Emini Day Trading Diary

5 min Emini Nasdaq 100

Hi,

There was the GDP data released today at 8:30. Coming out at 4%, it was better than the estimate of 3.4%... But does this means that market is going up?? No, in fact market gapped down today.. Apparently market players did not like what they see...

Price made a furious attempt to close the gap and even went beyond it... However, there were no clear technical signals for me to enter and I stayed on the sidelines...

I only entered the market at 14:30 when price completed a head and shoulders formation and broke beneath the neckline... I shorted 1 contract at 1972 and exited when price reached 1961 which coincided with yesterday's close and my moving averages...

profits = $220. You might ask me why I did not trade another 2 more contracts as usual, that's because, I already wanted to get out at 1961 even before I entered the trade, the profit target was clear in my mind and I didn't think there was enough room for shorting another 2 more contracts.. The risk/reward is simply not attractive enough.

Posted by Michael Taylor at 7:46 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

How's it going? Market gapped up today and never did close below the opening price at any one time... This is very strong price action... If you observed carefully, price is being supported by the opening price... But it hit resistance at the cyan moving average at around 11:00 am... I did not enter the market then..

My chance only came when Stochastics started to turn up from the oversold regions in a double bottom fashion. This is a very rare pattern.. and the risk/reward seems great in this trade, being supported by the high of the opening bar. I longed 1 contract at 1927 and another 2 more contracts at 1938...

Short-term MACD crossed the signal shortly after I entered, confirm the direction of trade.. I held my position all the way till the end and exited at 1960.. notice how Short-term MACD crossed back under the signal line? I made profits of $1540.

Fundamentals:
>Many investors believe the Federal Reserve will cut interest rates at its next meeting on Sept. 18 or even sooner and were preparing for Fed Chairman Ben Bernanke to hint at such a move on Friday at a speech in Jackson Hole, Wyo. The possibility of a rate cut has given Wall Street some hope that the stock market will recover from its summer volatility, and that right now, it's a good strategy to buy while the buying is cheap.

News that Bernanke said in a letter to Sen. Charles Schumer, D-N.Y., that Fed policymakers are "prepared to act as needed" if the market's turbulence hurts the economy helped pad the market's gain.
The Fed, although it has not yet indicated that it will indeed lower the benchmark fed funds rate, has been adding cash to the banking system in an attempt to keep the credit markets liquid. The Federal Reserve Bank of New York said Wednesday it would inject $5.25 billion through a one-day repurchase agreement, where it buys that amount in collateral from dealers who then deposit the money into commercial banks.

Posted by Michael Taylor at 8:11 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi,

How is it going? We are entering a new era of hightened volatility... market is nervous about how things might turn out.. Major economic news have an amplified effect on market movements.. Today we have two major pieces of news. The consumer confidence report at 10:00 and the FED minutes at 14:00

Market gapped down without really recovering... Although the general direction was down, there was no strong momentum ... Consumer confidence did not really have a big impact on the market.. I stayed on the sidelines...

Fed minutes came out at 14:00 and market did not react in a big way at all.. But now however, it was pretty obvious that market was slowly trending down.. I only needed a technical confirmation for me to go short... The signal came at 14:45 when price broke the support line at 1923. I shorted 1 contract at 1920 and another 2 more contracts at 1917.. Although stochastics was not strictly in the overbought region, it also turned down... Short-term MACD also turned down sharply below the zero line.. I held my position all the way till the close and exited at 1909 with profits of $540.

