DOW - PA, Stops and hedging

established BUY MO for DOW@ 35000 and below just in case

Earning Season - extremely important
PA held the trend on M30 and higher TFs
ISG closed, observe the other ISGs closed
Gap to the PSC not completely closed, in the region of 86%

Not much has changed re the way I trade so will post here occasionally.
I tend to scalp and hold intraday trades only in current market conditions.

The expiration date for listed monthly stock options in the United States is normally the third Friday of the contract month at 3:00 p.m. Central Standard Time (CST).
There are usually a high volatility few days before, and at times on that Friday too.
Market ingenuity makes it sure that serious professionals take large profits, both the option writers and option buyers/traders. If it was not profitable nobody will be doing it, certainly not professionals, as they will not be professionals for any time. The reason for option existence and option treading is fascinating and very interesting.
That usually is the reason for certain wild swings on Indices few days before these Fridays demanding as usual a very disciplined approach to trading,

https://www.ii.co.uk/investing-with-...eason#calendar
One of many sources for the earning info
Earning season has usually good volatility, and in the gloom and doom very often makes market to go north, at least for a while.
CNBC usually comes with data of earnings as the news is released, that is one of a very few advantages of news channel, but one needs to be very selective and ignore the other junk they propose.
I am done for the day after DOW reached III quarter of 30750, and NASDAQ done similar run where I taken reasonable profits, in spite of the local electricity cut for few minutes.
I have also trade NASDAQ and DAX. DAX usually before the NYSE session, NASDAQ also have good spreads before and during NYSE session.
My risk appetite evaporated and do not want to force myself to trade, so a bit of sailing for the afternoon.

Indices have done a good move since London open
DAX -1.6%
NASDAQ -1.3% and DOW -0.8% S%&P -0.65%
Positions loaded in accordance with the intra indices proportion like 2.5x DAX to 1 DOW, and 3x Nasdac to 1 DOW, when one looks at the % game it makes sense. Using % approach is very useful.
I am considering also a hedge trades as the % speed varies between the indices, like 3x short on NASDQ to 1 long on DOW, hedge one against the other and harvest the difference. At times it looks like a very safe approach, well hedged trades are more secure though profits are smaller, every hedge has a price tag.
Gaps to the PSC well above 1% in respect to DOW take time to close, and tend to have a partial attempt to close it. More statistical approach needed to that observation. ISG also are great insights to trade as they tend to close when PA is well decisive in their direction, though it might take days.
Being a third Fri less expected PA might be on cards.
I am done for today, other things to do.

Today earnings (Thursday Oct 27-2022)

Caterpillar Inc (CAT) PMO
Keurig Dr Pepper (KDP) PMO
Mastercard (MA) PMO
Merck & Co (MRK) PMO
Shopify (SHOP) PMO
Takeda Pharmaceutical (TAK) PMO
Amazon.com (AMZN) AMC
Apple Inc (AAPL) AMC
Gilead Sciences (GILD) AMC
Intel Corp (INTC) AMC
Pinterest (PINS) AMC

So far earning season supported the upward trend with few well signaled PB of NASDAQ due to Microsoft and Meta
NSADAQ at times seems to be easier to trade than DOW, and the % moves are greater that DOW

DOW has closed the gap to the LSC
earning season and some more results after the close

DOW has closed the gaps during the NYSE session, gone a bit above the D Pivot, from where it hit mS2D and in the last 30 minutes made a good move up from mS2D to close the session near the pivot. Very volatile.
Have been trading both ways, though some of my short entries were premature, making me to adopt a rescue strategy on that short trade, where I added short position just above the D Pivot, adding more shorts to that trade once that entry above the Dpivot has been in profit, thus holding that multi entry (short) position with limit set to a few points below mS2D. It has been a bit of a difficult day for me, but all came good in the end.
Over all have taken only around 160 points profit during the NYSE session, but have had to nourish one short multi entry trade which initially has been well underwater.
Tomorrow is the 3rd Fri, so as usual before these Fridays there is some jumpy PA, so trading on these days demands guts, as today has proved.

