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Commodity and Futures - Physical commodity and financial futures markets.
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Posted by on January 11, 2007, 8:48 am
BS"D
KISS Daytrading Course
Exploit Pit Pivot Points
Learn to Read the Tape
http://www.TradingThingys.com
******************************
PIVOT MAGIC JOURNAL - LITE
Good morning,
Fairly nice range, Wednesday. However, with the LT SW Channel
floor and ceiling setting the boundaries, the (always proven)
Pivot slashed things in half. All we could safely squeeze out
was a couple of small bites.
If the ceiling holds, Thursday will be more of the same.
Be well,
=] ;-)>
******************************
Pivot Magic Trading
First rule:
"...Any time you don't know what is happening,
get out!"
******************************
Wednesday, January 10, 2007
Morning session opens gap-down just through the semi-permeable LT
Sideways Channel
floor (lavender line).
1 = Count em! That's three lower highs and three lower lows, a
preceding trend.
"P" reversal behind the LT SW Channel floor (Obvious Doji spike on the
10-Minute,
bottom left chart). Price Window to the Pivot is a bit small, so trade
it like a
Pivot Scalp.
NOTE: We are inside a rather narrow LT SW Channel and the Pivot
is pretty much at the midline. Unless Price Action clears the
Pivot, it will likely ping-pong inside the lower half of the
channel. If it gets through the Pivot, it probably will then
ping-pong inside the upper channel. That means high probability
of lots opportunities today for swing traders. We don't swing trade.
Doji and what could pass for a white inverted (Bear) Dragonfly pulls us
in above
the lavender line. Initial stop under the S1 reduces Undefended At
Risk a bit.
A = Nasty! Inverted white Dragonfly. Second close above lavender line.
Move
profit-locking stop under the LT SW Channel floor.
2 = Interesting 123 Second chance to enter the move. Price Window
would be just
just barely a Pivot Scalp, but it is a good opportunity to add
contracts.
B = Giant white candle breaks north with a vengeance. Move
profit-locking stop
under the MA.
Notice that we have more than 2 points of profits exposed and search
for a
creative stop movement excuse/solution. I see none, so I'd exit the
instant
the next candle showed red. +/- 3.0 points
C = If you didn't apply the 2-Point Maximum Profit Giveback rule, this
failed
test of the MA would encourage you to move the stop up under the MA.
Gap. Inverted white Dragonfly following implies this was an exhaustion
gap.
No power left to cross the Pivot. Trade won't convert to PMT Scalp.
Surely
Pivot Scalp exit when the Doji taps on the Pivot, = D. +/- 3.75 points
Having not crossed the Pivot, Price Action starts the lower channel
ping-pong
routine. We aren't "swingers"!
3 = Floor is holding strong. Couple of pongs on the lavender line.
Nice
Double-bottom pattern as well as a failed TTT. (Shows very clearly on
the
10-Minute, bottom left chart.) Look at that Doji spike. Now look at
the
associated DVS (middle chart) That is Momentum exhaustion and reversal!
Even in light of the failed TTT corollary "promising" another attempt
at the
Pivot now, the remaining Price Window to the Pivot is way too small to
warrant
PMT entry. Besides, it's still lunchtime and there's no Volume.
4 = Alright! Massive 123 "S" of the Pivot.
E = Giant DVS (middle chart) generates a giant white candle, which
pulls us in
AND permits us to advance the initial stop under the Pivot. **
Entry one tik above the (demoted inside the LT SW Channel) Close, for
nicely
controlled initial Risk.
*** Although it is tempting to scoot the stop more
aggressively under the Close, the high probability of
a quick Pivot retest would take us out at the stop
before the move had any chance to "work out". By the
second failed spike north however, we had almost no
choice but to advance the stop under the Close
(and cut short the nervous hour ahead!!!) or consider
the signal, = 4, invalidated and exit with a small
profit. My choice, BTW. Good ole risk-conservative me!)
F = Just as we were about to call the trade a dud (if you held on),
Price Action
tested the Close (Not the Pivot!) and failed. Extremely anxious to get
to "free
trade", call this instead a failed test of the MA (it was that too),
and move the
profit-locking stop under the MA. "Free trade" plus a bit.
And Price Action turns sideways again! This time though, the Price
Action tapes
an Ascending Triangle (blue lines). Even mid-air this sign of Bull
pressure is
encouraging.
G = Failed test of MA. Getting mighty close to EOD hiccup Danger time.
Per our
rules, move profit-locking stop tighter, under the MA. Watch the Vital
Signs.
H = Doji DVS (middle chart) and a Marubozu sumo (full-bodied candle
with no wicks)
ram north. As always, the question remains, "will the troops rally
behind the sumo
and continue the charge?"
Though it's not such a big candle, so close to hiccup, and so close to
the primary
objective (LT SW Channel ceiling lavender line), it seems discreet to
move the
profit-locking stop under the Marubozu.
No matter it turns out. The next candle is a red Bear Dragonfly. The
troops are
not rallying into the hole punched by the Marubozu sumo, and our stop
is in danger.
R:R is skewed the wrong direction.
Ideal exit: as soon as the mini-spike north failed and the candle
showed red.
Cancel the stop first!!! +/-3.0 points
PERSPECTIVE
(Daily, bottom right chart)
Not much to add to yesterday's observations. Although Price
Action is outside the LT Trend Channel (green lines) it is
pretty well contained in the narrow sideways channel (lavender
lines).
Wednesday's daily candle is a healthy white bull Dragonfly.
Perhaps the Bulls will try to resume the Long-term trend?
REMEMBER: Trade the Tape, Not my Prognostics!
Asher
=] ;-)>
Pivot Magic Trading Course
http://www.TradingThingys.com
Wednesday's PMT Chart:
Http://www.TradingThingys.com/PMTJ/PivotMagic011007.gif
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