How I made 7 points in the emini S&P 500 today

Every morning in the live room I spend around 30 minutes before the open talking about the key support & resistance levels for the day ahead, along with various trade ideas which may come into play as the day progresses.

The benefit of doing this ‘homework’ every morning is that you are prepared for whatever the market can throw at you. You know what you’re going to do at a key price level before the market even trades there. That’s a big advantage most traders don’t have!

What I’m about to show you are extracts of real charts and commentary that were shared with our live room subscribers today, so that you can see a practical example of how Market Structure helps us to trade better.

Please note that the time stamp on the chat transcript is British Standard Time.

14:19 @Sam: ok so back to trade ideas for today
14:19 @Sam: we’re trading pretty much in the middle of our globex range
14:20 @Sam: we’ve got a globex high @ 42.50, which coincides very nicely with our 3 day merge value area low
14:20 @Sam: and our globex low @ 33.25 is also fairly close to yesterday’s low down @ 30.50 – also a HVN
14:21 @Sam: so here’s what we do
14:21 @Sam: trading in the middle of a range is no mans land
14:21 @Sam: that’s a fast way to get chopped & lose all of your money
14:21 @Sam: why? simple – you’re right in the middle of both of our reference points – the globex high & low, and in this case, you’re pretty much 5 points away from those reference points
14:21 @Sam: 5 points away from knowing whether you’re right or wrong
14:22 @Sam: I don’t know about you, but that’s way too much risk for me on a trade
14:22 @Sam: I want to know within 2-3 points if I’m wrong or not
14:23 @Sam: so here’s what I do – I wait for the ES to move to MY levels
14:23 @Sam: I wait for the market to come to me before I get involved
14:23 @Sam: until the ES trades at either 42.50 or 30-33.25, I’m not interested

14:24 Bill_D: learned those lessons the hard way
14:24 @Sam: I don’t trade in the middle of a range
14:24 @Sam: yeah we all do, Bill – most of us learn the hard way when it comes to trading
14:25 @Sam: but if you’re the kind of trader who is lacking in discipline, or has an anxiety to trade, needs to be in the market even when you know you shouldn’t be
14:25 @Sam: this is a great technique for taking that pressure, taking that anxiety right out of your trading
14:25 @Rick M: waiting for the market to come to you takes patience
14:26 @Sam: by doing our homework, by being prepared, we can afford to wait for the market to come to us, and we are ready to act no matter what the market does
14:26 @Sam: it can’t take us by surprise when we approach it this way
14:27 @Sam: so let’s say for example that the ES moves up to its globex high today @ 42.50, up towards the band of resistance there on the big merge from 43-45
14:27 @Sam: at this point, I’m expecting that price area to act as resistance
14:27 @Sam: so if and when the market moves up there, I’ll begin stalking the trade, I’ll start looking for clues in the volume, the price action, the order flow
14:27 @Sam: if I can see anything that suggests resistance is found, then I’ll get short there
14:28 @Sam: likewise, if and when the market hits the globex low & yesterday low area @ 1330-33.25, I’ll start looking for clues in the volume, price action, order flow
14:28 @Sam: is the volume picking up as we hit that low? are there any aggressive buyers in the market here?
14:29 @Sam: if I detect an absence of sellers then I’ll get long down there
14:30 @Sam: ok so we’re open, we’re trading bang in the middle of our globex range, and I’m waiting for the market to come to me
14:34 @Sam: looks like we’re heading for a test of the globex low
14:35 @Sam: if we do get down to the globex low of 33.25 today, then I’m pretty much expecting us to head lower still, and test yesterday’s low @ 30.50
14:36 @Sam: they’re in such close proximity that we can treat it as a price area

16:08 @Sam: time for an update
16:11 @Sam: before the open today, we talked about how the trade idea was to do nothing until the ES came to us – until the market reached either our globex high or low, at which point i’d be looking how to enter
16:12 @Sam: so here’s what happened…
16:12 @Sam: the ES traded down to our globex low @ 33.25, very little volume took place (shows a lack of aggressive sellers)
16:12 @Sam: then we ticked 1 tick under the globex low to 33
16:13 @Sam: after that, there was a 4 point rally, aggressive buyers seized the opportunity
16:14 @Sam: how do we trade this? in all honesty this wasn’t an easy trade to enter – if you were looking at the DOM or a footprint chart you would have seen the lack of volume being traded as we approached the low, and ticked under it – that was really the only signal we got
16:14 @Sam: I had a resting limit order @ 1333, but I didn’t get filled
16:15 @Sam: you pretty much had to enter at or as close to the globex low as possible on this particular trade
16:15 @Sam: so not an easy trade – but a good illustration none the less of why it pays to WAIT for the market to come to you before getting involved
16:15 @Sam: patience is most definitely a virtue in trading

19:23 @Sam: another update, re-testing the day session low now @ 33
19:27 @Sam: this 1330 area is pretty critical support
19:28 @Sam: it’s where yesterday’s low was put in, as we discussed before the open
19:28 @Sam: but also it’s a large HVN in the bigger picture composite profile
19:28 @Sam: if we can’t make new lows here on convincing price action then it could be a good trade location for a long
19:30 @Rick M: isn’t there a HVN node here?
19:36 @Sam: yes 1330 is a good sized HVN
19:41 @Sam: trying a long here from 1329.50
19:41 @Sam: playing for a delta divergence bounce off the 1330 HVN area
19:45 @Rick M: nice entry sam
19:51 @Sam: thanks rick – worked out nicely, just caught it on the way back up
20:05 @Sam: taking some off here @ 1332.50

20:23 @Sam: i’m holding the rest of my long for a return towards today’s HVN @ 36
20:23 @Sam: that is the target
20:23 @Sam: really hinges around whether buyers can crack the 34 level
20:26 @Sam: rejection from there and we’ll probably move back down to test the lows once more
20:26 @Sam: but let’s see what happens

20:45 @Sam: there we go
20:45 @Sam: target hit
20:45 @Rick M: decent rejection of the 1330 area
20:45 @Sam: i’m flat @ 1336.50
20:46 @Rick M: very nice
20:47 @Rick M: 1339-1340 next area
20:49 @Sam: and we’re approaching it already!

20:50 @Sam: chart update
20:59 Bill_D: nice trade
21:04 @Rick M: see you all tomorrow for more fun