Please remember today is the 3rd Fri of the month.
Yesterday DOW has moved lower before the NYSE session, it looks that move satisfied demands of some options, and now DOW is on the move to the 3 quarter (750) and above.
Next Thursday, Thanksgiving in the US. Please check the historic data as to what statistically indices do before that particular day.

DOW is in the process of closing gaps as it often does, looking for 200 + points move down
out at 33640, just in case

will re-enter short on rotation on M5 in the direction of M30, if in accordance with USD Index and volatility index
D Pivot 33444, mS1D 33322, which is just below of consolidation zone printed yesterday
mR1D just below 33600 when i plan to exit another short positions
looks like a done deal in few minutes
getting manually out at 600 just in case, done for a while

we shall see if dow will close the gap to the LSC
for now I am taking a break

DOW has done its dance, might re-enter shorts on rotation M5 to M30 TF, otherwise my day is done
USD index prints a slight weakness, so I am drinking coffee
so far many good points today, it is useless to bore you with numbers
Looks like my day and trading week has concluded.
Time to study and entertain some friends later on. Do not wish to be in trade when we have guests.
It is very rarely that I comment during active trading, the above has been the exception.
Good weekend to all!!!

This post is an attempt to explain my reasons for taking short trades on Fri 18th Nov 2021and is an attachment to Strat's request for a chart. Out of respect for Strat and his hard and highly commendable work I did not want to clatter his thread, so posted these additional explanation/s here for perusal for the few who might be interested.


For inrta day I use 3 TFs M1/M5/M30
After the close of NYSE session I look at the chart on MT4 M30 with NYSE sessions highlighted and the sessions close level (white)
At the opening of a new NYSE session I look at the gaps, ISG (intersession gap) plainly visible and the gap to the last session close
I have put the arrows on the M30 charts as an indication of the direction of the intraday, and scalping trades. These arrows and crosses have been put after the session close for the purpose to illustrate the way I interact with the market, and allowing me to put some explanation/s.


I am not that crazy as to insist on particular price zones and direction before the active market session, but there are clear possibilities and data like opening and closing prices, volume versus result and so on...
I will show the precise entries and exits on either M5 or M1, I use both of these frames for intraday
Please bear with me as I use only one computer to post the charts, on others I do not have that particular fast stone capture software



The three indicators at the bottom are derived from market data and afford a limited but based on statistics view. For more description please go to my journal p 1, post 1 and 4.

On Thursday, before the 3d Fri and at times earlier I have observed that there is an internal market need to satisfy certain price levels IMHO due to option expiry on that following Fri. I used to trade FX options around 20 years ago, and have never kept them till the very end to their expiry. That made me think that those that had to acquire these options as I was selling them, had to do something with them. I think that this is a possible or likely reason for the market spikes.
There are spikes away from the median, after which the price goes back to the median, repeating that same process. When it happens and when I can see it and perceive it I try to trade toward the median, or away from the median, following the market structure, also aiming at gap closure/s.

For me the concept of the Median is very important, like trending or ranging market and it is directly linked to a given TF.
Price seems to go away from these zones and re-visit them in ranging market and in trading market, like being glued to an expanding rubber.
Trending markets also have a range, channels, envelopes ect...

This kind of possible direction I get from M30, one of them posted above.
On the top of that I use Daily pivots with mid points, just as orientation, it is not automatic entry, though at time I use a small position as a bait when market structure indicates either strong continuation or a possible rotation, to which I add aggressively if and when in profit.



I also look at intermarket and a selection of instruments, like Volatility index, USD index, crude, ect I enter the trades using Order book or from a given trading platform, from which I than manage trades like adjusting stops and limits One of my trading platforms below.




Summary and a few additional notes:
I start preparation for the following day after the NYSE session close.
I use sets of 3 TFs
For intra day and scalping I use M1/M5/M30, for other things I use 3 set of higher TFs or just a given TF like Wk or Monthly
I also look at intermarket, poss rhythm/cycles and seasonal holidays, like the coming Thanksgiving, and look at statistics, but always take trades in accordance with a strategy, when my bias is well confirmed. There is a point of not having any bias too.
300, 500 points on DOW makes hardly any economic impact and vice-versa, often there is return to the median within 4/8 hours, unless there is a tectonic change
I also look at the % change not just numbers.
hope to some extend I have been able to explain the reasons for the last Fri trades
When actively trading i do not post much, got enough to keep me occupied
Because I use at least 3 computers it will take a lot of time to even snap the charts,and posting them is a hassle to me.
I need to see and make decision at the glance , because I have already prepared myself for some scenarios, and if they happen I pull the trigger, if not I am relax and take break or go sailing.
Trading indices I use a slightly different approach yet very similar in to trading FX. Stopped trading FX years ago. Mainly trade DOW and DOW quarterly futures (for trades that last much longer), at times trade DAX, but not during NYSE session.

