Wednesday, 2 June 2010

Going to The Beach Trade

One of the traders signed up for the trading has told me that he likes the idea of just one trade a day and then "going to the beach". He asked how he could do what the guy I had written about did - the guy with the Porsche.

There are a few trade setups that are like that. Not all of them come up every day but between them I think that the "beach" trade is a viable idea as long as you have determined your needs and risks and have the capital to support that profile.

Today's trade when ES RTH opened was one of those.  I sold 1076.25 against the bottom of the triple prints of yesterday's Profile with the vision of it running down "the zipper" to at least 1071.25 or lower.

It was an easy trade to put on as order flow clearly supported the trade. I scaled only once on the way down to protect myself in case I was completely off base and then covered during the bar at about 14:54 London time as the order flow had stalled and looked to reverse.

As value was accepted above 1077.00, I looked for how to go long. The guys in their Porsches had already gone to the beach with the 5 points per contract profit, not too shabby even if you were trading on just a 10 lot, or even a 3 lot.

The long came at 1076.00 and my target was the bottom of VA of yesterday. There were 2 numbers: the TPO and Volume VA. As it happened the Volume VAL of 1080.00 was hit and I exited as order flow dried up.

When trying for CP, there is something for deciding on a smallish profit target and stopping live trading when you get there, moving back to SIM for the rest of your session.

We are going to cover all of these "the business of trading" subjects in the training. It's an important part of the whole path to CP.


  1. 4 candles before trade 1 wasn't a trade? What's the difference? If so, why didn't you go for it?


  2. BrĂ¡ulio, order flow change didn't confirm until that bar.

  3. El, where was your stop for 1 trade if the market would decide to don't fill single prints? Is it above swing high ~1178.25-50? How should you decide that trade would not work? also you hadn't answered my question regarding Kiki success three posts earlier. Thanks!

  4. Andreyyy, I don't use stops, I trade the order flow. Kiki is doing great as I wrote earlier. I'm not teaching her much any more as she has her roadmap and tradeplan and is maturing as a trader as you would expect, becoming self reliant.

  5. Hello Tom,

    Is the last indicator on your chart showing the
    difference between the two EMAs ?

    What do you use that for, can this be used as a
    "chopmeter" ?

    Thanks, great as always!

  6. Tom, could you, please, write another blog post about diffirent MP tricks you are aware and using. As from this blog we know that there are several tricks you told us as a:
    1. Single prints filling
    2. Counter trend move from three prints as happened today for a single prints filling.
    3. Neutral day 50% rule after the second range extension.
    4. 80% rule of value areas.

    So are you aware of any additional MP context rules which Pete told you ;)? Thanks!

  7. Can you be more specific? You mean the CCI's? They both look the same on both candles. The VB/CVD? They are also both on red...

  8. Hi Tom,

    Can you please explain your answer to Braulio again? I do not understand your point that order flow change has not confirmed until the bar of trade 1.

    Thanks a lot!!

  9. Tom: on Wednesday's long trade you stated:
    "As value was accepted above 1077.00, I looked for how to go long."

    I am having a hard time understanding how value was accepted above 1077 at this point in time. No recent bars had closed and held above this level. I see you had 1076.50 marked on your chart which was the top of the "zipper" from Tuesday's RTH profile, but price hadn't held above this level either.

    thanks in advance, Rick

  10. Guys, all these questions are looking for mechanical answers. We all sit in front of our screens and watch the same movie. We see different things because of the way we have trained ourselves and the things we watch for. I keep saying that I look at a "picture" and make my decisions based on that. The charts I post are the same charts I use so there is no magic in that. It's the WAY I look at what is happening. I'm not looking at indicators, but at what traders are doing. This can be learned but requires a change in attitude to what you have now. When I taught Kiki to trade, it was this concept that we spent time over, not indicators.

    Today's opening trades in ES RTH were similar. I'm writing this during the first half hour. You will see the trades in the post for today. I'm still long after being short into the gap. I caught both trades because I was looking for what the traders were doing and the order flow revealed that.

  11. Tom,

    as you very well said (and I'm still learning from you), I'm trying to look at "the picture" and not the indicators.

    I know it's not easy to explain but my question was exactly that! What "movie" were you watching to see order flow change at those specific time/candles? What do you see traders doing there?

    Don't give a mechanical answer and I'm sure we will all try to grasp it. Samer included ;)