1 2 3 Divergence Play

TraderSmarts Numbers for the YM Emini Futures - Wednesday August 11, 2010

Support becomes resistance and vice versa...

10596, 10639, 10699, 10747, 10794*, 10833* Resistance on the YM Emini Futures

10536, 10451, 10403, 10362, 10333, 10255 Supports

Trade smart and trade well!

Okay 7 days of consolidation now. I tweeted a $TRIN chart today that would be a good idea to take a look at:

http://tradersmarts.blogspot.com/2010/08/what-i-am-seeing-on-trin.html

On ES we still have 1155 big target with 1135.25 resistance along the way. A test of 1190.75 would still make sense to me before going much over 1135.25.

YM: 10794 and 10833 highest odds short FTU. 10362 highest odds long FTD.

What I am seeing on the $TRIN

TraderSmarts Numbers for the YM Emini Futrures - Tuesday August 10, 2010

Support becomes resistance and vice versa...

10663, 10699, 10747, 10794*, 10833* Resistance on the YM Emini Futures

10612, 10570, 10536, 10461, 10403, 10362*, 10333, 10255 Supports

Trade smart and trade well!

SIX days of consolidation now. Expect a big move soon. Can FOMC today be the catalyst? We have 1155 big target with 1135.25 resistance along the way. A test of 1190.75 would make sense to me before going much over 1135.25.

Ideally at this point we get a move to 1135.25 - 1138.25 extreme that can be faded for a nice move back lower. We shall see - be prepared to trade whatever is presented.

YM: 10794 and 10833 highest odds short FTU. 10362 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Monday August 9, 2010

Support becomes resistance and vice versa...

10623, 10699, 10747, 10794*, 10833* Resistance on the YM Emini Futures

10570, 10536, 10461, 10403, 10376* 10333, 10255 Supports

Trade smart and trade well!

YM: 10794 and 10833 highest odds short FTU. 10376 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Friday August 6, 2010

Support becomes resistance and vice versa...

10699, 10794, 10833 Resistance on the YM Emini Futures

10632, 10613, 10532, 10461*, 10403, 10376, 10333, 10255 Supports

Trade smart and trade well!

Not much has changed. 4 days of consolidation ahead of NFP Friday. Is there going to be an anomaly in the number? Like I tweeted today 1155 is big upside target but 1135 is initial target. The floor HERE (last 4 days range lows) feels VERY weak but NFP fear seems to be keeping it up. If we pop on number 1135 seems logical area to fade for reversion back to the mean. If we dump hang on because I can see us all the way back to 1090.75. (Numbers for the ES)

YM: 10699 very decent spot to look for shorts FTU. 10794 highest odds short FTU. 10532 good spot to look for long FTD. 10461 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Thursday August 5, 2010

Support becomes resistance and vice versa...

10632, 10699, 10794, 10833 Resistance on the YM Emini Futures

10613, 10532, 10461*, 10403, 10376, 10333 Supports

Trade smart and trade well!

YM: 10699 very decent spot to look for shorts FTU. 10794 highest odds short FTU. 10555 good spot to look for long FTD. 10461 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Wednesday August 4, 2010

Support becomes resistance and vice versa...

10597, 10614, 10639, 10677, 10794 Resistance on the YM Emini Futures

10532, 10491, 10451, 10403, 10376, 10333 Supports

Trade smart and trade well!

YM: 10677 very decent spot to look for shorts FTU. 10794 highest odds short FTU. 10532 good spot to look for long FTD. 10376 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Tuesday August 2nd, 2010

Support becomes resistance and vice versa...

10616, 10639, 10665, 10794 Resistance on the YM Emini Futures

10541, 10491, 10451, 10403, 10376, 10333 Supports

Trade smart and trade well!