Fundamentals:
The stock market found little to assuage concerns in minutes from the Fed's last meeting, released during afternoon trading. The major indexes' losses steepened after investors parsed the minutes for signs of a possible cut in interest rates.
There had been some hope on the Street that Fed policymakers might have sent a stronger signal they were more willing to cut interest rates to help calm turbulent market conditions. But in the minutes from the Federal Open Market Committee's Aug. 7 meeting, while the central bank noted the turmoil in the markets and said, "to the extent such a development could have an adverse effect on growth prospects, might require a policy response," it didn't discuss a cut in the benchmark federal funds rate that Wall Street has wanted.
The meeting predated a number of actions taken by the central bank to try to alleviate market volatility, including the Aug. 17 lowering of the discount rate, the interest the Fed charges banks to borrow money. Wall Street, despite a calmer week after that step, seems to be growing more dissatisfied because the Fed has not yet lowered the funds rate -- and with a return to the intense volatility seen earlier this month may be trying to force the Fed to act.
"Investors are getting whipped side-to-side because their expectations, which are changing almost on a daily basis, aren't being met," said Chris Johnson, chief investment strategist at Johnson Research Group. "We've gone from the roof is on fire to the Fed is riding in on a white horse, and what we're seeing now is a reality check."
Stocks were down the entire session on further worries about the economy. The Conference Board's report that consumer confidence sagged in August amid volatile financial markets and ongoing housing problems added to the downbeat mood on the Street. Keeping alive credit worries, a Standard & Poor's housing index showed that U.S. home prices in the second quarter posted the sharpest decline since 1987.

Posted by Michael Taylor at 8:05 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

HI,

Market gapped down today but it did not really recovered.The gap never closed and market direction was mixed at best...

At around 14:30, a double top appeared to be in the formation... Stochastics also turned down from the overbought region.. This gave me the confidence to short 1 contract at 1964 and another 2 more contracts at 1961... however, the pullback was shortlived as stochastics started to turn up and price bounced off the moving averages, I exited my position at 1959 with profits of $180...

Posted by Michael Taylor at 7:31 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi,

Today there's an important piece of market info that all traders should take note of : New home sales at 10:00. This will greatly affect the direction for the rest of the day...

At 10:00 am, annoucement was made that new homes rose sales 2.8% and market was reacting good to it.. But I didn't believe the rally ... I had to wait for some confirmation... At 11:50, finally, price broke out above the high established by the morning and momentum seems strong. Stochastics was constantly in the overbought region suggesting strong buying pressures. I longed 1 contract at 1946 and another 2 more contracts at 1952 when price paused for a while... Today seemed like a bull trend day and I didn't want to exit prematurely as long as I am still in the green.. The trade was in the green since I entered and I held it all the way till 1962 where a red candlestick appeared and stochastics started to turn sharply down... for profits of $720.

Fundamentals:
New-home sales turned up and factory orders soared in July, suggesting the economy was on stable footing before a credit crunch took a turn for the worse.
The Commerce Department reported Friday that sales of new homes rose 2.8 percent to a seasonally adjusted annual rate of 870,000 units. The increase came after a 4 percent drop in June.
Another report from the department showed that orders placed with factories for big-ticket goods jumped 5.9 percent in July, the most in 10 months.
The latest batch of economic news was better than analysts had expected. They were forecasting home sales to fall and calling for a much smaller, 1 percent gain in factory orders.
On Wall Street, the reports cheered investors who have been consumed by worry in recent weeks about the country's financial health amid spreading credit troubles. The Dow Jones industrials vaulted 142.99 points to close at 13,378.87.
The housing report showing the July sales boost comes as credit standards have been tightening on home mortgages. Credit problems took a turn for the worse in August, making it even harder for some buyers to get financing. That means home sales in the coming months will likely show renewed weakness, economists said.

Posted by Michael Taylor at 5:43 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market gapped up by around 3 points and for the first 5 minutes it made a desperate attempt to go higher. Why desperate? You can see that with the long upper shadow for the red candle for the first 5 minutes. Price then closed the gap and momentum appeared to be pushing it down... Stochastics went from overbought region to cut below its signal line. This was enough for me to short 1 contract at 1947 and another 2 contracts at 1945...

Notice that my trade was confirmed by short-term MACD and mid-term MACD cutting the signal line.. I held my position until 1940 when stochastics started to turn up and price bounced off the moving averages.. profits of $340.

