Monday, December 7, 2009

Monday 12/07/2009 - S&P 500 Market Review

E-Mini S&P 500
The 1099-1100 support zone highlighted last night worked out great today! As I've mentioned in prior posts, I use 6-8 tick stops, and move the stop-loss to break-even as soon as the position goes a few ticks in my favor. Initiating trades at Key Levels is the only way the tight stop-loss can work for me. Entering a trade in the middle of the range requires a wider stop since the near-term support/resistance level is further away from the entry, but if you initiate trades at the Edges (Key Levels), you can set a tight stop and be confident that the area may hold IF your trade hypothesis is correct. In the event that your trade hypothesis is not correct, you want to be stopped out quickly anyway! Your stop is the amount you're willing to risk in order to find out if your hypothesis is correct. But the stop can't just be an arbitrary amount like 4 ticks or 6 ticks; it needs to be logical as well. You only want to be stopped out if your trade idea is wrong. It's very similar to the blind in Poker. Gotta pay to play :)

Check out today's annotated 5-minute chart to see the areas that offered good risk/reward setups. Keep it simple!

ES 5-Minute Day Session Chart for 12/07/09


  1. E mini, I've been enjoying your posts of late. Keep up the good work. Also, those IB lines on your chart, I have been looking for an EasyLanguage code for TS that will draw them automatically but haven't had any luck finding you draw yours manually everyday?


  2. Hi Charles, thanks, glad you're liking the posts. Re: the IB; no sir I do not draw them manually. I use the TPP Balance indicator from -- It auto draws the IB, Prev Close, Globex High/Low, Mid-Point, Prev Week's Close, Prev Week's Mid-Point, VT Hist, etc. I would highly recommend the TPP Balance indicator!

  3. Good post, great chart! Thank you for sharing this info! Quick question - how many trades do you usually make per day? Thanks.


  4. kkaech, these days (part-time), only 2-4 trades. When I trade the entire day, the number is much higher since I also scalp in certain areas.


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