Before the open:
Last session we identified a few goals to focus on today:
1) Testing larger stops. Nothing under 5 points.
I've decided to be more volatility-based when choosing stop size. Daily ATR now averages about 17 for last couple of weeks. Dividing daily ATR by 3 gives us a stop of about 5 points. With today's 7 point range, I felt very comfortable using a two point stop on the small time frame.
2) Diligent odds-based thinking at reference zones and before I enter or exit.
I like how well you saw the afternoon false breakdown. Volume was just not strong enough to pull away from such an established value area.
3) Trying harder to find trades every 30 minutes (when not in a trade).
ATR was just too tight today.
4) Trying new tactics and ideas and discussing them.
I will for sure practice some tick fade trades when the day is right. They worked today, but a 1.5 point range is just too small.
After the session, your performance on each will be graded.
Review:
Last session (Friday) was a great example of afternoon look above the range highs and fail. It was also a great example of how powerful recency bias can be, as I clearly remember being influenced by Thursday's session where the breakout to new highs was very successful. But, as I noted, Friday's structure was much different than Thrusday's. Thursday featured an upside excess tail in A period, and Friday featured a downside excess tail in A period. Also, sediment was much weaker.
It also might be helpful to review the three core trade ideas.
Journal:
30 Minute Trade Exercise: Simulated Trade every 30 minutes if possible. New tactics, new ideas:
6:50: So far just a look below yesterday's range lows at 1392.25. We are long 1392.50, looking for a rotation to 1399.
7:05: New price lows down to 1391.25 without new lows in tick. Producing 1st significant bounce of the day. So far all that's occurred is stop gunning on waning momentum below yesterday's lows. Not looking good for sellers. Intermarket themes so far neutral, with the exception of Apple which is off 2%. Still looking for that rotation to A period highs. Value area high and POC rejecting upside price so far. Volume so far above that of last 4 days. Market should increase ATR today if that keeps up.
7:20: Initial balance coming to a close soon. VAH still rejecting upside price movement but at least a tick +600 was able to print.
7:30: Total failure of upside at VAH and new low in tick. Price still above range lows. Not sure what to make of this move. Value is still within yesterday's range. Looks like they're going to try for new lows here in C the period.
7:50: Still winding up for a downside range break. I am going to buy a failed breakdown. XLF already minor new low.
I liked your idea here. You tuned in quickly that the day was going nowhere really fast and that defined levels were holding. When you entered, the trade went positive. There was just no going over value area high today.
7:57: Trying a long here at 1391.75 with tight two point stop. This is a pure minor low trade with a tight target of VAH. Lower prices did not bring in volume and tick diverged.
8:30: Price is literally STUCK!!!!! at the POC and VWAP. The machines won't let it through. Going to up target to 1395.75 on this trade as if it does break, it should go beyond VAH.
8:37: Scratch the minor low trade. Another nasty rejection down and I'm going to let this thing do what it will and take a break. Looks like it wants to peak down lower.
9:17: We are long again here at 1392.50. Looking short in the hole here. All 5 points of it. LOL. Apple down farther to -2.8%, but Nasdaq not following. Interesting. Up, Up, and AWAY!!!!!! lol.
9:37: Well, a two hour range of 1.5 points. Somebody call a doctor!
10:55: Close of long trade for 1 point loss and will swing short here through overnight session.
11:30: So far it's looking like possible downside continuation. Here is the break. No volume coming in yet. It's going to take high volume to pull it away from value and I don't think there is enough volume. But the base was very tight so maybe that will help.
11:45: Classic example of a low volume look down below range extremes ( A #1 Reversal)l that didn't garner any increased participation and reversed. Look down and fail targets probably value area high.
I really should have entered a long here. But it's hard to fade yourself on a shorter time frame. Something that I'm not used to doing. But will try it next time! This gets trade of the day in my book.
12:05: Massive bonds spike lower. Unless something wired happens I think the close should occur around the POC/VWAP.