Posted by Michael Taylor at 8:00 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi,

Again, for those who have been following my trades, today's set up is nothing new.. This is one of my favourite set ups... Market gapped up by more than 10 points today and the gap absorbed much of the move today.. As usual, it was trading in a ranging fashion for the morning..

The real chance came at around 14:30 when I saw price bounce off the moving averages and stochastics started to turn up... price seems to be forming the double bottom pattern again... Well, you might ask how do I know? Fact is, I don't know, but if you wait till the pattern form, you will have less movement to trade. So you just have to trust your instincts and follow the technical indicators.. Furthermore, this is a low risk trade, placing the stop loss just beneath the moving averages.. I longed 1 contract at 1937 and another 2 more contracts at 1938 when price borke the neckline...

I held my position all the way till close to closing bell where I exited at 1943 and stochastics started to turn down.. Profits = $320

Posted by Michael Taylor at 8:09 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

We are trading in exciting times when volatility expands and the emini contracts tend to trade with greater ranges. Today's trade is a little unusual in terms of technical set ups.

Firstly, price formed a double bottom pattern with yesterday's price and finally broke yesterday's high (which is a resistance level) at 11:30. Both stochastics and Short-term MACD are already at high levels. But upward trending moving averages, stochastics and MACD all offer comfort for me to go long 1 contract at 1908... Price never did pulled back below 1905 ( which is below yesterday's high) and this gave me confidence to go long another 2 more contracts at 1912.5

I stayed in my trade all the way till price hit the top of my bollinger band and stochastics and Short-term MACD started to turn down.. I exited at 1918 with profits of $420.

Posted by Michael Taylor at 7:55 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market was generally sluggish for the morning session, It opened with a gap of around 6 points, closed the gap and moved in a ranging fashion... I could not tell which direction it was going...But at around 14:30, I began to see prices bounce off moving the moving averages and a double bottom starting to form... It should be clear to you that the moving averages are providing strong support...

This coupled with positive divergence patterns formed by both stochastics and Short-term MACD gave me the signal to go long... This is a high return/risk ratio trade... I simply put my stop loss beneath the moving averages at 1880... My upside is at least to the opening price of 1898...

I longed 1 contract at 1887 and another 2 more contracts at 1895 when prices broke the neckline... price went up as expected, it broke the high established during the morning and continued to go up a little further... I prepared to exit my position and got out at 1908 with $640 profits.

Posted by Michael Taylor at 5:54 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market gapped up by almost 30 points today... and guess what? it started to close the gap.. Price made a desperate attempt to go higher.. but tumbled.. I shorted 1 contract at 1887 when price broke below the opening price.. and another 2 more contracts at 1882

Stochastics also turned down from overbought region.. and this gave enough signal for me to short the market...

When to get out?
price never really closed the gap.. but it met strong support at the moving averages.. and stochastics also appeared to be turning up.. This is a danger sign... I exited at 1865 with $1120 profits..

Fundamentals:
The Fed -- which had resisted lowering rates despite weeks of market volatility, and instead added nearly $120 billion in liquidity into the banking system -- cut its discount rate to 5.75 percent from 6.25 percent. The central bank acknowledged that the stock market turbulence that has pulled the Dow down by hundreds of points a day was posing a risk to economic growth.
"People were kind of baiting the Fed into doing something, and finally they did," said Philip Dow, managing director of equity trading at RBC Dain Rauscher. "The playground monitor finally showed up, and it showed someone cares and someone is bringing rationality into the market."
But the central bank made no mention of lowering its target for the federal funds rate, which has stood at 5.25 percent for more than a year. The fed funds rate determines the rates that banks charge each other, while the discount rate only covers loans the Fed makes to banks. Many strategists believe the market won't settle down until the Fed lowers the fed funds rate target, considered a more significant benchmark.

