XJO 22 July 2011 - Trade Chart, Bar by Bar

With the strong positive lead from the DJI (Dow Jones) the market took off in the morning. I was able to catch most of it during the night session. So at the Australian open even though the XJO starts charting at 10am the Aussie cash Index at MF Global has already reached the morning high from the night before. It takes about 20mins or less for the two to match up.

In any case I watched and waited for a trade to unfold...........

At 11.50am I entered a potential bounce of the 50moving average @ 4597 and waited to see if it would stick. It bounced again against the 50ma and then broke out of the small consolidation area to test the previous high. I sold my first lot at 4602 and held the rest to see if it would keep going. It did and moved to the 4612, I probably could have taken profits there but held, as my price target was at 4619. I could see on the 15min chart resistance yet I felt it would break to the upside.

As time went on it did very little but go sideways and starting to sag, so my stop was placed tight and I let the market do its thing, either move up and hit my price target or stop me out. It stopped me out at 4607: 10 points.

How To Trade - Example Trade blow by blow, A new day 2nd trade

At around 12.10pm I entered my next trade which was a set and forget trade.

Which means I placed a contingency order either side of the trade eg a profit target and a stop loss. I had to go out to meet someone for coffee and happy for the trade to unfold without me. Upon my return the trade unfolded perfectly.

The Entry (shown as the down green bar) was too early. Where as point 3 would be a much better setup however I was impatient with the market and had to get ready to leave. I gave the trade room to move against me as I got stopped out prior to this trade by .5.

The trade was made on a 5min chart with Stop loss shown with 7points of risk. My profit target was projected on the 2min chart as the market is in a range bound pattern. Profit target = 17 points thus a good position size eg win greater than loss.

You  can see on the 5min chart how the price action flakes or faints when it hits the 50MA (thick black line)
These points are numbered and it took 4 rejections before it let loose to the profit target. 

Its very cool when I find the right time frame to trade that the market is in rhythm with, as shown on the 2min chart. If I had watch the trade I would have had the emotions as shown.

From this one needs to look for the greater time frame for setups eg 5min and then trade the lower time frame for precision.

Enjoy :>

How To Trade - Example Trade, blow by blow

 

Trade washes out as it hits Stop loss. :<
A loss of 20 points. This is how trading is , not all trades make it and one needs more winners than losers to make up for the losses. All I can do now is either wait for a new trade and valuate why the trade didn't work and what to fix for the future.

In this case entering reading the overall markets weakness and last two day sell off should have looked to trade the 2min chart for a long (up) position.As shown below

The day chart has a setup entry that is triggered if tomorrow moves up past the high of today at 4518.60 then entry will be made with the stop below the low of today.

How To Trade - Example Trade, blow by blow

THE ENTRY

My entry at 4510 was triggered using my entry rules for a intra day Swing trade
1.My rules is that if there is a white candle that closes above the double blue lines then that candle becomes my Setup Candle.
2. If the next or preceding candles break the high of that Setup candle I take the trade. It must move at least 2 points above the Setup bar.
3.A Stop loss is placed below the lowest low of the base or Swing. In this case its 20 points away. Position size I am risking 20 points. My 1st target is 4536 or 24points and second Target is 4559 or 46 points.
So I am risking on this Swing Trade 20 dollars to make 24 dollars or better.

I  will update during the day with more live snap shots of the trade.

Now I am trading an CFD called AU200 CASH.IND provided by MF Global Australia, this CFD follows the XJO more closely than  the SPI.

XJO 6th of July 2011 Market Comment

The Aussie market is quiet and awaiting an overseas lead it needs to find direction. However looking at the chart the following observation can be made.
1. Triple bottom formation from March 2011 and a double bottom June/July 2011. Reversal pattern to the upside.
2.Momentum is still good with price holding at the top the power breakout candle
3.Pausing at the blue GM line which normally is nothing to worry about
4.Pausing at 50 moving average line (blue MA) which happens to nearly inline with the GM line (blue)

So what does it mean?

I believe that the market is bullish and a retest at the 20MA (red line) is on the cards. 
Profit targets:
short term =4669
mid term =4701 Red GM line
long term =4785

So lets see how it pans out.

Enjoy.

Disclaimer: Remember this is not financial advise or a call to trade the markets.