Friday, November 14, 2008

Trading ES

With the big ranges we are seeing in the last weeks and months I'm thinking about trading ES again. It feels safer than other contracts which can jump 10 to 15 ticks on me in the blink of an eye. I applied my standard chart template to ES, but wasn't really content. And I did what you should do in such a case. Go back to the basic.

Start with a clear candlestick chart and add what you feel is missing to read the chart:

I added a moving average to have a trend feeling.

I added my round number tick lines calculated from yesterdays close, which I use as horizontal gridlines. Not only will they show me round numbers most traders trading with numbers only have on their screen as well, the spacing also tells me something about the volatility of a contract compared to another one. The wider the spacing the slower the contract trades.

Some markers on the right side showing me the pivot, today's and yesterday's important trade levels.

That's it.

But my wonderful band I introduced to tell me about oversold or overbought conditions, my Donchian channel...Gone after I applied the great tool I had sleeping in my pocket. Stashed and waiting to be used again


Sweet, don't you think, considering I got that picture by applying the Fib-tool to the opening range from 888.25 (strong premarket support into the open) to the open move high at 907.