Late, and a Slow Grind Day 3/22/13

BOT TRADING SYSTEM

Sooner or later you have one of those days you are late to the party.  Trading in the U.S. market was well under way and had a bullish bias.  No price below the 5 minute EMA, and bars were seen as sluggish.  A slow grind of waiting if in a trade.

If a move is established ( i.e. late to the party) personal preference is just to stay on the side until a promising set up develops.  Chasing is not recommended,

The only play today was the thought that the high resistance would fail again, allowing a short in the pullback.

Resistance was seen in the 1549.5 area and another test was in progress from bar 20.  The thought was, price would push slightly into the resistance (we had 1450 as well) and pull back.

The short was taken and followed back to the EMA.  Not as exciting as yesterday, but small ranged moves, prices that are relatively stagnant, or prices that trades sideways are more difficult to trade.

It's Friday.  The market will change and more trades will come.  No need to waste energy on limited returns    Enjoy the weekend

Mult-Chart Looks as a Trade Timing Tool 3/21/13

BOT TRADING SYSTEM

Speak to any number of traders (x) and you are likely to find X number of opinions about trading.  As you gleen through all the information, you are likely to see patterns emerging that center around some Price Action Strategy.  In your quest, just remember to find what seems to work for you, and keep it simplified.  I have seen some charts that are more for an art museum than for trading.

Today's point is to look at multiple time-frame charts as a tool for trading.


LOOK 1:  3 minute, 5minute and a 1point bar chart


The pre-open for the U.S. today was decidedly bearish in tone.  Thus my approach was to wait for a pullback, if the bull was to be revived, or wait for an opportunity to take a lower-risk short that would be with the dominant trend.

All three charts were showing a resistance level near the 20 and 50 EMA's.  The 5 minute was stalling near the price turn in the pre-open where price moved away from the 20EMA.

Any entry you take can fail.  The trader's job is to identify where price is likely to do what your trade is designed to do.  There should be some compelling reason (or reasons) to enter what your judgement is regarding as a lower risk trade that is likely to produce favorable results.

The trade was entered with a belief that price would, at a minimum, retest the prior lows.


LOOK 2:  setting targets

Setting targets and stops are a personal choice.  My preference is to take a winning trade that has price moving beyond my target.  No "here is the top, or the bottom".  Just play the action and leave biased opinions on the side.  In this case, they were set at support/resistance levels.

The trading range dictates; not random BS.  The market could care less about what you think.  Plays are from reading what is happening and what is the likely near-term results; not wild speculation ( example: "market is moving to 1520!").  There is a huge difference.

LOOK 3:















When a trade is over, look, read, make new interpretations.  Yes the trend line failed, yes price hit resistance, and yes it hit our target.  BUT.....

The higher lows seem to suggest a pullback, not a trend continuation for the bear.

Look, read, enjoy your day trading....

TREND LINE IN A RANGE BOUND DAY 2/28/13

BOT TRADING SYSTEM

Today the BO5 bull failed,  In this pattern we expect price to pull back to the long BOT, and look for the range run for a break out of the opposite target, the short BOT, where BOT is the Break out target where one side is deemed stronger than the other.  That struggle today created a range bound day, roughly +5 to -5 from the range.

5 minute ES

Price began low in the range unable to firmly break out bearish.  Early news spiked price through the range and we began to see a resistance at 1518.75, and the short back to the open low.  With this type of price action, the trends are harder to play (emotionally) with all the wicks and tails.  One of the reasons for developing the BOT Range was to eliminate some of this emotion.  "If this, then that" logic is behind the system.  If the LB fails, we run the range, and so on.

To see the difference, look at the next trend that developed off bars 26 and 27.  It actually started off a 50CB 45 degree line from bar 19.   If you were nor "range run" long on bar 19, you should be able to decide after 4 and 5 hits of the trend line.

The next TL developed as the BO5 failed around 1524 and price fell below the EMA at bars 62-63.  Another 4-5 touches that failed to break the trend.  Action?  The TL is  suggesting strong bear bias.  BOT action was saying the same...

TWO THINGS ABOUT A STRONG TREND 2/27/13

BOT TRADING SYSTEM

one point range bars

THERE are two things ( more I'm sure) about a strong trend:  There seems to be exits at each new high, and there will be another trade for those that are patient.

In general, look for the second or third hit at the trend line (EMA , etc.) that you are using for a measure of support (bull) or resistance (bear).

