Trend Trading

The Trend is your friend…

until it comes to an end…

There are many half-truths in our business. Enough to drive you crazy.

We have a core philosophy at eminiwizard.com that guides us.

It helped us call for the 87 target as resistance pre market, and then we suggested off by 81 to 82 and reverse. Profits gained in that scalp short were used to subsidize the long side trade, with several upside targets, including 90.25 and 93.5.

We have seen the “Jump the Creek trade”  before, ho hum.

We posted on Twitter that our target had been achieved, and 94 was being used for scalping short. We targeted 87 as the likely bounce support, and said 92 to 93 was the upside target.

Flat, and no opinion inside that chop zone after profits taken.

“Late longs are always vulnerable” we advised.  We were wary of the long side late day, because we have studied the Criminal Handbook written by the Boyz. When it became obvious that 92.25 could not be busted, we jumped into the short side risking two points and hit targets along the way, with all out at 83.

Sequence trading we call it, and it works.

No system is perfect, but we can capture our share of profits while others chant their favorite mantras like “The trend is Your Friend.”

We use our left and right brain, and “Capturing profits” is our theme song.

The teamwork and synergy of our group of members is nothing short of amazing.

If you are tire of going solo, or of re-inventing the wheel, why not give us a try?

You will only be chasing our price higher, because the low introductory rate during our beta phase is the floor on prices.

If you are tired of peering through the window pane for a couple of snippets of information, step to the plate and see what we are all about.

Day after day, week after week you have seen the calls.

It is a false economy to think you are saving money; look at the opportunity cost lost while it takes you years and money to figure this stuff out.

“If you can’t make money using our system, you shouldn’t be trading.”

The Trend is Your Friend

Rhythm

The market did it’s normal two step shuffle back and forth, and although the range was small, it did offer opportunities.

Sometimes we need to be nimble, and other times we can just ride the rhythm.

Small range days it makes more sense to catch a piece of the action, and usually it doesn’t make much difference whether we are playing long or short. In a trend day, riding the rhythm in the direction of the trend is a lot easier.

The half gap and gap fill was all there was for the short side, although it took until late day to finally breakout and invalidate the early morning high.

The bounce for profit taking strolled into the RTH open area, and settled there for an obnoxiously long chop.

We never know when we are “over-trading” until we take a breather, and assess the damage. Having predetermined rules allows us to accept our stop outs when wrong, and, stop trading entirely if we exceed a daily limit.

If we have not broken that “threshold”, we like to retrieve any lost capital before worrying about making more money.

We liked the 47 area as resistance and 36 as support during the RTH, with a pivot point of 842.38, right near the open.

Technically, it was a weekly and daily breakout.

Smoldering action on another listless summer day.

Riding the Rhythm

Head Fakes

Ho hum, boring day.

Anyone who just glanced at yesterday’s closing price and today’s would conclude nothing happened.

Flat.

As a trader, we experienced a bit more, wouldn’t you agree?

Note the heading of this blog, and the caption on the chart below.

Subtleties exist in the market, and we must always discover them, because there is a huge difference in our results based on timing.

Small difference if we went long on the open and short on the close; but devastating if we play it that way and don’t respect stops.

Strength and Honor.

Courage to take the trade, Honor your stops.

We are trend traders, but remind you we love to find late day support for the contra trade. This is the one that fools all the mantra traders: (“The trend is your friend.”)

…until it ends is the last part of that saying.

R2 to S2 and 28 points later is reason enough to be cautious EOD.

First and last hours are special animals that have a mind of their own.

If you played well, congrats. If you didn’t, keep up the good fight.

Get the tools the professionals use and learn the rules.

And play some music here and there and relax… it’s not a funeral you know.

Lighten up and have some fun.

Here is the opening resistance called from the 55 Demon.

Here is the 27 support called.

Emini Support and Resistance

Trend Trading

Two days ago we posted the 47 to 52 as resistance.

“All off by 50″ in the trade that jammed the late shorts.

To play the game, we must know how the enemy thinks and acts.

The “chump change” higher high or lower low is meant to trick and deceive us.

A great example of that was the 22.5 late low; shorts were warned of overstaying, but I am sure it fell on deaf ears.

The first bounce to the 27 to 29 area is normally safe, the second one late day usually is not.

Pre-market entry was shown on the charts, as the Angels were under attack and the breakdown took out yesterday’s low.

“Late to leave the party and  you lose.” Risk and reward is what the game is about.

When we get near the big magnet (24.5 late day) and you have to respect it. If I am smart enough to know this, so are the Big Boyz.

Having a variety of tools is only the beginning; we must put the pieces together and see how they align with timing.

After 1:30 I begin looking for scalping trading only, and recognize they I can be wrong on any of these trades, if we have come near the expected support zone.

I prefer to take trades with the trend, until I suspect the contra which should be good for 8 to 10 points.

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The Eminiwizard system is almost ready, and will be offered by the end of June if we have 25 players. $750 in the subject line of an email locks it in if you have interest. (For general public only, commercial ventures need to contact me directly).

Everything included, no other charges.

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I Support Resistance

Head Fakes

Wild day.

That’s all I can say.

