Observe & Trade*

Friday, December 17, 2010

A vertical leap from Russell 2000 (TF).

With the last two lower high coupled with the ascending 20MA, it leaps vertically from thereon.

It can also conclude prior to the opening from the previous last hour, it kinda' form a box.

And also the S/R level make sense to consider.

As I posted earlier that QQQQ (NQ in e-mini) has the probability to breakout.

And I was right!

As I mentioned, it formed a "W" pattern and it consolidates after (in between 54.56 - 54.58).

This is the kind of pattern that is a sure fire to trade.

You can enter at 54.56 and exit at 54.66 for a gain of just a mere +$0.10 per share.

But if you trade this in the e-minis, you can enter at 2222.00 and can exit at 2226.00 for a gain of 4 points.

NQ moves in the increments of 0.50 points at $10.00.

So for a gain of 4 points, that is +$80.00 for a contract.

Not bad for 30 minute "job"!

Watching this QQQQ chart (NQ from e-mini) formation on a 5-min. frame and I can conclude it is forming a "W" pattern.

Meaning, it has a tendency to go higher.

It may consolidate for a while but there is probability it might rally.

Reading stock market news today from Yahoo and found this interesting attached picture from the subject I was reading.

The caption mentioned that this one in the photo traded the BA shares and had some issues with her trading transactions.

But my observation on this is how can she (he) become a good trader by just trading like that. I mean the setup where she's at.

Does she trade from the Starbucks coffee shop?

Well, no wonder the caption says, "this Amateur Trader"...., it really speaks what's in the picture.

A drop in the open from the two main index markets.

Selling in the open can make you a fast money.

It's the reverse movement from yesterday's action.

But there is no surprise on this, it's Friday (traders profit day).

Observing the market action can give us an edge.

That's the only way we can participate from the world of the Streeters!

Nice rebound today from the three core index market.

The market went down after the open but came back roaring after a couple of hours into the trading.

Notice the similarity of the pattern.

If one goes up, they will go up almost at the same time.

That's the advantage in trading the e-minis.

Just monitor to four index market and you can make a sure profit.

But trading is not just like that, don't trade just for the sake of trading.

Timing is important and pattern recognition is a must.

No confirmation, no trade!