Trading Plan of the Day: The Edge is on the Edges.

16 במאי 2023

ESM2023 has been range bound for the past two weeks and in a committed contraction as it consolidates. This market is uncertain and waiting on a catalyst. This day could end up a few different ways.

I watch for the following using multiple (three total) daily SVPs set to custom time frames, and that is pretty important for tracking these moves.

1. No breakout. Price respects the range and continues to contract. Trade the value area (VA) to the point of control (POC) or the POC to the VH. The edge is on the edges of the profile.

2. Breakout. Price moves outside of the range. Builds time and acceptance (T and A-that's fun to say) outside of the range. Evidence of T and A is the building of an HVN. If price builds an HVN over time, look for further moves in the direction of the breakout.

3. Chop. Price moves out of the range but does not do so with significant volume or does not build an HVN through T and A. Instead, it just grinds or makes a fatter SVP rather than a defined LVN to HVN. This type of move is not predictable enough to trade. Sit on hands or sell an OTM option.

Rules of the day:

A. Take trades only in HVNs.
B. Watch the trend extractor, expect easier volume and money flow in the first big move of the day.
C. Trade in the direction of first big move after the open in the trend extractor.

Time frame for trades: 15M

Chart layout: 230514_Hell Bitch_15M (again, not a sexist or derogatory comment but named after a rather difficult horse in Larry McMurty's novel "Lonesome Dove").