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TFC Commodity Trading Forum

Navigating S-traps *PIC*


Good morning,

Navigating S-traps cut many of our moves short on Wednesday, but our
Pivot Magic Trading Money Management Rules kept us out of trouble,
as we clambered around accumulating points of profit.

Enjoy and be well,


"Don't gamble; take all your savings and buy some
good stock and hold it till it goes up, then sell it.
If it don't go up, don't buy it."
Will Rogers


E-mini ES H1
Wednesday April 27, 2011

After opening gap-up at the R1, Price Action dipped and returned to retest the R1 Resistance.

1 = Resistance holds strong, and we have a nice 123 "S" Signal opportunity.

A = Breakaway gap and a large red candle through the MA pulls us in. Initial stop advances
above the MA/Free Trade.

B = Black Volume Bar of Death (pink arrow) Doji. Prepare to exit on white.

C = No white here!

Large red candle. Per PMT stop rules, move the profit-locking stop above the high of the
candle. Long bottom wick, S-trap stall cut short the trade for most of us. +/- 1.25 points

D = Weathered the S-trap?

DVS (unlabeled) and a large red candle. Normal stop placement (above the high of the candle)
leaves our position exhausted, in Pivot Magic Trading Maximum Profit Giveback (MPG) violation,
and very near to the Primary objective, Pivot/Close.

Mental stop at Giveback. Prepare for a Pivot Scalp Exit or instant bail out. Next (white)
candle taps on the Close and pulls back, triggering our Pivot Scalp Exit. +/- 3 points

2 = No Volume (pink arrow). No entry on this 2-bar off the Pivot.

Lunchtime sideways drift ensues.

E = Mid-lunch, a bland FOMC statement stirred up the usual brief hysteria (pink arrow),
driving Price Action to press hard against the R1 Resistance.

4 = Sluggish Double Bottom oozes through the R1. Price Action retests and breaks free on
a 123 "S" Signal (blue arrow). Out of sheer giddiness, some of us are pulled in

F = Volume really bulges (pink arrow), and the rest of us are pulled in on a healthy white

P.S. Those who entered early should move their
stops to Free Trade and a tik.

G = Many of us jump as the position first closes in MPG violation and then tapes a mid-air
Reversal signal. +/- 1 point

ACTUALLY: Since the R2 proximity and Volume
strength show no indication of yielding easily,
a mental stop at Giveaway Level permits advanced
traders to hold through the small S-trap stall
and greatly increase profits.

J = Bull Volume is resuming. Looking for an excuse to tighten the stop, call this a failed
test of the MA and move the profit-locking stop under the MA.

K = Very Late-in-the-Move DVS (pink arrow) is a sign of exhaustion. Giant white candle blasts
through the R2. Normal stop placement leaves the position vulnerable and in MPG violation.
Use a mental stop and consider reversing on red.

L = MPG violation, and a Twin Towers (pink arrow) indicates a stall/sag/retest is coming on
the next candle. Mental stop at Giveback Level, but be prepared to exit if >62% is retraced.
No reason to give it all back!

N = Black Volume Bar of Death (pink arrow) Doji. That certainly qualifies as a stall.

Sag/retest is likely to follow. Per our Black Volume Bar of Death rules, prepare to exit
on first sign of red. +/- 5.50 points

EOD Hiccup is right on time with a classic "V" pattern (plum lines), and the day closes,
panting, atop the R2.

(Daily, bottom chart)

While we were gone, the Daily tape retraced exactly to the
Fibonacci 50% (red line) before resuming the steep climb.
Not exactly sure where to draw the lines, but a new LT Bull
Trend seems to be underway (green channel lines).

Following two large white day candles (each with more wick
on top than at the bottom), a slight retrace or at least a
breather is likely for Thursday.


REMEMBER: Trade the Tape, Not my Prognostics!

=] ;-)>

Wednesday's PMT Chart: