Chart Patterns Video for Apr. 29 to May 03, 2013

April 29, 2013 · Posted in ABC Bullish, Fib. Bands, Head and Shoulders · Comments Off on Chart Patterns Video for Apr. 29 to May 03, 2013 

Chart Patterns Video for April 15, 2013

April 14, 2013 · Posted in ABC Bearish, ABC Bullish, Head and Shoulders, Pattern Trade · Comments Off on Chart Patterns Video for April 15, 2013 

Chart Patterns Video for April 08, 2013

April 7, 2013 · Posted in ABC Bearish, ABC Bullish, Pattern Trade, X5 Patterns · Comments Off on Chart Patterns Video for April 08, 2013 

Trading on Friday…

January 11, 2013 · Posted in ABC Bullish · Comments Off on Trading on Friday… 

HAPPY NEW YEAR 2013!!!

Most traders hate Friday trading. Specially in the after noon hours. It is incredibly slow with choppy action. Traders should be smart to quit trading on Friday. I thought I am, but today I got caught in the Mid-Morning trade around 10.45am. I saw a good ABC Bullish pattern with lots of great conditions. On the first attempt it tried to reverse and close above EL (1463.75), I bought a position around 10.50 am at 1464. My Targets are: 1467, 1470, stop set at 1462. After my trade, market rallied a bit but Friday trend was unforgiving. Now at 2.50pm, it is chopping between 200-SMA and EL (1464). Few minutes before it rallied to 1466.25 but dropped back to 1464.5. This has happened too many times. Now, I raised my stop to B/E. I should keep a note: Never trade Friday from Noon.

Wish you all great weekend.

Trading Large ABC Patterns

December 28, 2012 · Posted in ABC Bullish, Volatility Zones · Comments Off on Trading Large ABC Patterns 

Trading large patterns is a bit risky. My definition of large patterns are patterns with Major swings of patterns with 15 pts or more. Of course, it has larger targets but it also has Larger Stops, which may or may not fit into many traders trading plan. But there are some tmes, Larger patterns with Volatility around the entry have smaller stops (by design). This way if Pattern is WRONG, you can get out of trade with a smaller loss.Today’s ABC presented such an opportunity.

From mid day yesterday (Dec. 27, Thur.), ES rallied from a low of 1396 to 1416 on “fiscal cliff” news. This swing (AB Leg) is 20 pts in the ABC pattern. The BC retracement (overnight) was 16 pts. These type of ABCs will have larger targets and larger stops. At the open, ES showed this pattern completion. I was watching Opening VLTY and it is over 60. I usually wait for price to settle (VLTY < 50) in the first hour and wait for trade trigger. Today VLTY also helped for a better entry and smaller STOP (EL to C). I was not still convinced at the OPEN and waited until 9.50 am to start looking closely for a trade setup.

Around 9.55am, I entered LONG at 1403 with a Strict STOP at 1400 and NO-more adds, incase if I am wrong. As expected, Large ABC has Larger profit levels. So, my first Target was set 38%AB level at 1407 and next target is set at 1411 (just before 62%AB).

Around 10.30am, VLTY was slightly above 50. After sudden drop from 200-SMA, ES broke above 200-SMA to hit my first target: 1407 (+3 pts). I moved my STOP to b/e for the rest of the trade. About 10.50am, my trade was closed at 1411 (+8 pts). I still think this pattern may move much higher later in the day.

Dragon, Double Bottom and ABC Bullish Patterns with Market Context

December 21, 2012 · Posted in ABC Bullish, Double Bottom, Dragon, Fib. Zone Pivots · Comments Off on Dragon, Double Bottom and ABC Bullish Patterns with Market Context 

ABC is one of the most universal pattern. This pattern is the most simple pattern but very powerful as it is part of at least 10 other patterns like Gartley, Butterfly, Double Bottom/Tops, Dragons, H&S and Inv. H&S etc. In Double Bottom patterns, the two bottoms are never really equal and may have 5 to 8% difference in their depths. So, these Double Bottom patterns also form Dragons with distinct hump and two legs. Both these patterns have ABC
embedded in it. The confluence of these patterns gaves a great opportunity to trade from Long side using ABC as a guide.

