ES - Cup W Handle & Fibonacci

ES Hourly

What I see:

- ES coming down from ceiling of broadening channel, possibly going for 740.25 support (also Fib retracement 23.6), or to 729 (also Fib retracement 50).

- A bull would want a 50% retracement - coz a drop to that point is the pattern we've come to know as a partial decline, a fairly reliable indication that price will break above the channel.

ES Hourly with Fib Retracement & Extension

I see a very bullish, rosy picture:

- A cup with handle formation in the making (the cup is that whole grayish area there)

- If we have a partial decline ie. if ES pulls back to fib retracement 50% (seed highlighted in green on above chart) at 729, and ES breaks above 750, we should have our complete cup

- If we have a cup (comes with the handle of course - IF we get our partial decline), there's a possibility that ES will at least hit Fib Ext 423.6 (seed is highlighted in blue on the chart) or resistance at around 800 (won't happen today though).

- For the first time in a long time, the faster EMAs have gone above the 200EMA

- Where ES went up by way of the 1st leg of a measured move was exactly the point of a bullish crossover of the 20 and 50 EMAs

I'm not concerned about this being just a dead cat bounce, or a sucker's or bear market rally. It could be. But that's D's problem (he invests. OK, so I'm a little concerned ). All I'm interested in getting out of my charts are the best areas to place my entries and exits for intraday plays.

I'm not going to plan anything until 5am EST.

Will trade mainly the active hours from now on.

I've had enough of the non-active hours - drained me to the point that by the time market opens, my brain's half dead. Prices crawl around in a haphazard fashion, and almost always never break out (resulting in my fear of buying breakouts after having traded those hours for a while). Well, you can't expect breakouts without volume....

Tape is easy to read though - so if chart's not too ugly, I might still take a scalp here and there. But I'll rather use that 12 hours to read - books, blogs, anything.

ES Trade 3/12

Sat on my hands for more than 15 hours (what can I say, I have problem trading bullish patterns), and finally decided to go for a break out play. Was fooled into covering too early - by a dark cloud cover! I should have known better. Anyway, I gave it a shot.

No more breakout plays for me.

Told D last night that I was going to go back to trade the active trading hours. Looks like I have to tell him again. Coz he's waiting up for me, and I have to turn in now....

ES 3/12 - 3 Rising Valleys

ES 3min

A pattern I've seen often enough...Didn't take the trade coz it's not my practice to buy an upward breakout. Maybe one day I will. I most definitely should!

A rather reliable reversal pattern to play. Look for it around day's low and near major support (712 in this case). High probability trade as the expectation is for price to break on the downside of the triangle (ie. betting on bears running).

First exit target's the start of the pattern (715.75). If it develops into a cup with handle, 2nd target could easily be at day's high (fib ext 261.8 -"seed" is that drop before the 3rd valley). Enter 0.25 point above the high of the trigger candle for the MSL at 3rd valley. That's the way I would play it. My exit target would have been at 714 (which is actually the confirmation for the pattern) , or maybe even at 713.5 (I don't buy breakouts). It would have been a nice scalp - too bad that entry is less than 3 points from my exit target.

Definitely going into my depository.

ES 3/12

ES Hourly

Nothing much to say except that I can't see ES going up without revisiting support at 665 - 680.

As far as trading goes, will stick to scalping if there's no quality setup to trade. Using stop loss.

Am now spending a fair bit of time looking for the setups that I've been trading - those that had worked for me, and those that had gone against me in lightning speed (am particularly interested in the latter). All will go into my chart setup warehouse...

ES Trade 3/11 - Scalping Setup

Above's my scalp. Went in at higher MSL, trigger candle is an inside bar, entered 0.25 point above trigger, stop loss at 0.25 below.

This is one of the patterns that I'll BUY. I don't care if price will break out of range, coz I always get out before price hits resistance. It's a scalp after all.

ES Trades 3/11 & A Pretty Chart Pattern

Ugly day and ugly charts for most part of the day. Ugly hourly, ugly 10min, and ugly 3min - well, except for the setup below.

