Today we opened lower by 1.25 pts after testing the 1220 level at the lows in the Globex session. We sold off early but quickly reversed on a test of the 1223-1224 range. We peaked at 1235 on High Volume and proceeded to sell off very hard dow to the 1208 level by midday. Daily is at Cycle Support, Dow closed off lows at Cycle Support.
Trade Lesson of the Day How Not to blow the 13 Open Ice Sequence
Recap Notes:
Trade Selection - Very Poor only 1 qualified sequence of the three. I added to a position in error 2x's. The first was a liquid trade with no setup that was unqualified with respect to the time of day. The 13 open ice was perfect and would have maxed out very quickly for a 1S1k. The second trade was a qualified 15/5 with strength premise behind but I got shaken out, I carelessly added to the position with NO technical cues to do so. The 3rd Trade was unqualified as well, No real reason for entry at all.
3 Sequences entered during the 90 minute grind.
Today's 15m Close: Dn Blocks @1206-1214,1216-1218
Accumulation Range: 1206-1216 with Block Volume.
Distribution Range: Blocks @ highs from 1232-1235
Todays $TICK Close: + 748. Divergence from Price.
INTANGIBLE OBSERVATIONS:
Qualify the Open Ice to start the Day - Today I completely missed the open Ice!!, I rushed into the open and entered a 15/5 sync that was into RESISTANCE. I spoke about this before. Opening S/R should not be entered into S/R but Away from S/R.
Price was rejected at new Resistance in the pre-open and retested on the open, then broken on the Ice Bar to the down side.
Adding to your position - ONLY add to Qualified positions when I have clear cues and odds in my favor. Be very sure not to add to a trade moves away immediately. Taking loses on 1 lot wont hurt as much and you can hold to max if needed but adding to unqualified trades wont work.
Price was rejected at new Resistance in the pre-open and retested on the open, then broken on the Ice Bar to the down side.
Adding to your position - ONLY add to Qualified positions when I have clear cues and odds in my favor. Be very sure not to add to a trade moves away immediately. Taking loses on 1 lot wont hurt as much and you can hold to max if needed but adding to unqualified trades wont work.
Think Wholesale - when entering a qualified trade with a liquid entry respect the break points and act on them quickly. The advantage of the wholesale entry is that it allows you to take SMALL LOSSES when a failure occurs and the Risk Reward is clearly defined and heavily weighted in our favor.
Be sure to have a defined and clear premise on the open prior to entering ANY sequence. Stick to your Premise of the open and for the 90 grind. This is the basis of all sequences.
When entering Liquid sequences, note typical cues the trade is moving in favor prior to scaling in further. Price should move in favor fairly quickly without hesitation. ie price rejection at the entry price or very near it.
**Note** Wall Street Gang pg 241 para 3 The Specialist decision to avoid Accumulation/Distributions at key prices (round numbers) can mean only 1 thing. He is going Higher/lower - What this means is that one needs to observe how the specialist reacts around key price areas of High/Low volume and/or S/R round numbers. Gaping thru round numbers is often an indication that prices may head to the next round number prior to further reaction by the specialist. He uses gaps to avoid limit order and public involvement in his intended direction.
Furthermore, when we see No or little reaction at these areas after Accumulating or Distributing has taken place then look for the next S/R round number to be tested.