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,
The MA Resistance consistently suppressed Price Action on
Monday, guiding a very rangy run down. The ABS was quite
large, so the 5-point increment vertical axis often made
reading the tape difficult. Small Price Swings were large
in terms of Risk exposure. This chopped our day into a
series of very chewable bites. Overall, a hard way to
earn an easy living paid off nicely.
Expecting a breather tomorrow - or a market crash (LOL?).
[SNIP]
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 Z3
Monday 03 February 2014
After opening at the Close, Monday morning trading heads to test the LT SW Channel Floor/Historical
S/R (lavender and green lines, respectively). Price Action bounces, and then exits the Channel with a
123, dipping to test S1 Support.
1 = Solid 123 through the S1. DVS (pink arrow) and we enter aggressively. Stop advances above the
Low leaving the position in instant Maximum Profit Giveback (MPG) violation. Mental stop at Giveback
Level.
NOTE: ABS is quite bloated today, even the small candles are >2 points. To avoid constantly getting
stopped out at every Price Swing, expand stop, exit, and MPG placements.
A = Another large red candle, and again our position is in MPG violation. Twin Towers (pink arrow)
indicates a stall on the next candle. Mental stop at Giveback Level covers both possibilities.
Though relatively small for today, the stall candles are in fact >2 pointers. When the 3rd, red,
candle cannot regain sente we exit. +/- 5.50 points
2 = The MA Resistance holds. Counting the first reversing candle for a preceding trend, this is a "P"
Reversal at the MA, which qualifies as a PMT "S Reversal Entry Signal. Volume, though relatively low
for today, is still quite substantial. As the Reversal crosses below the MA, we enter aggressively.
B = A Black Volume Bar of Death Doji warning resolves with a red candle below the MA (blue arrow).
Advance the stop to Free Trade and a tik.
C = Large red candle puts our position in MPG violation. Mental stop at Giveback Level.
D = Even the small candles are putting us in MPG violation today! As this red candle slams into the
S2 Support, positioning a mental stop at Giveback Level protects us from a bounce as well.
Doji spikes the S2 and retracts. That's a Pivot Scalp Exit Signal. +/- 6.50 points
3 = A 123 through the S2.
E = We are pulled in on a large red candle.
F = The next (white) candle has us confused about size; meanwhile, the Bears recover nicely on the
next candle. We are in MPG violation again! Mental stop at Giveback Level.
G = Large red Marubozu candle puts us in MPG violation. Late-in-the-Move DVS (pink arrow) implies
exhaustion. Since we are always wary that the troops will not rally into the hole punched by one of
these sumo candles, we are happy to place a mental stop at Giveback Level.
The next (white) candle completes a mid-air Reversal Signal. We exit. +/-4.50 points
4 = Double Top "P" at the MA qualifies as a PMT "S" Signal. The MA Resistance proves once again,
but, even as the completion candle deeply penetrates the MA, Volume is too low for us to enter
aggressively.
H = Volume is up (pink arrow), and we enter below the MA.
At the Close of the candle we risk-conservatively adjust our stop to Free Trade.
J = Red Spinning Top initiates a stall. Possible Twin Towers (pink arrow) seems to confirm. Most
confusing today, with the vertical/Price axis so stretched (5-point increments), this 2.25-point candle
looks miniscule. Can we reliably call it a "large red candle"?
Anyhow, like good ole risk-conservative me, we move the profit-locking stop above the high of the
candle. K = Brief stall resolves with another small large red candle. Per our PMT stop rules, move
the profit-locking stop above the high of the candle (almost Giveback Level for today).
Getting close to the S3 Objective, and the strides are very short (weak move). When the next red
candle (blue arrow) extends the Risk to MPG violation, change the stop to a mental one.
L = Large (?) red candle through the S3. Looks small, but the penetration is almost a full point.
Our stop placement choice (above the high or above the S3) is made by the appearance of a
Late-in-the-Move DVS (pink arrow), which tells us that Momentum is gone. Move the profit-locking
stop above the S3.
Hah! Stopped out, but the move resumed, sort of. Wrong choice for the right reasons?
+/- 4.50 points
5 = A 123 through the S3. Not enough late lunchtime Trading Volume/Interest to make an entry
beyond the S3 Extreme PL inviting.
6 = A mid-afternoon 2-bar failed retest of S3 Support-turned-Resistance is a bit more inviting.
N = Volume (pink arrow) is solid, but doesn't really suggest improved Trading Interest. However,
with ABS so large today, even a mild move is likely to pay off. Once we see that the MA has proven
yet again, we elect entry below the MA seems safe. We must, however, move stops aggressively!
P = Small red candle gives us just enough room to advance the stop to Free Trade, permitting us
to exhale.
R = Brief stall breaks out with a Marubozu-like red candle, putting our position in MPG violation.
Mental stop at Giveback Level.
S = Small red Bear Dragonfly candle puts us back in MPG violation. With no excuse to move the
stop, our MPG rules demands we exit. +/- 4.75 points
Actually, the day turns sideways now, sliding all the way to EOD close.
PERSPECTIVE
(Daily, bottom chart)
Oops! For the second Monday in a row, a giant red day candle
streaked the tape. The plunge easily crossed the Historical
S/R (green line), exiting the LT SW Channel Floor (lavender
channel lines).
Since the Price Action has stopped at the next lower Historical
S/R (plum line), we can probably expect a breather on Tuesday.
REMEMBER: Trade the Tape, Not my Prognostics!
BE PREPARED FOR ANYTHING, AND GUARD YOUR FUNDS!
Asher
=] ;-)>
Monday's PMT Chart:
