Trader Kingdom

Order Flow Analysis - Tracking Intraday Volume Transitions

D.B. Vaello — Fri, 24 Feb 2012 06:00:00 GMT

Title: Order Flow Analysis - Tracking Intraday Volume Transitions

Speaker: D.B. Vaello

Join D.B. Vaello of Order Flow Analytics as he discusses the benefits of tracking volume transitions within the intraday market movement.

Learn how to confirm trend direction and strength as well as isolate specific support and resistance levels automatically with OFA's new server-based Alert module designed to take the guesswork out of learning Order Flow.

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The following topics will be addressed in detail during this live online event:

Automated Instant Trend Identification Triggers
Monitoring Trend Strength Based-On Volume Clusters
Trading Trend Support & Resistance
Trading Trend Breakouts & Breakdowns
The 3 Intraday Perspectives: Scalp, Spread, Swing

This website is for educational purposes only. Futures, options, and spot currency trading have large potential risk and traders should be well-educated before putting real money at risk. You must be aware of the risks and willing to accept them in order to invest in all markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to buy/sell a futures contract or currency.

Looks Like the S&P May Be Starting to Roll-Over

Fri, 24 Feb 2012 06:00:00 GMT

The Market (S&P) hit a High of 1369.50 on Tuesday with a deteriorating RSI (Relative Strength Indicator) and lower volume. I had hoped that it would have hit 1373 before going lower. Now I would like to see the market retrace and start to consolidate before moving higher again. The RSI and volume will need to improve before The Market can really move higher.

Now, let's see what this all means:

Now, let’s see what this all means:

The RSI (Relative Strength Indicator) continues to show weakness.
I do not want to see The Market close below 1334.75 which would indicate a lot of weakness.
This should be good for The Market as long as the RSI bounces back.

Here’s my new updated short term Trading Levels:
1369.25
1360.75
1355.75 (Important Level)
1351.50 (Important Level)
1347.25 (Important Level)
1342.25
1334.00

Updated Trading Points:
1253.00
1146.75

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Click on image to enlarge!

Have a Profitable Day Trading!

For more from the Market Trading Guru, you can follow his blog at http://mrkttradingguru.wordpress.com to receive the daily Trading Levels or on Twitter: @MrktTradingGuru.

The Bears Are Still in Hibernation

Fri, 24 Feb 2012 06:00:00 GMT

The US markets were closed for the US session on Monday for President's day and we had a short trading week. So far we have had quite a bullish run for the year, the market closed the prior week near the year's highs. The market has now reached a critical juncture. Less than two month into the year, the benchmark S&P index (SPX) is up more than 8 percent and has already exceeded many analyst forecasts.

The S&P ended last Friday at 1361, it's highest level since May 2011. This is also higher than the Reuters poll forecast in December that predicted the index would end 2012 at 1340. If the market pushes higher a break above 1370 would put the S&P back at price levels not seen since June 2008 before the September 2008 collapse of Lehman Brothers. The Nasdaq has also been trading near its highest levels since 2000 and the Dow industrial average is quickly coming up on the key 13,000 level.

The S&P 500 earnings performance so far has trailed recent quarters in terms of beating Wall Street's expectations. The percentage of companies beating analyst profit expectations is at 64 percent, according to Thomson Reuters data. Even though this percentage has improved since the start of the earnings season, it's still below the average beat rate for the past four quarters of 70 percent, as shown by Thomson Reuters data.

This week we were looking at earnings from top retailers like Wal-Mart and Home Depot. Companies in the consumer discretionary group so far have had a beat rate of 70 percent, above the average for the S&P, but many retailers in the group have yet to report. This week was viewed as one of the last big weeks of this earnings season. 404 S&P 500 companies have already reported, as a result of that, investors focus may have already shifted away from earnings. That leaves a lot of focus on the outlook for Europe and the U.S. economy.

Over the past weekend China lowered the ratio of funds banks must set aside as reserves, in an apparent effort to fight sharply lower lending, and analysts now are looking to upcoming data as critical to China’s economic direction. The People’s Bank of China announced on Saturday that it would lower the reserve-requirement ratio by half a percentage point to 20.5% for larger financial institutions.

