Trades 1-6 were all Channel Continuation Trades
1. Structure
- These 3 charts show (left to right) 4h, 30m, 2m. The 4h has extention to upper band of ascending channel which means we can pullback to the middle channel until shorting becomes less desireable. The 30m chart has a descending channel and the 2m is in the center of the descending channel. These channels were much tighter in the beginning of the day, the ES was at the top of the descekding channel on the 2m and close to it on the 30m but at the EOD we had a big 40 point move higher so my regression channels updated to account for that price action.
2. Internals
- VOLD was descending at the open but then broke out to HOD, the ADD also broke out to HOD and the TICK was mostly above 0.
- Weight was at the lows of their descending channel
- These trades all had the right idea but my timing was terrible and I was trying to add when I shouldve been scalping. I saw the ADD and VOLD being bullish and I ignored it because I thought the Weight would break the prior day lows and rip down, It almost did but then when it didnt I was still fighting the trend and adding into a short that wouldve been a nice 7-8 point win. This is me being stubborn again and not noticing the objective information infront of my face.
Channel Reversal
- This was an A+ example of a trend reversal on multiple timeframes
- the 4h 30m and 2m all confirm the breakout. 4h we have a reversion to mid ascending channel, 30m we have a clear breakout above the anchored vwap to the peak, the +1 pivot, the top of the descending channel, and broke above the previous days high with ease.
- Increasing VOLD al day on both NAS and ES, ADD massive up move, TICK 90% above zero.
Weight
- The biggest tell of this move was the fact that the weight was at the bottom of their descending channel as well and they made a massive bottom and were primed for a big breakout. This was so obvious im not sure why I sold my last position on the day.
- I had a 2 contract long position at 11ish and I sold it at the breakout level. I think I was scared to hold into all those confluence downtrends but this move has been so slow and weak to the downside, the big upwards move was going to happen soon. There was zero followthrough on all the short moves this past 2 weeks and because we are in a bull market, this one day had a 40 point move to the upside deleting like 5 days of the downtrend. I was waiting for this move and I just didnt think I was going to have to hold through a grinding green day, this move was very hard to hold for that long to get a big trade. It was slow weak breakouts that took a long time to resolve. Yeah if you held long enough you couldve theoretically made like 25 points and added a million times but truth is that this wouldve been damn hard to hold.
How should I have traded this?
Channel Reversal
- Before my channels updated it looked much more like this (green line). That line was the top of the descending channel and I saw it breakout with slow momentum which is more likely to continue, usually if we were going to fail at the top of that channel it wouldve failed very fast. We pulled back then moved higher for a clean breakout. I traded this for a measly 4 points with 2 contracts when I shouldve made at least 15 with minimum of 6 contracts or more. This was a clear breakout that was based firstly on the fact that the 4h on the ES is on a huge uptrend and we mean reverted so the breakout should now continue back to the upside.
- See how we mean reverted back to the center of ascending channel
- Weight was at the bottom of their descending channel which was signalling a bounce could easily happen on ES
- ADD ripped up huge and consolidated at the highs
- VOLD also breaking out and making new HOD over and over and over
- Sectors were also all green on risk on all red risk off
THIS IS AN A+++++++++++++ SETUP!!!!!!!!!!!!!
- It is a FUNDAMENTAL flaw to not size huge into A+ setups. If I do not do that then I will never be a profitable trader. I need to make sure when these opportunities arise I am ready and not scared to take it. The signs were there and yes it was weak breakout with not strong followthrough but this was a pure clean easy breakout of the descending channel and it had about 30 points of followthrough for the next 4 hours of trading. I shouldve made at least 400 on this trade because I couldve added up to 6-8 contracts and made about 15 points. Let the winners run and add into them.