YM: 10665 very decent spot to look for shorts FTU. 10794 highest odds short FTU. 10541 good spot to look for long FTD. 10376 highest odds long FTD

How I View and Use Stop Losses

This was an email that I sent to a client regarding stop losses - hopefully it helps give an idea of how I view and use stop losses:

 

For me my stop is dependent on the trade itself.  I do NOT use, for example, a 20 tick stop on all my YM trades.  I find that each trade is unique and therefore needs a unique stop.  Others may disagree but for me this strategy works.  Also there are some trades where I will pair into a position and then the stop will be based on the cost basis of the position not the initial entry. Along the same lines I also am a BIG believer in managing risk by controlling size. If your maximum position size is 50 cars but you only initiate with 10 cars then you are controlling risk from the start and can afford to take a larger stop then you would if you initiated with maximum size, 50 cars. 

 

As a general rule though I use a 13 - 30 pt initial stop (not hard stop) on the YM if I am not pairing into a position. If you are not pairing in there is rarely a need to use more than a 30 pt stop on an intraday trade - especially in this slow market. Obviously Fall 2008 that was not the case :)

 

I rarely put in a hard stop with my initial entry unless I know I won't be monitoring the trade. I have enough discipline to get out if my trade parameters are being violated. A lot of times my stops will be based on over or under and HOLDING a certain level. Say I am short 11050 on the YM and I don't want it over and holding 11068.  Well we could go hit 11073 fast and then get back under 11068 fast and if I had a hard stop sitting I would be taken (stop stolen) while the premise of trade was still valid. Yes this costs me extra ticks sometimes when I do exit a loser but I have found that over time this approach pays off.

 

The time I will put in a hard stop is usually once I get a scale or two and then determine okay if it hits X level I want out.  I'll just put in the hard stop so I don't have to worry about it. 

 

Hope this helps! 

TraderSmarts Numbers for the YM Emini Futures - Monday August 2, 2010

Support becomes resistance and vice versa...

10510, 10558, 10630*, 10639* Resistance on the YM Emini Futures

10451, 10403, 10376, 10333*, 10243, 10059 Supports

Trade smart and trade well!

YM: 10510 is the line in the sand for longs. Needs over and holding to create a melt up. Prolly worth a short FTU and see if it can roll over and fill the gap. 10630 - 10639 highest odds short FTU. 10333 highest odds long FTD.

Be Back Next Weekend...

TraderSmarts Numbers for the YM Emini Futures - Monday July 26, 2010

Support becomes resistance and vice versa...

10393, 10440, 10451, 10558, 10630 Resistance on the YM Emini Futures

10322, 10255, 10233, 10216, 10162, 10058, 10023 Supports

Trade smart and trade well!

YM: Potential for 3 white soldiers on daily YM. 10322 highest odds long FTD. 10451 highest odds short FTU.

TraderSmarts Numbers for the YM Emini Futures - Friday July 23, 2010

Support becomes resistance and vice versa...

10297, 10319, 10365, 10440, 10451* Resistance on the YM Emini Futures

10242, 10162*, 10116, 10080, 10023, 9962 Supports

Trade smart and trade well!

YM: 10162 highest odds long FTD. 10451 highest odds short FTU.

TraderSmarts Numbers for the YM & Example of How I View the Market - Thursday July 22, 2010

Support becomes resistance and vice versa...

10177, 10212, 10242, 10293*, 10319, 10365, 10451 Resistance on the YM Emini Futures

10153, 10141, 10116*, 10104, 10080, 10023, 9962, 9918, 9864*, 9829*

Trade smart and trade well!

YM: Don't be overwhelmed by the amount of TS #'s. I am leaving a lot of them on that probably won't hit on the day for a reason. Anyway 10116 is Huge for Thursday. Consider it a line in the sand on the day. Expecting occilations around 10116 until we find direction. Over and holding and potential for short squeeze and under and holding and potential for long squeeze. Highest odds short FTU is still 10293. Highest odds long FTD is the 9864 - 9829 zone.

I thought it would be good to try and "break down" how I use the TraderSmarts Numbers and how I "view" the market. Hopefully this helps some of you.

Above is how I post them. Below is MY breakdown. See you may view the market different and I try not to impose MY view on Subscribers. It is perfectly logical and realistic to make money with the TS #'s within your OWN market context. Anyway below is my context just so you get an idea of how I think...

(10451) High extreme and a huge and area price hasn't traded at for a month. If hits will be looking for divergence from the most recent swing high (10367) for a short.

