Nick1984

I'm confused we went from ATR 10/3 to 10*3? Say the ATR of the last 10 periods was 100 for simplicities sake, then the stop would be at -30 100/3. You wouldn't have it 10*3 cause that would make a ATR of 100 a 300 point stop. Wouldnt the 10*3 be a your first profit target and 10/3 your first stop?

I've been taking position trades on an intraday basis on the YM when I can identify momentun conditions but in cyclical days I'm trying to take scalps more and more often but I really need to work on developing a scalping strategy. If we are just grinding the day away in a cyclical motion i just bracket the price action and scalp off the extremes. The first time price reaches a channel border I will automatically fade that position going for 5 quick YM points with a stop loss of 5 points (1:1 RRR). The subsequent 2nd or 3rd times price touches that chanel boundary without breaking through I have found that the moves tend to loose strength so these are higher probability fades. Position sizing in scalping is the hardest part to master I think and that is what is going to kill you if you mess it up. I think when scalping you really need to keep it as simple as possible. Walter's "flip" trade is a great scalping technique that I use with some variation on a 55t chart or an 89t chart. I'd like to hear more about the mentality of the scalper who goes in every day with a view of making 20 YM points per contract over X amount of trades. Why they choose this trading system over say a higher probability intraday position trade that has a high chance of getting +10 therefore reducing the amount of trades and thus commissions paid?

I know what that feels like Brown. In the Australian football league my team (Geelong) has been a big underperformer with heaps of potential. When I was a kid they made it to 4 finals in a row and lost them all! This year they are on top of the ladder so I hope they can come away with a premiership

That sounds like a pretty fun idea brown. I used to play fantasy football (real football where you use only your feet ) and it certainly is really addictive. I'm a fan of NFL as of early this year so it would be pretty cool to play. I'm not a die hard fan of any one team yet but I am partial to the Colts and the Patriots hehe.

James the situation you describe is very very similar to our stock market here in Aus. Like feb said watching a chart of a sector is a great tool for trading the equities. If you're trading any of the financials keep a watch on the 90 day bank bill market as well as this has a huge correlation with any financial companies that are primarily lenders i.e banks, mortgage brokers etc. For electronic sector stocks believe it or not the price of Nickel is correlated as its used extensively through electronics manufacture. These are all things I kept track of when trading stocks. Of course the big players in the market will have a huge effect on the market itself, so its a good thing to keep an eye on your major players. Keeping to a longer time frame chart in stocks where markets are prone to gapping is a sensible idea. Have you considered also using a longer time frame anchor chart for the stocks or only for futures?

James the way the MA's pan out across with this particular type of indicator is really nice and not to dissimilar from those in Walters "trend" trade in the FX section. I think that the flatness of the MA's really helps to identify momentum changes however being a MA system like you mentioned they can only really be used to confirm moves. I don't know what this looks like on an equities chart but from what I notice the MA's start to identify the change in momentum around 2-4 candles after the move starts. If you can maybe post up a chart with some MP or pivot points so we can see how the indicator interacts at key price levels. I know that lots of people find the concept of Pivots strange in equities however in my experience they actually work very well! Another thing is that like I said in the original post, I think that this indicator won't work so well on the shorter time frames. In the chart above you don't get too many signals given off by the MA's crossing over.

I've heard $5k being flung around as the minimum required by IB. Check it out on their site though cause they'll know more than I do!

My internet got capped so it took a while to go through all that but it was worth it. I love the simplicity of this Walter. You've taken a very simple novice idea and really expanded it to make it very useable. When you first started posting about forex I thought that your small time frame might hurt you in the long term with some of the harsh spreads out there in spot FX but I think that the simplicity of your trend system along with the benefits of going on a longer time frame to help reduce the whipsaw effect will really pay off. I reckon you'll make your millions soon That idea of buying an island somewhere in the pacific is still looking good. As the local chimp you can be the minister of finance of the little Bananna republic!

