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Trendlines & Discretionary Trading

July 9, 2012

By the time the cash session opened there was already an uptrend in place, and I had a support line and a buy limit under the market. After a push higher everything looked good, but then I was filled and stopped within about two minutes.

Price pulled back within the sell-off, but I was waiting to short at the EMA and wasn’t filled. I was able to put in a new resistance line using this price swing, and as the market then made a new low I was still looking to short. Price rallied to the resistance line, but the CCI wasn’t overbought, so I waited and shorted at the EMA.

I then did something a bit more discretionary, using the high from the open and the most recent high for a new resistance line. Hopefully from the chart you can see why this makes sense. Nevertheless, the market bounced and took my stop out before it rolled over. In retrospect, this was a very poor trade – the potential profit on a retest of the lows was too small.

The area I have highlighted in grey shows a potential level for shorting, but I didn’t do this. The reason was that although we’d made a new low, we’d also made a new high, and I wanted more clarity on the trend than I was getting.

After a failed move lower, and then a new higher high, I began looking for long entries, and was filled on the next pullback. Price came within a tick of my stop before it finally rallied steadily, hitting my target up at the prior highs towards the end of the session. I ended the session with 6.75 points profit, less 3.25 points from the losing trades, leaving me 3.5 net, or $175 per contract before commissions. I’ve marked today’s chart with exact entry and exits prices.

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Daytrading Chart 9th July

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View Today’s Full Chart

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