Video on How to Read the Time and Sales

A live trade setup from the chat room today showing what the time and sales should look like on a breakout trade for the Dow emini futures (YM).

Video on How to Read the Time and Sales

A live trade setup from the chat room today showing what the time and sales should look like on a breakout trade for the Dow emini futures (YM).

Live Trading Video from this morning with NYSE A/D Trade Setup Explained

Watch live video from High Probability Trading on Justin.tv

We opened the day with a Gap Down and selling in Europe and Asia. My Hypothesis for the day was to gauge market internals and look for short setups. With regards to Market Profile, I was looking to short Value Area High with a target set to at least VWAP or VAL depending on volume and TICK readings. I call all my trades live everyday. I reviewed this mornings trading and saw what I did wrong. I exited my trades too soon. I should have scaled out of half and given more patience for the other half of the trade, leaving my original stop in place. Today should have been a big profit day, but instead I ended up with average profits. On the bright side, I learned something and there is always tomorrow for work to be done.

Live Trading Video from this morning with NYSE A/D Trade Setup Explained

Watch live video from High Probability Trading on Justin.tv

We opened the day with a Gap Down and selling in Europe and Asia. My Hypothesis for the day was to gauge market internals and look for short setups. With regards to Market Profile, I was looking to short Value Area High with a target set to at least VWAP or VAL depending on volume and TICK readings. I call all my trades live everyday. I reviewed this mornings trading and saw what I did wrong. I exited my trades too soon. I should have scaled out of half and given more patience for the other half of the trade, leaving my original stop in place. Today should have been a big profit day, but instead I ended up with average profits. On the bright side, I learned something and there is always tomorrow for work to be done.

Key Trades from the Morning

We had a morning opening gap to the upside which was quickly filled. We had weakness in tech companies like AMZN and MSFT.

I took short trades based on my signals and they worked good.
Tradestation ATS signals-

IB Trades-

TECH weakness with Trend Signals to the short side.

Key Trades from the Morning

We had a morning opening gap to the upside which was quickly filled. We had weakness in tech companies like AMZN and MSFT.

I took short trades based on my signals and they worked good.
Tradestation ATS signals-

IB Trades-

TECH weakness with Trend Signals to the short side.

YM Futures Calendar Spread Trade

On April 30, 2009 I put on a YM Futures Premium Trade by Shorting the June contract and going Long the September Contract.

April 30, 2009- YM Futures Contract- Short June, Long September.

June 1, 2009- YM Futures Contract- Short June, Long September.
As you can see the spread has not tightened at all for the last month. The Trade has been -$30 since I put it on because of the initial cost of the bid/ask spread. The June Contract expires June 19.2009. The next two weeks should tell whether there is any merit to this trade at all.

YM Futures Calendar Spread Trade

On April 30, 2009 I put on a YM Futures Premium Trade by Shorting the June contract and going Long the September Contract.

April 30, 2009- YM Futures Contract- Short June, Long September.

June 1, 2009- YM Futures Contract- Short June, Long September.
As you can see the spread has not tightened at all for the last month. The Trade has been -$30 since I put it on because of the initial cost of the bid/ask spread. The June Contract expires June 19.2009. The next two weeks should tell whether there is any merit to this trade at all.

CNBC Bullishness and Dow/Futures premium

CNBC is cheerleading the Dow to 10,000 this summer. Nevermind its the last day of April (window dressing) and we have the "Sell in May and go away" theme starting,,,Tomorrow.



It's interesting to note the Premium/Discount in the spread between the Dow Industrial Cash market and the Futures market. The September YM contract is at a 100 pt discount to the Dow cash currently.

Lets see what happens to this Futures Premium Trade in the next month, I expect the two numbers to get closer together, making me money in the process.
Trade setup-
YM Futures Contract- Short June, Long September.

CNBC Bullishness and Dow/Futures premium

CNBC is cheerleading the Dow to 10,000 this summer. Nevermind its the last day of April (window dressing) and we have the "Sell in May and go away" theme starting,,,Tomorrow.



It's interesting to note the Premium/Discount in the spread between the Dow Industrial Cash market and the Futures market. The September YM contract is at a 100 pt discount to the Dow cash currently.

Lets see what happens to this Futures Premium Trade in the next month, I expect the two numbers to get closer together, making me money in the process.
Trade setup-
YM Futures Contract- Short June, Long September.

The bad trade

October 6, 2008. Chart of YM. Dow opens gap down, going down over 800pts intraday.
I'll tell you what happened. I was long 4 NQ contracts and short 1 YM contract. I was short 2 contracts on YM but I covered the additional contract on YM in the morning. My internet connection went out a little after I covered 1 contract on YM short. I waited to see what was going to happen because the market looked quiet and we bounced off the morning lows. The market kept dropping so I tried calling my broker but I was on hold for 10min and then I got disconnected for some reason. One hour before the market close my internet comes back on and I was stressed out. I decided to add to the YM short right near the lows when the Dow was down 800pts(even though I had a buy signal- market internals were like 300/1 to the downside, so I said screw it). I thought the market was going to fall -1000pts for the circuit breaker to kick in. Well, we reversed and I took a big loss on my YM short that I just added to and I sold my NQ long a little too soon for a loss as we rallied before the close. Lesson learned - trade 1 instrument, 1 direction, unless you plan on doing a longer term pair trade. My original plan was to hold the NQ/YM trade for a bounce, with the ability to add to the YM short if the market kept dropping (my internet went out so I couldn't add to the YM short unless I called my broker, I should have called sooner). My original thinking was that NQ would bounce more than YM because there would be more short covering in Tech names as opposed to financial names because of the short sell ban.