This market is not for the faint of heart; nor anyone without seat belts or stop losses.

How many ways can it trick us? More than I can tell you, that’s for sure.

Selling highs, buying lows, that’s all I know. The odds are better there.

What’s high?

What’s low?

Everything is relative.

Keep it simple, the 875 925 battle with 900 as middle still continues, that’s all I am smart enough to know.

Well, one other thing.

The year opened at 900.

If you want to play this game, you need to keep track of the bigger battles as well as the little skirmishes.

The battle was lost for the longs when the 17.5 pivot was given up, but the closing battle was not lost until the 14.75 resistance could not be overtaken and then the 07 given up. Longs were still in the game in my opinion until that zone capitulated.

Our reference to “turtle soup” was regarding the “turtles” who buy breakouts and then get trapped by a reversal.

If all of this sounds easy to you, I can assure you it is not, at least for me.

If you think I catch all of these trades, I can assure you I do not.

I am always thinking however, and analyzing, and deciding where are the best places to risk my money.

The comments I have made on twitter show you the most relevant thoughts I can post, without giving away all my “secrets”. If you have been careful to make a few notes, you may even find a few gems hidden amongst all the gibberish.

The theme of “Price, Pattern, Time, Psychology, and Reacting will appear over and over, as I believe those are the essential components of trading.

Hamzei Analytics has a webinar this Saturday. Sophisticated traders like this that offer us opportunities to further our education are to be appreciated; if I am in town I plan on attending.  Still checking with family about the long holiday weekend.

The Middle is the Middle

The Boyz

In last night’s post we speculated that the weak hands were being shaken out by the Boyz; today’s action confirmed that opinion.

The market has taken a nose dive of 50 points off last Friday’s high.

Gotta love option expiration.

“Bounces are for shorting” was our mantra, and the market never looked back after we called the longs off by 996.

If you think markets plunge forever without profit taking, you miss the point of the game: accumulate profits ! 78 support was called as temporary support, and we nailed the ranges correctly.

Please don’t think I am tooting my own horn; I am a very humble, low-maintenance trader. This is not hype, just one trader saying “I have studied the markets for 15+ years and have discovered a few things that may help you in your journey for financial independence”.

Today’s sequence was called again on Twitter, and those who played the trades would have again paid for the entire one time investment to learn our methodology. Charts were provided to enhance the insights.

Time is money, and opportunity cost is being lost everyday you delay from signing up.

More importantly, the time has come for me to teach this, or just focus on my trading.

Angels and Demons (the movie) opens this weekend. They are projecting rain, so I will be there. In honor of this event, if we get 25 people in the beta launch, I am offering those traders a discount. For $750 those who wish to register please send me an email with $750 in the subject line to reserve your spot with a non-binding intent.

The conundrum of “how can we buy something if we don’t know what it is?” has been answered daily by the calls I have made on Twitter. Through this process I have met some wonderful traders and friends across the country and abroad; from the west coast to the Midwest to Asia and beyond.

Anybody can post on Twitter generalities like “The market is pulling back”, or “the market is rallying on news”. There are few out there who have consistently given specific support and resistance areas.

I love teaching, but I am a businessman. If you want to learn this system, invite friends to join the party.

I rarely post in my active chat room these days, just trying to post in Twitter and trade is more than enough for me.

Yes, the course comes with hand-holding to show you how to put it together in real time.

This is a tough economy, and I am doing my part to help a few people learn a skill that will support themselves.

Beats college tuition and room and board, doesn’t it?

Shakin Hands

Short Bounces

Round numbers

Someone recenty asked me for my current support and resistance.

“Hard to say.”

Can’t you be more specific?

“Of course, I just don’t want to confuse you.”

Try me.

Ok, Round numbers, let’s call 825 as resistance, and 775 as support, with 800+/- being the middle.

Intermediate support may be somewhere between “85 and 92″.

The rest is, as they say, “Horse trading.”

That battle needs to be resolved before we fight other larger battles.

I am not sure if that is helpful to you, but that’s the way I think.

The exact high could be 823.25, 821, 827 even. It’s the concept of  relativity and risk and reward.

The high needs balancing if my judgment is correct, and the catalyst for this battle was “news” or whatever. The deep retracement that came after the early shorts were taken out to the woodshed and shaken out but good is a healthy and normal process of ebb and flow.

The 123 Higher High pattern is one of he Boyz favorites, so study it.

Study! It’s worth a lot of money!

This pattern is detalied in depth in our study course.

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The above text was written mid afternoon.

Generally right, but didn’t make a  dime on it.

I was out of the office, and although I had my laptop with me, I don’t trade when I am not focused.

Superman Don Miller does, (he could probably trade on an iphone); “know thyself” is an important maxim of mine.

I always keep learning though, even when ” not on the job”.

Still on the road, no chart available yet.

Last night’s chart should be close enough for now.

Don’t fall in love with positions right now; capture a slice and be happy with it.

Intuition

The early morning test of the weekly low held, and that was all she wrote for the short side other than intra-day range trading and scalps.

Our system sell was 70 resistance, and we stood aside late day after the first attempt  as it became obvious the longs were trying to jam the shorts.

