DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
The BBs needed to create some range in a lackadaisical market, so
Wednesday morning presented us with one nice Bull trade inside the
LT SW Channel (Daily, bottom chart, blue lines). The rest of the
day was predictably sideways drift and untradable.
Got a feeling that to create some trading range, Thursday Price
Action will tap on the Channel Ceiling and return to the Floor.
Never know, so be prepared for anything!
Enjoy and be well,
E-mini ES Z0
Wednesday October 20, 2010
Morning session opens at the Close, bounces north, stalls, and returns to retest the Pivot/LT SW Channel
Floor/Historical S/R (light blue line).
1 = Pivot retest fails with a 2-bar "P" Reversal Signal.
A = Pulled in on large white candle. Initial stop advances under the MidW, for nicely controlled At Risk.
B = DVS (pink arrow) drives a large white candle putting our position in violation of Pivot Magic Trading
Maximum Profit Giveback (MPG) rules. Mental stop at Giveback Level locks in profits.
C = S-trap neither retraced 62%, >2 points, nor threatened our stop. Price Action recovers with a large
Normal stop placement leaves the position once again in MPG violation. The elongated top wick (warning of
imminent Momentum exhaustion) makes us double happy to use a mental stop at Giveback Level.
D = Late-in-the-move DVS (pink arrow, another sign of failing Momentum) pumps a large white candle vaguely
through the R1. Mental stop into the gap per my convention is pretty much at Giveback Level. The mental
stop again provides increased exit flexibility (no Cancel-Replace order needed). Stay alert.
E = Higher-High-Turns-Red. Exit on red! +/- 6 points
Following the red Bear Dragonfly through the R1, no Reversal move ensues.
2 = A 123 below and a 123 above the R1 together invite entry.
F = Volume burst (pink arrow) and we are pulled in on a large white candle. Initial stop advances under
the low of the candle.
Price Action stalls, and we suspect a lunchtime sag to retest the R1. Any of us still holding on go flat
when the small white candle does not recover Bull Momentum.
G & H = Too bad because a couple more Volume bursts goose Price Action north before lunchtime sideways
drift finally sets in.
Price Action continues to drift till EOD, when traders offload open contracts and Price Action sags with
the day closing atop the R1.
(Daily, bottom chart)
Wednesday taped a healthy white day candle off the floor of the LT Sideways Channel
(light blue line). Trading stayed inside the Channel, but did not manage to achieve
the Channel Ceiling.
Maybe on Thursday?
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
REMEMBER: Trade the Tape, Not my Prognostics!
Pivot Point Daytrading Course
Wednesday's PMT Chart: