NQU8 09-08-08 (click chart to enlarge)
ESU8 09-07-08 (click chart to enlarge)
I generally trade from 6:30 a.m. until about noon, and today I am stopping at 11:00 a.m. I had emergency hernia surgery three days ago and feel like I am losing my mental edge on the market. I usually trade the ES contract pre-open, and then switch to the NQ contract once the markets are open and settle down some. The NAR released data this morning that suggested that some relief might be in sight for the housing problems that have been a component in the markets recent volatility.
As a trader I am not particularly concerned about data in the report, only what kind of impact the news will have on the markets or, more importantly, how the other traders will react to the news in the report. It is not unusual for the market to receive news and react instantly then take a moment to digest the information and turn the other way. This phenomena is especially true on the reports released before the opening, usually at 7:30 a.m. Of course, it’s important to keep abreast of when these reports and announcements will be released and tread very lightly as they become public. Since it is not unusual for the markets to gap up or down as the information becomes available, stops are of little value. I prefer to not to be in the market when the news is about to be released…..but I will have OCO orders bracketing a position to take advantage of the exaggerated movement in the market, if there are any.
I run my stops in the 12 tick range and set multiple profit targets so I can take advantage of any exaggerated movement that may occur unexpectedly. Like most traders, I want my trades to run, if possible….of course, I am usually looking for the fractal-type configurations to formulate my exit strategies. I also calculate pivot points, but use a logarithmic methodology to avoid the straight line mentality you will hear me rail about. I will calculate the Fibonacci retracement levels in a run, but use them with guarded reliance, as they are irrelevant on many days. On the other hand, especially days that are low volume and traded very technically, the market may follow the Fibonacci levels to the tee. Of course, I am always drawing support and resistance levels as they become obvious…..add some Bollinger bands, CCI and mathematically altered MACD oscillators and I am set. I do not use trend lines, or any other linear type calculation.
Today was a relatively easy day to trade as the market moved for extended periods of time in one direction, which is a traders dream. I captured 11 points @ 10 contracts.