Posted by Michael Taylor at 5:51 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

The market gapped down by almost 15 points today.. The fall yesterday is going to continue? We don't know, we will just watch the market and react accordingly.. I did not enter for the morning session..

A big double bottom began to form from 12:00 pm onwards and it only became apparent at around 15:20, the apperance of a hammer together with positive divergence of the Short-term MACD and Mid-Term MACD plus stochastics turning up is a very powerful signal for me to go long... I long 1 contract at 1828 and another 2 more contracts at 1835.. I held my position all the way till the end and exited at 1856 with $1400 profits.

Posted by Michael Taylor at 5:41 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

As usual, price was ranging in the morining session and I simply couldn't tell where the market was going.. I decided to stay out of the market..

At 14:00, things started to get interesting as price bounced off nicely away from my moving averages ( look at cyan moving average). However, this was not enough for me to go short.. I waited for it to break the support line at 1905 established by the low of the morning session before I entered...

At the same time, stochastics was turning down from the overbought region and Short term MACD was cutting the signal line again... I shorted 1 contract 1904 and another 2 more contracts at 1895.. I held my position all the way till the end when I exited at 1878 when shot-term MACD and Stochastics appeared to be moving up.. profits of $1200.

Posted by Michael Taylor at 5:32 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Market was quite undecided for the first 30 min of trade, I couldn't tell which direction it was moving and it was generally ranging... But at 10:05, things started to change and price started to move down...

If you look at the 5 min charts, you will notice a huge red candlestick... This is a clear sign that we should go short... it broke out of the range for the first 30 min of trading..

Let's take a look at our indicators... Now, Stochastics although not at the overbought region, turned down to cut the signal line and short-term MACD followed suit.. But what gave me the most confidence was

Mid-term MACD cutting the zero line.. this is a very powerful signal.. I shorted 1 contract at 1942 and another 2 more contracts at 1938. holding my position all the way till 1927 when stochastics started to turn up and I exited at 1927 with $740 profits.

Posted by Michael Taylor at 5:24 PM | Permalink | Comments (0) | TrackBacks (0)

I have finally set myself to the task of compiling a tutorial workbook with detailed trade analysis after numerous requests from my readers. Here is it, this workbok gives you step-by-step instruction on how I view different market scenarios, where to enter, where to exit, where to put the stop loss, profit target, etc.....

You will be trained to think in a discplined manner if you follow through all the exercises in the book. With 24 Case Studies and 6 tutorial style detailed examples, you will be thoroughly drilled until trading becomes second-nature. This workbook builds on the knowledge you have learnt from the previous book, elavating your trading to the next level.

Please refer to top page for more info http://www.daytradingdiary.com

----------------------
What you will learn:

Case Studies

From 24 case studies, how to time the first entry, second entry, where to place the stop loss and where to exit the position. Study these case studies in detail to make trading second-nature to you.

How to integrate the use of daily charts into your trading plan. Learn how a long-term view can be useful in helping to identify potential trouble regions such as support and resistance lines.

How to clearly identify entry and exit signals from the various indicators. Learn how to combine the various signals together that gives a more powerful and accurate signal.

How to avoid potentially lethal market that can cause you to lose alot of money. Trading has nothing to do with being brave, learn how to logically dissect market conditions and make a conscious decision not to trade.

How to expect what the trade scenario will be like tomorrow. A mentally prepared trader has a higher chance of being a profitable trader.

Tutorial Workbook

Designed to drill you on real-life trading scenarios. Some scenarios are meant to be tricky, but these are all taken from real-life scenarios.

Sample trade execution with detailed trade analysis to help you understand why the trade is made in that particular manner. Learn to work out mentally why each trade worked so that you can repeat your success.

Learn to analyze the probabilty of the trade, assessing the risk/reward and identify the signals that confirm your trading decision is correct.

Posted by Michael Taylor at 9:30 AM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

I can't tell you how much I am enjoying these few weeks. Market volatility is up. Fed is moving in.... nothing could be better for day traders...

