Wednesday Log – Early Trade Then Go Away

With the FOMC freight train scheduled to depart at 1415 today, I wanted to get a couple trades in prior to 1100. I generally do not trade the afternoon session on FOMC day due to expected high volatility, long candles and unpredictability. Only if you want to take emotional trades (which in the long term won’t and don’t work to improve P/L) should you be attempting to throw these dice. I made lunch plans for the afternoon with fellow traders and took the afternoon off. Great BBQ!

I took two trades today. First one was the pre-market “Hot-Box” trade in anticipation of the durable goods eco report. ES was trading about in the middle of the overnight range (R1) with R2 just above overnight high and overnight low near the PP. This was a strong set-up for the fade on possible pop and flop. I set sell stops at 898.25, approx. 1.5 points above overnight high and buy stops 1.75 points below overnight low / PP. Price came up nicely at the announcement and picked up my sell order. Added one contract @ 899.25. Exit plan was take 2/3 off just above R1 @ 895.75. Missed fill by 1 tick. Stop was initially just above key resistance of 902.25. Moved stop to B/E once price was hovering around 897 area. Maybe I was too ambitious? Moved stop down once price did not move past 896 but not before only getting a fraction of what I planned. Result: .075 point.

One observation, generally, on emotional spikes pre-market, price does not hang near the high for very long. Today, price was stuck in a 2 point range for several minutes which may be an indicator of strength in future trades. Market later went up after open. I will be observant of the emotional “hang-time” on future “Hot-Box” set-ups.

The last trade of the day was a 4 tick scalp after the open. Went long from 898.25 and targeted 4 ticks (899.25) with two C’s, just below R2 and overnight high. Result: 2.0.

At the end of the day, the plan was executed well…Early Trade and Go Away, albeit some good points left on the table. Planned to trade eco report “Hot-Box” trade and first hour – hour and half of morning session and then call it a day. Prior to leaving for lunch, I anticipated that the range of 900-907 would be the trading channel until the FOMC train left the station at 1415. Upon my return, my trade range area was confirmed. Good planning and/or seeing the TA better? Not sure but I am realizing that planning and identifying key ranges and areas of support and resistance help take the guess work out of the trade. Following ES traders on Stocktwits and Twitter is a blessing.

GDP and Jobless eco reports tomorrow @ 0830. Start planning the “Hot-Box”.

Trade Well !