Nov 30 Premarket levels

LL and HH in Fri/Sat overnight session.

Digestion of Dubia credit problems on tap.

AOP=4624

Small setback

It has been an eventful holiday week and I am looking forward to getting back to a more normal routine. There are two more days remaining in my SPI observation mode only routine. The week had me trying to squeeze the market in while having a houseful of guests. I did have a setback of sorts when on Friday I had a rare oportunity to trade the emini during the day. I found myself in my old routine of overtrading (22 RT's for -$458) and getting caught up in the excitement, so much so that I still have 1 long position open because I missed the early holiday close. That position and several forex positions opened a few weeks ago will need to be closed so I have a focused mind on the NEXT 21 day training routine.

Nov 25 Premarket levels

LH and LL in overnight session.

Look out below!

You could sense something big was going to happen when all that volume showed up around 10:40 without price responding. Price ended up moving from resistance at the overnight high 4782 to the prev day low at 4693.

Nov 24 Premarket levels

HH and HL in overnight session
AOP=4765

Monday Blues

What looks like a good short at 4723 above turns out to be a loser below.

Nov 23 Premarket levels

LL and LH in Fri/Sat overnight session

The 21 day plan

I did not trade the last 3 days due to the day job requiring me to travel. I am looking forward to resuming my 21 day plan...

Before starting this blog I found myself in an all to familiar position of many aspiring traders...a position of overtrading and chasing markets! This had been going on for awhile and I reasoned it was something that just needed to be worked through. Then I met Anthony over at http://adelaidespitraders.blogspot.com/ and we started conversing during market hours. Anthony showed me how a patient trader trades while I continued down my errant ways but now exposed to a fellow trader. This hit me hard after a particularly bad day of trading and I decided right then and there that serious action was needed if I was ever going to be successful.

I had read in several places that 21 days can make or break a habit so I decided to take the next 21 trading days and use them for observation only....NO TRADING. I needed to learn how to be able to watch the market action and not feel the need to trade. I have 16 days under my belt and I find myself rather enjoying the experience. Without the anxiety of placing trades I can see patterns in the market appear on a regular basis. I am also developing discipline by following this rather simple plan. My next step, after the 21 observation days are complete, will be to add ONE trade (or none) to each day for another 21 days. That will be the only goal, 1 or less trade a day, another simple plan to build discipline. Stay tuned for more....

TICK 30 and 1 Min Charts

I have changed my screen layout to show a TICK 30 chart next to a 1 Min chart. I have volume under the T30 chart and the tick indicator under the 1 min chart. I like both charts because they can tell different stories. The circles in the above chart show the same moment in time.

Another sample of market action around news. This time with the T30 and 1 Min charts side by side.

Nov 17 Premarket levels

HH and low = prevday high in overnight session

AOP=4815

Divergence X3

Anthony over at http://adelaidespitraders.blogspot.com/ monitors the action in the stock sectors as well as two big cap stocks (BHP and CBA) while he trades the SPI. He uses them to help confirm his trading ideas. Following his lead, I have started watching BHP (minerals) and CBA (banking stock). This morning, after the move down, a double bottom formed on the SPI while BHP, CBA and the tick index formed bullish divergences. See chart below for result.

Exit points are another matter. Here I circled the tick spike as a possibility. In hindsight it turned out to be the correct call as the market moved lower for the rest of the day (not shown).

Tick chart on open

I look for action as price approaches levels. In this case the aop (anticipated opening price). Price sliced through fairly easily, came back tested it and then moved down again with some volume.

Nov 13 Premarket levels

LL and LH in overnight session.

AOP=4736

People watching

I did not get any strong feelings for an entry this morning.
I would like the lesson to be that it is OK not to trade. I am starting to appreciate observing the market without taking action. The chart is a reflection of many people taking action on many different time frames. Observing a chart without taking action is like sitting at a cafe on a busy street corner, enjoying a latte, without an agenda and watching people go about there business...people watching.

The chart show news events at 11 and 11:30 AM. The 11:30 inflation report instilled a strong immediate reaction, a pause and a continuation. I could see how traders wanted to join the immediate reaction then the market retraced and paused as uncertain traders bailed on their initial reaction. Moments like this show the difference between the pros and the amateurs.

Nov 12 Premarket levels

HH and HL in overnight sesion. Price closed midrange.

AOP=4788 (overnight close)

Priority #1...your well being!

