The market is opening out of balance and out of range from yesterday, with a gap down. It is going to be a tricky day. We also left a spike yesterday as the market was moving down quickly and did not have time to confirm lower prices. The low from yesterday 3766.75, that is the level we need to reach for a gap close. The base of the spike is at 3782.50 or 3808.50 depending on how you look at it.
We opened at 3732.
At 7:15 am we are back at OPEN price, trading is slow. Price initially left the open range and tested below with the low of the day so far at 3704.25 in B period.
It looks like price has left the opening range with IB 40.75. POC is at 3728.25.
Trade 1: Long, .618 entry @ 3737.50 with 1 point stop loss. Moved entry up two ticks to 3738 because Fibonacci high went up 2 ticks. Got stopped out though.
At 8:50 it looks like we are going to have another rangebound day. Price went back through the opening range and tested again the overnight low. We opened with a gap down, that has not been closed and also a late spike from yesterday that has not been reached yet. It looks like lower value is being accepted.
POC moved up to 3734.25 indicating a move higher and a possible range extension to the upside on the day frame. The day structure looks like P shape indicating short covering (below).
Set up a short trade with entry at .5 and stop loss at .618. Range has been extended to the upside but we are still not able to close gap let alone touch the base of the spike from yesterday. The P shaped Market Profile also looks to hold throughout the end of the day with price returning towards to point of control.
Updating price to 3752.50 entry short. Unfortunately, I got stopped out at 3754, by one tick (candle high was 3754.25)! My stop loss was 6 ticks. This would have been a nice trade if I could have managed to stay in. An entry at .618 would have been better. Price is now returning to the POC.
I set up a long in case price returns to the lower part of the P. It has to be far enough from the POC for this to work. Entry is at 3727 with is stop loss at 3725 which is .619 for the day. Most likely price will not come back that far down again. It is now resting at the POC.
Footprint chart of my entry on my 2nd trade: Dot is entry and diamond stop loss.
In the video, I incorrectly mention the 3732 level as the POC, that is not correct. 3732 was the OPEN price. POC was closer to 3732.
At the end of the day, I entered a long by accident at 3727! Should have deleted that one!! I was able to take it off before the deadline at 1:10 pm. Always double-check at 1 pm that there are no open trades.
Market Profile looks like a P, indicating short covering
Entering at the extremes of the P yielded the best outcomes.
Key takeaways:
-big down day yesterday, 140 point range after FOMC announcement
-today 50 point day range
-first hour of trading came back through Opening range multiple times
-opened with a gap down and a late spike, both levels were not reached meaning that lower value has been accepted
-P shaped trading limits entry points only to the extremes (high and low), don’t enter a trade at POC
-trading on a day like today is easy once the extremes are established
-trading was made difficult as it looked like we are rejecting lower prices and want to trade higher yet in comparison to yesterday we are trading down as confirmed by not closing the gap and not
Footprint chart with Delta turnaround on the 3-min chart indicates the downtrend correctly at 8:03, 9:54 and 10:18 (when I went in but got stopped put unfortunately). Next time wait and confirm signal works and then go in with larger contract size on the 3rd go or to confirm a retracement.
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