PA and the market structure in any and every case is the most important, and for me this most important is painted on the canvas with some background.
If the background confuses you, abandon or ignore it. I will not be upset and understand if for some the immediately preceding sentence might be the most important, confusion is not good. I find it difficult in this single post to weight and allocate the exact degree of importance to all the background stuff which at times can be avoidable noise.

Sailing is very enjoyable for many, one can just board the yacht and if there is wind put the sails up and go, when the wind stops, just have a break, hopefully not for too long and not in the open sea. However it is useful and for some essential to have some other insights like compass course, weather forecast, tide table ect...
But it is still essential to know how to tack, jib and hold a course.
Real estate and building trade involves a lot of trades, all important but some much better paid than others.
Plumbers, electricians and roofers in the UK command much higher rewords for their services, interestingly all three of them among other things have to do with water and temperature. It does not mean we do not need the other trades.
It is ok if not desirable to be a plumber and take the cream, but in some situations it helps to be aware of other things.
I try not to be like a roofer or a landlord who having a leaking roof says, when it does not reign it does not leak, so why to fix it, when it rains and it leaks, says it cannot be fixed now as it is too wet.

Good weekend to all, especially for those who have not fallen asleep trying to decipher my reasoning.
2be

first move down after the NYSE open from mR2D just over 100 points,
Being careful with shorts, as Thanksgiving rally/spike might be in progress
If it goes to last session close, which is also D pivot, long entry, for a ride to 34K and above

closing all longs just below 34K
will go long if in the middle of the session PA is near the pivot
so fat DOW has moved up 0.80+%, which is not that much, so it is still a territory when gap closure is very possible

DOW spike to 34k and above shall give some possibility for a measured PB. The spike up is likely not last too long, and return to median is on cards.

What constitutes MEDIAN?
For me the concept of the median is more useful that the exact definition.
Firstly median is directly related to TF.
For intraday I use Daily Pivot, for longer I used to use wk pivots, but due to large SL required, I used mainly Daily pivots.
One can also draw trendiness, and a middle of the the channel created by two TLs also represents for me the median zone.

Though the definition of the median is fluid, and lacks the desired and detailed precision,(unless one uses an MA with HL/2 settings on any given TF), I find it very useful.
Would welcome others to share their thoughts and experience.
I easily sacrifice the desire of precision for positive (points) profits.
The Thanksgiving spike up is likely eventually to fade away, creating a PB, possibly a sizable one before the expected rally.
Patience is a desirable friend to a trader.

starting to build a short position from today's H
initial short trade hit a conservative SL, will re-enter when the rotation is well in progress, when it happens

Big account was not enough

https://www.foxbusiness.com/markets/...-tumbling-down

so far this Friday NYSE session closed the gap to the last session L and done about 50% from today's L towards closing the gap to the last session close
if over all NYSE session closes lower to its opening, it will go in accord with DOW rhythm, getting ready for the next week rally, but anything can happen and DOW might go up today and continue the rally, Low VIX points to a rally too.
Traded to the upside from the today's L, 30 min before the opening NYSE , now I am flat.
PA close to the daily pivot, at 34387

So far ever since the move down inspired by the data release, going up from today's Low before the NYSE opening proved to be profitable, at the lowest DOW has been in the region of 1.3% in the red since the last NYSE session close, therefore in the good territory to attempt gap closure.
Looks like DOW has had a sizable move up towards the median, it happens very often.

It is impossible to eliminate what I would like to eliminate, namely RISK. The best I can do is to limit it, especially at the initial stages of position building.
Being well, peaceful and focused is essential IMHO to be profitable, obviously that in itself is a huge subject.

LOW tic volume on this move up