Manic Monday?

Not very manic at all but Friday's S and P action deserves special attention.

I started with the Gap trade, buying the 1202s against the buying tail of 11/11. The key was having seen the Profile split, giving a VAL of the split at around 1209. This became my first major target rather than the actual close. I scaled out all the way there.

Next, I saw the trend change on the range bar chart and anticipated the range extension down, so was able to get short at around 1204.50 on one of my favourite pictures. After that it was easy. The market range extended down and I started scaling out just above the Keltner low. Meanwhile, the Euro was breaking down too. As a mere male, it was hard for me to watch both, although I did, but cut the Euro trade too early.

Then we have today's DAX (German stock index on Eurex). This is a big contract (25 Euro/point) and it takes no prisoners. It is known for making people a small fortune (out of a large one). Once tamed, it's a great beast to trade but most of us have paid for our lessons dearly, so caveat emptor and sellers too.


Anyway, the trade in the pic is a good example of positioning yourself for the move. Whether you call it the Gap trade or anything else, you had to be long already to make money out of the move. I was positioned at about 6707 and waited for the sweep which came a few minutes later. I had exit orders waiting, beginning at 6718 and going up to 28. The pop came and it was over in a blink. That's the DAX.