My first trade this morning was against my FavFib. I got stopped out for a loss. I re-entered again after the failure was confirmed by a lower high and lower low. The outside in trades are lower probability and need to have a bigger potential profit than the risk. My initial target was the top of another FavFib: 6812.0 and a secondary target of a hoped for close of the gap, so a sale at about 6862.5 with a stop at 6878.00 fitted the hoped for potential profits at 6812.0 and 6782.0. While these numbers look big, they are in line with the volatility of the DAX.
As you can see from the pic, the initial target was hit and held. I covered half there the first touch and waited for a break of that level. When that didn't happen, I covered the balance. Then I waited to see if there would be a break of that level or a bounce to buy.
The ADP job numbers just came down and pushed the indices down even further. The gap was filled mid morning, London time, with the market sliding downwards. I believe that unless the Friday actual job numbers overcome the realisation that the U.S. is still in transition, we have a down swing on our hands. Also, the ECB is talking tomorrow and we may see some changes there. Another U.S. number tomorrow too.
I have some bearish option positions I put on at the highs - specifically engineered butterflies and condors - and I will begin taking profits on these as the U.S. markets come down today. I'll re-instate them on rallies until I see that the swing is over. How will I see that? Exactly the same way as i do on my intraday stuff - CCIs and the EMAs. My longer term trading is an important part of my overall wealth building strategy.