This is a guest post from professional trader David Blake.
Friday saw a decent down day for a change and all being well we’ll see more like this in the weeks ahead. I wanted to share how useful again the spotgamma unicorn levels were to me on trades during Friday RTH allowing me to trade with conviction and weight, and to thus provoke some thoughts of how they can help you trade the ES mini contract.
Despite the premarket rally up, once bell was sounded the bulls didn’t have a case at point 1 and struggled to keep within the opening range bar, and with some 10 minutes into play we’d already broken through L2 and then very quickly through L2 combo unicorns at point 2 on the chart. With the pace of move everyone should have been shorting hard here, and using the unicorn levels as targets or places to re-enter etc.
The bears continued their work though point 3 and onto point 4 to the tick of the volatility trigger level at 4334. The market then weaves back up 12 points or so to point 5 on the chart and was a ‘101’ long trade off this level imo, then dances to a lower high at 6 before smelling another lower kiss & roll at 7 of the volatility trigger level before diving down to Zero Gamma as we head to the end of the day and week. Tip is go back and see how these levels played a key part to price action and how they would have helped trading decisions, and remember I have these yellow SpotGamma levels on the charts well ahead of the open, both on my NinjaTrader and BookMap charts, fed automatically by cloudnotes.