Now my understanding of Japanese markets is scant at the moment (I'm planning on leanring more about them next year) but some of the scenarios you say occur here as well in Australia. Our stocks do gap up or down significantly off the tails of US action however I've managed to notice that underlying markets drive the individual stocks so I watch those closely. The best example I can give is the mining sector. Our biggest stocks are all miners like BHP Billiton, Rio Tinto, Newcrest, Paladin etc... This is where a bit of fundamental analysis comes into it. I like to find out a bit about the stock and what mining sector they specifically operate in i.e: are they gold miners, uranium miners, nickel, iron, zinc etc... I like to keep an eye on the underlying price of their main resource as the stocks do track these markets quite closely. Uranium prices over the past 8 or so weeks have dropped off from $135 US/pound to $90 US/pound of U308. The drop in Uranium prices has effected my uranium mining stocks. Even though over the last week the domestic SPI has recovered from the fall, the downward trend of uranium prices on world markets has been pulling back on general Uranium stock price recovery. That being said, the same situation may occur in Japan. Granted in Japan there are not so many mining industries as here in Australia but the principle still applies. I think that you can get better clues to market movements in your domestic equities markets by doing a bit of research on the individual stock and then its key stake holder and subsidiary markets. This can help you gague the strength of a move against a highly correlated market and is free from the bias of Tape or L2. If you use somehting similar in combination with a simple MA crossover you might be able to start spotting some incresingly obvious combinations which can help generate both short and long term long/short signals. Hope that helped

The benefit of the crossover setups is in the way the MA's are actually calculated compared to other MA's. I see them as "truer" MA's than your regular MA or EMA. I still feel that it is better on a longer term time frame. Intra day the signals of the cross overs would be way to late to be meaningfull. If you're trading the equities intraday you can use them to confirm a move once entered, however I'd mostly use candlesticks and basic market generated information to get my signals. Tape is all right on a stock but the L2 I don't trust.

From what I've heard the indicator works best on longer time frames mainly daily and weekly. The cloud is basically meant to be a "momentum" type indicator. If price is inside it then you have non trending conditions with the boundaries of the could being support and resistance. In your chart price stays outside of the cloud most of the time. When the price is below the cloud the two levels form two different resistance levels and vice versa when price is above it. I take it in your chart the purple line is your Chinkou line? Thats your signal line, if it crosses through the cloud from the bottom thats a long signal and vice versa. Works similar to a MACD or RSI style entry signal. The Kijun is sort of a trend strength indicator but I'm not 100% sure of that. Personally I think it's a very messy looking thing and I'd probabbly give myself cataracts looking at that all day. I don't know whether it is better in equities markets than in futures markets. If you're looking for a more "automated" entry signal than I guess that it could work because the rules for this indicator are quite easy to follow but some rigorous back testing to see its long term win/loss and estimated profits are. Don't know if thats the type of response you're after but hope it helped.

How liberal are you with your definitions of your candlestick patterns on those really small time frames? In a fast moving market a 55 or 89 tick charts candles are pretty much worthless same with even a 2000v candle. A 1 minute candle can be relatively speaking, a much "longer" term candle than the candles mentioned previously as the candle has more time to form.

Here in Australia we don't have an open outcry system anymore at all. I think it got phased out completely around 10 years ago. Whenever I saw those pit traders in a royal rumble I was always fascinated by how they actually managed to get anything done, it looks so chaotic with all those crazy hand signals and people pushing and shoving! I guess the current trend is that we rely more and more on technology these days to get things done for us that why we as a planet are adding to the gravitational pull of the Earth with our ever expanding porcine bellies!

Ok I'll give this a shot but I'm a candlestick noob so bear with me. On the 30m chart the signals are not that strong imo. What I notice is that the volume on the blue candles starts to rise slowly after the 3 red candles. Of course we're all geniuses in retrospect so I'll try to play this as if I didn't know what was coming up. The first 3 blue candles don't do anything for me, especially the 3rd blue candle. Volume is going up but the 3rd blue candle has a long wick at the top. If I saw this I'd assume with the increasing volume that we'd be coming to a top just above the previous high from a few candles back. However with the next big blue candle I would have seen a great long as thats a very bullish candle on even bigger volume. I would have entered that at the close with a market order trying to squeese out a few points, with a stop placed at the close of the previous candle. The 15 minute chart looks nicer to me. 3 candles after the gap up there is a candle that has a really long wick (i have no idea about names of candles so be kind when you judge me here). Seeing as there was a gap up, that candle is a short signal to me and I would be looking to go for a gap fill with a stop at the high of the candle. The gap fill doesnt occur but I would have scaled out most of my position by the time the low on the 2nd red candle occurs so the last part of my position would have been stopped out at break even. That being said, once I stopped out I would have quickly gone long again on the hammer candle at 10:30 (I think thats a hammer but again I don't know terminology here) with a stop being placed at the most recent low. Scaling out I would have stayed in that trade after 2 red candles had formed. At 13:45 theres another similar candle that would have been the same play with a stop being placed at the bottom of the candle. That one would have turned out well as well. On the 5 minute chart there is a really strong bullish candle at 9:30 which I would have gone long on at the close but that would have been a scratch trade being stopped out. The 3rd red candle after that confuses me cause it looks bullish but it ends up closing lower than the open, I wouldn't trade that one so I probabbly would have missed that down move. At 10:40 there is another strong bullish candle which I would have taken at the close with a stop at the bottom of the candle. After we have a "doji" finishing in the lower range of the candle I would have been worried and 2 more red's after that would have seen me exit the trade. If i had an anchor chart up on the 15 minute time frame the candles are still blue so I probabbly would have stayed in it as the longer term trend is still up. The last trade I would take is at 14:25. For 3 bars we had been stuck in a little channel but then there is a big blue candle that breaks out of that channel and closes above it. Would have entered in the close of that candle and probabbly would have held that to the close. Thats as good as I can do trying to put myself in the position of not knowing whats coming ahead. Hope I passed the test brown!