TODAY:  bullish trend coming into the open.  Bar 330 and 345 could be entries off the TL.  Better was the gap bar after B5 with an exit (at the high area) when the micro trend line broke.  Micro TL's will occur with in the larger time frame daily TL.  Both have play advantages.  I prefer the micro as it tends to be a quicker in-and-out. From the side you are able to take advantage of the market.  If in a trade and conditions change, traders have a tendency to think " I can wait this out, it will come back into profit soon!".

next opportunity was the TL from B20 to 45.  This was a later trade in the TL around the B35 gap ( price to the trend line) with a MTL break at another high.  B55 came next with an exit at the prior high (1506).

1510 break was considered a short but price failed to run for the bears.  Instead, the trend line was rising suggesting more bullish action.

FOLLOW THE TREND EVEN WHEN IT CHANGES 2/26/13

BOT TRADING SYSTEM

This is a 1 point range bar chart and I find it help ID the trends nicely.

open:  price in a narrow range and it moved higher to find resistance.  The break of that stall was the short and we see TL 1 developing.  The EMA offered additional resistance for adds or new entries.

Three lower support areas developed and we had our first failed break out by the bulls set up TL 2/  Two additional attempts by the bulls created a resistance neckline that would be a long on the break out.

When TL3 was in play, longs were taken to the first high area  on TL 4.  Some remained short and continued to add contracts.  If you have the bullets and emotional control, play YOUR game.

The first counter trend play was a short at the double high back to the EMA area.

TL5 was also a continuation of TL3, and the last long to the double high area was played.

FOLLOW THE TREND, PERIOD! 2/25/13

BOT TRADING SYSTEM

Not much to say today.  If your against this super trend you deserve to have your account wiped out.  A little mid day price above the EMA  (bar 40-44 area).  There is our standard bear gap from bar tops to the EMA, and bar lows were pushing lower.  A very convincing bear sell off.

TREND TRADING: ONE MORE LOOK 2/22/13

BOT TRADING SYSTEM

NICE week of trading and we end on a trending Friday, bear to bull.

Bear trend line to support followed by a break out bull trend from the support. 

Additional support at the trend line was a secondary entry or add-to.

TREND TRADING: DAY 3 2/21/13

BOT TRADING SYSTEM


THE focus of the blog shifted for a quick look at trend trading as an initial focus for new traders.  It has been very nice of the market to work with us to help with the discussion.  The trends have been fantastic.


TODAY:

Price action was stalling around 1506 area.  As a new trader you would not have the experience nor knowledge of the Break Out Targets.  But you would have a two bar pull back to  EMA with a third bar breaking it.  This is a steep sell off, (bearish) trend that is playable with your trend lines.  That TL was broken around bar 8-9 for your exit.

The pull back to the EMA would be considered counter trend, and not a play for the beginner.    I do not suggest playing these, until you are confident with "with trend" plays.

In this case, some shorts were covered and a reversal long was enter and held until price stalled around 1504.  You now have a second point for a bearish trend line, and should be looking for a short..  A scalp short was taken for a push to the EMA.  Trading was over due to another commitment.

*******************

WHAT FOLLOWED?

You trend line continued to see hits for additional shorts and/or new entries.  There was a counter trend pull back that broke the trend line.  Around  bar 66 you have a higher low.  Here you should be looking for another push to challenge the bear trend line.  With a higher low, a TL break, and a break above the EMA, this is a legitimate long.

Another higher low at bar 78 area was another long consideration.

Continue to practice your trend trades, and practice the micro trends that develop.  You should always be looking for a reason to enter, and just as important, a reason to GET OUT.

TRADING: WHERE DO I START DAY 2 2/20/13

BOT TRADING SYSTEM


We used yesterday as a starting point to help traders begin the process.  We discussed trend trading as the easier style  to learn as a beginner.  The market was bullish, and we played bull trend lines.

DAY 2, let's try the bearish trend lines.  A great trend line back-to-back day for both sides of the trade.

THE FLIP:

The market flipped to bearish in the Euro Zone and would be the dominant trade.  Again, no counter trend trading and stay away from micro ranges trading.

The one point range bar chart

The five minute chart:

You start by reading what the market is saying, and both charts support a selling bias.  You draw your trend lines and wait.  Play the resistance (yesterday was support) at the trend line, at the EMA, or if you see the trend line hold, play the crossing of the EMA.  YOU ARE ONLY TRADING SHORTS.

Once in the trade with the trend, you try to hold until the trend line is broken, or until your market target is reached.  When you go "live"  this will test your emotions as price fluctuates.