Took a scalp. Not a perfect setup, but one that I'm familiar with - price going for resistance. Used a stop. Stress-free scalp. But I'm sick of looking at trendless charts with price going everywhere and nowhere. Calling it a day.

Profit: USD 100

Double Bottom & Fib Extention 161.8

Above is the only good setup I've seen on the 3min for today. It appears often enough - you wait for the low of the day, and keep a lookout for "W" shape. Best if the 2nd bottom is a double-bottom MSL. Take the left of the "W" as the seed, and use fib ext to get the exit points. 161.8 is usually attainable. 261.8 is NOT uncommon, but you'll usually have to sit through a retracement.

I missed the entry when I was checking out the higher timeframe for confirmation. Part of me just wasn't sure about the trade. It would have helped if either side of the pattern was a hammer or at least a double bottom MSL. Highlighted in green on the chart is the trigger candle. As usual, enter 0.25 point above its high, and place a stop 0.25 point below its low.

This is one of the very few patterns that I'll trade on the long side. So far I've only scalped it and hardly held it til its potential. It's a reliable enough pattern . Hence, should it fail, short it!

YIKES!!!

Exactly how many are still holding their shorts from yesterday??

Anyway, ES has broken out of that stupid wedge on the hourly (FINALLY), pulled back, and I really don't know where it's heading now.

740 perhaps?

I wanna throw up.

No, I'm not in any short position (thank goodness). But I really want to sell! The time that I wanted to buy had long passed!

ES 3/11

ES Hourly

I just keep seeing ES going back down to 681 support. That is, if it doesn't break above 723.75 resistance. If it does, I'll buy, depending on what develops on my charts.

Damn! I just missed this!
My fib ext drawn for nothing! Blogging is bad for the wallet!!

About Fighting The Trend

Trader Tao wrote:

I am a new trader, I agree that today is that kinda trendy day. buy and hold till the end. Don't quite understand why you fight with the trend and short it?

I read you blog recently, you are a great scalper to me, pls show me some tricks. I happen to use ToS platform too, if you bring up a chart of $UVOL-$DVOL, you will see the retracement never made a real reveral on net volume.

I haven't gone long, Trader Tao, coz I had missed the window that offers good setups for a long entry. I started looking at my charts only 3 hours before the US session began. I could have gone in after ES broke out of 692 of course, but I was wary of overhead resistance at 695, and a few more above it all the way to 723. When the pole of a bull flag was formed by 10am EST on the 3min, and 2 strong bullish candles were also seen on the 10min, I could have gone in long, but by then, I was already looking out for a short setup. PLUS I was even more wary of those resistances.

Like I said, I'm primarily bearish. I did acknowledge that it was going to be difficult to go in short after realizing that ES has been trending up quite nicely for half a day prior to market open. But that didn't change the fact that ES is still not on an uptrend. I don't want to simply react to what was happening, especially when I didn't know where it was going. I could pick a level that I think it's going to be stopped in its track, and put in a short entry there, and if it doesn't stop, so be it.

I wouldn't chase a move like yesterday without the proper setup. I had used stops in my shorts precisely coz I was prepared for ES to continue to go up to test resistance. In a nutshell, I was looking out for short setups only and passing up other opportunities. One has to stick with one's plans and rules. So I stuck to mine, and missed the run up. I'm fine with that. What happens next is to reassess the market and apply the same rules and plan to trade it.

Yes, I am much better at scalping than any other mode of trading. But it's been very tiring following the tape, and I can't do it continuously. When I get really drained, shit happens. I am looking for a calmer way to trade - cool is always good in trading. Adrenaline causes blow ups. I want to keep a cool head and a healthy heart to FEEL what the market's doing. Following the tape and scalping doesn't allow me to see the bigger picture. Above all, it doesn't allow me to put in a stop (no time!!). I'll still scalp from time to time, especially during the quieter hours. But my focus now is on the learning process, and not so much on making money. I will still take scalp profits whenever I see fit of course. But I'll avoid scalping as a method.

