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Warrior Trading Blog

No FOMO Thursday | Steve’s Futures Pulse 185

Steve_8.1

Hey, what’s up everyone? Just thought I’d use this as an opportunity this afternoon to talk about my no trade day. Those of you that were logged in this morning when I went live, many of these markets had previously … They’d already kind of made their move a little bit earlier in the morning early, four, five, 6:00 AM in the morning before I was ready to pull the trigger. So I said my biggest accomplishment today was not capitalizing on this wild and crazy volatility today, but was actually having the discipline to get on the sideline and stay there.

So I thought I’d recap a couple of the markets that we looked at earlier this morning here just as a opportunity to learn today. And for many of you that have been still trading these markets, you can see there has been plenty of opportunities even into the afternoon, the big selloff in the S&P here today. Let’s talk a little bit about this S&P. We actually were talking about a long signal earlier at above 89 and a half and that was back when the market was way back in this ballpark. We started to see that breakout above that 85 level, even on the 30 minute time frame as well, which we look at and then we got that big follow through with that market topping out at the 3014 and a quarter. Just a massive, massive move.

25 point move from when we first started talking about the long side, but I didn’t want to chase that thing. So many of you I know, did really well on the long side, so me on the sideline as your coach, your number one cheerleader, this go around. But this is kind of the big news here. You could see this is 12:20 Chicago time, big selloff, long range bar. I mean, just a massive sell off a bar there. We’re talking 20 plus point bar there all by itself right there and I think the power of risk management is exemplified in this right here.

So anybody that was on the long side and of course kind of starting to count your money thinking you had a great trade to the upside. It’s all about taking stops and trailing them up when these value areas shift and that would’ve been a stop just down below that 3002 level. You see that right here and then massive breakdown opportunity as well. One of the things I think that when I looked at this trade with the, you call it benefit of hindsight here with 20/20 vision was, there’s still some real nice cues to tell us that that market was likely getting a little top heavy technically here, see the pink magenta color warning bars on our Taz navigator. And then look where we are on navigator plus 51, if you look over here, my data window.

If I put my cursor here plus, actually plus 53, I stand corrected. Anything over plus 40 on our navigator scales is a pretty good sign that market’s overbought and then we started to see that turnaround here. Again on, this is on the 10 minute chart for the S&P. And look almost perfectly calls where the market started topping out technically so.

Anyways, that was the S&P. Let’s go over a couple of other markets here that we looked at this morning and I opted to not chase. Here you go. Look at the gold. Big mover here on the gold as well. We also were looking at silver, which was our one attempt I’ll show you here in just a moment this morning. Big break to the upside on the 10 minute chart. This is early this morning, nine o’clock. We started seeing the market again penetrate above our value areas.

Now remember, if you’re seeing this for the first time or you’re watching this recast as an observer and maybe you’re not in the futures room with everybody that’s in here with me live today. Remember what you’re doing. You’re looking to eliminate one side of the market. So when you see the market perpetually continue to close above that top red supply line, that upper band of the balance area, the fact of the matter is, you don’t want to be trading the short side. You want to eliminate any kind of bearish sentiment that you have, any negative thinking you have about this market goal and you’re only gonna trade the long side. You could see you’ve been … I mean just massively enhancing the reward. That’s a $3000 move in gold by the way today, okay, from nine o’clock this morning. That’s $3000 in what a half days worth of work. Not a bad trade, needless to say, so proof positive. There’s plenty of opportunities.

Let’s look at silver here. Now this is the trade that I guess we’ll call this the one that got away because this is the one that we did place a long entry order in way back here, okay? At 1605. Market was at 1607 and a half, about two and a half cents higher. I wanted the market to pull back just a little bit. And at that time those of you obviously are over here kind of shaking your head yes. But at the same time, shaking your head no. So it looks a little bit like this, I don’t know, like an … And the reason being is we wanted to actually get a little bit of a pull back because I did not want to put my stop way down here across that technical load. It was going to be too much risk. I didn’t want to risk $700 a contract. I wanted to get it in that kind of sweet spot. Maybe 7 cents or 8 cents. In fact, 8 cents was the one $400 a contract.

Well guess what, wasn’t meant to be. I think we got back as low as six and a half, six maybe, but we did not get filled on that 1605. And again it pains me to show this to you but sometimes my confessional on the one that got away today is still a learning opportunity. So it was 1605 rate where I drew that big circle right there. That’s where we’re looking to buy. We were going to put our stop down there at 1598 which is down, right down, or 97 right here, I’m sorry, down below this demand zone, which is 1597 and some change. Didn’t fill.

Again, market goes off to the races right here is likely where we potentially would have been stopped out cause we’re real good about trailing those stops behind the levels as they go. But still would’ve been a nice little trade in this instance, almost 10 cents, $500 per contract. Many of you know, I’m doing anywhere between six 1218 contracts on any given crack so left a little opportunity on the table there. There’s no doubt about it. Frustrating, yes. But again, sometimes the biggest lesson for us in the markets is being disciplined.

The other opportunities that we saw starting to emerge, but I didn’t want to chase today was actually, we saw many of the currencies that were beaten up pretty bad coming into the early morning session. They started to have some turnaround opportunities, didn’t want to chase it. And as I look at some of these markets here, I’m feeling pretty good about that decision actually. So again, no trade day for trader Steve. We had a great day yesterday, 3K in the crowed and I got on the golf course yesterday so I’ll never regret that and I’ll go see what the market holds for us tomorrow morning to finish the week, okay?

All in all, it’s been a good week, lots of trading, lots of fantastic volatility and I hope you’ll meet me back at the markets again tomorrow morning. So long everybody, until then, trade well.

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