3-18-2013

My Notes:

Today was one of those dream days where you take a trade and off it runs w/o ever really testing your trailing stop until you get 10+ points out of 1 contract.  I saw that there was a huge gap down in the overnight session so I figured price would eventually fill the gap.  I thought it might test the overnight lows before filling the gap but it didn't even do that.  Stuck to my rules today.  The one trade that was a valid trade but not one I am taking right now I was able to get out at BE because it wasn't off the trend channel and the next bar created a long trap.

Mack's Notes:

Mack also talked about the gap down from the overnight and how we should have expected to fill it so my thought process was correct.  He said the first trade was a failed 2nd entry short as well.  The bias was up in the first trade b/c we traded up into it.  I need to work on looking at 2nd entries going the other way.  What I mean is you can count 2nd entry longs when you make a new low as well as when price makes a new high which is how I have been doing it.  He used the 2 legged measured move to show how price went within a tick of it before it corrected a bit.

Always pay attention to how price arrived at a level.  If it moved up into a range then the bias is up.  If it moved down into a range then the bias is down.

Find your channels, your trend lines, your support/resistance lines and label them!  Keep working on it, keep practicing and you will get better.

My Trades:

1.  2nd entry long, 2 legged pullback and off of support after price broke out of the trend line for the first time.  The rule is that when price breaks out of a trend channel for the 1st time it will usually go back up and make a new high before it trades into a range or reverses.  The one positive this trade had gong for it was that it was not too far from the gap lower from the overnight session.  Instead of taking my usual profits near the previous highs which is what I've been doing when this type of trade sets up I decided to put my 2nd target one point below the completion of the fill to the overnight gap and keep my trailing stop 2 ticks below the swing low.  This worked out extremely well.  Once price broke into the gap I felt good that it would keep going until it filled the gap.  Great trade and management!

2.  2nd entry long and 2 legged pullback to the EMA.  I got out when the next bar created a long trap and closed on its lows.  It wasn't off my lower trend line, just the EMA and I usually try to take them off the channel lines.  Good trade, even better to get out with a scratch trade.

3.  2 legged pullback to the channel line.  Turns out I drew the correct channel line.  Could have waited until the 2nd entry developed but I actually got in 1 tick better.  Either trade is good.  I got out a point too early.  Should have waited until price went nearer to the upper trend channel before I got out.  Left a point on the table but wanted to pocket 2.25 points rather than .50.  Great trade!