I don't have any tricks for scalping. I read charts and I read the tape, just like most scalpers do. How I go about doing it I've done a little explaining on my recent entries.

I don't look at up and down volume. If there's a follow through on a move, the price patterns will tell. I don't need to be able to predict accurately what's going to happen next to trade. In anycase, I can make all the right prediction and NOT make money, and I can make the wrong predictions and still make money. I was clearly going against trend yesterday, but like I mentioned yesterday, I could have taken the 3 point scalp profits a few times had I chosen to take them. Or I could have been right, and went long after I get a confirmation, and sat through a 5 - 7 point retracement each time. I mean, the flag pole was formed in the first 30min of the trading session and that was it. The rest of the run was unimpressive at best.

Things tend to look so obvious on hindsight. But I'm not one who looks back and regret not having taken a trade, or ran too early. The only thing I absolutely dislike, is not having traded my plan and respected my rules. Coz that tells me I'm still a lousy trader, and I still have a very long way to go.

Sorry for the long response. Just need to set the record straight that I'm never out to fight trends. If I were indeed fighting anything, it was D. He came home telling me repeatedly that Citi has made money, and I kept saying that I heard him, and that I actually KNEW about Citi's news, and I kept selling LOL!

ES Trades 3/10 - Best Day In Months!

One of the rare few times that I actually allowed my trades to go auto-pilot and stop-loss to kick in, when I could have taken my usual 1.5 points profit (total of 3 points for 2 trades).

I was going for 692 (entries and stop losses shown on chart above). 702.5 was a minor support, but on such a bullish day, a support IS a support. My finger was on the transmit at market button both times when ES was at 702.5 support - I had plenty of opportunities to run with my USD 150, and call it a day. But I just gotta let my stop loss do its work, so I can trust it in future. Can't remember the last time I did that.

I didn't chase ES up. Chasing always causes huge regrets and a lot of heartache. That said, looking at what's developing, it seems ES might just hit 723 today. Citi's good news working magic I suppose.

Well, I'll call today a good day, despite the USD 225 loss. It was stressless trading all the way. I had all the time in the world to figure out what my charts were doing, and all the time in the world to take scalp profits that were actually quite good compared to the usual ticks.

I'm definitely taking those profits in future, especially when I'm going counter-trend.

And I definitely should have waited for a star that sticks out like a sore thumb to appear before considering any short entries on a bullish trending day. Harami/inside bar is not good enough; neither a double top. Maybe I should even consider BUYING in future.

Loss: USD 225

ES 3/10

ES Hourly

Resistance at 694.75. Support at 676.25, then 665.75. Trendline providing support too...looks like we could be trading sideways today and tmrw barring any surprises in the market

ES Daily

I'm a bear. I keep imagining that the bullish candle for today is going to end up bearish....

ES 3min

Pivot below, open's below, and price is at day's high....It's nearly 6am EST now...Textbook.

Correction: Just noticed that ES has been on a pretty healthy uptrend for the past 15 hours ...I'll be watching support at 689.5 and 680.75

Game Plan & Rules

- Buy (day) low, sell (day) high

- Trade familiar setups

- Honor stop losses!!

Chart Setups (from ES 3/9)

Double Bottom (Wash and Rinse)
(ES 3min)

Reasons to enter long:
- 670.75 was day's low then
- End of wave 5
- Double-bottom Market Structure Low (MSL), which indicates strongly a change in trend
- Resistance is 10 points away (shooting star on the left)

Trigger Candle: 3rd candle of MSL
Entry: 0.25point above high of trigger
Stop: 0.25 point below low of MSL
Exit: Fib ext 161.8 (before entry, check for nearby resistance. If it's too near, don't bother entering) or when Stoch does a bearish crossover at overbought

3 Rising Valleys
(Same chart as above)

Reasons to enter long:

- 2nd higher low is a double-bottom MSL
- bears covering should create quite a good run (I know, coz I was holding a short, and covered once I noticed the higher low and the double bottom MSL! %&*(#$!!)
- Pivot is above, open is above, high of day is above, and it's the time of the day that ES should be trading towards those...

