Into my third year of trading E-minis futures and I am still guilty of taking the bait. I fell into the bull trap on yesterdays open.
The lure:-
- The previous days close as support
- Support at 1 min moving average
- Price and stochastic divergence at 1102 area
The basis of my frustration is not so much the bullish criteria that set my bias at open but the fact that I continued to trade long when the trade premise was broken. See the channel on price I have drawn between 1104 and 1102.25. As it broke 1102 i should have been flat and sitting on my hands never mind re-entering long.
The attempts long at 1097 price were justified as a fade on the 1 minute chart stretch but it was all too late and i got out just before the news announcement for some meagre pickings.
With the account down $300 my plan says that I sit out the rest of the session - only to watch the consolidation break on the 1 minute chart soar North without me.
With some help from Harry Hindsight here is how it may have played out:-
- Pre-market bias is short with 3LB confirming.
- Market opens and consolidates - wait for break out
- Market breaks down - wait for 1st pull back to moving averages and short at 1101
- Scale in on further confirmation and pullback
- Scale out at 1097.5 area as price and stochastics diverge
- Flat at news and wait for price to settle out
- 1 minute chart shows consolidation around 1098-99 area - wait for break out
- Market breaks long - scale in on first pullback to trendline support
It couldn't be easier - what d'ya reckon?
