Daytrading Course
Learn to Read the Tape
Exploit Pit Pivot Points
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PIVOT MAGIC TRADING JOURNAL - EXCERPT

Good morning,

Having not read yesterday's Pivot Magic Trading Journal, instead
of swinging wildly with little effect on net Price as we suggested,
the Bears accidentally [sic] dove back into the LT SW Channel
on Wednesday. LOL!

The tape presented us with some interesting PMT trading scenarios
and puzzles to solve though, as well as a good reminder of the end
of move advantage in flexibility that a mental stop affords !

The market has plunged over a very significant precipice and is teetering.
A Red Flag warning remains in effect.

CAVEAT
Guard your funds. Although a dangerous time for beginning traders to
get wet, this is an excellent time for paper trading and practice.

E-mini
Wednesday Jan 07, 2009

Morning session opens gap-down, with a Bull bump off the S2.

[SNIP]

3 = Failed TTT/Doji Sandwich off the S2. Volume has come back to life (pink arrow) and we enter aggressively
as Price Action plunges below the MA. Although advancing the initial stop above the MA fits our rules,
personally, I'd like the stop dropped to "free trade" in this circumstance (good ole risk-conservative me!)

A = Looks small, but this is "legally" a large red candle. Good thing, because the pair of red Bull
Dragonflies is a bit worrisome. Per PMT stop rules, move the profit-locking stop above the high of the candle.

B = DVS (pink arrow, late in the move this might mean exhaustion). Normal stop placement would leave this
position in violation of Pivot Magic Trading Maximum Profit Giveback (MPG) rules.
Mental stop at Giveback level.

Price Action stalls, but nothing threatening.

C = Large red candle and our position is again in MPG violation. Mental stop at Giveback level.

D = Black Volume Bar of Death (pink arrow) Doji taps on the S3. Prepare to exit if the Bears don't recover.

THREE READINGS - THREE STRATEGIES

Nervous: Next candle (at completion it's a red spinning top) shows white,
which makes this an Exit Now! +/- 6.25 points

Wary: Neither of the following red spinning tops was able to regain the
Momentum and do more than stab vaguely through the S3. Exit as Price
Action crosses back above the S3. +/- 7.50 points

Fearless: The first spinning top meets our criterion for large red
candle. Per our stop rules, move the profit-locking stop above the high
of the candle. The stop holds.

4 = The large red candle is a failed test of the MA. Tighten the stop.

If you were Nervous, or just Wary, and jumped earlier, this is a 123 continuation "S" entry. Getting pulled in
on a Black Volume Bar of Death Doji does little for our ulcers. Call the next candle a second red candle closing
below the S3, and tighten the profit-locking stop above the S3, per our stop rules.

E = Very late in the move DVS (pink arrow) is a severe Momentum exhaustion signal. The position is thankfully in
MPG violation, so we place a Mental stop at Giveback level. ("Thankfully", because the mental stop gives extra
flexibility should we require a fast exit, with no time for a safe Cancel-Replace order maneuver.)

Two white candles later, the Bull Price Action retraces >62% of the large red candle. That is a mid-air "P"
Reversal signal, and thus, one of our Exit Now! signals.

Short trade, from = 4: +/- 1.50 points
Long trade, from = 3: +/- 10.25 points

EOD, Price Action peters out at the S3.

PERSPECTIVE
(Daily, bottom chart)

During overnight trading the BBs ducked back into the safety of the LT SW Channel
(lavender lines). Unless there is still more to the LT SW Channel ceiling
challenge, the ceiling is re-established with a failed TTT (Third Time Through).
A turn-around Failed TTT Corollary assault on the light blue line is set up for
Thursday/Friday.

REMEMBER: Trade the tape, not my prognosis!

Asher
=] ;-)>
Pivot Magic Trading Course
http://www.tradingthingys.com/PMTJ/Commodity%20Day%20Trading.html

Wednesday's PMT Chart: