Back from holidays and a little slow to get into the blog writing.

A trade setup tonight on the Euro which has some unique characteristics.

Long term viewers of the blog and those that have done Alexander's Pride Trading course know of it as a pump fake trade.

The trade does enough to give longs hope with price making a higher high but the major trend is down.

This price action nails the retail bottom pickers looking for reversals.

As buyers fail to push price up any further sellers take the batten forcing long traders to cover and setting up a down move with the trend.

This trade needs to be traded in the right context to get high win percentages consistently.  As do all trade setups.

In partnership with Alexander we have been developing an analytical system for traders.

I have been using a beta version successfully in live trading and the execution of this euro trade tonight is an example trading 3 contracts.

I am aiming to have a fully functional version ready for my ATAA presentation in Brisbane providing any bugs are sorted with our engineers in the US.

Nothing better than putting my head on the chopping block in front of a crowd.  Should be fun.

pfa.jpg (95.32 kb)

A few posts ago I decided to concentrate on currencies to free up some time for myself.

Focus on one thing and hit the setups as they appear.

Guess what, that completely went out the window and I have been trading everything.

The Dax, ES, Hang Seng, SPI, stocks and currencies.

It was just too boring for me.

Over the last 10 years I traded hundreds of times a day and to just trade in the single figures was like watching paint dry.

The good thing for me is that my style has tightened up and the results have been consistent over the various instruments.

January results were positive $47,000 which was reasonable considering I spent a few weeks away from the market.

I feel I am finding my footing on the Dax with some consistent results and I feel very relaxed with my trade style and risk.

Today I traded the Dax with an initial long trade that failed.

Instead of just closing out the trade for a loss, I reversed the position as the structure looked like it had changed to favour a downside bias.

In trader development this is one of the most difficult things to do in an objective manner while trading real time.

There is a fine line between reversing for a new setup versus reversing because you're revenge trading.

Revenge trading has been a specialty of mine which has provided some of my biggest losses over the years.

The only way for me to stop this mental problem has been to have a consistent structure for every trade I take with pre-planned what if scenarios.

I know I am trading well when I can adapt to new information quickly and act decisively.

Below is the Dax trades for the first 2hrs of trade.

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Trade results.jpg (75.43 kb)

Today's early trade on the Dax was almost a mirror image of yesterday.

My first trade was a long at a possible support (demand) area at 5660-5655 area.

I was stopped out at the low tick at 5652.5 when on review was the prime area for demand.

If we look at the first hour of trade a nice support formed at the 5652 area.

The re-entry average was 5556 and I managed to scale out for a total $ 1400 US profit.

My exit style can still be improved but the profits are starting to add up.

The key to profits so far today came from panicked retail traders selling into support!

Dax 3 minb.jpg (85.71 kb)

One thing I notice with trends is that on retracements price often bases but then pushes just below the lows to take out stops and panicky trend traders.

This is the natural order of price movement in that for a trend to move it needs a continual supply of new fuel.

If the trend is up and a trader is already long he will not bid up price.

If he is not positioned he will be tempted to trade into a position and in effect provide fuel to the move.

Price structure of a single bar in the context of a set of bars gives clues as to when traders are caught out of position.

This is what I look to trade off.

This does not mean I nail every move! For me it is still constant learning and practice.

Dax sep23.jpg (134.28 kb)

SPI sep 23.jpg (134.16 kb)