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Posted by Asher on September 25, 2008, 11:21 am
BS"D
Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
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PIVOT MAGIC TRADING JOURNAL - EXCERPT
Good morning,
Although ABS has calmed a bit, the market is very jittery, hovering at
a potentially significant precipice. Therefore, the red flag warning
is still in effect:
CAVEATNow is a good time for paper trading and practice. Read and
heed NOTES A & B, below.
In yesterday's Daily Pivot Magic Trading Journal, PERSPECTIVE section,
we noted: "Bears retrace most of Friday's large white candle, closing
nose-down at the Historical S/R (double aqua line). Looks like
another Bear in the works for Tuesday."
Actually, it was a breather day, but the white Dragonfly day-candle
was inverted, and definitely Bearish, sort of a panting bear!
Be well,
Asher
=3D] ;-)>
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Pivot Magic Trading
First rule:
"Any time you don't know what is happening, get out!"
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E-mini
Wednesday Sept 24, 2008
NOTE A: The ABS has been bloated for several weeks. Should bloated
ABS conditions continue, high-wind warnings, and precautions apply.
To avoid getting stopped out at every Price adjustment, expand the
Pivot Magic Trading Maximum Profit Giveback (MPG) and stop placement
spacings.
To reflect the ABS, and to avoid sudden-death Price Action swings:
=B7 MPG limit needs to at least as large as, or larger than, the average
candle.
=B7 Stop placement (still applying our PMT stop rules) spacings backs
off by to approximately 1/2 ABS.
NOTE B: The expanded spacings obviously make for greater risk
exposure. Of course, the profit-per-minute potential increases as
well.
=B7 This represents an acceptable threat to well-funded Advanced
traders.
=B7 Intermediate traders might wish to trade fewer contracts than
usual. Put less of your funds At Risk.
=B7 Beginning PMTers might be wise to sit out the fireworks.
That said, let us proceed.
*******************************************************
Morning session opens slightly up from the Close. Five long-tailed
spinning tops in a row, and Price Action dips below the Close.
1 =3D Signal doesn't complete.
2 =3D The signal completes, and throws a 2-candle 123 on takeoff,
outside the "green fog". Volume is supportive (pink arrow).
A =3D Pulled in on large white candle, with initial stop advancing under
the Close.
B =3D Large white candle crosses the MA. Position is in MPG violation.
Mental stop at (slightly expanded) Giveback level.
Once the next red candle retraces >62%, a mid-air Reversal is
signaled. Scratch! Exit now or get taken out at the stop. +/- 1.75
points
The BBs now head out for a sip of lunch. Lunchtime drift forms a
Descending Triangle against the Close, exerting constant Bear
pressure.
3 =3D Support at the Close holds strong, and the Bears give up,
resulting in a low-Volume, Double bottom (orange oval, self-confirming
set) reverse Triangle breakout, off the Close.
With no support, the signal fails, but suddenly, Volume booms (pink
arrow), and the signal is reconfirmed with a 123 kickoff (blue
arrow).
C =3D Pulled in (aggressive entry techniques apply) on giant white
candle. With the position in almost MPG in the first moments of the
trade, move the initial stop to "free trade" (no rule, just good
sense).
D =3D Large white candle. Normal stop placement would leave the
position in MPG violation. Mental stop at Giveback level.
E =3D Large, white, inverted (Bear) Dragonfly with a very long top wick
(a sign that end of Momentum is near). Per PMT stop rules, move the
profit-locking stop under the low of the candle.
F =3D Giant white candle slams into the Pivot. Mental stop to MPG.
Next candle is a Higher-High-Turns-Red, spiking through the Pivot and
failing. This is one of our Exit Now! signals. +/- 8.25 points
4 =3D First reversal signal off the Pivot (blue arrow) doesn't complete
well enough for our criterion. The full Double top pattern (orange
oval) does however! A fast-moving, low Unsecured At Risk entry below
the MA. The initial stop advances above the MA. Nice!
G =3D Giant, red, inverted (Bull) Dragonfly, and our position is in MPG
violation. Mental stop at Giveback.
H =3D Desperate Volume Spike (DVS, pink arrow, likely to have exhausted
Momentum completely), and the Bears break free of the painful Price
Action stall, diving for the Close. MPG violation, so move mental
stop to Giveback level. Exit or get taken out at the stop, tough
call. +/- 4 points
5 =3D A lovely 2-bar, in range of the Close. With the entire Price
Action of this signal outside the "green fog", entry off the Close
becomes interesting. Alas, the Volume dies (pink arrow), so we let it
pass, and we get sit out a run all the way to the Pivot!
6 =3D Whopping 2-bar "P" Signal off the Pivot. Aggressive entry was
possible.
J =3D Large red candle. Per our rules, move the profit-locking stop
above the high of the candle.
K =3D Failed test of MA. Position in MPG violation. Mental stop above
the MA/Giveback level.
L =3D Large red candle. Per PMT stop rules, move the profit-locking
stop above the high of the candle.
Yuk! Next candle forms a mid-air J-hook. Hopefully you had the
presence to exit at >62% retracement! +/- 4.50 points
Price Action swing-steps down for a failed, final EOD test of the
Close.
PERSPECTIVE
(Daily, bottom chart)
A nose-down, long-wicked, inverted (Bear) white Dragonfly. Wednesday
nets out as a breather day, but, in line with the current markets, all
the candles are only coming in one flavor, Bear.
REMEMBER: Trade the tape, not my prognosis!
Asher
=3D] ;-)>
Pivot Magic Trading Course
http://www.tradingthingys.com/PMTJ/Commodity%20Day%20Trading.html
Wednesday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic092408.gif
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