Today ES sold off from overnight on fiscal cliff news. ES traded about 50 points down overnight but recovered 30 points at the open. This morning I was patient to develop any potential patterns to trade. Around noon, I started noticing price is entering into the extreme Support Zone (Fib. Zone Pivots) of 1415 to 1418. Fib. Zone Pivots do provide great support and look for any patterns to develop to trade. Around 12.50pm, I noticed price is forming a double
bottom pattern in the FZP and started to breakout. This pattern also has Dragon setup with a smaller ABC inside. Trading these patterns strongly supported by the FZP is an excellent opportunity. I also watched CMI and other VLTY. VLTY is safely below 50 and CMI3 was green and CMI5 was nearing GREEN setup.

ABC Bullish pattern signaled EL (Entry Level) at 1419 with a stop at 1416.5. Targets were 1421.5, 1424. Around 1pm I entered a Long trade at 1419 with a STOP at 1416.5. At 2pm, I exited my trade at 1421.5 (+2.5) and 1424 (+5 pts).

Head and Shoulders Pattern with Market Context

December 19, 2012 · Posted in ABC Bearish, Head and Shoulder, Head and Shoulders · Comments Off on Head and Shoulders Pattern with Market Context 

Head and Shoulders Pattern with Market Context

Market Context is one of the most important concept traders should master before they start trading. Most traders have some concepts of Market Context… If price is above 50 EMA or 200-SMA and price is trading above Pivot or below Pivot etc. But solid understanding of Market Context makes traders confident in trades. Every trade I study and plan, I must clearly know what Market Context I am trading… I trade Price Patterns with Market Context. Market context validates, shows where entries and stops and where to place targets. If Market turns against the trade, I would even have a plan of where my theory fails.

Today afternoon around 1pm, I started seeing a Head and Shoulders Pattern develop in @ES. I started to notice CMI on 5m gave a sell signal about the same time. ES was trading around 1440. I started watching the market price action and wanted to trade below the Neckline of H&S at 1437. Another key element I noticed was today’s Opening Range and the First Hour Low was set at 1437.

This combination of level 1437 (Neckline, First Hour Low around Floor Pivot) gives me a strong H&S trade. I initiated a SHORT trade at 1437 with a STOP of 2.5 pts (1439.5). My Targets were set by measuing Head to Neckline. The fib. ratios of this length below Neckline sets my targets: 1431.5, 1430 and 1428.

About 30 minutes into my trade, ES traded below 1434 and reversed its trend and traded above my Short price. I have 2.5 pts STOP at 1439.5. ES traded at 1438.25 but again it reversed in my Short direction. I knew this time I wanted to close at least part of it around 1434 (+3 pt). Then I kept my next target at 1431.5 and moved my STOP to 1437. (B/E).

By the end of day, my next target was hit at 1431.5 (+5.5 pts) . My previous target gained (+3 pts). I think H&S will work further down overnight and trade below my exits (1431.5).

Two ABC Bullish Pattern Trades

December 17, 2012 · Posted in ABC Bullish · Comments Off on Two ABC Bullish Pattern Trades 

Today was a great day with both ABC Bullish Patterns worked. Late in the trading around 3pm, second ABC Bullish pattern emerged. The second pattern is more stronger pattern than the first pattern. Today market Gap opened and traded higher most of the day. Second ABC was developing above Mid Fib. Band 200-SMA late day. This usually is strong case for its rally. I traded second ABC Bullish from 1418.5 to 1424.5. By close, ES traded even higher at 1428.5.
First ABC was described in the morning blog post.

