Quick Recap
The S&P futures (ESZ19:CME) closed at 3004.25 Thursday, about ten points below its opening print of 3013.75, and towards the lower end of its trading range (2998.75 – 3015.25). Holding the 3000 level on the intraday low side was important, but a reduction of the trading range after testing lows and highs leaves much to be desired.
There was nothing to really react to yesterday, as trades were pretty much within the boundaries of the Bollinger Bands. I also had a prior commitment lecturing several local traders from an international hedge fund. Nonetheless, it is good to look at a chart to see what you should not react to. In other words, there’s really nothing there, so go do something else.
Feel free to email me at david@amstradinggroup.com if you have questions, and above all, keep reading, today’s commentary is priceless.
50+ Years of Trading Experience
I want to first say thank you to everyone who has taken the time to send us an email commenting on the content we have chosen to provide. What impresses us is the level of quality of the comments you have made. It reinforces decisions made where our objectives will be met; a general commentary, a few select tools and how we use them and more. Also, how can we best take the knowledge we possess, and turn it over to you.
Given the fact that we had “zero” signals today (everybody loves the “gold cell”), let’s go with a generic discussion of the steps we go through in deciding to trade. In other words, how we start our day. It has nothing to do with what we will trade or how we will trade it, rather, it determines whether or not we will trade at all.
The first question we ask ourselves is, “how do we feel?” If the answer to this question is anything but “good,” we don’t trade. The second question relates to our life surrounding us, “is there anything on your mind that will sidetrack you from just trading?” Again, if the answer is anything but “no,” we don’t trade.
There could be a multitude of things; a sick child / parent, a middle of the day event, a problem that needs your attention. If any of these are present, we don’t trade. That being said, if we get by these first couple questions, we turn our attention to the real world; current macroeconomic and geopolitical situations.
We trade with a bias. Seldom, if ever, are we looking to catch both tops and bottoms, we’re just not that good. So, let’s assume we are trading ZN (10-Year Treasury Notes), and we believe interest rates are going down, so we are looking for a buy-side entry point. Macroeconomic data flows all day long. Personally, we use the following URL to keep track of economic reports:
Read: https://www.fxstreet.com/economic-calendar
We watch this closely every day. Quite frankly, we look at “what’s coming” a good week in advance, and prepare for it. With respect to geopolitical insight, the only way to describe what we do this; we read and listen to everything we can, not just for content, but for the underlying bias of the writer / speaker weighing the clout of the source itself. In other words, if “Fast Freddie” posts a blog saying interest rates are coming down, he doesn’t have as much clout as Fed Chairman Powell does (although sometimes we wonder).
We wanted to give you a starting point of how we trade, but find it impossible to educate everyone at the same time when limited to one column of text. This is, however, where we’re heading. The email has been lighting up, so we need determine how best to accomplish this task. Individually, no problem, we have many people like you asking us “how much” to teach how we trade. We’re interested in teaching the masses, so please tell us know what you want to learn.
The other caveat to asking us to teach you how we trade is this; we cannot teach you how we trade. We can, however, teach you how to identify symbols and patterns (see Opening Print 10/24/19) so that you can identify patterns that you recognize.
Read: https://mrtopstep.com/fed-adding-liquidity-2/
Email me; david@amstrdinggroup.com, and I will reply. Sure, we put together some great charts that we rely upon. Together with MrTopStep, we care not that you just buy our charts, but that you learn how best to employ them for how you trade. Enjoy your weekend.
Nat Gas Update
The “widow maker” broke through its 20-day moving average, but did so without conviction. Staying consistent with my above dissertation, I have plans for the weekend, so even if we wanted to (unless the bottom had fallen out), the likelihood of our making a trade is remote.
Storage numbers were uneventful, but we did see another slight increase in price of the VPOC and the VWAP, something that often precedes a move to the upside, and NG did close at the top end of its daily range. We have no position, and it is highly unlikely we will initiate one today, unless the bottom falls out.
In any case, here are the daily MarketProfile. Remember, I’m here to help you learn to use what we use, just email me at david@amstradinggroup.com with any questions.
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As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
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