Half Gap

I have written about my concept of envisioning. I start my daily prep and envision where the market will move for the day from what I see in the Profile, as well as from what action took place "overnight". This gives me a starting point for my trading. As the day unfolds, I may adjust my vision if the market tells me to.

I was trading the DAX from the open today in Germany. I traded the market's swings, both from the short and the long. I was looking for a downward bias. Weakness came in again before RTH and set me up for the ES Gap trade.

It was very interesting. There was a buying tail on the ES RTH Profile and the ES was to open half way on that zipper. Overlapping it it was the VAH of the previous split Profile.

The market opened very weak. As I was short from earlier at 1158.00, it was easy to hold my position into the RTH open and watch what happened at the area I spoke of above. As you can see, the market did not retrace back to close the gap or even to the VAL. It bounced off the VAL of the Profile of the 11th and traded down to the VAL at 1151.75 of the 7th. It bounced from there and retraced, still trying to close the gap.

Each of these points was a clearly identifiable and tradable opportunity. Those of you who have been studying the course will recognise the trading pictures. It was the range bars and the context of the Profile that gave you these trades. Without the context, it would, at least for me, have been difficult to make these trades. Trade #1 was identifiable as overbought, Trade #2 was a reversal point.