Smaller banks will see their reserve requirements eased by a similar amount, to 18.5%. The long-awaited move was expected to pump about 400 billion yuan ($64 billion) into the banking system. Still, other analysts saw the central bank’s move as evidence of a more serious slowdown in China. The economy appeared to be decelerating following a winding down of the government-directed stimulus that helped shield the country from recession after the global collapse of 2008. Capital Economics analysts said Monday that January credit growth was “very weak,” even allowing for distortions created by the Chinese New Year holiday. Oil prices on Monday jumped to a nine-month high above $105 a barrel after Iran said it halted shipments to Britain and France, the latest move in the dispute over Iran’s nuclear program.

Benchmark futures for March delivery rose $1.77, or 1.7%, to $105.01 a barrel in electronic trading on the New York Mercantile. The contract added 93 cents to finish at $103.24 a barrel in New York on Friday. The Stoxx Europe 600 Index (SXXP) climbed 0.8 percent to 268.09 at 4:30 p.m. in London. The benchmark gauge has rallied 9.6 percent this year amid optimism that the euro area will contain its debt crisis and as the U.S. economy continued its recovery.

On the monthly market profile for the ES Mini Futures, over the course of the past week prices rotated around the 1555 level and created a TPO cluster near the high. Prices have managed to push slightly higher to the 1361 level before closing the week at 1360.25. Based on market activity, there are still interested buyers at the highs and there are no visible signs of any initiative selling yet. We saw some responsive selling once the market arrived at the 1370 level. Leaving a tiny selling tail on the monthly profile. So far, the bears still seem to be in hibernation. As we look above, we still have the 1370 , 1373.50 to 1375 and 1380.75 levels as the next major levels of resistance.

Over the past few weeks the bulls have been severely punishing any bears that dared to challenge them on their upward path. Often when this happens, bears will hibernate and the market will only start to move lower when the buyers lose their appetite for buying or an unexpected market catalyst wakes up the bears. When demand decreases or the buyers decide on some profit taking and the market starts to pullback, the key profile support levels will be found at 1355, 1345, 1339, 1334 and 1322.50.

To learn more from Dr. Keppler, be sure to visit his website: Strategic Trading

Trading V Reversals

Fri, 24 Feb 2012 06:00:00 GMT

In today's video, we will show you how to spot and trade powerful V-shaped reversals in the Equity Futures - namely: TF - Russell Futures, NQ - Nasdaq Futures, YM - Dow Futures, and EMD - the MidCap 400 Futures.

These reversals occur regularly, almost every morning with some degree of predictability; and by closely watching the prices action at the time of the reversal will allow you to capitalize on early entries into this trading pattern.

For more from Charles and the team at Viper Trading Systems, sign up for their newsletter at ViperTradingSystems.com.

Technical Day Trading with a Patient Hand

Thu, 23 Feb 2012 06:00:00 GMT

Title: Technical Day Trading with a Patient Hand

Speaker: Pratik Patel

Company: TheFuturesRoom.com

Join Pratik Patel, co-founder and head trader of TheFuturesRoom.com, as he discusses why he made the switch to trading the grains along with the benefits of using a consistent trading strategy for day trading commodity futures. In addition, Pratik will also introduce strategies to manage trading risk in this uncertain volatile market.

This event will demonstrate optimal trading setups Pratik uses to control risk featuring examples including Grain Futures (ZC, ZS, ZW), Oil Futures (CL), and Index Futures (ES) that are traded on the CME Group. This session is ideal for both novice and experienced traders alike as Pratik brings his vast knowledge and experience into the futures trading environment.

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The following topics will be reviewed in this live session:

Characteristics of a consistent trader
What technical to look for before entering a position
How to manage a trade once a position is established
Controlling emotions in a volatile market environment
How to identify support & resistance levels used for Retracements & Pullbacks
Measuring risk while in a position

Pratik Patel is a full time trader specializing in the agricultural commodities sector. As the Head Trader at thefuturesroom.com, he brings his vast knowledge into the virtual classroom and lends 100% transparency to his trades and methodologies. Mr. Patel also acts the Managing Principal, overseeing the direction and growth of the firm.

