BS"D
Exploit Pit Pivot Points
Daytrading Course
Learn to Read the Tape
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DAILY PIVOT MAGIC TRADING JOURNAL - EXCERPT
Good morning,
Thursday morning the market drudged sideways, with nothing
much to even consider trading. We did however close out
the day very nicely, with only one breakeven dud to mar
our fun. And most interestingly, we dared to trade the
EOD Hiccup!
TGIF!!!
Enjoy and be well,
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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 ES H3
Thursday 06 June 2013
Morning session opens with a bounce, stabbing for the Pivot, failing and dropping back, followed by
a boring morning of similar bouncing sideways along the Close Support.
1 = We were already thinking lunchtime sideways drift, but suddenly the Volume is roaring, and the
tape presents a 2-candle 123 "S" chance to enter the fray. Actually, the fray has now been going on
for 5 red candles in a row. As we have discussed, Thin Line trends rarely go over 6, 7, or 8 candles
in a row, max.
We note that the still powerful Volume (pink arrow) has blown the completion (red Spinning Top)
candle out of the fog. With the Low soon to provide a legitimate nook for our stop, i.e. instant
Free Trade, we enter aggressively. At the close of the candle our stop is safely lodged above the
Low, just shy of Free Trade.
A = Though we haven't a specific rule, this healthy red candle easily invites us to aggressively move
the stop to Free Trade plus a tik.
B = Again aggressively, calling this a breakout from a brief S-trap, move the stop above the High of
the candle.
C = The plunge continues. Since normal stop placement above the high of the candle leaves us in
Maximum Profit Giveback (MPG) violation, make it a mental stop at Giveback Level. It's been a long
lunchtime ride. Nice to be prepared for turbulence at the S1 with a quick exit stop/market order.
D = Stupendous DVS (pink arrow) tells us Momentum is exhausted. We therefore do not hesitate to
execute our exit order as soon as the tail of the giant red inverted (Bull) Dragonfly recoups >2.25
(sorry, that placement is adjusted for today's bloated ABS). +/- 7 points
2 = Relatively wispy white Bull Dragonfly reverses off the S1. Volume (unmarked) is strong as is the
pull of the Close. This could be tradable.
E = We wind up pulled in on a bearish candle with it's tail repelled by the MA ceiling. Twin Towers
DVS indicates a stall. Put that together and we prepare for an instant SCRATCH maneuver.
When the next white candle noses into the MA, use that excuse to jump the stop to Free Trade and a
tik. There we get taken out.
3 = This bounce (along with = 2) makes it a Double Bottom off the S1. That's a much more powerful
signal than was the wispy white Bull Dragonfly. On the other hand, the white Spinning Top candle
does not make for a very encouraging completion candle for our bounce.
F = Large white candle through the MA, and the second half of the Double Bottom is firmly filled out.
G = Volume comes to life, and we enter right above the MA. At the close of the candle, move the stop
to Free Trade and a tik. Love the R:R of free trades!
H = Large white candle. The top wick stretches, but retracts well short of the Close. Luckily, our
position is in MPG violation and we can use a mental stop at Giveback Level. This also enables brisk
exit if the Primary Objective, the Close, is achieved.
Next candle, a Doji, stabs for and taps on the Close. As soon as the Price Action retracts, we
aggressively go flat, Pivot Scalp Exit style. +/- 5.25 points
4 = Looks like a Doji Sandwich off the Close, but it never takes off.
5 = A 123 below and an 123 above (green arrow). The Price Window is closed at the (always considered
proven) Pivot, so a quick decision is necessary. Since we have been reading Bull TELLS (blue arrows)
all afternoon, when Volume (aqua arrow) jumps to life, we enter on the giant white candle (= J) for
an aggressive Pivot Scalp trade.
Happily, the position is immediately in MPG violation and we can promptly place a mental stop at
Giveback Level (though we are not married to giving it all back!)
The next candle strikes in range of the Pivot and heads south. We exit as soon as we see red.
+/-3.0 points
6 = Now this particular 123 below and above (green arrow) combination is in fact a rather challenging
discretionary trade puzzle for the advanced traders amongst us.
DANGER: The PMT entry clock ran out almost 10 minutes ago.
BUT: The double Signal is a particularly reliable one.
AND: As the BBs offload positions from all that wild lunchtime
bear selling, Volume (pink arrow) is quite strong.
DANGER: We are entering EOD Hiccup Time Zone.
BUT: Even if the "V" check mark EOD Hiccup pattern adjusts
Price Action, our TELLS (blue arrows) scream, "BULL". Simply
put, it is clear that the BBs want to go north here, and that
is how the Hiccup will resolve.
We need to violate a PMT rule to enter here, but this IS discretionary trading and the TA is
overwhelming. The position holds great R:R potential, and we are holding nice profits from the
day. Let's play this trade out for fun (and profit). Go for it!
Enter aggressively on the large white Bull Dragonfly (green arrow).
K = Not overly happy with the large inverted (Bear) Dragonfly. Per our stop rules, move the
profit-locking stop under the low of the candle.
L = S-trap carves the "V" for the Hiccup, and the S-trap fully resolves with a large white candle.
We are now in MPG violation. Mental stop at Giveback Level.
N = Large white candle puts us back in MPG violation. Mental stop at Giveback Level.
P = The super DVS (pink arrow) surly warns of exhaustion, as the healthy white Bull Dragonfly, nose
up against the R1, may now bounce back. Mental stop under the low of the candle.
R = Large white candle. As soon as the Twin Towers (pink arrow) forms, indicating as stall/sag, we
exit. Anyhow, our Exit by 4:10 rule is NOT a discretionary one! +/- 8.75 points
PERSPECTIVE
(Daily, bottom chart)
Looking more like a Reversal than a breather, Thursday's
large white day candle spiked through the blue line, but
rebounded back almost deep enough to retest the green
line Floor. [Not sure how to read the blue line. Is
this a new Trend Channel Floor?]
BEWARE OF TRAPS ON FRIDAY!
REMEMBER: Trade the Tape, Not my Prognostics!
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
Asher
=] ;-)>
Thursday's PMT Chart:
