First Things First

Hello Traders,

“Which way did he go, George?”

which_way_did_he_goFirst things first … I opened up my trading looking to short the market below the S1 Line at 8979. My open trade was to short 2 at 8958 at 8:18AM CST this was taken out in stages.

The first being at 8978 at 8:21AM CST.

The market reentered my sell zone and I shorted another to make 2 again at 8957 at 8:21AM CST.

 

At this point I was looking at this opening chart below:

The blue bar volume had more weight in my humble opinion at this level than any red volume bar. We opened up the trading morning trading down to an overnight low of 8818. What I saw was weakness in the market, but I also started to see that the market was trying to hold off going down as well during the morning.

Here is the second chart of the trading morning:

This chart started to see the beginnings of a market that wanted to probe to the upside. Here is where I started formulating a trading plan to reverse and go long.

I carefully picked a point to go long based on the chart above. You can see the market was trying to hold at 8953, and it looked like the S1 level would be breached soon.

I got myself long at 8971 at 8:37AM CST. In addition, I also drew this trend line on the charts to show a level, if it failed I wanted to go short:

So this can be seen technically as an ascending triangle, with a base. This is what I saw and traded to reverse below the Support level of 8979.

I targeted what I like to call 2P on this trade to make up for all of my trading losses and give some profit on the trade. I didn’t know where it would go past the 9025 level, but I thought with this trading setup we were on the launching pad to reach at least to the 2P profit level.

Here is the chart after the trade was completed:

The yellow line on the chart represents my trading exit point on the trade. I decided not to extend this trade any further. I wanted to retain profits and get closer to the $3,000 profit goal on the trading combine. It seems to me that holding in this market is not the thing to do and try to pass the combine at the same time.

I am still working on my trading strategy … but suffice it to say … I believe the best course of action at this point in time is to generate a cushion of profit instead of trying to hold on to a position. Seek a level where the market will head towards and find the exit door for now.

This trade allowed me to turn what was a losing trading day into a winning trading day overall. I will continue to hone my trading skills, as time moves on and I pass the trading combine here at Top Step Trader.

I am only looking for a short term move either in the range of 2P to 3P on any move, unless it moves extremely quickly. I am also of the opinion, I would allow the market since we are in more of a downtrend recently to trail my stop on a short as opposed to a short term move up … as the market insiders simply position themselves.

Right now, I believe this market is better to try to trail on a short trade than any long trade at present market conditions on the daily chart.

From the Blue Arrow to current market conditions … this is a market that is much weaker overall. So trying to call a market bottom and trying to hold any long is my definition of insanity!!

Have a good one …

 

God Bless and Good Trading,

David AKA Tiger

About The Author

David M. Knight

I am a 30 Year Futures and Commodities Trading Veteran. In addition, I enjoy games of skill and chance like: poker, craps, blackjack and roulette. During my professional career, I have developed and implemented successful trading strategies and methods; along with winning systems in games of skill and chance. Join with me on our mutual journey together.