My 9/9/20 S&P 500 Futures Day Trade

Stocks moved higher on Wednesday as tech shares rally back from the quickest three day decline in quite some time. Tom Lee, head of research at Fundstrat Global Advisors said the megacap Tech stocks are no longer invincible, the bludgeoning seen in the last few days resulted in sharp pullbacks for these stocks. But today was a buying opportunity. I got into a long trade on the SPY futures a bit late, moved my stop loss to breakeven +1 tick when price was half-way to my target. Price did return to my zone, stopped me out before eventually moving higher and hitting my target.

MY TRADING METHODOLOGY IN A NUTSHELL BELOW

I’m a supply and demand trader. The premise of supply and demand trading is when the market makes a sharp move up or down the large institutions i.e banks/hedge funds are not able to get their entire trade placed into the market, leaving pending orders to buy or sell at the zone with the expectation the market will return to the zone and the rest of their trading position will be filled.

I use multiple time frame (MTF) analysis to improve my discretionary trading decisions. MTF analysis involves analyzing the same asset on multiple time frames. The rule of thumb when using MFT is you want your charts to scale down/up by 4X – 6X. In my case I tend to look at:

Monthly Charts (curve time frame) – which represents that jet fighter flying over the football stadium.
Weekly Charts (trend time frame) – which represents the concession stands looking down at the field.
Daily Charts (entry time frame) – which represents being on the football field with the player.
4 Hr Charts (entry time frame) – which represents the center hiking the ball to the quarterback.

The Dow Jones Industrial Average traded 500 points higher, or 1.8%. The S&P 500 jumped 2.1% and the Nasdaq Composite advanced 2.7%.