Fri AM Briefing Preparing For Our Emini Trading Room 07/26/2024

Preparing ES & NQ Traders
For Our Emini and Micros Futures Trading Room

RESOURCES:
            ▶️ ES Price Map (Single Prints, VPOCS, News Drivers,...)

            ▶️Youtube Community Updates             ▶️ Website for ES MES Trading Room (Back Up)


TRANSCRIPT:

Good morning, gentlemen. Good morning, ladies. It's pretty amazing—I'll tell my wife: "You know, the worst thing that hurts a trader is adding to a losing trade." She says, "Why would anyone do that?" I said, "You need to attend the boot camp. Let's get you trading." So, level 10 weeks starting today. I warned my group on Sunday: level 10 trading this week. Uncertainty is going to lead to volatility; it's a day trader's delight, but you've got to trade perfectly. So today's quote: "Be on your guard; stand firm in the faith; be courageous; be strong. Do everything in love." I love that! So, a fantastic day yesterday—let's see what today presents. I hope you had a fantastic day yesterday as well. Alright, guys, let's get into it. Welcome to the AM briefing number 226, brought to you by Microstrader.com. We're truly together; we trade better. Actually, I have a great example of that today, so let's get into it. Tip of the day: yesterday was a lesson in 80-candle land. Yeah, monkey business for our group. When we start having eight-point candles on a three-minute chart, to me, that represents irrational price action. Our levels work phenomenally in rational price action, but when things get irrational and we start trending, make sure you don't counter-trade. Because when you're in rational price behavior—which is short covering, as we had in the morning—shorts are getting out at a highly strategic location. If you counter that, you better be careful. When you start seeing all these eight-point candles, you better be careful. Respect the eight-point candle land. If your average stop loss is six points and we're having eight-point candles, that's a difficult place to trade. Reduce your leverage and increase your stop loss; you're not risking any more. Let's say you were willing to lose $300, okay? You were willing to have three full losing trades at $100 each. Well, one move makes a 20-point stop loss three times to stop out, which means you were 60 points wrong for the whole day. That's really difficult to do, to be wrong 60 points. So, on high-volatility days where there are eight-point candles staring at your face, make sure that warning is turned on in your day trading essentials indicator, okay? Respect the eight-point candles. That doesn't mean you can't trade, but I do recommend you lower your risk, widen your stop, and you might even want to have a rule: "Okay, we're in eight-point candle land. If I have one loser, I'm done," and move on. Alright, so news drivers today: we've got PCE in the morning. That is almost one of the most important ones, but PCE does outpace it. Level 10 trading for the next seven days, guys. We've got FOMC and non-farm payrolls. As we've said every day this week, and here's a glimpse into next week's news drivers. So, let's get to the chart. We're going to walk through the day yesterday. I like this new format. I hope you like this new format where I'm going a little more detailed into the previous day. If I feel there's something really important to cover, I'll do a wrap-up video, but I'm not going to do a wrap-up video just about my 60-point trade. I mean, I'm going to cover it here this morning. So, in the pre-market in our Zoom room, I was saying, "Alright, guys, the risk of short covering is high." The risk of short covering is high. And in the Zoom, not in the Zoom, on YouTube, I miswrote that one—I mapped out a long on the AM briefing yesterday. In fact, right here, about the 15-minute mark, I told you where I thought it was safe to be looking for a long. I mapped out one trade for you, and in our group, I mapped out four trades: one short and three longs. The short worked, and two of the longs mapped out perfectly; one of them you actually weren't given the entry. So, in the pre-market, we were talking about where I would want to go long. Ideally, either the trade I mapped out for you, because I didn't know if we were going to go straight up and that becomes our trade, or if we were going to pull back down and trap the trader. So, I had mapped out this trade: if we get down to 4238, I'm going long, and that's where I went long. We're in a sea of eight-point candles. One move makes a 20-point stop loss, and I told the group, "If I take a full loss here, I am done until Monday. I will remove myself from the trading floor because I feel that's going to set me up to not be the best trader emotionally." I actually had a losing day yesterday—not by much, but it was a losing day. So today, I said, "If my first trade's a loser, I'm removing myself from the trading floor until Monday." Took a little heat, popped it up. Now, this is a trade—you know, this week we talked about what's my profit target. We talked about that on Zoom and actually on one of the AM briefings. I said, "I don't know. I don't know what price is going to do." If you had forced me to give a perfect answer, it's when price bounces back in my face. Okay, that is where my perfect exit is. But if I have a great trade location, I want to try to milk that trade. When I got into this long, I told the group, "My goal here is, if this is actually the bottom—which I have no clue if it is—but if it is, I loved my trade location. I want this to turn into a multi-day long and see how we can milk that and build higher time frame protection layers than just three-minute protection layers." But that's not what the market had in mind. It went up 100 points and came down 100 points. So, let's go to the next thing. So that's where I went long; here is where I could have added. This is where I recommended if you weren't long and you wanted to go long, this is a great place to go long. And I know Grandpa Roger did and captured 20 points on this move and did very well. In addition, my eyeballs were here on the 100 points. I've never actually captured a 100-pointer. We have, in our group, the 100-Point Club. See, one of my traders did get a 100-pointer one day, and it is totally possible. I got within seven points. Why was I eyeing the 100 points? Because yesterday's RTH IB high was right above it. Okay, and so that's where my eyes were targeting, and we couldn't get there. Now, I did have some remaining SPY calls that I did exit. In fact, if you come over here, if you go to my website, I actually moved this trade into the recent trades area right here. So, if you hit recent trades right now, it's on the price map, but that'll disappear. So, this was my recap of yesterday. I did this in my cash account and TastyTrade; that's why this looks different. Like I said, I was hoping for a multi-day hold; that didn't happen. So, this