Market gapped down today by around 15 points. again. this is a big gap down... we would expect market to move in the direction of the gap.. I did not enter the market... I was just monitoring the market...

I entered only upon hearing that the FED injected another $16Billion into the banking system and my stochastics started to turn up.. it seemed apparent that price is going ot close the gap.. I longed 1 contract at 1912 and another 2 more contracts at 1932 when price broke the resistance line formed by today's open... I held it all the way till it hit the moving avearages and bounced back with a red candle.. I exited at 1950 with $1480 profits.

Fundamentals:
The U.S. Federal Reserve provided the banking system with $38 billion on Friday, the largest amount of liquidity since the days after the September 11 attacks six years ago, adding ample funds for the second day running as financial markets fretted over credit conditions.

Before Wall Street's opening bell, the Fed infused $19 billion in a market operation that was conducted more than an hour before its usual time.
By mid afternoon, the Fed conducted two more cash injections -- $16 billion and $3 billion -- a highly unusual but not unprecedented occurrence for a Friday.

The last time the central bank made a similar statement was after the September 11, 2001, terror attacks, when it also said it would do what was necessary to keep markets functioning normally. The Fed made a similar vow in October 1987 following a precipitous decline in U.S. stock markets.

The fed funds rate was trading at 6 percent in early morning trade, but fell back to 5.25 percent shortly after the operation, in line with the target set by the central bank. It was last trading at 5.25 percent.

The Fed said all of the collateral accepted in the 3-day repos on Friday was mortgage-backed debt.

Posted by Michael Taylor at 7:50 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Nasdaq Emini 100

Hi there,

How's it going lately? I hope you are enjoying the spike in market volatility as I am.. Traders need volatility to make money.. Market gapped down by close to 30 points today.. This is one of the biggest gaps I have ever seen.. Amazingly market made an attempt to close the gap and it did... I did not trade this... But as soon as it closed the gap, price bounced back... I stayed out of the market... I was unsure of market direction.. there seem to be enough strength to close a 30 point gap but as soon as it closed, it bounced back... this suggest weakness..

I only entered the market when a double top formation became apparent and price broke below the neckline and moving averages... I shorted 1 contract at 1985 and another 2 more contracts at 1975 when there was a slight pullback..

Notice how price broke down the support line established by the open price? After that the support line became a resistance line and price just plunged..

I held my position all the way till market close for a total profits of $1940.

Posted by Michael Taylor at 5:40 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Market gapped up by around 10 points today... The gap seemed to have exhausted most of the price action and price was pretty much ranging for the morning session.. But generally the direction is up....

It is dangerous to go short in such a market... Hence when price turned down sharply (Highlighted in orange) I have the trade a pass.. Instead, I waited for price to close the gap and rebound.. It indeed rebounded from the moving averages ..

If you looked closely, you will notice that there are several doji candlesticks as price found support at the moving averages..

I longed 1 contract at 1985 and another 2 more contracts at 1991.. This was accompained by the stochastics turning up from oversold region.. .I held the position all the way till the close when I got out at 2000 with $660 profits.

Posted by Michael Taylor at 5:35 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

Today is a quiet day before the FED announcement,,, I did not even bother looking at the market.. This morning I was pumping iron at the gym in my home...

As expected.... market volatility picked up as we neared 14:15 ... Market fell immediately when news that FED is leaving rates at 5.25% came out.. I shorted 1 contract at 1965 and another 2 contracts at 1955...
I was in the trade around 30 minutes when price started to turn up... and I instinctively knew the market might turn tables... I reversed my position ( by buying 4 contracts at one go, this netts of my shorting of 3 contracts and leave me 1 contract long) when price hit 1952 which is pretty near the resistance level set by the morning session...

I longed another 2 contracts at 1960 when price appeared to be confirming my trade.. Indeed price momentum was strong as it broke the highs during the morning session and I exited only at 1982 with profits of $1860 in total.

