System: When 3/3 Internals trend together, then I trade in that direction. As simple as it can possibly get.
- In this white rectangle we had the instance where all 3/3 internals are trending down below the open price or aggresively towards it. This is the exact time window where I want to be aggressively shorting. You can see quickly after the rectangular area, we flipped and went back above the open price on ADD and Weight (middle internal) which means that market movement will be choppy. Once I noticed that I sized down to MES to protect my profits. Below are the first 2 Trades with ES.
Trades 1-2: Both of these trades are scalps looking for quick break downs through the lows of the previous 2m candles. I was looking for shorts at the break of the head of the body of the 2m candles as I though it would possible be aggressive to the downside. I took profits quickly on the first trade then on the second trade I entered at 9:45 which was PMI Flash. I never saw PMI move the market that much so I didnt expect that type of a move but once I saw 3 points I was out because it couldve easily ripped back above highs. Shortly after this trade VOLD and ADD were conflicting eachother which signals that lackluster price action will ensue and in that scenario I want to size down heavily to make sure I am not overtrading or going for bigger wins.
Trades 1-3: All of these were me testing out the idea of if VOLD is below OP and ADD is bouncing around as well as weight, then possibly shorting and waiting for a clean breakdown would work. I tried that 2 times and I was up 10 points but only 1MES contract then it came back up and stopped me out at the HOD. I then noticed how VOLD was making higher lows after holding its LOD and that was my signal that we would possibly go long. i got long and was stopped out only to watch us rip back up through HOD. This again is the perfect example of when you see confliction amongst internals its best to just walk away as the market action will occur in how you think but it will be so choppy that you have to hold large drawdowns before becoming correct. Its just not worth it to be trading that price action.
- Trading within the system is great as both my ES trades are exactly what I should be doing. Using small size on MES was also great as I could test out some ideas but not lose a lot of profits. I also stopped trading MES once I took 3 losses in a row which is great. Overall good day of reading the system properly.