Using the BB Channel to Spot the Opening Trends and Reversals

After taking some tough loses I realized that my biggest problem was that I was playing from behind whenever I missed my Ice breaker, or took an early trade on the open without any true directional clues other than the day type established with the prior days close. While the 15 minute close bars and day type are very helpful many times this past information confuses my present view leaving me basically guessing the Open DIRECTION. 


So after reviewing these mistakes I noticed that the BB Midline was very Accurate at spotting Open price Direction. It acts the same as the intraday Trend Guide, Except it has taken into account the Globex and Pre-Open session providing the most current momentum swings, something i have been trying to nail for a while. 


Hear is How im using it


FINDING THE TREND EARLY - look for trades in the BB Channel Trend Direction early on the Pre-Open and Open; Often we get test of the midline early prior to moving deeping into the trend. ( see arrow )

Another Example of BB Channel pointing the way on the open

 Testing the BB Midline before Continuing deeper into the trend, Probar Down Close (Notice Price tested BUT NEVER CLOSED across the midline)

If Price Opens against Support or Resistance outside the BB Extremes, look to Fade these areas early, these confirm Globex momentum and insures that you are trading with the trend.
(Notice the Cycle Resistance above BB Mid with Probar, Notice Price NEVER CLOSED across the midline)

Price Opens Near Cycle Support at BB EXTREME

 Price Opens Near Cycle Resistance at BB EXTREME

If Price crosses the Midline multiple times early Be Wait before entering a trade as the trend has not been established.
(Notice the Choppy Open with Midline Violation on both side before the trend emerged, best to wait on these opens)

Another Choppy Open

Remember that Bar Breaks MUST confirm Trend Direction or look for the BB Midline to be Crossed, Closed and Tested with Bar break in cross direction prior to entering, These Open are treated like Reversals

 Another Test of BB Midline, Failure confirmed with Bar Break.

Adjusted Scorecard and Trade Prep Routine

Entering into the month of September 2011. I feel its time to adjust How i Critique my trading after each session and also update my Routine in order to tighten up my game and address problems that need improvement while eliminate problems that I no longer have any difficulty with.

Score Card Adjustments & Additions to my Score Card that need specific improvement:

Mental Pre-Prep Routine - Focused on the Mental Visualization techniques to a eliminate Nerve and Anxiety problems during the session.

Trade Selection - This is to place emphasis on Focusing on the very best Trade setups of the Day. This will help with Maximizing each opportunity while preventing Over trading.

Maximizing Exit Targets - Monitoring the ability to allow the trades to play out and hit inevitable targets. My Exits need improvement. Use the Anti Nerve mantras and breathing techniques below. click for more info (see Sigh Breaths)

Emotions / Nerves & Anxiety - This is very important to gauge my mental progress when executing sequences. Am I applying the techniques consistently through the day? (This includes pre entry as well as monitoring the market for high quality sequences.)


Mental Routine Focus Points and Meditation
Concepts to Remember

Remember that each trade is a small part of the whole sample size, no need to put so much emphasis on each sequence. I am the Casino and My Mind, Discipline and Focus ability is My Edge..
Take Every Sequence that fits my Criteria as an A, B or C trade. Loses are a natural part of this business.
Consider Loses as the cost of doing business, the overhead that allows me to be successful.

Exposure Routine

Do Exposure visualization before bed with fear and focus tones, do this for as long and intense as possible.

Do Exposure visualization again in morning but very quick.

Use Frequency Tones for Fear, Focus, Concentration and Relaxation.

Visualization

Imagine sequences - waiting for a great trade, getting excited when i see the opportunity, quickly assessing risk, entering with confidence. This all happens naturally as if on auto pilot.

Then watch trade go against me or stay still, watch how i feel about this and when anxiety shows, breath deep and say "I have to give it some time" keep the slow breaths and mantra while the trade goes in and out of profit. as the trade moves deeper my favor, assess the broader view of the market and say " i need to see the 4500 or 1500 tick exit signal. stay in this scenario for as long as needed. then feel yourself limiting out.

Do these types of meditations and include loses, especially tough 1 tick target misses and reverses. imagine how i will react to these in preventing loses, included dragging orders, bad fills etc. Also imagine moving past these tough trades without dwelling or losing focus.

Visualize my Equity Curve moving UP (Not my Account P&L) taking small loses and managing large wins. Imagine a strong Win/Loss Ratio 80%, 100%

Tips to Practice

You can do this even during trading hours as if you are going to enter a live trade while waiting for setups (Do NOT Jump In Live Without a Setup) But create the feeling of pre war anxiety and listen to it, use breathing techniques to quail this feeling, keep practicing this until the anxiety begins to fade and lessen. When we do finally enter live use the same breathing techniques and mantras to mentally manage

the anxiety of each sequence.

The Idea is to get as close to the feeling of trading anxiety as possible and DEAL with it enough times to eliminate its important to your subconscious us mind.

THE SEQUENCE CYCLE START TO FINISH

Pre Sequence Behavior - Analyzing the Open and Daily Progression with a Focused detached  Mind.
Scanning the markets on Auto Pilot as a detached witness that only recognizes Low Risk High Probability Trades that are listed as key Sequences A, B, and C. 


Looking at the Broad View and asking the pertinent questions as if I'm in a trade can help with Quality Trade Selection.


Use the whole ACTIVE Trading Session as a Meditation/Visualization by Monitoring your Breathing While Focusing on the Activity.


Read the Tape to get a feel for the market Pulse.


Use the information from the Pre-Prep Routine, ie. Daily chart, V Profile, Globex Session, Market Bias and Day Type and try to Visualize How the Day will End Up.


Question the Higher Time Frames (13500t, 4500t, 15m) Ask yourself, Where is the Ideal Entry Located? At what Price would I like to enter?