Trigger Candle: 3rd candle of MSL
Entry: 0.25point above high of trigger
"Safer" Entry (totally subjective - to me, it's higher risk as my stop would still be at the MSL) : 0.25 point above the previous peak
Stop: 0.25 point below low of MSL
Exit: Fib ext 261.8 (Nearest resistance is shooting star on the extreme left, which is about 3 points away from fib 261.8, so, I would use 261.8) or when Stoch does a bearish crossover at overbought

In the 2 examples above, stochastics and RSI have both visited oversold and turned up from there (best to avoid those that have not first gone down to oversold). Decision to take trades should be based on price actions (see "reasons to enter" above) and not on indicators though.

Both are setups that I'm adding to my "trade setups" warehouse. I didn't trade them yesterday. But I know they almost always work - I've sat through them while holding short positions often enough to know. Everytime I saw these patterns, I instinctively knew I was going to have to ride a potential loss of 8 - 12 points. Then I'd curse myself for not trusting a pattern I've seen over and over, and for continuing to hold my shorts. For most of them, I've gotten out with a small gain that is totally not worth the pain and COST of waiting.

Letter To Harry

Dear Harry,

Thanks for your email. It's very sweet. :-)

I'm sorry I've caused you to feel down. Apparently I'm not the only that feels others' pain.

My mum called and said she's lost her job, having problem with her eyes, and is scheduled for a brain scan. She's lonely and depressed, and asked if I am feeling depressed too. I told her to stop asking me questions like these, although I know she's just concerned. We know mine is a genetic condition. My dad killed himself. On my mum's side, 2 of her 3 siblings have taken their own lives. So, it runs in the family, and I'm worried for her too. She's caused a lot of pain to the family in the past, so my siblings and I have not been close to her. But still, she's my mother. Her situation makes me feel immensely sad. Since I don't know how to talk nice to her, I text her after we've hung up, and told her to think happy thoughts. Seabloke said she would call her too, and that makes me happy.

I then began to think why I don't do what I preach: to think happy thoughts. I get sad so readily it baffles me. I see a bird dying in the middle of the road, or a cat limping, or a handicapped sitting on a busy street by his electric piano eating from a Styrofoam lunch box, and I can feel sad for weeks. The bird - I didn't get the image out of my mind for years. A few weeks ago, I took a dragonfly that's hurt home. D said it looked like its time was near. I couldn't get myself to just leave it outside, so I put it in a box high up on the shelf so my cats couldn't reach it, gave it water and breadcrumbs, and hoped it would get back some energy and maybe pull through. It died the very night. D said I should have left it outside so I didn't have to watch it die. But to me, at least it didn't have to be exposed to the elements that night. It saddens me to see helplessness and hopelessness. Things seemingly trivial to others make me feel terribly sad, so sad that it will get me questioning the purpose that we're here - all we living things. Are we here just to make earth a happening place, and we have to die so the next generation can give it a brand new look?

About me being tough - yes I am. Quite a bitch in fact.

Totally explains why I'm confused....

Seriously, I think I know I have to be tough coz I understand that we are fundamentally lonely beings. We are on our own, whether we like it or not. We came alone, and will leave alone. That's about the only 2 facts that can never ever be refuted. I've learned from young to not depend, and along the way, I've also learned to not expect.

Thank you for thinking that I'm a sweet girl. I usually don't take that as a compliment. But for you, I'll make an exception. :-)

I'll make an effort to banish negative thoughts.But if sometimes I can't help but have to dump my frustrations on my blog, I don't want you to be affected.

Thanks for having been a great friend.

Knot

I am on the brink of a nervous breakdown.

My relationship is complicated, and my life feels pretty screwed.

Maybe it's all my fault. Maybe it's all his. It doesn't matter anymore.

Staying away from the market. Trading is about my only drive in life now, and I don't want to make a mess out of it too.