 You will develop your trend style with practice.  Note the two mini trends within the day trend.  Each had an entry point per the trend rules, and both had an exit when the trend was broken.  Until you build experience, the mini TL will likely be your trade.  Holding for longer periods will test your emotions, even with the trend.

Should price break the trend for the day, you stop trading and draw new trend lines with the information.  Wait, analyze, trade.

TRADING: WHERE DO I START? 2/19/13

BOT TRADING SYSTEM

The question appears in various financial oriented sites.  New traders, or those wanting to learn, need a place to start.  Tonight we look at one of the easier trading methods to learn, and practice for consistent profitability.  The TREND TRADE.

The TREND TRADE is the first trade a beginner should attempt.  It will require that you analyze the market to determine a trend bias, then determine potential entries and exits.  With practice, trend trading is likely to keep you stops safe and allow you to convert your trade to profit.

Learning to trend trade has another benefit. Perfecting your trend trading will be a boost to range trading.   A range bound day is composed of micro trends that run 2 to 5 points and reverse for 2 to 5 points.  Maybe not perfect runs,  but certainly a range that has playable features. 

Getting Started:

1. Determine the trend and play with trend only.  Do not try counter trend trades. and stay away from range bound price action.
2.  Determine the Trend Line.  New entries (or your first) will be at the TL that is supporting price.  Look at the 20 EMA for support as well.  Keep your charts simple.
3.  Set your target and exit.  If price continues, and it should your not trying to capture highs and lows, after your exit beginning planning your next trade.  Where is the TL and EMA?  a pullback to support can be your next entry.  Stay with the trend.
4.  Continue to play the trend until your TL is broken or the EMA if playing it as your support.
5.  For bear trading, the TL and EMA will be resistance for short consideration.

Practice the trend trade until it becomes a habit; a profitable habit.  Only then will you begin to add more tools to your trading style.


TODAY:

You have support at the open and a break out of the consolidation

READ:  trend bias is bullish from the Euro Zone.  There is a consolidation prior to the US open.  The TL's are holding as is the EMA.  Play the touches for your target and use a protective stop below the support.  If you missed the open, look at the opportunity around bar 20 (11 am est). 
Continue playing the support with trend into the close.

Learn the basics.  Practice for mastery.  Play real for  the emotional aspects of trading.

You may not move beyond the trend trade.  When your ready, add a new method and develop it with the same discipline used with the TREND TRADE.

TRENDS AND THE RANGE 2/15/13

BOT TRADING SYSTEM

WE stayed in the range for ANOTHER day.  Price is consolidating and we simple have not had a break to move from the 1513-1521 zone.   In the Euro Zone, price was rising toward the break out 5 level.  This is a point five point into the bull zone, which is above the long Break Out Target (LB).  The LB and SB are simply an area where the bull/bear is deemed to be dominant.

At the US open we had a reversal break out at the BO-5 and our first trend line.  As we discussed in yesterday's blog, trend lines added to the range helps fine tune the entry-exit of a trade.  For TL trades, a break of the TL is generally regarded as the exit in the absence of other data.  Other data could include an exhausted run which is of interest in the  2 to 2.5 points range around a level.

The Bar 8 shorter took price to around 1519 off the reversal bar and the TL break.  The long target here was the 1521 which we felt would see at least one more hit.

Shorts again, and follow the trend to around 1518, then enter again on the second leg of the bear and a failed push to the EMA.  The target was 1516, the LB level.  Part of the BOT philosophy is that a failed break of a level (today BO-5 at 1521) will run to the opposite level (1516 today).

Price bounced but flashed new shorting around B54 and established a lower high, and a gap between price and the upper level (1521).  This is deemed bearish in nature.  A quick scalp to the EMA was followed by a range run short  back to the SB level (1512.75).

Another nice day for the range and trend lines.

USING TREND LINES WITH THE RANGE 2/14/13

BOT TRADING SYSTEM


With or without the ranges, traders will often use trend lines to help identify their entries and exits.  Definitions will vary, but for the sake of argument let's say 2-3 bars creates a trend.  Connect the bottoms for a bull, the tops for the bear.

Add the ranges, as a gauge of the market buy/sell strength, and you have a nice day for trading.


the open:   a support level combined with a reversal bar at the short break out target (SB).  Price is bullish and enters the range for a range run.  The bull trend line was used for exit timing, and the EMA was considered in a support  role.