Try to foresee what is likely to happen and where you Would like to Enter at.


Listen to your body. I often Get Excited and feel Very Confident when I see a Low Risk Opportunity, This the Time To Jump In!!!


Positive Things To say Myself (while in a Sequence) - Quality of Thinking can be managed with pertinent Mantras that are in line with my trading goals.

Notice the Anxiety, listen to it and call it by its name (Nerves, Post Entry Anxiety etc.)

Take a few moments to notice my breathing patterns.
Take slow and deep breaths. focusing on the pause at the end of the breath .
Relax my Face, Throat, Jaws, Shoulders & Abdomen.
Click for more breathing info (see Sigh Breaths)


Mantras
Stay Positive..

My Mind provides the winning Edge..
My calm is my advantage.
I want a pull back to my entry, that may be a good add-on opportunity.
We should hit the inevitable target soon.
I have No thoughts of my own im just listening to the markets

I need to see the 1500 probar with exhaustion before exiting.
Give It Time, at least 15 minutes then i'll reassess the odds.
A test in a Rising or falling Market means we have more room to go. 

I'm getting better at this.
This thing is going our way.
Whats the worst that can happen?

Its Not life or death

its only one sequence out of many

fed reserve notes are not real money

Productive questions to ask while in a trade. -
Is the trend still strong?
Are we pressing the BB Extremes? This is a sign of momentum
Is the Tape Volume Progressing in our Favor? Supply or Demand
Where is the Strength or Weakness in the current background?
Are there any recent test of Strength or Weakness since entering?
Are we near a Time interval 5, 15 or 30 minute bar open/close?
Can i visualize where the 7 Bar will peak?
Is the next POC holding?
Is the Tape Consistently reading in your direction?
Is the 500 cycle moving in our direction?
Is VPOC Value moving in our direction?

Review The Sequence After You Close Out- Review after the trade will provide a Break From Intense Focusing and provide some time to Re-Assess the Current Action.
Note my thinking before entry, during sequence and at close out.
Was my thinking positive?
How did That Sequence Feel?
Did i notice anything Different about my thoughts or Feelings?
What could i have done better?

Consider Going to the Restroom, Stretch or taking a walk around the house - Its good to go Away from the Screen after intense focus periods. This is a great refresher and things often appear clearer upon returning.

Move On - After reviewing the sequence forget about the last trade and began the process of probing the market with a focused but detached perspective.

Listen to Your " ITS TIME TO QUITE INSTINCTS"

Listen to your "Its Time To Quite Instincts"
If you cannot hear this after 3-4 trades then the ODDS are Great that you will OverTrade on the day and possibly blow up your account. 


So listen to that voice in your head that says, "thats it. Done for the Day!" Win Lose or draw. Listening to how you feel and acting on it early is professional behavior.

THINKING IN TERMS of LOW RISK ENTRY!!

THINKING IN TERMS of LOW RISK ENTRY
Today i put on trade that brought something to the forefront of mind as i entered the position. Nothing new but It needs to be reinforced. When entering my best trade of the day i was thinking. "Wow this is a LOW RISK OPPORTUNITY, GO!!!" At this point I was fully aware of the point at which I No longer liked my odds, (ie. Bar breaks, BB Breaks, recent 1500/500 S/R Cycle breaks, probars that may show up in the wrong place etc.) 
Just Placing mental or physical markers can help with EXIT STOPS TREMENDOUSLY and keeps your Risk Reward Ration above 2:1. Using this for stops while keeping natural targets and observing Holding time in the trade can be really effective Trade management techniques that are subtle but effective. 


No this is not a holy grail but all it takes is the ability to cut losers short and fast and allowing the winners to max out in order to show consistent profits.

Text Book REVERSALS and TRENDS that Follow

TEXT BOOK REVERSAL SETUP
1st we had a 6.25 Gap Dn = Reversal Day Type signal.


2nd we had multiple Exhaustion signals on the 4500 and 1500 ticks as well as the 5 minute.


3rd we had Probars appearing on the 1500 at cycle support.


4th we saw the 4500 Mid line BREAK & CLOSE.


5th We saw the Retest of the mid line that had probars on the 1500 and 500 tick, once that 500 probars breaks this is confirmation of early pullback in Up trend.

MORE ON TRENDS
ON Strong TREND's Notice how the Price will trade within the Upper or Lower BB When Trending, using the Midline as S/R in continuation. These are notes Not trade entry's. The Reversals and Trend Confirmations are great guides and will often sync with other tick charts clearly showing pullbacks and re-entry's on the 1500 and 500 ticks.

BIg Shout To Barry Taylor for showcasing my greatest day EVER!!

http://emini-watch.com/emini-trader-showcase-ace-from-california/4229/

Trading Abnormal Markets With Ultra Volitilty and HUGE ranges

Over the past few weeks we have seen volatility pick up casually and Then suddenly we are Hit with a huge 71 pt Range as prices sell off on the ES. The Dow Sells off 512 pt giving up 4.31% in one day. This is referred to as a Black Swan Event by Larry Conners.

How to react to events such as the one we are currently experiencing is the question at hand. Below is a list of ideas that i saw as solutions to preserving capital and and actually putting on profitable trades.

#1 Avoid Trading at all, Waiting it out Is Never a Bad Idea and is probably the very best thing traders can do to avoid unnecessary risk and exposure. If you feel you must trade us the demo account.

#2 DO NOT GET CAUGHT UP IN THE HYPE - Thinking Wow look at all these opportunities, i could just scalp the action. THIS mentality is sure to have you on the losing end of most trades and will decrease your odds causing you to over trade for sure.

#3 START THE DAY LATER- meaning avoid the open an look for midday opportunities when the range settles a bit.