is where I went long; this is where I was locking in 30. I probably should have taken more screenshots, but here's the screenshot where I now moved it up to the 60-pointer, and it came and got me. And here are my fills, as you can see there as well. So, I got out of my remaining SPY calls from the bracket order that I had in my TastyTrade account. And then, as we were approaching this area here—which, by the way, was a strong level; it's a strong level sitting right there—as we were approaching this area, this is an example of "together we trade better." Other traders in my group and traders who weren't even on Zoom, like Justin, were helping me keep an eye out on higher time frames, making sure I'm aware of certain things. We were also discussing: do I just take the 100-pointer and exit? Do I try for a multi-day hold? If we get above the 100 points, do I just put my stop at 100? And if price keeps going, great; if it comes back and gets me, well, you captured 100. Those were things that we were discussing live on Zoom and on the trading floor inside of Discord because not every member can be live on Discord. I decided to just have two or three protection layers, okay? To where I was like, "Okay, if price gets to here, get me out, plus I'm locking in 60 points. I'm not going to be upset." So, my exit—I still had the 60 points. It was one shot, one kill, done. I was behind at least three protection layers and the RTH halfback from yesterday, so I felt I was in a good place. Almost like on a chessboard, I felt the king was protected, but the market had other ideas. And we never know where the price is going to go; we are just good at guessing where the price is going to bounce. And so, that is how that worked. And once again, there are my confirmations, and I think that worked out really well. So, let's slide over. Oh yeah, one of my new traders that joined—not last night, the night before—first day live in our group as a full member: "Hey George, thanks for adding me during the market hours." I actually didn't see that he joined, so he sent me a private message right after the market opened, and I got him in and got him on Zoom and all that. I don't think it's an understatement to call today great. I got 18 points on three MES contracts, so yay, that's awesome! So congratulations, my friend, and welcome to the group. So, let's go to a 10-minute chart. Let's pull this out just a little bit. Let's pull this out a little bit. And what are we doing, guys? We are still trending down, are we not? Let me turn on my trend line here. So, this is a 30-minute trend line I had. It probably needs to be adapted out just even one more time. Once again, trend lines are not entries, but they give us a directional bias based on high time frame levels. You've still got to say we're going short or flat. I did say nothing happens until we ladder over a session high. We did ladder over a session high, but we couldn't take an RTH high. Which high is the most important? Do you think an Asia high, a London high, or an RTH high? An RTH high. We still can't take out an RTH high. These guys are stacking on top of each other, so make sure these levels are on your chart. If you're in my group, it's real easy. Make sure you have them marked. So, what are we doing here in the morning? Well, I would draw this very prominent trend line here. We're now about halfway through the RTH, which, based on everything we're seeing, is a great place for price to turn around. It doesn't give me a trade because PCE is here in an hour and a half. I have zero interest in doing anything. In fact, I'm going into the day with the thought process that I'm probably not even going to take a trade. I'm doing it for the love of price action and being here with my traders and supporting them. So, everyone's got an upward-slanting VWAP. Everyone appears to be loading up. Everyone is at least above yesterday's low. Once again, NQ is still the sickly sister of all of these indices; it's just limping along. So, where are we? We're still in a downtrend. We still have not taken out a daily high. We certainly have not laddered over a daily high. We're having tremendous ranges in volatility, tons of eight-point candles. You certainly dial it down small, if at all. And if you're going to trade at all, drop it down, widen your stop. I'd rather you have a 20-point stop. Why? Because it gives room and it gives time, and it's going to make you really be picky about trade location. Where is that ideal trade location you would want to be long, or where is that ideal trade location you would want to be short? And then give it some space. 20 points on a single MES contract is not going to kill your week. Now, if you take a little one-minute level inside of eight-point three-minute candles, you're asking for trouble. Get off the one-minute chart on these high-volatility days. Get off the one-minute chart. That's my humble opinion. The three-minute chart still rocks. There was one loser yesterday, kind of technically. On Zoom, I told you not to take the trade, and we had a—if you're in my group, go to the end of the day chart, and you'll see a discussion there between Scott and me about that level. He didn't hear me say don't take that trade. So we talk about why that was really—gosh, maybe in some respects it met the requirements, but it had the tiniest, teeniest, bitsy, teeny-weeny yellow polka dot bikini clearance. In fact, I would argue that the first candle—hey Scott, go look at this—that first candle that cleared the backside only had three ticks clearance. If three ticks is our metric for a level, is it tested? I don't know. It's an interesting thought. I just wanted to throw that out. I know you're listening, so I wanted to tell you that, so I'm telling you here. So, we looked at the indices. The game plan today is it's PCE, guys. You're in level 10 week; give it the respect it's due, or the market will humble you. I am certainly looking for a great trade location. And when I'm looking here, I go, "Okay, from this high to this high, where's the middle of all of that?" Somewhere in here. I have no interest in trading in the middle of that range. So, if the market was to open here, what's my trade? Wait. That's my trade. Wait. Get more coffee. Wait. I want to get to an edge. Wait. We will wait. I want a great trade location—a trade location I feel like I could take a 20-point stop and like, "Hey, whatever," and I'm out for the day. I will end up taking a much smaller daily stop loss than I should. It's PCE day; we're in level 10 trading week. Does that all make sense? I know I'm hammering a dead horse, but I've got to keep saying it, you've got to keep hearing it. Alright, I wish you the best of luck today, and may your chart go from the lower left to the upper right. Alright, guys, I will see you later. Green, my friends. And to learn more about our group, go to Microstrader.com.