My Trading Setups (I)

Breakout Of Wave 4 Triangle

One of my favorite plays - when wave 4 (or B) is a triangle. Here, I'm trading against buyers who had jumped on the bandwagon of running bears earlier and are now looking to bail.

I'd wait for a second close after price breaks out of triangle. I like to see a doji or a spinning top after that, which would be my trigger candle (ie. I'll start looking out to buy or sell after price has gone 1 tick above/below the high/low of that candle - price can do its usual pull back and all, my focus will only be on that price).

In the above example, the low of the trigger candle (highlighted in yellow oval) is 708. I'll watch what the tape does once market goes offer at 707.75 and if offers continue to increase despite being hit in sizable quantities, and if bids start to dwindle as comparable sizes are being hit, I'll place a limit order at 707.75 first. Once bids start to disappear, I'd cancel my limit order and hit a tick below market.

Knowing that support is at 705.5, I'll not expect price to fall more than 2 points. I'm usually out by 1.5 to 1.75 points in this case. And this is considered a good run if it happens in less than 3 minutes.

Wave B (or 4) Range Play

Here I'm trading a Wave B 3-3-3-3-3 wedge. The premise is my assumption that ES is trading towards the high of the day at 724.25. I usually trade a 3rd touch of the floor of the wedge (subwave D here).

Trigger is high of highlighted candle (the 3rd candle of a market structure low). I'll start paying attention to how tape behaves as price (bid) moves 1 tick above the high of that candle (ie. at 717.5). Again, I don't set a specific exit target. With major resistance at 724, and channel resistance at at least 2 points away, I have a trade. I get out once bids gets hit big time and offers are not being snapped up.

Breakout of 9-Wave B (or 4) Wedge

This is a 9-wave broadening wedge that I'll play for shorts. Doesn't matter if this is a wave 4 or wave B, it is simply a corrective wave. What that means is that I'm assuming there's going to be a 2nd leg to a measured move down (1st leg highlighted in blue rectangle). What I like about this setup is that subwave I is exactly where it should be ie. at key resistance (high of the day). When price is stopped there, it validates the pattern that I've identified.

I would have taken a trade at the break of the red dotted trendline within the wedge had it not been for the long pull back candle and the subsequent long bearish candle. What I would do in this case, instead, is that I would wait for price to break out of the wedge and wait for a pull back so I get a market structure high (MSH) to trade.

Trigger candle is again the 3rd candle of the MSH. As usual, I would watch how price behaves at 716.5. With support at 711.75, I usually will take the trade even if tape is not moving as fast as I like it to. But because I expect ES to trade in a downward CHANNEL, I'd be prepared to exit after 1 to 1.25 points.

Notice how you can also trade wave H on the long side. It's the 3rd touch of the floor of the broadening wedge. My kind of long play. I don't trade upward breakouts, as always. At least for now.

About Blogging Motives & Depression

I really like Complacent Panda's latest posting on "Motives". Perhaps coz it brought up a number of points that I can really subscribe to.

From time to time, I ask myself why I'm still blogging.

The answer is always this: my blog is a place where I can dump my thoughts - both toxic and benign. It's a place I feel safe enough to speak my mind, be myself, and from where I get a little interaction with fellow human beings. It's primarily a trading blog still of course - where I keep track of my progress and stockpile my trading ideas and plans.

The reason I want to write as little as possible on non-trading related matters is so that those who are here to take a peek at the life of someone who trades fulltime will not find the visit a waste of their time. Somehow, along the way, I started to actually want this blog to benefit others too. I'm still insisting that my writing doesn't educate. But for those who are curious about the struggles of a woman who was raised to embrace non-capitalist values, who knew next to nothing about investing and trading before, and who's now aspiring to someday be able to trade for a living, I hope my blog will at least give them a rough idea...

