/D showed bearish divergence after the morning pop, as well as ER2 and NQ, while on the other hand YM kept going higher (probably due to lots of retail traders covering shorts, not knowing that YM was overvalued relative to the other indices, as it usually is).

Trading thoughts-
I think I might be wasting my time scalping stocks intraday, because I'm much more productive trading ER2. I tried trading 4 other stocks besides AAPL today, but the orders were taking so long to get filled that I canceled all of them. I'm use to trading ER2 where the fills are pretty much instantaneous, and didn't like having to wait for my orders to be filled while the market was moving (AAPL however is much quicker at getting filles and suites my taste compared to the NYSE listed stocks). I did manage to scrap out 100 bucks on AAPL, but during that same time period I was trading AAPL I probably could have made 2-3x as much trading ER2. If I'm going to trade stocks, I think I need to use a scanner to find my stocks and look to put on trades and hold these trades for 30min or longer instead of trying to scalp them, because I'm more likely to get chopped up scalping stocks. So, I should continue to scalp ER2, and look to find stocks that are trending and put short term position trades on these stocks, instead of trying to scalp these stocks (because my time is better spent scalping ER2 and not stocks).

AMEX TICK REVERSALS

The amex strategy was a pattern I saw where the market would reverse in conjuction with the AMEX tick reversing at key numbers like -100, +100, +200. I would see this pattern occuring occuring 1-2 times a week and found it odd that the market would make this pattern so often. I think the AMEX tick reversals are just a common occurence like 10:30am and 3pm EST reversals, and there really is no secret to AMEX tick reversing at these key numbers, it is just pattern that occurs frequently for all I know. It is an interesting indicator to look at and shouldn't be overlooked, but for the most part I would rely more on price, volume, NYSE TICK, and NYSE A/D for trading intraday.

Here are a couple more charts from my archive-

In this chart you see two -100 AMEX TICK reversals.



In this chart you see a +200 AMEX TICK reversal.

Volume Profile works, but my computer doesn't

If your read my post on saturday, you knew what I was planning for today to have happen. I initially saw the volume gap between 824-819 on Feb 20th as noted in my jorunal, and I've been keeping a close eye on it. ER2 hit 819.1 around 1pm EST. Although I predicted what the market was going to do today I was timid to short the VAH on ER2 this morning. I have to admit, it was the ideal setup for the professional traders to inflate the market this morning with a gap up, putting YM right at the 38% fib level for my planned short. The initial 30min of trading I normally avoid because I'm normally still trying to figure out the markets direction. Today I lacked confidence in my execution of trades although I kept to my trading plan of shorting the market down to 819 and remained postive. I had computer hardware problems this morning, having my IWM tick chart stop working(which is the main chart I trade off of) and my internet connection went out 4 times this morning. For some reason my computer is running super slow right now and it is popping up with the message that my virtual memory is too low. My charts kept freezing today, so I'm stopping trading and taking the profit I got until I can figure out how to make my computer work right. I'm pretty sure it's from running too many charts at once(I have about 25 charts up, I'm thinking about getting rid of A/D and Volume market internal charts to free some space, as I rarely use them) I saw that 828 was a good short, however I was timid. The first trade of the day is always hardest for me because it could be a good trade, but I will often put a stop that is too close or once I get a small profit I trail the price too close, only to be stopped out and watch the price continue my direction. Today I bought the LOD again for the 3rd day in a row(it was the LOD when I stopped trading, also I just noticed it was an AMEX -100 tick reversal setup!), I took the trade this time on YM because I wanted to take less risk; however, I did it again. Once I had a profit of 1 tick, I trailed the stop and got hit, only to see 3 minutes later 10pts in my direction(If the trade was on ER2 it would have worked better, I'm begining to think I should stop trading YM altogether). So, my plan is to keep the initial stop and give the trade 6-8 minutes to move, or use my own discretion and exit if I feel the NSYE TICK doesn't favor my position. This weekend I was thinking about trading all day and what I was going to do. Today I made 1 bad trade by shorting ER2 when the NYSE TICK was in the low range and I didn't exit the trade soon enough, instead of -0.2pts, I let the trade run -0.8pts, this is all because I got greedy and tried chasing the trade instead of waiting for shorting on a pullback. This past week I've been getting better at exiting my losers by using NYSE TICK. Also, what has been helpful for me in determining market reversals is by watching VOLUME in USO, SMH, XLB, and most importantly this past week XLF.



Here's the daily chart: