A Basic Trade
A Basic Trade
A Basic Trade is typically a 'bread-and-butter' for every trader. It is something that you lean on over and over again. This is perhaps a type of set up you are comfortable with and like to repeat it with success. For me such a trade is shorting on Fridays on a downtrend.
Fridays are interesting on the stock market. I typically trade index futures, in this case S&P 500 Index Future. It's symbol is /ES. Usually, there is an expiration after than, in this case it is [M22], the full name of the contract will be /ES[M22].
Index futures expires every 3 months, so it is HMUZ, not that hard to remember. Most of the time I do not hold futures position overnight, so the symbol doesn't matter that much anyways for me. I always just trade the active contract. Anyways, today, in the morning I was looking at the chart as I was heading to my daughter's elementary school graduation (please don't ask!). I saw that that the daily and hourly of /ES is on a downtrend, and yesterday it is a big up day for the market. When this happens on Thursday, Friday is typically a profit taking day. I saw the market keeled over in the Asian session, and dropped below VWAP and stayed there. This is my typicall bread-and-butter set up. I don't even look at anything, any trigger in this particular case. I simply so short at the open or just before the open. I typically put a target just above previous day's low or a whole number. In this case I entered short while creating a OCO (one-cancels-other) order at 4133, and I put a target at 4100, and stop at 4160 (which was a spike high). I knew I am not going to time to monitor the trade as I will be in my daughter's school, so this is the only way I can do it today.
At 10:30AM when I was done and arrived home, I saw the trade just got closed with the 33 point profit. A Basic Trade. One good trade!
Disclaimer: This is NOT professional advice, this is all just my own opinion and experience. I am NOT a Certified Financial Adviser. Consult professionals for any financial, accounting or legal related questions you have.
Charts are created in Tradingview.com, which is a free service.
