The QID trade hit our target and even continued in our favor. I think this is a good point to discuss how important it is for me to look at others charts besides just the one I am trading. In this afternoons case the 3 minute YM chart brought me a good amount of information that gave me the confidence to hold the QID trade into the close. So what tipped me off to this short. Well first it was price and volume. If you look at the blue box area on the chart we see volume swells on the down push and dies out on the up moves. That’s sign number one. In the blue box we also fail to make a higher high. Then we are watching close the 13 period moving average as a sort of line in the sand number. We see it get broken to the downside and volume comes in heavy on the move. This is sign number two. Then on the QID chart we see volume and price action break above it’s recent swing high and away we go taking the short.
If you followed me in the morning action chat, we noted the 12885 being a very key level today. In fact it still is a key level as we closed right at it. Anyway once price on the YM was below the 885 level I had no fear in holding the QID long . If YM got above the 885, with interest then I would take profits on QID and go flat.
So you can see it’s not just the one chart of QID I am watching even tho that’s where the trade was placed. In fact I actually am watching the futures and bonds at the same time. If you think about it it makes sense since the market sentiment should be universal. If you see a two charts that should be moving together not doing so, it’s a good sign the signal your getting is weak and it’s best to sit on the sidelines until they sync up again.