1516 was the target for the bull run and we allow a 2 to 2.5 (1518-1518.5) zone for the run to exhaust.  The 1518 area was seen as a scalp short. (considered as .5 to 1.5 points).  Could it be a true reversal and run more? yes, but it was considered a scalp only due to the strength of the bull.


[10:44] <CM> 18-18.5 stall scalp potential


Mid day:   Bar 26 to 29 held at the 1516 support and was a low risk long.  We also got another bull TL to play longs at the TL, or if more conservative, after the Tl bounce enter at the EMA.  The double high at 18.5 was considered another scalp.

Price did push higher toward the 1521 target and later settled around the 1518.5.  Nice, but some days early trading is all it takes to be happy.

PRICE CHECKS RESISTANCE ^ SUPPORT 2/13/13

BOT TRADING SYSTEM


 Price was relatively stable over night and the ranges were unchanged.  The difference?  Price was expected to make a run on the 1521.

[07:40] <CM> 1521 upper target today with a 2-2.5 point allowance for a failed break out or exhausted run stalling.(1523-1523.5) a gap between price and 1521 or the 2-2.5 stalling would likely sell off back to/near the 1516 support

1521 was the important resistance.  Price has two choices when a target is in play and expected to exhaust (trend end).

1.  Price falters just below the target and reverses.
2.  Price exceeds the target and falters in a 2 to 2.5 point range then reverses.

When price follows either, it is likely to sell off back to (or near) the original break out target.  For  price below the range, it would buy back to the range.

This return to the range (buy or sell) is a test of support/resistance before the next push by either the bull or bear.

Option 3:  when we are anticipating a break out expansion day, price will run the target and move another 5 points., albeit today was an exhaustion day.

The three option for a break out, all depending upon the day type.

BULL BIAS DAY 2/12/13

BOT TRADING SYSTEM

The market hit a reversal low around  12:30 AM EST in after hours and showed another bull trend line hit around 3:30 AM EST.   Our first longs were on that trend line at 7:40 AM EST.  Price was in a strong bull, and likely to reverse (enter the daily range) by crossing the short target (SB).  The exit was near the Middle BOT around 8:30 AM.

The range was unchanged for today .  Price pulled back to test the support at the SB (1512.75) and longs were entered on bar 2.  Exited part on the bull bar push (bar 5) then the balance on bar 7.  Both strong bull push bars.

The range run (from 1512.75 to 1516) was completed on bar 12 around 10:25 AM EST and pulled back to test the EMA and Middle BOT where it bounced around for hour and a half before bull resumed their drive higher.  By bar 50 area (13:30 PM approximately) prices was judged to be exhausted and a pull back to the EMA could be scalped.

RANGE BOUND GRIND 2/11/13

BOT TRADING SYSTEM

 The range was narrow today and we had a pre-open 50CB at the middle BOT around 8:35 AM EST.  We would see this become a barrier to the bulls.

[08:46] <CM> ES targets of interest today 1516-1414.25-1512.75

At the US Open we had a break out of the short BOT that stalled at 1511.  The thought here was that we were likely to see a stalling around SB +2 to 2.5 points, (1510.75-1510.25).

  An early long  (target listed) was taken that hit the stop out as B7-8 failed to continue the reversal into the range. Targets good, entry aggressive,  the stop did it's job.   Bears had one more push to settle the low of the day at B10 and  was a better confirmation on the stall.

[10:10] <CM> 14.5  15.25    (upper target for price)

[10:22] <CM> no  looking for a stall at sb-2 to 2.5  like b10 lod

 A new long was entered for the stated targets, and additional entries were taken  in the narrow range  and at the bull trend line.  Not an optimal day, but the range expected worked to our advantage.  You have two choices:  avoid the market or play what the market has to offer.  We will not have 5, 10, 20 point run days every time you trade.  Your tools need to include the ability to play range run days, break out days, and narrow, range bound days.

AS IF THE MARKET CLOSED AT 10:00 AM 2/8/13

BOT TRADING SYSTEM

TODAY we had a range run, the break out to +5, and...

Price Action (PA) that hovered around the BO-5 for most of the day.  Essentially, the best the market had to offer was over by 10 AM EST. One very extended consolidation.

Typical, for BOTs anyway.  So what was the play for today?   We had Short Break Out Target (SB) support (a failed break out) which implies a range run and attempt to break out the opposite range, in this case the Long Break Out Target  (LB).

