Pre-market Trade

I don't usually trade pre-market, but the picture of imbalance was so clear that I was compelled to take the trade. A strong component of what made the opportunity so compelling was the fact that larger timeframe demand was so far down that it doesn't even appear on the chart. This makes for a very large profit margin potential, which is just another way of stating the market was then very from from equilibrium. Here's where my analysis started...

The supply level (denoted the shaded blue rectangle) was touched well before I got to my computer. I would have taken that trade, but just wasn't there. So, being that demand was so far below, I simply looked to see if any smaller timeframe supply level presented itself. Take a look at the 5 minute chart below...

In this case, I placed my order to sell short at the dotted blue line. Shortly thereafter, price returned to the level, hit my entry and price dropped. Here it is...

I only took one contract, so missed out on a big move; but the smart thing is always to take profits when price reaches an opposite level. The nice thing was the whole trade took literally about 2 minutes!