2/14/11 Seller Failure

2/9/12 Market Analysis

Fundamentals
Futures Gain on Greek Deal Report, Jobs News

Economic events today
None

Technicals
(Analysis provided on chart)

The chart above identifies and analyzes current price in relation to:
- Price structure, previous and current days’ “levels”, trade/no trade zones, and magnets

2/7/12 How to recognize reversal points and the way to enter them: Where to place your targets

Here's a quick example of how I recognize reversals and the way that I enter on such recognition. I also show WHERE I place my targets and why. This target management has helped me from getting stopped out at break even and assisted in setting realistic / thought out targets for my positions. I place them at levels, not random points.

2/2/12 Market Analysis

Fundamentals
Stocks higher after jobless claims

Economic events today
10:00 am- FED Chairman Bernanke testifies
Technicals
(Analysis provided on chart)

The chart above identifies and analyzes current price in relation to:
- Price structure, previous and current days’ “levels”, trade/no trade zones, and magnets

2/1/12 Market Analysis

Fundamentals
Wall Street to open higher, futures hold gains after ADP report

Economic events today
10:00 am- ISM

Technicals
(Analysis provided on chart)

The chart above identifies and analyzes current price in relation to:
- Price structure, previous and current days’ “levels”, trade/no trade zones, and magnets

Trading Buyer (Seller) Failure: The Lowest Risk / Highest Probability setup

Here is the progression of a position from after hours just now:
4 points profit

Consistency is key (In losses especially). How I use Maximum Favorable Excursion (MFE)

You want SMALL losses. I have a max loss of $40, 1 trade in the chart had -$45 because of slippage. Small losses are quick and easy to forget about. You never want to be stuck in a losing trade / digging yourself a hole. Always cut your losses quick!

MFE stands for Maximum Favorable Excursion. It is a measure of the most profit that COULD have been extracted from a given trade. For example, a position goes 10 points ($200) up from your entry and you end up exiting at 6 points ($120), this results in an MFE of $200 and a DIFFERENCE of $80. The difference is what I care about most when analyzing my results.

Check out this chart from my most recent 20 trades (approx):

I want to stress that I take consistent small losses which are expected in this business. I have a max loss of $40 on a trade. My goal in a position is to be correct on a move and average into the trade with another contract. So I take what I call “attempts”. When I’m getting stopped out for $5, this means the expectation of the move never happened or I got stopped in a quick move back. The thing to realize is that each one of those $5 “attempts” were RISK-FREE after moving my stop and my profit potential was theoretically unlimited.

Remember, keep losses small and try to move your stop to risk-free as soon as possible.

1/31/12 Daily Recap: Trades explained

After running the blog for some time now, I got a sense of what people want to read and find valuable. I also realized what helps me out the most in my trading. People want to see how I analyze the markets and forecast. Then, they want to see that I actually trade the way I’m saying, and that I’m turning a profit (or else they wouldn’t follow). I myself want to know that I’m systematic, performing an intelligent analysis everyday, and trading based on that analysis. Anyways, I’m going to have a market analysis posted every morning pre market or the night before if there’s movement in after hours. At the end of the day, usually the afternoon, I will post a daily recap. This will go over a few positions that I took and how/why I took them. Please let me know if you have any suggestions. Thanks!

1/23/12 Trade results: 5 trades, $285 profit. Trading hard trends and breaker signals

Today I had 5 trades for a profit of $285. I made 1 really big emotional mistake and took a loss of $100 on the trade. The trade should of had a max loss of around $50-$60, but I let my stop get hit at 5 points, which was way out of the way of the initial invalidation point.

This type of a mistake is an amateur mistake that needs to be corrected / never repeated. I will make a video later on discussing how I should have managed that position properly. It will detail the concept of invalidation points and risk elimination upon movement of price in your favor. I did not apply any of those concepts during that trade, big mistake!

1/20/12 Trade results: 4 trades, $45 profit. Using price magnets to trade

Today, vey slow day in the markets. A lot of failed breakouts, tight range, and low volume. This is typical of Fridays, thats why I trade very light Fridays and do not expect much from the markets on tight range days.

I want to show how I use price magnets to trade. I mainly use them as targets for trades because around those levels there is indecision. Look at this chart, and then the following:

The open is a major magnet because it determines whether the instrument is + or - at a certain point in time. I use the open as a target in the above trade.

Here are the trade from today.

Review the past week; your trades, decisions, actions. Take your new knowledge and experience from this past week and get prepared for the next trading week. Most important of all, enjoy the weekend!