[08:47] <CM> ES range of interest today: 1507.75-1506.25-1504.5 (rounded to nearest .25)

[09:33] <CM> here we have an LB bo  long break out target  thus bull favored for a +5  a 2-2.5 point failure is likely to reverse the range

We have the range, a run under way so a BO was favored, and a run to +5 (1512.75) expected with the run likely to exhaust in another +2 to +2.5 (1514.75-1515.25).

 The only play after the BO-5 was to short the pullbacks, or long  when the PB began to reverse for the high.  These small range "rolling" highs-lows are high risk trades, t unless you catch the true break out the returns are minimal in comparison to a good trend run, and the consolidation can take hours before we see a true break out.  The better trade would be wait for the break out and enter with trend on a quality pull back.

RANGE BOUND DAY 2/7/13

BOT TRADING SYSTEM

Before the US Open price (PA) was trapping within the range and finally moved up to test the long break out (LB).  It failed (FBO) and ran the range to the short break out (SB) and continued for the break out +5 (BO-5).

Albeit we announced a range bound day bias, it does not exclude a BO-5 run and a return to the range.  The bear was showing some signs of reversing. and we generally look for an area 2 to 2.5 points beyond the BO-5.  A tick and 1 point range chart was flashing long at 96 and 96.5 respectively.  These were aggressive long (and a stop area) with a conservative entry around 1499 which was the first signal on B12.  Trend lines will always be an important addition to the ranges, and they began changing in the same general area as the reversal signals.

The targets for these longs:  target 1 the first 50CB bar at 1501 then the next at 1504.  1504 would be taken rather than waiting for the SB at 1505 since this was deemed a timely exit.  Price was expected to stall at the 1504 and could take 1-2 hours to reach 1505.

PA pulled back to test the 1501.5 support (a lower risk long), then ran for the 1505.

All-in-all a nice trading day, and range bound....

FOLLOW THE TREND 2/6/13

BOT TRADING SYSTEM


Price sold off in the Euro Zone but failed to break below the SB.  By the US open (just before) we had a gap to the SB which is considered bullish.  The bull TL developed and we are off to a BO-5.

In a break out day, or perhaps any day, there is always an urge to short/long against the trend.  Counter Trend trades are viable, albeit expect less from a CT in a strong trend. and expect some "heat" if your hold against the trend.  I am not opposed to adding to a trade, it may not be in the best interest of the majority of traders learning the game when it is a CT trade.

Can it work?  Yes.  The with trend just seems more productive and less stress.


The TL broke for a better reward short around  B42, and moved below averages and the BO-5.  Why is this better?  It was a TL break, a BO-5 break that was anticipated to return to the LB for a support test.  Another gap, but at the LB.  B50  returned the market to bullish and TL2 developed.

A nice day.  More productive with the trends and reversals.

THE EURO ZONE BULL: US BREAK OUT 2/5/13

BOT TRADING SYSTEM


TO understand the US Market today, you need to look back at the overnight trading and the Euro Zone open around 3 A.M.  Trading was actually adequate in the after hours.  Then price moved down for new lows.  LOWS that attract new interest for the bull market.  Around 3 A.M. EST  price began the revived bull run.  We had a narrow gap to the SB near the US open and price moved through the range.  BO-5, then BO-10.

We did not break the bull TL that began at the SB gap.  Even when price broke the EMA support around mid day, the Bull TL held for new long considerations.  When the BO-10 yielded a FBO, PA reversed to the prior level, the BO-5.  Part of the BOT strategy.

GRINDING OVERLAP DAY 2/4/13

BOT TRADING SYSTEM

Maybe it was the remains of the Super Bowl.  Today just seemed different.  Slow grinding, overlapping bars.  The middle range BOT was near the short, so the bias going in was bearish.  Two bulls, a pull back bear bar.  Two bears, a pull back bull bar for the bull, and so it went.  It took us to bar 24 to get four consecutive bar in one direction (bearish).

We had the SB BO  and the EMA was holding as resistance as PA pushed to the BO-5.  Each bull CT channel would break the trend line slightly, come back to test the TL, then resumed the selling.

When yo do not get your nice trend run day or at least some nice bar runs, you can choose to wait it out, sit out, or try scalping some of the 1-3 bar moves.

BULL BO DAY 2/1/13

BOT TRADING SYSTEM


[08:47] <CM> ES ranges today 1503.25-1500.25-1498
[08:47] <CM> bias to long side


Price  ran the range early on news prior to the US open.  PA  broke above the LB, stalled and returned to the MB for support.  With the long bias indicated in the range spread, all pullbacks of quality would be counter trend but playable,

A wedge developed that broke long also and filled the gap to the BO-5 (LB +5 points).  With price grinding at a slower pace, a BO-5 +2-2.5 points was likely the high of the day target for the bull run.