(10365, 10319, 10293*, 10242) Area price hasn't trade at in a few days. Most likely will be selling longs and looking for shorts if price can move into this area, especially the 10293 and higher.

(10212, 10177) Area that has been recently traded yet has acted as resistance. The initial resistance zone on the way up.

(10153, 10141, 10116, 10104*, 10080, 10023) Area price has spent the majority of the recent time in. 10116 the Line in the Sand. Whichever side of 10116 price resolves on can get a move going in that direction. This is the most difficult area for new traders to trade. There is a lot of infighting in this area.

(9962) Price hit this as a low extreme most recently.

(9918, 9864, 9829) Low extremes. Will be looking to long this area especially the 9864 - 9829 if price can make it this low.

Hope this was informative!

TraderSmarts Numbers for the YM Emini Futures - Wednesday July 21, 2010

Support becomes resistance and vice versa...

10212, 10242, 10293*, 10319, 10365, 10451 Resistance on the YM Emini Futures

10177, 10141, 10115, 10070*, 10023, 9962, 9918, 9864, 9829 Supports

Trade smart and trade well!

YM: 10293 highest odds short FTU. 10242 good spot to look for short FTU. 10115 good spot to look for longs FTD. 10070 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Tuesday July 20, 2010

10109, 10141, (10177, 10212)*, 10242, 10309, 10365, 10451 Resistance on the YM emini Futures

10076, 10023, 9967, 9918, (9864, 9829)* Supports

Trade smart and trade well!

Using the ( and ) hopefully give you a better idea of how I am viewing things.

YM: Still viewing the 10177 - 10212 area as short zone FTU. Watch the midpoint of that zone. 10023 has held support and then 10K at the close. I'm expecting a move up to the short zone from here before 10K snaps to the downside. If 10K snaps highest odds long FTD is 9864 - 9829.

TraderSmarts Numbers for the YM Emini Futures - Monday July 19, 2010

Support becomes resistance and vice versa...

(10177, 10212)*, 10242, 10309, 10365 10451 Resistance on the YM Emini Futures

10088, 10023*, 9967, 9918, 9864, 9829 Supports

Trade smart and trade well!

Put something a little new into the TraderSmarts Numbers. I have done this before but curious to know what you think? Hopefully it helps you see how I view the areas better!

YM: Viewing the 10177 - 10212 area as short zone FTU. Watch the midpoint of that zone. 10023 is big and may produce a pop just under Friday's low.

TraderSmarts Numbers for the YM Emini Futures - Friday July 16, 2010

Support becomes resistance and vice versa...

10319, 10365, 10406, 10451* Resistance on the YM Emini Futures

10233, 10168, 10086, 10023, 9967, 9918, 9864 Supports

Trade smart and trade well!

YM: 10023 highest odds long FTD. 10451 highest odds short FTU.

TraderSmarts Numbers for the YM Emini Futures - Thursday July 15, 2010

Support becomes resistance and vice versa...

10319, 10365, 10406, 10451* Resistance on the YM Emini Futures

1266, 10233, 10168*, 10086, 10023, 9967, 9918 Supports

YM: Failure to sell when opportunity was present makes me think may want a test of 10451. Overnight spike confirms shorts are on the defensive. 10319 could be considered the Pivot Point for Thursday. 10365 which was the target of move up from Tuesday was hit on the o/n spike. 10451 highest odds short FTU. 10168 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Wednesday July 14, 2010

Support becomes resistance and vice versa...

10365, 10406, 10451* Resistance on the YM Emini Futures

10303, 10233*, 10168, 10086, 10023*, 9967, 9918, 9864 Supports

Trade smart and trade well!

YM: 10365 was the target. It hit 10362 in the o/n session. As of now there is no reason that it is obligated to push higher. 10451 highest odds short FTU. Under 10233 and holding and potential for LONG squeeze to ensue. 10023 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Tuesday July 13, 2010

Support becomes resistance and vice versa...

10169, 10202, 10252*, 10265* Resistance on the YM Emini Futures

10149, 10083, 10023, 9952, 9918, 9864*, 9829 Supports

Trade smart and trade well!

