Some of the best trades are the hardest to make. Early in the morning, we broke above the opening range in the ES futures (top chart) and looked ready to take out Thursday's high.
Meanwhile, per the morning Twitter posts, we came into the day sensitive to it being a range day and saw that the important XLE and XLF sectors were not confirming the upside breakout. Also looking sketchy at the highs were XLB and XLV. Per the historical analyses, we were sensitive to seeing market weakness today.
Unable to take out yesterday's high, we moved back into the morning range (bottom chart). Note how you didn't need to catch the exact top to recognize that the upmove was failing and play a reversion back to VWAP as a first target.
Making the hard trade: It's all about preparation.
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7 comments:
wonderfull instruments.. "the must have" for a daytrader.I think the main thing why my acquaintances lose money - they are dont understand current market conditions
Hi Brett, after the day hi the very first tick < -800 signaled the downtrend - the next tick > +800 in the last hour signaled a late rally ...this plus market delta etc kept me on the right side of the market today - really enjoying the learning experience - keep up the good work!
Can someone tell me what VWAP means?
Also, regarding Joslin's comment, I understand what Delta is with respect to options. But what does "market delta" mean?
Thanks and have a great weekend
hi matthew,
This post from Dr.Brett will give you a start and further reading on VWAP. http://traderfeed.blogspot.com/
2008/11/trending-markets-and-
volume-weighted.html
Also, by market delta I'm referring to the application software that allows you see volume at bid and ask. ..Dr.B refers to it in many of his posts....I recently signed up and find it very useful...hope this helps!
Hi Joslin Lolo,
Great point; those shifts in TICK and Delta are very helpful in identifying potential turning points in the market--
Brett
Hi Matthew,
VWAP is volume weighted average price and is an estimate of the average trading price for the day.
Market Delta (www.marketdelta.com) charts the distribution of volume at bid vs offer, among other things.
Brett
Hi,
Dr.Brett could you tell me what platform you use to chart your charts and what you use to trade?
thanks
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