Pennant Wedges & Today's Trades (12-May-2009)

This chart is of the ES (S&P emini's - futures) on a 15-min. timeframe. I forgot to add volume to this. As you can see from this chart, at the beginning of the day, this was forming a pennant wedge. It broke out to the downside within the first hour of the market. It took about 4.5 hrs to go from the top (914.50) to the bottom (894), which is 20.50 points.

On one contract of the ES, if you held it through, would've been a $1025, which would've been a 200% ROI using my futures broker. That's REALLY good money.

However, I did not want to get in, even though signs were showing things were going more bearish, until it truly broke the pennant, which is when I entered. Since my kids are up during that time, I do trade cautiously, taking smaller profits as they come. See the next chart.

Today I placed 13 trades. You can see most of them on here and there is some overlap, and some profits got taken very quickly, so you don't really see the "green", which indicate profitable trades. All my trades today are profitable, which is rare that I would have this many trades in a row profitable.

As I look back at the trades, there are obviously many things I could've done much better. For example, as the price action goes quickly down, I could've kept moving my stop down. However, as I've learned from other trades, sometimes one just needs to take profits as they come. Things develop differently at times during real time, which this was what I was doing, than hindsight.

Plus, as I mentioned before, my kids were up and getting ready for school, and I was not totally sitting at the computer. I would make a trade, set my stops and walk away. They would be OCO (one cancels other), just in case my trade turned against me. Somehow the trailing stop feature hasn't been working on my trading platform for the past 2-3 weeks, so I need to talk to Genesis about this, because it sure would've come in handy here.

Having a trailing stop would've allowed me to take bigger profits, but the profits I did take were good and no complaints here.

If you'll notice, there was strong selling action and the range was big, but after 3 interations, each selling action got smaller. There were 3 phases of this, each time testing to see if the support it was wanting to find was really "it" or not. Once it saw it was it, it reversed.

The reversal provided another opportunity to see if the bulls will come in or not, and if we look at the bigger 15 min. picture again, we can see an even greater pennant wedge forming. I personally would wait for the breakout at this point and play that. The pennant wedge is basically a compression pattern where pressure is building.

One of the things I learned that the more it goes into the wedge, the less the umphf of the pressure release. Let's see if that's the case or not. Well, if I remember to write on this, it will be Thursday as tomorrow my schedule is pretty full. I can only trade for a short amount of time.

Today, I actually used a combination of the 15-min. and the 3 min. charts to trade, and not the 1 min. But, the 1 min. gave an easier "look" to my trades than the 3 min.

Happy Trading.
2 Responses
  1. Anonymous Says:

    Hello Shewhodanceswithgorillas,

    Given your busy schedule you seem to be doing very well, I'm happy to read. Congrats Lady B!

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