I hate Comcast.

Overall, I let emotions get to me on this trade and I miss-managed this trade very badly and took a big loss. I was up 7k in the last 2 weeks, but I lost all that plus another 3k. It may not seem like a big loss to some of you or compared to my January blow up, but it was a mistake that really set me back because I keep losing weeks worth of profits from making the same disastrous mistakes on crazy trading days like Monday.

The bad trade

October 6, 2008. Chart of YM. Dow opens gap down, going down over 800pts intraday.
I'll tell you what happened. I was long 4 NQ contracts and short 1 YM contract. I was short 2 contracts on YM but I covered the additional contract on YM in the morning. My internet connection went out a little after I covered 1 contract on YM short. I waited to see what was going to happen because the market looked quiet and we bounced off the morning lows. The market kept dropping so I tried calling my broker but I was on hold for 10min and then I got disconnected for some reason. One hour before the market close my internet comes back on and I was stressed out. I decided to add to the YM short right near the lows when the Dow was down 800pts(even though I had a buy signal- market internals were like 300/1 to the downside, so I said screw it). I thought the market was going to fall -1000pts for the circuit breaker to kick in. Well, we reversed and I took a big loss on my YM short that I just added to and I sold my NQ long a little too soon for a loss as we rallied before the close. Lesson learned - trade 1 instrument, 1 direction, unless you plan on doing a longer term pair trade. My original plan was to hold the NQ/YM trade for a bounce, with the ability to add to the YM short if the market kept dropping (my internet went out so I couldn't add to the YM short unless I called my broker, I should have called sooner). My original thinking was that NQ would bounce more than YM because there would be more short covering in Tech names as opposed to financial names because of the short sell ban.

I hate Comcast.

Overall, I let emotions get to me on this trade and I miss-managed this trade very badly and took a big loss. I was up 7k in the last 2 weeks, but I lost all that plus another 3k. It may not seem like a big loss to some of you or compared to my January blow up, but it was a mistake that really set me back because I keep losing weeks worth of profits from making the same disastrous mistakes on crazy trading days like Monday.

Light trading

Yes, I still trade. From the charts, I was watching my trade signals in conjunction with block trades. The block trades on ER2 really pinpointed the reversals. I've noticed block trades tend to work good for reversals when NYSE A/D has hit resistance/support levels and on NYSE TCIK extremes. I sold too soon on the 11:14 reversal; for some reason my quotes went blank, so I closed the position.

Bond Futures look like we are nearing a resistance point. Treasury bond yields will likely go higher.

Daily Charts

The US dollar has rallied hard against all the other major currencies this week. Gold is around 875 and Crude Oil is hovering around $120. It seems the bullishness in the US dollar has helped support a bounce in US stocks and a drop in commodities. I'm remaining neutral / bullish on Stocks until the Euro bounces. At these levels, I'm watching Gold closely for a bounce.

Aug 1 2008 Trading, Choppy with lots of news events

Even though the day was choppy, there were some great scalping opportunities for Day Traders.
There was a considerable divergence in strength seen in the Russell 200o compared to the SP500 the last 2 days.
For the week, the SP500 finished up 0.56% & the Russell 2000 finished up 1%.
2yr bond future ZF vs. Dow Jones future YM.
I traded the first 2 hours, catching a good long off the bottom and a good short on ZB playing an inverse pair strategy between bonds and stocks.
I use the simulator account to place trades to get a better feel for which contracts may be a better long or short.

Checkout TokyoTrader for a recap on July's Virtual Office Performance.

MER classic Gap Trade

A classic opening Gap trade. News came out last night that MER was selling 200 million shares to raise capital to stem its losses from its CDO's.


I'm sure swing traders are having a difficult time trading these markets with 1 day down 240pts and the next day completely reversing its losses.


I actually made money from 2 short scalps. I also had a good long on ZB off the bottom but sold way too soon. I actually tried to trade a long bounce on the Euro, but it never worked out as Crude Oil is weak and money is flowing back into the US dollar.


I shorted ZB last night. This trade was up as much as $700, but I wasn't around to cover it at the time. This trade was based off my bullish bias for 30yr bond yields rising. Bond Yields are near resistance from last June, so my bias is more neutral until after the next FOMC interest rate decision.

July 25 Trades

Traded for 40min mid-day. Traded 5 contracts.

Long ZN, Short ER2. (I exited ER2 too soon; however, I re-entered short via YM, also, I expected my ZN trade to work out sooner but gave it time and exited at my sell signal)

Stock Bond Euro Intermarket Relationship

July 14-24, 2008 (The general theme is bond futures and the Euro trade in tandem while at the same time inverse to the stock market)
July 14

July 15

July 16

July 17

July 18

July 21

July 22

July 23

July 24