Premarket Prep DAX 20210614

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This is my pre­mar­ket prep for today’s Euro­pean ses­sion for DAX. This prep builds off of my week­ly trade plan I made here:

DAX 2021 Week 24 Trad­ing Plan

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The pur­pose of a pre­mar­ket prep is to find setups with­in my week­ly trade plan bias

Com­pared against Week­ly Trad­ing Plan

• Price made a slight HH trad­ing at the top of last week’s range/body

Non-con­jec­ture obser­va­tions of the market

• Price action
  • Price took out D1 Sup­ply and formed a spin­ning top with near­ly no wicks
  • H4 Bear­ish Ham­mer with price extend­ed above H4 VWAp in DT
• Trend: H4 Up, D1 Up, W1 Up
  • Pre­vail­ing trend: Trend is UP 3/3
• Mar­ket Profile
  • 3‑day brack­et
• Dai­ly Range
  • ADR: 12264
  • ASR: 11493
    • 287
  • Day
    • Yes­ter­day’s High 15738.10
    • Yes­ter­day’s Low 15547.40

Sen­ti­ment

• Loca­tions
  • D1-C‑D 15591 with­in val­ue at VAL
  • M30 demand at VAH
• Sen­ti­ment
  • LN open
    • Above Val­ue, Out­side Range
  • Open dis­tance to value
    • 0.5xASR
  • Pre­mar­ket
    • H4 Bull Engulf with long buy­ing wick
  • Nar­ra­tive
    • Mod­er­ate to large imbal­ance at the open. H4 Cre­at­ed a bull engulf with long buy­ing wick
• Clar­i­ty (1–5, 5 being best)
  • 3
• Hypo 1 —  Trend Continuation
  • Nar­ra­tive: H4 Bull Engulf pre­mar­ket. Equi­ties ten­den­cy, D1 Sup­ply tak­en out, open sentiment
  • Pre­ferred: IB exten­sion up (momen­tum) sus­tained auc­tion, exhaust­ing ADR
  • Con: all-time highs 
• Hypo 2 — Return to Value
  • Nar­ra­tive: Same as Hypo 1
  • Pre­ferred: IB exten­sion down to failed auc­tion, LTF demand at VAH, pos­si­ble test of value
  • Con: If M30 clos­es with­in value
• Hypo 3 — Val­ue Acceptance
  • Nar­ra­tive: Open sen­ti­ment, all-time high, Fri­day trad­ed high­er, ADR exhaus­tion at VAH,
  • Pre­ferred: Ear­ly accep­tance and quick follow-through
  • Con: Equi­ties long-biased, D1 C‑dem at VAL 
• Hypo 4 — Auc­tion Fade
  • Nar­ra­tive: Vari­a­tion to Hypo 1
  • Pre­ferred: Hypo 1 play­ing out, build­ing struc­ture and PA rever­sal to IB edge
  • Con: short­ing equities

Addi­tion­al notes

• Cap­i­tal Preser­va­tion Rule in effect

ZOIs for Pos­si­ble Shorts

• Not favored in equities

ZOIs for Pos­si­ble Long

• D1-C‑D 15591.00

Mind­ful Trad­ing (lack of sleep?)

• Feel­ing okay

Focus Points for trad­ing development

• Month­ly Goals
  • No momen­tum trades on Non-Farm Fridays
  • Total of 13 trades by the end of the month
• Week­ly Goal
  • Min. 3 times work­ing out at home + manda­to­ry cardio
  • Use SL scal­ing in case the prof­it tar­get for the set­up doesn’t pro­vide 2R for exam­ple for FA or VAA setups
• Risk Man­age­ment
  • With­out forc­ing a trade: aim to take 1 trade a day, if pos­si­ble 2. 
  • Cap­i­tal Preser­va­tion dur­ing draw­down allows for 1R profit-taking
  • 2 con­sec­u­tive days of lack of sleep = NO TRADING

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