[14:03] <CM> bull bias  but thinking bo-5 +2-2.5 about max

Price hit 1510.5 at B54, 2.25 above the BO-5.  Nice day.

RANGE BOUND DAY TO END JAN 13 1/31/13

BOT TRADING SYSTEM

END of the month and we end in a range bound mode.  PA was in bullish trend line from 8:30 AM EST.  Around 9 AM we had a 50CB bar which was pivotal at the US Open.  PA tested the 50CB and held, creating a gap to the SB.  this was a long opportunity with a limited downside.  It also was a touch of the bull TL.

PA ran the range to break out at the LB before hitting resistance at 1500.  Short was the call  and additional shorts entered at the TL break as price ran the range to the SB.  A range bound day.

Longs entered on the B26 50CB BO to capture the bull range run.  A couple more major 50CB's and PA ends flat inside the range.

RANGE BOUND WITH LATE SELL OFF 1/30/13

BOT TRADING SYSTEM


[08:35] <CM> ES PA completed range run to the bo-5 (1500.5) after the bo-10 (1505.5) was a fbo hit 1498.5 which was in the area discussed yday that bears would try to test (support) [13:11] <CM> bears will want to test 1497-1498 support at 1497.5 in hopes to put 1500 to rest.. new buyers were waiting there..

[09:30] <CM> range for 1/30   1504.5-1502.25-1499.75


A range bound day at the start that gave way to selling at the end of the day.  The selling broke the bull channel and the SB to run to prior support levels at 1497.5 and 1493.5.

Early shorts at the beginning of the day followed by SB longs.  The gap to the LB was bearish and a BE short failed at B22 where we were expecting another bear push to the SB.  Given the nature of PA the stop was at BE 1503 which hit.  Right direction, tight stops.

PA developed a second gap and the selling to the 97.5-93.5 supports hit.

BULL BREAK OUT DAY 1/29/13

BOT TRADING SYSTEM


WE began the day with a narrow range ( 3.75 points) with the middle BOT closer to the SB;  I.E. a break there would likely run the SB for a selling day.  PA was in a range run from about 8 A.M. EST and completed the range run at the open.  Here is an overview with some chat sprinkled in.

[09:35] <CM> am range run completed  test of LB  

Bar 3 and 4 were the first pullback at the test of the LB, and B4 began leg 2 for a test of the resistance at 1497.5

[09:44] <CM> fbo es shorts  b3 continued pb

[09:49] <Chartmaster> b4 leg 2 for bulls

[09:50] <Chartmaster> target 97.5


[09:53] <Chartmaster> in a lb bo now 97.5 t1
[09:55] <Chartmaster> 1500.5 t2  the bo-5



Then, news hits.  News is a novelty.  There are times the market seems to move ahead of the news giving credence to a leak.  Other times, news is a smoke screen.  Just an even for the pros and institutions to move the market.  Generally, I look for trapping in news. i.e.  the market will move in a "contra" fashion running trend stops, and drawing in orders from the opposition.  This happens for two reasons:  1.  to allow the P&I Group a better entry price and 2. get the opposition to help fuel the new drive by covering orders or selling their stops.


[10:01] <CM> read this as news trap  mkt wants to long  this will get stops out of the way  give P&I a better entry price to move mkt    enough shorts enter  they will fuel the bull as they cover..

The LB became the long entry, however it would be an "add to" nature since a better entry could be made at a lower price.  Think of it in terms of a conservative entry for the revived bull.

PA pushed toward the MB but gaped.  A bullish signal.  the P& I group would likely run the price higher and be fueled by the shorts covering.


[10:09] <X> ok, not in. stop order at 95.5...
[10:09] <CM> hint the mb is an entry watch
[10:10] <CM> buys ES @ 1493.75
[10:11] <CM> be stop if it fails


Pa hit the BO-5 and stalled at mid day developing an ascending triangle.  This was likely to break higher, but we have seen them fail and reverse when we have an exhausted run.  With the 5 minute EMA showing as support, the long was a lower risk entry.


[12:42] <CM> the ES breakout focus (chart deleted)
[12:46] <CM> tends to test +2 to +2.5  so 1502.5-1503  low buyers from b8-9 are around +7    likely exits +8 to +10
[13:09] <CM> 1502.75

PA was stalling below the BO-10 at the end of the day and pulled back to the EMA.