I found that I had a similar problem, deciding what time frame to use. I had setups based on longer intraday swings off a 5 minute chart and I'd time entries off pivots and other key price levels using limit orders. Then I started looking at 55 tick charts instead but they move so darn fast that I got whipsawed out of positions very often. For my scalping strategies I started to use 89 tick charts instead and found them much more comfortable. However I was still being whipsawed out of positions much to early. The transition to an 89 tick chart from a 55 tick chart didn't reduce the numbers of entries significantly but it did allow me to fine tune my entries better. I found though that using an anchor chart (5 minute/233 tick) helped a lot more to keep me in the trade if there were obvious trending conditions in the longer time frame chart. I think having a good anchor chart is important as it helps alieviate the "tunnel vision" brown spoke of.

A volume histogram should show you what price the most volume was traded at. Is that what you're referring to?

Nah not planning on competing any time soon. I recently dislocated my knee and its not healing up as well as I'd hoped so that'll put me out of commission for a long time till its ready for anything apart from controlled movements at the gym.

Holy crap thats funny as hell! My mate just visited the US and whenever he said he was from Australia a lot of American's thought that we spoke German and that Governor Schwarznegger came from here as well. A lot of them thought that we could actually have kangaroo's as pets, we could hypnotise buffalo by making weird hand gestures at them and that yes we all carry around gigantic knives. You call that a knife? This is a knife! hahahah I love that bit.

Thats my man! I'd do exactly the same thing. If I had 10 million id put about 5million into a regular fixed income instrument and live off that income. Id put 2 million into a small company sector managed fund cause they usually pay nice cash distributions and have nice capital growth, 2 million into property (mostly commercial), and the rest can stay in cash to fund anything else I need. With that I can sit on any beach in the world I want drinking coffee, playin sports, going out with friends, reading, maybe I'll learn how to paint! Who knows?!? The world would be my oyster.

Learn the Greeks! Thats probabbly one of the things options users would say. Look into Black Scholes cause its an options pricing model that actually won them a model. You can create ceratin spreads with options to capture moves in different types of market conditions. You can take bull spreads, bear spreads, butterflies, straddles etc... It's much more complicated than futures and its more pricey cause you have to pay the premium to buy a contract. You could play a very risky game and write naked puts or calls and rake in some quick cash but thats a highly risky game and you'll probabbly loose out on that. For hedging personally I think futures are better! If your stock matches the movements of an index very closely than hedge with a futures contract! Options may be a bit easier to use for hedging however depending on the size of the portfolio you want to hedge.

Yea it would be fun. The hardest part of that is the logistics of setting it up. On what day what time when everyone's free? Brown the best part of playin in an online tourney is that you don't have to read us hehe.

You were really lucky to catch a couple of pocket A's as well as being last to act. Could you imagine if the guy didn't come in over the top of the first raise? You could of limped in and taken them out as well in one fell swoop. I've found that playing pockets is a really tricky business unless you have Queens or higher cause the chances of someone making a pair with an over card is pretty high. But then again it depends on where you're playing from and who you're playing against. Best thing is to be as cold as possible and try not to give away any tells (easier said than done) and play the player not their hands. Lots of guys who play the cards will lay down an AK if someone makes a big bet before them. You just need to suss the table out and take out the weakest player first and then move up. I have a mate who doesn't even look at his cards very often. He pretends to do it but spends his time studying peoples faces 95% of the time and their body language to see if he can guess if they are strong or weak and he does really really well! Good luck with the poker bro, one day if we all are rolling in money we can have a real life "TL" poker tourney in some Caribbean resort!

Thats exactly what I would think. Wouldn't you love the smaller moves? I personally would. You can go into a position without it having a wild swing on a whim like the Russell is famous for!

If you got stuck in the crash just take a hedge position on an equivalent CME contract. Globex seems way more reliable than ECBOT.

I thought this was gonna be about your avatar! Hehe the last chimp was much cuter. Though an Orangutan in a nappy would look pretty cute too!