Wednesday, May 13, 2009

A Profitable day?

Well its taken me awhile to get everything sorted trading this week. I decided to completely get rid of taking "advancing" setups or setups that are making a H, HH and then break a trendline (opposite for shorts) because they just don't hit consistently. My best and most consistent setups have always been wedge patterns or patterns that go H, HH, LH, break of a trendline. Check out the setups from today to see what i'm talking about. My loss in the ES yesterday was one of the advancing setups if you want to see what those look like.

So i'm actually only trading one setup these days (hard to believe ain't it?) but I truly feel like its my best shot. In fact, this setup is almost like what I was originally trading back in January. Its a different trigger, management, and exits but the chart patterns are the same. I just wanted to take a minute and explain the pseudo genius behind these moves.

Take this trade I took a couple minutes ago in the ES. The market is making higher highs and higher lows? And what are all the traders doing? Buying it up and placing their stops outside of the higher lows. What happens when the trend halts and reverses? I'm there with a trendline watching the break. What is fundamentally happening is all the traders buying it long are getting their stops hit as the market starts to go against them. And obviously as we roll over through the lows of the swing where all their stops are sitting their orders get smacked and flood into the market feeding the move to the downside (and I get the profit from their failure!). Its simple, but elegant at the same time.

Trade Results:

ES: +87.50
NQ: +50.00


E-Mini Player said...

Well done!

Michael said...

Sounds like a logical plan Matt. There's nothing wrong with trading only one setup, a person can do very well mastering and properly executing one setup.

MBAGearhead said...

Nice job. Agreed Michael, 1 setup is all you need. With the leverage in futures, the sky's the limit if that 1 setup has an edge.

Good trading!

daytrader233 said...

Nice trades Matt!