Fundamentals
Although Federal Reserve Chairman Ben Bernanke and his central bank colleagues acknowledged challenges that have intensified since their last meeting in late June, they nonetheless expressed hope that the economy will safely make its way.
The policymakers also clung to their belief that the biggest potential danger to the economy is that inflation won't recede as they anticipate.
Against these economic crosscurrents, the Fed left an important interest rate at 5.25 percent on Tuesday. In turn, commercial banks' prime interest rate for certain credit cards, home equity lines of credit and other loans -- would stay at 8.25 percent.
The central bank's key rate hasn't budged for more than a year. Before that, the Fed had raised rates for two years to fend off inflation.

The Fed policymakers didn't signal that a rate cut -- as an insurance policy against undue economic weakness -- would be imminent. Analysts believe the Fed probably will leave rates alone at its next meeting on Sept. 18. But economists and investors think the odds are growing that the Fed might lower rates by the end of this year, if the economy shows signs of faltering and if inflation isn't worrisome.
"Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses and the housing correction is ongoing," the Fed said. "Downside risks to growth have increased somewhat," it added.
Even so, policymakers stuck to a forecast that the economy is likely to expand at a moderate pace in coming quarters. They also said they expected "solid growth in employment and incomes" -- vital ingredients to the country's economic health.
The Fed was faced with a delicate dance, analysts said. To maintain credibility, it needed to acknowledge recent market gyrations, fears about a worsening housing slump and worries about a spreading and painful credit crunch. At the same time, it needed to send a comforting message but not be viewed as overly optimistic or pessimistic.

Posted by Michael Taylor at 6:17 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

The morning session is undecided but it was comforting that there was some kind of support at 1925... I did not enter the market...

At 14:00, there was a huge white candle coupled with stochastics turning up.. I entered 1 contract at 1937 and another 2 more contracts at 1947 whe price pulled back from the moving averages..

price finally broke through the moving averages... but pulled back sharply with a red candle.... I exited at 1953 with profits of $560.

Fundamentals:
Oil and gasoline futures plunged Monday on concerns about the economy's health and as investors sold to lock in profits from last week's record-setting rally.
September oil fell more than $3 a barrel, and gas futures slid more than 10 cents to settle below $2 a gallon. Both contracts extended declines that began Friday after the government issued weaker-than-expected employment numbers. That data added to the sentiment of a series of other government reports analysts say suggest the economy might be slowing.

Posted by Michael Taylor at 5:45 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi there,

Market has been relatively quiet in the morning session.. direction was not clear and there were no clear signals to enter the market... But at around 14:00., things started to turn bad... price action appeared to be forming a double top.. then when it broke the neckline accompanied by a down turn in stochastics, I was short 1 contract at 1960 and another 2 more contracts at 1955..

It was a smooth ride downwards.. It's comforting to see your profits increase.... I only got out of the market when a white candle appeared towards the end and I exited at 1935 with $1300 profits.

Posted by Michael Taylor at 6:09 PM | Permalink | Comments (0) | TrackBacks (0)

5 min Emini Nasdaq 100

Hi,

I hope you did not trade today.. Price action is in a ranging pattern... tightly bounded ..

The top reason for not trading is --> Short-term MACD is too close to the zero line..

Posted by Michael Taylor at 5:33 PM | Permalink | Comments (0) | TrackBacks (0)

5 minutes chart Emini Nasdaq 100

Hi,

The market was unpredictable today.. there were huge swings up and down and I could not tell market direction.. I did the only thing I could do --> Stay out of the market...

I had to wait till around 15:00 before there is a decent trade.. Price hit lower but bounce off the support line ( the low established in the morning session.) Also there is this big double bottom that seems to be forming..

I longed 1 contract at 1935 and another 2 more contracts at 1943... I held it all the way to the end where I exited at 1958 with profits of $1060.

Posted by Michael Taylor at 9:25 PM | Permalink | Comments (0) | TrackBacks (0)