YM: 10252/10265 and higher highest odds short FTU. 9962 FTD a spot to look for longs. 9864 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Monday July 12, 2010

Support becomes resistance and vice versa...

10139, 10169* 10182, 10202, 10265 Resistance on the YM Emini Futures

10104, 10023, 9962, 9918, 9864*, 9829 Supports

Trade smart and trade well!

YM: 10169 and higher highest odds short FTU. 9962 FTD a spot to look for longs. 9864 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Friday July 9, 2010

Support becomes resistance and vice versa...

10096, 10128, 10169, 10217, 10265 Resistance on the YM Emini Futures

10023, 9962* 9918, 9864, 9829*, 9972 Supports

Trade smart and trade well!

YM: Viewing 9962 as the line in the sand today. 10096 was Thursday highest odds short FTU. There and over and I will be looking for shorts. 9962 FTD a spot to look for longs. 9829 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Thursday July 8, 2010

Support becomes resistance and vice versa...

10023, 10068*, 10096, 10128, 10217 Resistance on the YM Emini Futures

9972, 9918, 9864, 9829*, 9772, 9683 Supports

Trade smart and trade well!

Well Wednesday we got the $TRIN day and the move up to 9921 - 9938 I had been expecting. HUGE up day so a consolidation day would make sense for Thursday.

YM: 10068 and higher highest odds short FTU. 9829 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Wednesday July 7th 2010

Support becomes resistance and vice versa...

9683, 9704, 9772, 9850*, 9921, 9938, 9962 Resistance on the YM emini Futures

9638, 9618, 9566*, 9494, 9458 Supports

Trade smart and trade well!

YM: I am still expecting a move back to 9921 - 9938 before market goes much lower than 9494. 9850 highest odds short FTU. 9566 highest odds long FTD.

TraderSmarts Numbers for the YM Emini Futures - Tuesday July 6, 2010

Support becomes resistance and vice versa...

9618, 9648, 9727, 9804, 9850, 9921, 9938 Resistance on the YM Emini Futures

9566, 9494, 9456 Supports

Trade smart and trade well!

Tweeted Friday, or it may have been Thursday, that I am expecting a "TRIN Day" in the market. A TRIN day is one where the TRIN is .78 or lower all day and price is straight up with NO retrace. Underlying bid all day. I think we are due for one soon.

YM: I am expecting a move back to 9921 - 9938 before market goes much lower than 9494. Not inclined to short for anthing other than scalps until 9727. Came close to the 9494 O/N on Monday night. If we get a new low I will be looking for a long to hold - we may not get one.

Some things I look at when trading...

When TraderSmarts Numbers line up with divergence on the bigger timeframes and a momo killing volume spike - it is go time. My homework (the TraderSmarts Numbers) already provide me with the areas I am interested in initiating trades - when other things line up there is nothing left to think about. This is what I mean when I say I am always aware of what the bigger timeframes are doing.

TraderSmarts Numbers for the YM Emini Futures - Friday July 2nd, 2010

Support becomes resistance and vice versa...

9685, 9727, 9757, 9804, 9842, 9921, 9938

9637, 9612, 9601, 9533, 9494

Trade smart and trade well!

YM: 9637 aggressive long. 9612 - 9601 high odds long. 9533 - 9494 highest odds long FTD. I am expecting a move back to 9921 - 9938 before market goes much lower than 9494. Not really inclined to short for anything other than scalps until 9757 or higher.

TraderSmarts Numbers for the YM Emini Futures - Thursday July 1, 2010

Support becomes resistance and vice versa...

9694, 9757, 9772, 9817, 9842*, 9921*, 9938* Resistance on the YM Emini Futures

9677, 9606*, 9575*, 9494* Supports

Trade smart and trade well!

YM: 9772 - 9752 first spot to look for shorts. 9842 harmony from Tuesday and huge resistance Wednesday - spot to look for short and look how market reacts here. 9938 - 9921 highest odds short FTU. 9606 and lower highest odds long FTD. I am expecting a move back to 9921 - 9938 before market goes much lower than 9494.