2016 Trading Starts Of With A Bang!
2016 has been a very interesting trading year so far. I always like to start the year with a bang, but this year has really been bang! bang! bang!
Here is a trade I took on Thursday January 21, 2016 as the market was rallying to the day’s high. I usually look for a reason to get short around a high, as opposed to looking for reasons to buy the breakout.
However every now and then I do buy breakouts into the high when I feel it is too good to pass up.
So on this day, we had the high of the day at 1876.00 and the previous day high at 1878.50. The market had made a few weak runs at the high earlier but could not really gather the buying momentum to break through the high.
The market started trading up towards the again on another attempt. I placed a buy stop one tick off the high at 1875.75 because I was really looking for a pop through the high at 1876 and then a run to the previous day’s high at 1878.50.
A big buyer showed up and there was a stacked buying imbalance at 10:56am and there was a big offer at 1875.00 which was trading pretty good – it wasn’t bouncing lower which was important. The market was ready to go higher.
I bought 5 lots of ES at 1875.00. A short time later my buy stop at 1875.75 was filled and then we broke the 1876.00 level and a minute or so later broke through 1878.50 I took the 5 lots off at 1881.00 and was trying to let the other 5 lots run a bit. We hit a high1883.25 and turned lower. In the next bar there was a strong negative delta and a single print. It was time for me to get out. I covered the remaining 5 at 1878.25. The profit result was $2125.00. A decent result.
The ES market has been pretty volatile since the beginning of the year with all the stuff coming out of china. This extra volatility creates more trading opportunities, but it is a double edge sword. The market can easily move against you just as easily. That is why I look to order flow to guide me when to get in and when to get out.