[15:58] <CM> likely pop to bo10  as books clear


We go the BO-10.

RANGE BOUND AT 1500 1/28/13

BOT TRADING SYSTEM

The month is coming to an end.  Price tested yearly highs and has challenged the 1500 magic level.   Today was, well, a range bound disappointment.  The US opened with a range run that was heading for the BO-5.  Alas, another gap.  The bear party was about to end.

We have the gap and the trend line is broken by the bulls.  Bulls pushed as if we would see a range run only to stalled between the NB and LB.  Another gap, and a break of the bull TL.

A range bound day hidden away under the 1500.

MATCHING YOUR CHART AND TIME HORIZON 1/26/13

BOT TRADING SYSTEM


 Whether your a day-to-day trader, or an investor looking at an extended hold, one critical aspect in trading is to match your chart with your trading horizon.   A day trader may use a 1 minute to a 15 minute chart, whereas someone looking at stocks or options may prefer a daily-weekly chart.

Which chart you use is a matter of personal preference, but a few points of interest remains the same:  the trend and the nature of the trend.

With the BOTs, we look at the nature of the trend with a special focus on 50CB trends.  Those trends are classified as a 45 degree trend run or a "run away" trend which moves "away" from the 45 and the EMA.

ES WEEKLY

On any chart, these TL's are used to time entries/exits, where entries are staged around the 50CB (does it hold?  trend continues.  Does it fail?  look for a trend reversal.) and the exits are staged around TL break outs.

Using this philosophy, what would you do with an option/stock if you see the 50CB and identify the different trend lines?

LEARN SOMETHING EVERY DAY 1/18/13

BOT TRADING SYSTEM

Sooner or later, you will hit a day where your get out of sync.  It can be a change in habits, a change in focus, or simple a bias against what the market is doing.

 The best medicine?  STOP.  Do not trade until you are doing what you were doing successfully before this new event.  When your focus is restored, then return to trading.  Follow your rules, technical data, lines, Fib levels,Pivots, tea leaves, whatever you feel offers an advantage for you.

TODAY:

Levels in, PA had a small gap to LB and was running the range to the SB where it stalled.  The "long" bias was in, and affecting trade decisions.  After all this had to be a FBO and long was just waiting to run in that wedge area.

But three things happened, four counting the "distraction".  PA was stopped by the MB, the EMA, and broke short on the wedge.  ALL playable and reasonable shorts.

Price was selling to the BO-5 and found buyers (double signal) and created a bullish gap to the BO-5.

The next opportunity was a replay, just change the BOT.  PA stalled at the SB and the EMA, then broke the bull TL to retest the low of the day.  Found new buyers and created another bullish gap.

This bull was ready to return into the range (at least we discussed that!) and ran the range to the LB:  our bias from the early wedge.

Price stayed above the TL and found the EMA to be support.

A little medicine is good.  Getting back in focus is better....

RANGE BOUND UNDER THE 1500 1/258/13

BOT TRADING SYSTEM

QUICK look.  Price started the day erratic  with B4  a single candle runner of the range.  No biggie, the range was super narrow at 2.5 points.

The SB finally broke, but PA developed a gap at B12-16.  Likely a range bound day and a return to the range off this bullish look.  The bull TL that developed saw the range run and a buy/sell challenge near the LB.  Bears denied the bulls the 1500.

PA broke at the EMA/LB at 1497 then broke the bull TL at B68.  Was a nice bull biased day, albeit a narrow range.

The LB shorts took profits at the SB  and the day was essentially over.  A late range run rally stalled short of the golden 1500.

TRADE LIKE THE MARKET 1/24/13

BOT TRADING SYSTEM

The market opened with a BO of the LB on B1, which was a 50CB as well and not immediately tested.  The run to BO-5 was expected.  The gap to the SB was a bullish note.

We saw another 50CB develop at B7 and it was tested when PA pulled back from the FBO of the BO-5, and a flag develop.  A final flag after the pattern failed.  PA moved back into the range.



The market does what the market wants.  You can not bend it, you can only identify with it and understand what is likely to happen.  Never what you wish for, want, or "get me out this time and I'll trade better".  There is no bargaining with the market.

When you identify with the market, and not your personal biases, only then can you begin to understand "likely to".  Because likely is the psychology of those trading, and they make the market what it is.  Trade the market like the market, not like you....

