31 Jan 2014: S&P500 UTB123 Short – +8 / +32

It’s rare for me to a) trade on Fridays and b) trade on the last day of the month. However I just happened to be in the right place at the right time today for a short on the S&P500.

What gave me confidence to pull the trigger was that there was a short signal last night – a UTB123S set-up – which I didn’t take (I wasn’t looking at this market at the time). However the UTB123 reversal often turns into a FR continuation trade.  This was a picture perfect set-up and I was here this morning to manage the position so: trade on!

I entered sooner than I normally would but was happy with the price action (supportive and benign) and was short at 1779.50 with a stop-loss at 1782.50 for 8 ticks risk (my broker for this trading still quotes S&P in 1/4 increments – some now quote in decimals).  My target was 2 ticks in front of the daily S&R zone at 1771 (which has been a popular level this last week or so!)

Trade triggered nicely and strongly…and then put in a bullish pin bar for its second bar. I was expecting this to now form a double bottom and for me to be stopped out at worst or a slight loss at best if I killed the trade early. However today the momentum was with me and once the next candle was a bearish engulfing candle of the previous bullish rejection candle I was happy and let the trade run to target.  I hit target after 10 am after running for approx 2 hours.

I wish all trades were as nicely set-up and as simple as this. However that’s rarely the case so I just enjoy them when I can. That was 8 ‘handles’ or 32 ‘ticks’ profit for 2 / 8 risked. It generated a +4R trade or 1% profit. You can see its run a good 6-7 handles past my target.  However for short-term trading like this I’m always happiest hitting a sensible target and stepping aside.

Trade well

Paul