Wednesday, 11 August 2021

Context is King

 Those of you who have been reading this blog for a while, especially those that have had learned from me personally, know that I have things I call "trade pictures". 

A trade picture is what a chart has to look like for there to be a trade.

Today in the ES we had two pictures that happened almost into one trade.

The chart above is a simple Market Profile chart of the ES RTH. The red "0" is the open and is the area where my Open Mean Reversion picture was triggered. The trigger was the order flow I read on my bar chart like the one in my previous post. I was waiting to see the order flow as the ES RTH session opened as I was looking to sell based on the order flow and context in the minutes before. You can look on any low periodicity bar chart and draw in the mean and see how this trade worked.The second trade is my VAH - VAL trade. It is triggered by order flow and context as price is accepted into the previous value area with correct order flow and context.

The other part of the trades was the trade management. Stops, Targets, Scaling in and out, Doubling down id necessary. Scaling out allowed the second trade to be profitable even though it did not hit its profit target of VAL. 

August has been lower volatility but trades have presented themselves non the less. I also trade CL where there have been some nice trades too.I'm planning on showing some of those if the markets co-operate.

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