We reached our targeted 869.00 level, and placed a 5pt trailing stop as planned. Hope the downtrend continues throughout the rest of the day so we can let these profits run.

S&P Chart 30/04/2009

As you can see there is alot of resistance at the 875.00 level, and we have a rising wedge in the chart. This usually is not a good sign, let’s wait and see how the market closes today to see what direction we will be heading the coming month.

I am short the ES again at the 884.00 level, with a -5.00 points stop and the plan is to put a 5pt trailing stop when we reach the 869.00 level.

I trade according to the plan, so I got stopped out at 880.00, which brings my first trade to -10.00 ES points. I’m still trying to find out what went wrong on this trade, but taking a loss is part of trading futures unfourtunately. I will be looking to reenter a short at higher levels since nothing has changed with yesterday about the economic situation.

The best explanation I can give you is that we almost always go up on FED announcment days, perhaps I should have waited untill the announcement to short.

This is a swing trade and it is based on:

• Anticipation of the sell in May effect.
• The fact that there is a strong resistance at the 875.00 level.
• The fact that we have recovered over 30% in a month and a half, and most of it is based on ”good” results from most banks. The results were not good, but thanks to some changes in the mark to market rule, all of a sudden banks look saved.
• We are still under the 200 days moving average, which tells me we are still in the bearmarket.

We take a short position in the ES around the 870.00 level, with a stoploss at around 880.00 and a target around 850.00, where we will place a trailing stop of 5.00 points.

Welcome to a new blog dedicated to people who want to trade the ES future, with success. I will give updates on how I trade the ES future with detailed analasys from time to time and give an update on how the account performed over time. I will start with a 15.000 € budget, people with less money can also follow the trades, however with less than 5.000 € I would not advise you to start trading futures.

Some basic rules I urge you to consider & respect:

• The first and most important rule in trading futures: plan your trade, and trade your plan. Before entering any position, think about how much you are willing to lose if the trade goes bad, and at what point you want to take profits. When you entered the trade, don’t change your plan, stick to the target and the stoploss. Keep in mind that only 10% of the traders out there make money trading, because the other 90% either enter a trade without a plan, or make a plan but don’t stick to it.
• Another important rule: Cut your losses and let your profits run! If you plan to swing a trade make sure to always put a hard stop so the loss is minimized to what you think is acceptable, for when the trade goes bad. If however the trade goes in the direction you wanted it to go you should consider using a trailing stop once you have reached the level you eyed. For daytrades I would suggest to use fixed stops and targets rather than letting the profit run, due to the fact that it is a DAYtrade… Keep in mind that the best traders out there are so good simply because they are able to cut their losses and exit a losing trading without feeling any emotion or bias on the next trade!
• Keep in mind not to trade futures when the amount of cash on your account does not allow you to have some margin for error. If you only have 3.000 € on your account and make some mistakes in a row, you will end up by not having enough margin left to continue to trade. On the other hand, if you have 15.000 € on your account and you begin trading multiple contracts at a time, the same thing could happen to you. Always keep in mind that some breathing room allows you to trade better, or so is my experience.
• Never trade when you are feeling exhausted, when you are drunk, when you are angry or sad, … Only trade when your mind is capable of trading without emotions interrupting your trade. Make sure you cannot be disturbed or distracted when you are in a trade, and if you are distracted or called out and do not feel comfortable to hold on to the trade, to close it!
• If you lose more than 5% of your money on one day, stop trading and go out to take a breather. Most traders will want to win it all back the same day and you could end up doing silly things! There’s always tomorrow, the market does not run away. Keep in mind that being out of the market is a position as well.

I will post more updates when we start trading, I wish you good profit today!