Daily CME Market Study

Dan Gramza — Thu, 23 Feb 2012 06:00:00 GMT

Today's Daily Market Study with Dan Gramza reviews yesterday's setups in each of the CME Group markets. Dan presents graphs in his easy to understand teaching style to provide insights, considerations and implications for trading futures and options on Stock Indexes, Forex, Grains, Precious Metals and more.

Daily Market Studies with Dan Gramza provides free daily market set-ups in up to 21 futures markets covering the most active futures contracts. Whether you are new to futures or are an experienced trader, these videos will provide you with a way to examine current price action in some of the most volatile futures markets.

To register for Dan’s Daily Market Studies, visit dangramza.com or visit the CME Resource Center.

ES Market Slowly Moving Lower Since Gap Open

Thu, 23 Feb 2012 06:00:00 GMT

In today's pre-market prep, we take a look at the S&P market as well as several others. The S&P market started off the week with a nice gap open, but was unable to keep that momentum as it has slowly ground downwards over the course of the week. This movement has not changed our bias for the short-term on this market.

To learn more from Jerry and the team over at ATW, be sure to register for the ATW Pre-Market Analysis!

Hip-hip Hooray for Crude Oil's Breakout

Thu, 23 Feb 2012 06:00:00 GMT

It has been quite the move in the last two weeks. Especially after crude oil lulled everyone to sleep for about three months, even though the tension in the Middle East (particularly Iran) grew slowly and steadily.

Well, that tension is still building as Israel leans towards aggression, Iran stands its ground, and the outside powers voice their disapproval of potential military action; the US and Europe are watching their sanctions dig deep and the Eastern powers of Russia and China don’t want anyone meddling in their Mid-East relationships.

At the same time, there are some supply concerns from Iran, South Sudan, Yemen and Syria. In Iran’s case, part of the disruption came directly from European and US sanctions; the other part was voluntary as Iran preempted the shipment of crude to the UK and France by cutting off its exports immediately. The geopolitical turmoil in the other nations has created supply risks as well.

Based on the above plus technical reasons, I had been expecting a break higher for crude oil. Members of myCommodities Essential letter have been rewarded for their patience before crude oil’s sideways movement resolved itself.

Even though I believe there are very many risks that the price of oil could collapse as we move further into 2012, as I discussed in an issue of Commodities Essential back in mid-January and again more recently, I still think crude oil has some room to run a bit higher still on the current drivers and market sentiment.

Crude oil futures, daily – breakout:

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Click on image to enlarge!

Ultimately I think demand destruction will overtake supply concerns at some point later in the year, perhaps as early as May or June, though not just yet. Currently the geopolitical sentiment is helping the supply threats to mask the soft global demand. But it won’t last.

For more from Jack, visit Black Swan Capital and check out their daily Currency Currents.

High Probability for Greater Trading - Part 2

Thu, 23 Feb 2012 06:00:00 GMT

In the last post, we covered two very popular methods that technical traders use to trade. Horizontal support and resistance along with trend lines are in almost every trading book you will ever pick up. Check out any forum on trading and you will also see these two talked about at length. Entire trading strategies are made up of these two ways to keep track of technical levels.

This multi part article is not about a strategy though. We want to focus our efforts in finding the high probability areas to take trades off of. That is going to lead us to two more methods we can use to identify where the majority of traders may take trades from. Knowing this allows us to increase the probability that our trades will be winners.

Does this sound too good to be true? Look at it this way. If you are heading out of town for the weekend, you plan your route as do many other drivers. Traffic chaos usually ensues as everyone wants to reach their destination. After a few times travelling the same route, you start to learn a few things. You know that once you approach a certain landmark (cut off to a main artery), traffic movement will come to a halt. You also know that if you stop for a snack at a certain time along the route at a certain time, you are forced to wait because everyone is looking for the same thing. If it continues to happen, the probability that it will happen every time you travel is pretty good. After all, most people know the same route and best place to stop to eat.