A warning to those who chance upon this personal space of mine - I'm not a particularly cheery person, and although I totally advocate positive thinking, I'm still very far from being able to do that on a consistent basis. I suffer from chronic depression since I turned 17, and am on long-term medication to keep my blood pressure down and my brain from firing too many signals (to do crazy things). Unprovoked, I'm nice, generally. I was raised the very traditionally Chinese way by an English educated father (who didn't know how to write his name in Chinese) - yes that means I got a fair amount of spankings as a kid, always greet my elders and say my pleases and thank yous, and smile A LOT - and self-control is my 3rd motto. What that means is that you won't see a lot of expletives even when I'm really, really mad. So, just because I'm not swearing and cursing doesn't necessarily mean that I'm not frustrated or pissed. I am an emotional person, and bad trades affect me. When I'm not ecstatically happy, it usually means I'm either pissed or downright depressed.

If you trade, and are somewhat of a moody person, my trading journey and results might offer an insight as to whether there's really any truth in the popular saying that only the emotionally inert should trade. To the best of my knowledge, most traders are consistently depressed.

And I'm a woman. So expect me to have more mood swings than the general trading population.

ES & TF Trades 3/6

Total for today: USD 157

Just when you think that ES is getting choppier by the day, TF is both choppy and crazy. I really have nothing much to say about my trades. It's been difficult to find entries for ES coz the tape's simply not giving much signals. Looking for setups from charts means hours of sitting and watching. TF is totally impossible to trade based on tape. Charts are not looking pretty either. In fact, ES charts are really starting to look prettier.

TF has become a freaky stranger.

SIGH.

I'm calling it a day. My heart can use some rest. Don't wanna die in my sleep (Check out Sage's Matter of The Heart).

ES 3/6

ES Daily

ES Hourly

Once we close below 681.5, I would take it that our odds of reaching 645 (fib ext 132.8) has become higher.

ES 10min

We are now trading within the range of the last bullish candle on the 10min. Within the day, I'm prepared for ES to test 688.75 - 703.5, although my view is primarily bearish.

Game Plan

Using mainly the 3min and 1min for scalping. Will go primarily for shorts at key resistance. Longs will be considered as price makes newer lows.

RULES

- Honor all stops
- No holding of any loss for more than the max pain set for the day - exit position once reason for getting in is no longer there.
- Be objective at all times and stay with what chart is doing, NOT what it has done and what I think it will do
- Be attentive to what candles are saying, especially on 10mins.
- DOJIs! DOJIs! DOJIs!

ES Trades 3/5 - Love Scalping

Took 8 scalps to save half of what was lost in 2 trades that I used a stop loss and a target. Definitely not going to continue to experiment with holding a trade. Sticking to tape and tick indicator from now on until market's less crazy.

It's not a bad day. I decided to give holding a trade a shot, and was prepared to take the loss.

Will We Have Rainbows, Ever?

Lord Tedders' back on his trading blog! His comeback post: Time For Changes

Maybe I did mention to him that one is supposed to be able to write what he/she wants to on his/her own diary. I don't remember anymore, coz for a long time now, I've not been able to vent on mine.

My general motto towards life has always been to "MOVE ON". Shit happens to everyone, no one is spared - some get it more frequently than they think they can bear; the lucky ones get it maybe just once a year (like during Xmas and Chinese New Year). So I don't ask, "WHY ME?" - especially when I"m usually the one that cause bad things to happen in my life and to those around me.

So, unless I think that venting on my blog after crying alone helps get the toxins out of my system, I do not document unhappy moments on this personal journal of mine.

When I read this a few years down the road, I don't want to see an angry, out-of-control monster.

And I don't want a certain someone to have to read about all the things that make me perpetually mad, and sad.

But the fact remains that I am an angry person in a constant state of depression. I don't think it has anything to do with my trading full time. Maybe I'm born depressed, and I happened to have chosen just the job for me.

On Mar 04 2008, something really, really bad came to light. A chain of events took place after that that had me taking a good, hard look at myself. It was then that I realized I never grew beyond 16. I never grew out of being Daddy's girl, even after Dad has passed on for 15 years.

All I can say now is that I'm broken. Maybe I'll never be repaired. Maybe I'll never be able to contribute to society, or make a difference in anyone's life.

But life goes on.

It has to.