Observe & Trade*

Saturday, December 18, 2010

Showing some similarities from SPY and the S&P 5-min charts.

They move mostly at the same time.

Trading them both especially in the e-mini (ES) can give you an edge rather than trading individual stocks.

Notice the previous last hour of trading and the first few hours into the open, it's a seesaw battle.

But after some selling and buying pressure, it settles down and started consolidating.

That's where the best location to enter a trade.

The advantage of trading the e-minis as compared to individual stocks is the absence of market maker (the middleman) that sets the price.

In the futures, there's no problem filling the order, it can buy/sell the price at the market with no marked-up.

And the execution is right on real time.

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.