SLOW MARKET TOLL: OVER THINKING 1/23/13

BOT TRADING SYSTEM

WHEN PA is bar-to-bar slow, traders have two positive options and one negative.  Stay out, or wait it out are positive.  "Wishing, hoping. over thinking" is the negative.  You can readily find it in chat and it is distracting.

Today we had a range run to test the SB. PA turned, and  another range run to the LB, and we had a strong bullish TL.  Took hours to complete.  Time enough for traders to over think what the market is saying.  Be it a slow bull or bear, there will always be a group that is looking for the opposite move.  "Bar X" is troubling surely this is where the bears take over!.

The bear did not take over until later in the day when we had a double top at the LB and a QUICK range run.  The kind we like!.

A slow moving market is, well, still moving.  Difficult to play only because traders want "it now" and ca not wait.  Follow the rules, whether slow or fast.

• A failed break out at a level is likely to run the range to the opposite level.
• A level BO is expected to run for a minimum of five points;  the BO-5.
• Failure to do so, price is likely to reverse and run the range.
• A stall or FBO at a BO level is likely to reverse back to the prior level.  I.E.  a BO-10 back to the BO-5, or the BO-5 back to the LB or SB.
• A range bound day will run level-to-level or stay within a BO-5 range.

PA failed to hit the LB at the open, and sellers were noted.
PA was considered a FBO at the SB and likely to run the range.
Strong bullish TL.  Range run completed after taking ALL DAY.  Requires patience. not speculation.
A double top, and a quick sell off range run.

Follow your reads, your rules.  Avoid at all cost the nay Sayers....

BO-5 RUN AFTER THE SB FBO 1/22/13

BOT TRADING SYSTEM

THE day after the holiday, price was trading in a narrow range going into the US Open.  PA tried twice to break the LB and finally failed at B6.   Per rules, a range run to the opposite level was expected.

Drew a bullish TL to B7-8 lows to see if the MB would hold for a new bull push.  B8-9 stalled at the EMA and could not break B7 50CB.  The TL failed and the range run was completed to the SB with B12 being a 50CB at the SB.

By B13 bull support signaled and PA ran the range back to the LB.  When the SB had a failed breakout, PA was expected to run the range.

A short around B25 failed.  Had a tight stop should the bulls press again.  Hindsight, not optimal place to short.  Yes had a gap to  the LB, but we had the EMA and TL support below.  Non the less, quick out and back to longs with the trend.

By the time prices crossed the LB to establish new highs (the targets mentioned in chat) we had a nice gap to the EMA.  Very bullish. Exits at the BO-5.

THE BREAK OUT DAY WITH A MAX RUN 1/17/13

BOT TRADING SYSTEM


Little recap  Yesterday we were looking for 1469 to hit, which was the BO-5 from the LB at 64.  Seemed many were looking for a minor PB, but were not excited about out thoughts for a hit of 65.5 and then the LB in after hours.  Bulls were buying, the selling would never run that low.

Well...

When the BO-5 had a FBO, rules look for a PB to the LB.  Selling continued until the reversal was noted

[00:07] <CM> selling stopped pa likely up in euro zone trading hit 60.5 for the reversal

This reversal was taken to a new five year high by the bulls.



1-17-13

Day opened bullish and never looked back until we hit the BO-10 max run.  New BOTs were set, and we had an early BO.

Continued for the BO-5....  with the BO-10 as the target.

New buyers had a chance after the open when we had our first pullback.

Which created a bull TL  for support.

This developed the larger, first wedge  and target were provide in the chat.

A smaller wedge developed at the targets and we took the BO-10.

This was viewed as a max run for the day and selling was likely to develop as profits were bagged.

Again, target were set and made available in the chat.  We end the day at the targets.

A nice day, a nice market.

A MARKET 180 VIEW WITH BOTs 1/15/13

BOT TRADING SYSTEM


At the end of yesterdays trading, we were seeing sellers at the return to the LB.  A bear TL developed and the after hours came alive

A nice range run with PA stalling at the TL.  The best the bull could do would be a return to the SB,

and more sellers for a BO-5 run in the Euro Zone.  Nice after hours!

Ok, follow the rules.  Use some eye drops to get the red out, look for a FBO run back to the SB.



US OPEN

With PA in range trading there was no noticeable change in the levels.  We would see why after the open...

Buyers create the FBO, we cross the EMA at the open and return to the SB.  PA creates a higher low at the SB, and we finish with a range run back to the LB.

A market 180 as seen through BOTs.