Day Review: 30th November 2017

I wish all days in e-mini trading were like yesterday. Wide range, good action, clear signals… what not to like!?

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I normally only trade the “morning session” until 1pm Chicago time. The second half of the day is normally slow, erratic and for my current time zone is way too late.

In the next screenshot are the 2 trades to take in the “morning session”. Remember, the key is not to trade all the time, but to exercise the difficult task of waiting for the right signals to appear. This is for me the most difficult task in trading. Waiting.

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Signal 1 came from the XBP Volume Ratio with a bullish divergence pattern. As this indicator is a leading indicator, we shall wait for the Trend indicator to confirm the change to a bullish trend to enter a Long position. The exit came at 2 with a double signal, from the XBP Volume Ratio came a bearish divergence and from XBP Paint Bars we had extreme volume with red bars coupled with high-speed signals.

I like to wait to enter a position and to exit when I see good enough evidence that the trend will be over soon. I prefer money in the pocket even though it means that I left money in the table rather than a loss.

The second trade came at 3 with a bullish divergence in XBP Volume Ratio. This time it was more clear than the one on the first trade. The exit came at 4 with XBP Paint Bars showing high volume red bars and high-speed signals coupled with obvious bearish divergence in the XBP Volume Ratio.

Seeing steady, kind of flat, divergence in XBP Volume Ratio while on a trend is something normal. Usually these patterns end with a spike of volume at the end of the trend. In today’s action you can see this pattern. At the beginning of the bullish trend after signal 3 we can see a spike in XBP Volume Ratio, then a steady bearish divergence, and at the end of the trend another spike in XBP Volume Ratio. This is how volume works, big volume starts a trend and big volume ends a trend. Not always is that obvious but today it has been a “text-book example”.

I hope your trading went well.

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