When To Counter Trade an Up Trend + FOMC AM Briefing
TRANSCRIPT:
Welcome to the AM briefing video presented by MicrosTrader.com, where together we trade better! Alright, happy FOMC morning! We are on the ES chart on TradingView, and this is the view I want to start out with. So today is FOMC. There are 250 trading days a year. Do you need to trade today? Do you need to trade full size today? Both of those questions, the answer is no. You do not need to trade today, and you certainly do not need to trade full size today. So, be careful. It’s a level 10 trading day.
We’re going to review Tuesday, which was a surprising trend day. We started out in this tiny little range. I would expect trading to have been horrible the rest of the day, being the day before FOMC. Then we turned out to have a trend day with four sets of single prints. Crazy!
Today’s tip has to center around what I know some traders struggled with, and that is when do you counter trade? Obviously, it was a trend day with strength. Counter it? It was a trend day with strength. It would consolidate, gap up, consolidate, gap up, consolidate, monster gap up, and followed by a monster consolidation. Now, here, I was hoping we would have a reversal box and it comes back in, but it gapped up again. Okay, how do you trade that? Well, typically, if I’m not in the trend on the second or third ladder, I’m done for the day. Yesterday, I actually felt better; you can hear it in my voice today. I watched it but didn’t trade again till all the way somewhere in here on that down move.
Trading can be really complicated. The complicated part is waiting, but I want you to define when you would counter trade a trend. You need to do that while you’re sober and not drunk on trading. You’re not in the moment. You need to decide that before you begin. One of the things that I would want you to have in your “when do I counter trade” is based off trend lines, in my opinion. So, the morning started off, and we were able to draw this trend line. Then, when we gapped up, consolidated, and gapped again, and consolidated, you had a clear, we are in a parabolic move. I posted that on our trading floor. And then, on this move, you could say we went parabolic again. So, kind of like a double rainbow, you had a double parabolic move. When do you want to short this? Well, in general, I recommend you don’t short, you don’t counter above a parabolic move. Okay, so you had this primary line, then it went parabolic, then it went double parabolic. You just stay out of the way. It needs to break the double parabolic at a minimum, right? And then it needs to break the parabolic, in my opinion, which is going to happen by time or by price. One of those two things is going to break the parabolic. The most complicated part of trading is waiting. We’ve got to wait for the breakdown. So, when I went short in this area here, I was on the third ladder down. One, two, the third ladder down. Now, what made that difficult is it was three hours of chop, basically. But we still had not taken the daily high. Surely, we were going to take the daily high. But after three hours of chop, with fail, fail, fail, third ladder down, I felt comfortable taking my short in here. Didn’t make much, obviously. I kept my stop at one tick because I was hoping that was going to be the move and they’d give it up. But they didn’t give it up. They marched it right back up and took out the daily high. So, one of the other things to consider in the equation of “when do I counter a trend move” is, have we taken the obvious big liquidity? And we hadn’t. That magnet was still sitting up here, and price went and freaking got it.
What have we done overnight? We’ve had acceptance in the upper distribution of yesterday’s range. In fact, looks like we’re about to take out yesterday’s high. So, we’d move that up there. There’s the big magnet right there. And above that, we have more magnets. Alright, now let’s briefly look at our strong levels from yesterday. I believe this range played very well. This range played very well, and this line was definitely a strong level. Then we have one more strong range right up here. We’re going to see how that works, and if we get underneath here, we have other levels as well.
Let’s look at a one-hour chart. So, this is our range that I believe we’ve been in, especially in this M contract. This is the M contract when TradingView switched over on its perpetual contract. And as you can see, we’re in the upper part of this distribution. We’re also still under this daily trend line. So, it’s got one, two, three, four, five highs right above its head. Do you think FOMC is going to take those? I would bet they do, and so it will be fun to see what happens. But those are the biggest, obvious targets in a monster uptrend from October. Stay green, my friends. And to learn more about our group, go to MicrosTrader.com.
Comments
Post a Comment