Wednesday, October 5, 2011

The $709 Lunch - S&P 500 Futures


I did not have any time this morning before work to do more than just take a peak at a few charts and hit the road running. But lunch time was better so I decided to sleuth around for something to trade while I ate my lunch.

Click on the chart to ENLARGE

With less than an hour of free time to work with I decided to take a good hard look at some futures contracts and ended up on the E-mini S&P 500 (ES).

After a short while what appeared to be a promising negative divergence showed up on the 1 minute chart. So I made a trade to short (sell) the S&P at $1132 with 2 contracts at 12:57pm. 13 minutes later I covered (bought back) the 2 contracts at $1130 after a trend line break finally materialized.

As I still had more free time I decided to keep watching the ES and see if something else may provide another quick trade. Sure enough, within 15 minutes another negative divergence appeared so I sold 2 contracts again - this time at $1133.25.

I had a trend line drawn on price and this time the negative divergence occurred closer to the price trend line and closer to the TSI ZERO crossover. Within 2-3 minutes price tested then dropped right through the trend lines just as I had anticipated.

My students started piling into my classroom just a couple minutes later than usual and as a trend line break of the TSI appeared to be in place I covered at $1128 and called it a day.

I wish it was always so easy. Don't you?

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8 comments:

  1. DanOctober 5, 2011 at 9:55 PM

    Thanks for the posts as always!

    ReplyDelete
  2. MarcusOctober 6, 2011 at 9:59 AM

    Woah, darn pro. Scalps like this everyday and u may just well quit your teaching job, no? Haha...

    ReplyDelete
  3. MrMiyagiOctober 6, 2011 at 12:03 PM

    Good move John, you didn't update your track.

    ReplyDelete
  4. John TownsendOctober 6, 2011 at 4:08 PM

    MrMiyagi - thanks. I was able to net $410 today with one eye closed....wish I had more time to do this.

    Anyway, I never put futures trades on my TSI trading record. How would I do that?

    When you buy two ES contracts at $1150 and sell them for $1152, the gain is $200. But what is the % gain (or loss)? I have no idea because futures are bought on margin and I never actually know what the cost of my position is - just the gain or loss.

    ReplyDelete
  5. rapperOctober 7, 2011 at 1:10 AM

    2.10 each way John. If you hold overnight or longer is when you need to win bigger. Nice trades.

    ReplyDelete
  6. John TownsendOctober 7, 2011 at 5:49 AM

    rapper - thanks for the compliment. There are an infinite number of strategies possible. I've tried more than a few of them and I'm sure you have as well. For myself, a strategy where my gains are small and win percentage high works best for me. And I am sure it is not for everybody.

    ReplyDelete
  7. Bob JoyOctober 8, 2011 at 6:31 PM

    Hi John,

    I've been driving myself crazy trying to understand this TSi indicator in TOS.

    ReplyDelete
  8. John TownsendOctober 8, 2011 at 8:13 PM

    Bob - just send me an email with your phone number and I would be delighted to talk you through it.

    ReplyDelete

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