As a trader, having an opinion is necessary, being stubborn is not.

Both sides made money for us today, but the obvious winner at the end of the day was the long side trade.

The 59 flip became the key trade with 57 support when it was retested after the lunch breakout.

My intuition told me ” long side” late day because it goes contrary to what we saw yesterday, and most traders feel comfortable seeing the same result as what recently happened. Markets don’t work that way I have found, as they try to confuse as many traders as possible.

I did not take that trade, even though I guessed right.

Not all trades are of the same quality, and if I have already made “my goal”,  I am less reluctant to take riskier trades like that.

We are testing the next level higher, and no one knows where the true resistance comes in until after it holds.

Look at the 240 chart and see the testing of this next level, while daily charts show the significant 50% area higher at the 800 +/- range.

We focus on day trading,  and try to capture the swings both ways as best we can based on risk and reward.

Option expiration week, and the bigger 39 support is still supportive. Long proxies can be also held with calls if you are so inclined after this push.

A reminder: registration is free, and there is no obligation to buy anything, ever. Traders who are registered have access to the chat room, forum, and are eligible for a 25% discount on our system if and when it is offered.

This site is primarily for me to focus my thinking, and I welcome any visitors who want to explore trading ideas.

We do not consider ourselves as experts or gurus, but are students of the market, maybe just like you.

We definitely have discovered some ideas that consistently work, and they will work for you too.

If you are having trouble reacting to the market’s moves, try this: Reaction test.

Feel free to post some of your favorite sites and experiences.

Emini to the Maxi

Stop Losses

Stop losses aren’t for everyone. Some very sophisticated traders don’t use them. They use a form of hedging, and/or have a mental blueprint that allows them to have a catastrophic stop when their premise is broken.

I don’t advocate that methodology for beginners. It takes time to understand how markets work, and in the live arena, one bad day of undisciplined trading with a brain freeze and your account is in jeopardy if it is a small one.

This concept is explained in detail in our Emini wizard system, and it stems from Jesse Livermore’s “bucket shop” theory.

A trader today suggested that he bought at 844 (pullback) and wanted to know if he could average in at the low 830’s, in expectation of a bounce to 850. The market was 832 at the time.

How do you intelligently answer this question?

Now he could have bought the gap fill, and bounce and get out whole, but putting that kind of pressure on ourselves does long term damage to our psyche, confidence, and trading account.

The outlier is the one that gets you, the one that keeps going against you.

If you scale in a few places, that is very effective in ranges. But a reversal like we had to today chops you up and spits you out on the heap of washed out traders who didn’t know where the line in the sand was. Mine was 49.75 stop (honest) and target 37.25 as support. If 37 breaks, then I expect gap fill and likely test 828.

Limiting your losses is the key in this business.

If you stop using stop losses, then you need to have the discipline to give up a size-able chunk to protect yourself. You’ll win some and lose some.

Easier to just never put yourself in that position, but that’s just my conservative nature. If the market is extremely overbought or oversold, and we are near a “time reversal zone”, then I allow myself the luxury of a ONE time scale in at the backup support or resistance. If that busts, I put my tail between my legs, admit I am wrong, and donate to the Boyz retirement fund.

Think of it as Russian Roulette’s; one bad spin and we are out of here. Traders who average in must be equipped mentally and financially to weather the draw down.

Fast up is sometimes fast down because no support has been built up along the way.

Today was one of those days they jammed both sides.

Stop Using Stop Losses

Emotions

On a personal level, the Emini wizard system recognizes that we all have emotions, and that we need to understand how to use them for our advantage.

If you have been around the markets for awhile, you probably will agree that you experience these “feelings”, and sometimes, if not often, talk yourself out of some great trades.

The edge is gained by setting up a system to turn your pain into power.

Here is a modest plan to consider:

• Identify the emotion you are experiencing
• Look to fade your emotion; buy fear and sell greed
• Immediately begin deep breathing rhythm ( exhale for count of 6, inhale for count of 3)
• Identify the next two levels of support, if you are feeling fear
• Identify the next two levels of resistance if you are feeling greed
• If it’s at the open, apply the gap rule theory, utilizing Angels and Demons as a guide
• Anytime you are within 2 points +/- of a significant high or low, consider that as support or resistance until proven otherwise
• Consult a larger time frame for perspective, like a 120 min chart
• Aggressive traders play the first level, using a maximum of 2 point stop
• Conservative traders play the second level, using a maximum of a two point stop
• After a 1.25 movement, move your stop to break even, and look for the normal T1,T2, and T3
• Optimize this strategy by keeping detailed records for a few weeks, and practice taking this trade, especially at the open if you are more than 20 points away from the previous day’s close
• This training will cost you $1,000. if you play two weeks with one contract and lose every time.
• Forget I ever mentioned it and move on if this happens
• If you break even, tweak it
• If you win, send me a note with a “thank you”

Today’s pre-market low of 899.5 qualified for this strategy.

Today’s 36 high near yesterday’s bounce high also qualified.

What emotions were you experiencing at these times? Check out Nazy Massoud for some ideas to help control self-sabotage.

Buy Fear Sell Greed