Knowing all this, you can plan a different route or “plan of attack” to reach your destination. You can get off at a side road and detour around the cut off getting in front of the traffic jam that occurs behind you. You can pack some snacks so you bypass the eatery and get ahead of the pack as they stop. Well, finding the areas where we assume most traders will do something is the same thing. How do we do that? We simply find the areas where the masses are looking at…at the same time. In the previous post, we can assume that we know where those traders are looking to take a play. Let’s add a few more players into the mix. Let’s look at the Fibonacci players and those that use Moving Averages (50 for this exercise).

Fibonacci

Google the history of Fibonacci for more historical information. It doesn’t matter if you or I believe in the “golden ratio” because the fact that many do, makes it important. There are a number of Fibonacci levels that we can use but let’s stick to the 38.2, 50 and 61.8% levels. I have also drawn the level from an obvious swing low to an obvious swing high. I will be straight up and tell you there are other ways to draw them including utilizing the thrusting type of candles, gaps and a few other methods. This is not a full course on the topic.

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What you can clearly notice in this example is price retraced to the 38.2% area three times before firing off 140 pips. Is it a coincidence that it held? It can only hold if that price, 1.3086, has interest to many traders. It is safe to assume that Fibonacci traders liked that area. Let’s take a look at another chart and see if this holds true as well.

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As in the previous example, I have chosen OBVIOUS areas to pull Fibonacci from. The bigger pull has pullbacks to 38.2% where price reacted. Price literally exploded through the 50% level and was strongly rejected at 61.8%. The smaller pull had three rejections at the 50% level. Obviously this is a small sample however we are not looking at Fibonacci in a vacuum for our high probability areas. I traded Fibs exclusively for many years and I do like the “concrete” areas to be interested in for trading.

Moving Average

Just like Fibonacci, there are many numbers that can be used with a moving average. Add to that the different calculations such as displaced moving average and exponential, you can certainly find yourself spending far too much time tweaking. For this, let’s just settle on a very popular (and time tested) 20 period simple moving average ( 20 SMA). Moving averages are often used as an objective measure of trend and the “line in the sand” area using the 200 SMA. Many don’t realize that it is also widely used as a support and resistance tool but more specifically, a dynamic s/r tool.

Here is a 20 SMA applied to a recent chart.

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We can see where the trend has changed by using the 20 SMA as a trend gauge. As we move down the chart, price routinely pulls back to the 20 SMA six times. You wouldn’t simply enter the market when price pulls back as you would want to have a trigger to get you into the market. What the 20 SMA does, is you give you areas to watch for where you may want to consider getting into the market.

These last two posts have covered four very popular technical analysis methods used by traders around the world. By themselves, they are great measures of where to look for places for you to enter the market. We want to take it a step further and increase probabilities for our own trades. Stay tuned for the next article where we put all the pieces together and come up with a completed puzzle which I think you will enjoy.

For more updates from Mark and the team at NetPicks, be sure to visit their trading tips blog at NetPicks.com.

The Gartley Trading Method: Learn to Utilize this Powerful Formation

Wed, 22 Feb 2012 06:00:00 GMT

Title: The Gartley Trading Method: Learn to Utilize this Powerful Formation

Speaker: Ross Beck

Company: Geometric Trading

In 1935, legendary trader H.M. Gartley described a unique trade set up that he called "One of the Best Trading Opportunities". 75 years later, this opportunity remains effective for traders willing to learn about this pattern.

Join Ross L. Beck for this dynamic session presenting the evolution of the Gartley Pattern over time and how it replaces most of today's overused technical analysis methods.

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Topics to be discussed in this live online event include:

Patterns versus Oscillators/Indicators
Gartley Pattern evolution
Tool required to find Gartley Patterns
Gartley Pattern examples

Ross L. Beck, FCSI, has been an active trader for over 15 years as an individual, broker, educator and a former top ranked CTA. He is also the author of The Gartley Trading Method: New Techniques to Profit From the Market's Most Powerful Formation. For more information about Ross, visit www.geometrictrading.com.