I attended a seminar by Dr. Pati which kept me away from the market today. Health and well being must be a priority in your life. Without it everything else in your life will struggle including your trading. I have a deep seated apprehension towards traditional medecine and therefore only utilize them in an emergency. I try to take charge of my own well being by eating and doing the "right things" but I sometimes wonder if I may be making a mistake by not including a doctor in my wellness plan. Well my wife found Dr. Pati, who is a traditionaly trained MD. Dr. Pati has embraced the idea that proper nutrition and well being can prevent/solve most medical problems and has geared her practice to treat her clients in this way. After meeting her yesterday I feel good about including her in my wellness plan going forward.

Repeat???

Price action at the open was very similar to yesterday where it opened near the highs and moved strongly up. It seemed very unlikely to me that we would have two runaway days in a row so I was watchful for signs of a turn early.

The DT at 82/83 was reienforced by the 4 tick gap clearly seen on the 30T chart and the volume spike.

News event did not produce anticipated result.

Nov 10 Premarket levels

HH and HL in over night session

AOP=4756

Strong trend

AOP=4515

The market opened near the overnight high and moved up strongly and consistently right from the get go. This type of market is what usually gives me problems as I tend to look for turns. As noted in the chart, I was looking at the divergence between tick and price, looking for somewhere to enter on the downside. I did feel a turn coming when price stalled in th 4655 area but that move did not last long (nor did a confirmation bar show up). I need to remenber that days like this show up reguraly and that not taking a trade or taking some small losses is OK.

The news event did not respond as anticipated as well.

I also need to pay special attention to Mondays as my anticipation levels are up from the weekend off.

Nov 9 Premarket levels

HH and LL in the overnight session with the overnight close 1 pt higher than the prev day high

News example

Another news example on both the 30 tick (above) and the 1 min (below) chart showing how a non reactive news event follows (at least short term) the first bar or two after anouncement.

Early trade opportunity

Early test of the over night high gave us an opportunity with a "pump fake". A second test of the high a few minutes later gave us another chance with a confirming engulfing bar. Tick and volume offered little help but I think we had enough to take the risk.

Now, where to get out? A small volume spike at the AOP (4567) would keep our finger close to the exit button. If we could hold through that, the volume and tick spikes near PrevDay high (4557) would be reason enough to exit.

Nov 6 Premarket levels

HH and LL in the over night session.

AOP=4567

Nov 5 morning session

Nov 5 Premarket Levels

HH and HL in Over Night session

Engulfing Bars

Davin Clarke talked about engulfing bars and their importance to your trading.

http://www.trade4edge.com/post/Engulfing-bars-and-there-importance.aspx

I saw a couple this morning and I also tracked my theory about news events.

http://miles382.blogspot.com/2009/11/nov-2.html

Nov 4 Premarket levels

LL and LH in overnight session.

No comfirmation...stay out!

Even though tick divergence makes jumping in at possible reversal points (prev day close at 4543 and piv pt at 4538) enticing, waiting for comfirmation is essential. In this case, no comfirmation was provided and two losing trades were averted.

Get out???

Tick spike indicating a possible exit point.

Possible entry

An ideal entry for me would be tick divergence with a volume spike near a support or resistance level. An expansion bar in the opposite direction would offer comfirmation of a valid entry idea. I did not have my level on this screen shot but everything else looked good.

Nov 3 Premarket levels

HH and LL on the overnight session

Rate news coming out at 1:30 PM local time

News theory

I have noticed lately that if a news release does not result in an imediate reaction, price will tend to steadly drift in the direction of the first couple of 1 min bars after the anouncement.











TICK spike high with divergence at the begining of the lunch time frame would have been a good place to exit.

Nov 2 Premarket levels

I am a patient trader...

My name is Miles Treschan and I am a patient trader.

I enjoy observing the markets and watching the charts, waiting for a clear market pattern to make an appearance. I am a patient trader.

I am confident that the market will present clear patterns for me to trade time and time again. I am a patient trader.

I enjoy the feeling of watching a conformation move present itself once a clear trading pattern has appeared. I am a patient trader.

Nothing feels better in trading than taking a position once a comfirmation move has verified a clear pattern regardless of the outcome. I am a patient trader.

I am grateful for knowing that every trade I take has the potential for a positive result and following my rules is the only requirement. I enjoy the feeling of following my rules. I am a patient trader.

I am grateful that the markets offer me a limitless amount of oportunites to learn about myself and the art of trading. My goal of constant improvement has no bounds. I am a patient trader.

I look forward to controlling my emotions as the market moves in whatever fashion it chooses at any particular time. Every moment I spend in the markets offers me an opportunity for a lesson in success. I am a patient trader.