Follow-Up Trade Also Picture Perfect

This follow-up long trade on the S&P 500 demonstrates most of the same methods and principles as the first one. In this trade, the prior test of the bottom of the previous trade can be seen. The green arrows indicate the points where fractals and EMA crosses show entry and add-on points. This trade ended just moments before this screen capture because another divergence of the Klinger volume indicator suggested that momentum was waning. Prices dipped quite rapidly following this trade. This trade allowed me to complete my trading goals for the day. Done deal!

Flawless Trading Day for Wheat

Here are the trades for today. Although volume has been light, the trading conditions have been some of the best I've ever seen. What a great day to be a trader!

Wheat: No Losing Trades Today!

I only had 11 trades in wheat today, but miraculously, I had no losers. This is extremely unusual! The trades are marked with red and green arcs (I just learned how to change the colors a few minutes ago). The green arcs are the long trades, and the red ones are the short trades. Wheat and soybeans show enough volatility that when I get proper signals for the trades, they usually move sufficiently for me to be able to at least break even.

Soybeans: Last 3 Trades

My most profitable trade of the day was the last one. My last three trades are shown on this chart (see the 3 arcs). I had 15 trades today, with two losers. The two losing trades amounted to less than $50 loss. I have learned to exit quickly when a trade doesn't look correct (Phantom's Rule #1).

Soybeans: Trades 12-13

Volatility increased once prices broke through the support barrier of yesterday's settlement price (dotted magenta line). Now the question is: Can it break back through the same barrier at resistance?

Soybeans: Trades 5-11

Trade #8 was too tiny for the arc to be seen, and was a small loss of 4 ticks. Trade 11 is still active at this posting, but the Klinger indicator has turned down, so I have tightened my stop in anticipation of this trade being closed out. Trade 10 started off very shaky, but has become one of the most profitable of the day.

Trading Win/Loss Ratio

Thus far, 9 of my 11 trades have been profitable, and the ones that lost money cost me only 5 ticks and 4 ticks. Good day! Working these up and down movements in the markets is what swing traders are most effective at doing.

If the trade looks questionable, I consider other factors:

• What do other indicators tell me (for example, the Bollinger Squeeze, Moving Averages, and MACD)?
  
• What do the indicators in the higher time frames suggest?
  
• Is there important support or resistance at this point? In this case, prices had already found support at the same price point three times today, so I considered it to be a good risk to remain in the trade.
  
• How much profit have I made so far today? Am I willing to take a little more risk, or are my profits too sparse to risk losing them today?
• How good is volatility right now? If the past few trades have shown sufficient volatility to take reasonable profits from the market, then I consider volatility to be good.
  

Wheat trading over the past few days has been supported by poor volume, and liquidity has suffered somewhat. I will wait until volume and volatility improve again.

Soybeans: Trades 1-4

Trades are marked with arcs connected with dotted lines. Trade #2 was a small loss, and is difficult to see on this chart. As is typical, the early trades are usually the best ones because liquidity is good and price moves tend to be sustained for longer periods and larger price movements.

Trades for 1-22

The following charts are for soybean trades placed today, 1-22.

Soybeans first 3 trades 11-30

I wish I could say that this chart was a single trade, but it was, in fact, 3 trades. These slow, gradual trades make for real nail-biters! I exited each time when prices passed below the 8-period EMA (Exponential Moving Average). The EMA is represented in the top chart with prices, which are represented by the Japanese candlesticks. (I prefer candlesticks over bar charts because they are easier to see and interpret for me. My eyesight isn't what it used to be.)
I missed the last trade here, represented in the last 20% of the chart farthest to the right.

Soybeans 3 minute chart

This is the soybeans chart for Friday, Nov 30. The slow, gradual rise composing most of the chart on the left was a difficult, but profitable series of 3 trades. The last one on the right was a very profitable trade that made for a good week.

Note on the 2nd and 3rd panels that the moving averages crossed over the more sensitive indicators sharing the same panel at just about the best moment to exit the trade. The bad news of this phenomena is that it is usually only clear in retrospect. That the time the trade is occuring, it is NOT very clear. Still, it is helpful for post-trade analysis of how well I'm doing. In this case, I made 3 trades.

In the next two pictures, I will cover these trades in more detail using a tick chart. Tick charts are based upon trades rather than time intervals.

First trade this evening

This is my first trade this evening. I have found that the market frequently provides good trades during the early evening hours on grains. My favorite is soybeans. I will discuss in detail my trading methods and the indicators shown as I continue to post in the future.