Second Chance ABC Trades     04/16/2012 4.45pm

ABC Second Chance Trades in ABC Bullish Pattern

Sometimes second chance trades from the same pattern are amazing. When I get stopped out of my trades I continuously look for where the trade went wrong and what I could learn from it. I document most of trades (specially losses) as they are best teachers of the market. When pattern fails in the first pass but gives another opportunity to trade, I usually never miss it. Today was such a case of second chance opportunity in ABC Bullish Pattern trade.
This morning ES Sold off (compared to Dow went up showing divergence) from the Open of 1375.5 (R1, Globex High Cluster) to 1360.5 (Globex Low and S1 Cluster). Around 10.15am, it appeared ES made a low and started to trade inside the Fib. Bands. This itself is NOT a signal as ES is trading in Volatile Zone and Volatility needs to become normal for any trade-entry. ES traded above Mid Fib. Band and started to retrace forming First ABC setup. I patiently waited until NOON for ABC Bullish pattern to trigger. ES Volatility was still above RISKY levels. Around 12.02pm, I have decided to trade Long ABC Bullish Pattern at the EL (1364.25) with a stop at 1362.25. Around same time I also saw NQ was making an ABC Bullish pattern in 610 Tick charts. I thought they both should rally higher as VLTY becoming normal and CMI is turning Green in 5m and 3m charts.

12.20p: ABC Trade1 LOSS: After rallying almost 2 points form my entry, around 1220p, ES traded back below my entry and pushed further to hit my STOPLOSS at 1362.25 (2 points) loss. I was bit surprised as Market Internals were Green and VIX is trading within the zone.

ABC Next 20+ minutes I closely watched ABC pattern and its price-action to note the pattern is acting well (uniformity) and Market Internals are still GREEN. ABC pattern has expanded now making a low at 1361.75 (but not the 'A' Low 1360.75). I was tempted to get back into the trade around 1361 but I waited for it to trigger the EL (1364.25), same level as my First ABC Trade.

ABC Around 1245pm, I am more confident of ABC moving up. CMI is green, VLTY Zones are showing normal range. I knew second chance ABCs are great. I placed double size contracts to go long at 1364.25. At 12.47pm, my trade was triggered and I have 12 Cars Long position. This time Stop Loss is set at 1361.75 (2.5 points). My Targets are 1366.25, 1368.25, 1370.25. Wanted to recover my loss from first trade at Target1.

1259p: My first Target was hit at 1366.25 +2 points (recovered loss on 6 Cars)
139p: Second Target was hit 1368.25 +4 points (3 Cars)
145p: Third Target was hit at 1370.25 +6 points (3 Cars)
ABC I do like second chance Trades as they are the best trades, specially after a loss. This rebuilds my faith and confidence in trading my 2nd Chance trading patterns.

1. Auto ABC
2. Fib. Bands
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