Wednesday, 23 March 2011

It was Easy

When I woke up, the overnight ES was down about 5 handles. I had a look at the DAX Profile and saw the second distribution of yesterday sitting on the zipper (row of single prints) of the day before.

It wasn't hard to see that the trade was to sell the break of yesterday's low and then "ride the zipper".

As it turned out, it was even easier. The DAX opened and ticked up to the VAL of yesterday's second distribution and then rejected it.


Then it was BAU (business as usual), scaling out. The DAX is a pretty awesome contract with far from the same liquidity as the ES, so I didn't have that many bullets. There was good action in the first hour before the European stock markets opened.

After the stock markets opened there was a nice retrace back to yesterday's VAL which allowed me to reload and scale out to the bottom of the zipper.

Then the Gap trade kicked in. Once we got near to the bottom of the zipper, the move was over and I was looking for what was next. Seeing the Gap kick in took a bit of looking, but by running a second set of Profiles based on the stock markets opening and closing times it was MUCH easier to see.

Finding a vision to trade is important for me, as I have said a number of times. Even if my vision is wrong, it doesn't matter because what does not happen is often as important as what does happen in discovering the real order flow.

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