Wednesday, June 3, 2009

06/03 Intra-day Trades

Today I had several trades, most of them positive, only one stopped out. Most interesting is the style of combining High/Low readings on $TICK with Support/Resistance levels. It seems to me this is a very profitable way to trade, and one could do it all day long, specially when the market gets into a low-volume/range-bound scenario.

Trade set-up:
1) Identify Support/Resistance levels
2) Wait for price to reach those levels in combination with a High/Low reading on $TICK
3) Fade the movement, going short it is moving up, or going Long if it is moving down

Trade/Money Management:
1) Use 3 lots, set the initial stop at 3 Ticks from the entry point (On /ES it is .75 away from entry)
3) Take profit for each lot:
3.1) 1st Lot with +3 Ticks
3.2) 2nd Lot with +5 Ticks
3.3) 3rd Lot at next support/Resistance price level. Once you hit +5Ticks on second lot, move the stop on the 3rd lot to B/E, so it is essentially a free trade (you win, or win big)

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