An Exercise in reading Market Context and ABC Bullish Pattern Trade

December 17, 2012 · Posted in ABC Bullish, Fib. Zone Pivots, Market Structures, Point of Control · Comments Off on An Exercise in reading Market Context and ABC Bullish Pattern Trade 

S&P Eminis (@ES) developed a Globex range (overnight) of 1409.25 to 1417.25 and started drifting lower at the open. At 9.30am, I was looking at ABC bullish pattern strongly trading over Mid Fib. Band and 200-SMA. Reached its first target 1416.25 (over night). I did not have this opportunity as it developed ABC pattern and reached 1st target overnight. Strong ABCs usually gives second opportunities from with strong market internals. One of the first reading I look is Market Context and where the ABC was developed and how current Pivots (Floor, Globex and Fib. Zone Pivots) are in relation to Fib. Bands and 200-SMA. This gives a pretty good idea of Market Context and how I should play. Also needed to look at Volatility to see it is safely tradable.

At the open 9.30am, ES started drifiting downwards and entered into the tradezone (EL to Stop) 1412 to 1409.25. Also, price seems to be strongly supported by VAH (Value Area High: 1411.75). Another context reading was, there was a small ABC (3) was developing inside the larger ABC (5) giving cluses of potential breakouts. This is an excellent trade setup. My plan was to wait until it trades at or supported by VAH (411.75) and then rises over pHI
(1413) and R1(1413) cluster. Smaller ABC entry was 1413.5. I also thought if ABC does pickup momentum, it will reach next Fib. Zone Pivots Ranges (100% Resistance area: 1416.75 and second FZP Resistance Zone (1419.5 to 1421.25).

Market VLTY at the open was above 50, but nearing 50 and may drop below as price starts to settle. If price crosses above 1413.5, ABC Bullish setup will take it to 62-79%. With 2.5 to 4 pts targets and 2.5 pts stop is well within my Trade plan.

So, my entry was set at 1413.5 (above pHi/R1 Cluster). STOP was derived from this logic. Larger ABC stop is at 1409.25, but if price starts to decline below 200-SMA and this trade and ABC may be influenced by negative momentum. So, I placed my stop safely at 1411 (-2.5 pts). Targets are derived with Price confluences of ABC 62%AB at 1416.25 (+2.75) and 79%AB at 1418. (+4.5).

My ABC Bullish Long trade from 9.36am to 10.10am worked out well and I am out of trade at 1418 with 2.75 and .4.5 pts profits. At 10.30am, Price retraced back to 1414 level.

I still think price will reach FZP Target range some time today (1419.5 to 1421.25). But I will wait for another opportuntiy with some positive price-action to
trade.

Patience has its rewards…

November 26, 2012 · Posted in ABC Bullish · Comments Off on Patience has its rewards… 

This morning ES gapped lower 5 points. General wisdom is to trade from SHORT side on big Gap up or big Gap down Days. Todays’ Gap is about 40%ATR of daily range and is not a big gap down day. Hence today it may be choppy day with slight bearish bias. After market open, market drifted lower but showed first sign of reversal from 100% GAP levels. There was a large ABC formation from 11/22 and 11/23 with AB range from 1387 to 1407.

In this ABC, AB leg took 134 bars to complete (Friday’s rally) the AB range (1387 to 1407.5). Around 10am, AB retraced to about 50% range giving first clues of potential continuation of rally from Friday. ES retraced 50% of previous swing in BC Leg (60-70 bars). Comparing to AB Leg (134 bars) it is about 50%. But this itself is not quite enough for it to reverse and start building CD leg. Fib. Ratios between the AB leg showed 61.8% ratio around 4-6 points below the 10am price. I decided to wait for 61.8% so I can get into the trade. About 11.15-11.30am, ES further retraced and hit my 61% range. ABC is also balanced as BC leg took 150 bars to complete this range. This would be a great candidate for ABC if it were to trade above the EL level (1397). I patiently waited for a LONG at 1397. Relatively simple pattern to trade. My risk is 2.5 points (Below C). I placed my targets at 1399, 1402 (38%) to 1407 (62%).

Patience paid off… About 12.22p, my first target 1399 (+2 pts) was triggered. After side-ways and choppy trading, at 2.50pm, my 1402 target was hit giving me +5 points.

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