TheNegotiator

To me activity based and structural references are everything. They are the what, the why, the where and the when of the markets and how they move. There are many different ways to define these references, but the underlying goal imo remains the same. To identify paper which ultimately can drive the market from point to point. Here are some simple examples for anyone who may be interested, to deliberate. Please remember that trading doesn't have to be complicated. It needs to be worked at, to be clear and not to be forced. Look at a big price move when for example either a big eco release such as NFP comes out or an speaker says something unexpected and market moving. Attached is the move from yesterday. I don't btw use fibonacci ret/ext to trade, but I do like to use them for structural confirmation. When I get such a clear line up with price areas I'd be looking at anyway, it tells me that this is something I need to be looking at. For example, a drop back into the move and below the last pullback highlighted in the chart late on, would imo opinion be very negative for all those bsd's who piled in. I would think that at least a good proportion of the move would be tested in this scenario. Another really important structural reference which many people look at is the initial balance. This is the first hour of trading in any market (primary session). Now the reason for this is supposedly most paper looks to do it's business in this time. There is indeed much of this type of activity although I believe there are better ways to define it nowadays. However, it's still extremely useful. I've attached another chart to illustrate this. This reference again can be used in terms of activity and strucure. For example, there are times when the IB provides excellent entry or exit points directly. But also, it can be a great activity reference. If say the market breaks only a small amount on one side of the IB and then reverses back into it, often the opposite end is revisited. As I said before, there are many different things which traders do use for references in their trading, but you have to have something which works for you. Do have yours?

So true. But I know a number of very good traders who are terrible in certain market conditions but excellent in others. The reason for their success is being quick to identify market conditions - pressing in the right ones and stepping back in the wrong ones. If they can identify the conditions so well, surely it shouldn't be too difficult to come up with some better ideas to trade the "wrong" conditions. But maybe that's just it. These guys lose when conditions change but are really quick to slam on the brakes. It's really interesting how different people grasp different concepts. I think many people don't get the importance of the often said advice of "Find a market and style that suits your personality".

I'm sorry I don't get it. Maybe the market has addled my mind!

Thanks for your comments guys. I really think this is a bit of a gem the more I look at it. I hadn't even seen the Spreadsheet functionality. I remember when I had CQG IC a while ago and they charged extra for the api to do that- like $100 or something I seem to remember. Then again they are pretty pricey imo, however you use the platform!

If generally one strategy takes longer than another, then it probably has different risk parameters anyway as a market's price movements on longer timeframes are larger. So I'm not sure comparing two strategies of different average length in the market is useful. What I would say is this. If you have a certain strategy, the longer you have the trade on without it showing signs of moving your way, the more likely it is to not achieve your targets before taking you out. Of course this would depend on current market activity, volatility etc., but over all, if it's not doing what you think it should be, chances are there's a good reason and others in similar positions will end up needing to exit too. Maybe you should plug in your trade data into excel. For each strategy you could simply plot length of time against profitable or not per trade. See whether you can determine any patterns.

Well it's a little late but here's my chart for the day. Just remember though, in news driven markets things can change very very quickly.

Okay that's fine. Full disclosure is what you need to give here. You also need to make sure that you are attempting to use your knowledge to benefit our community and not just to promote your product.

I'm sorry, I am correct in saying you're giving it away for free or that if you are selling something you are a vendor or both?

So you will be giving this away for free then? If you are selling it, you are a vendor whether or not it is good or bad, cheap or expensive.

I don't think they are the same things at all. The HFT technology probably just completely messed the exchange up or even they had two accounts they crossed in house with then the quoting account was behind a little. No idea why it happened really, but I'm pretty sure the delorian of hft hasn't just been invented either!! What is interesting though is that the exchanges have had orders executed without first distributing quote data. That just can't be good.

The other thing that I forgot to mention is that it looks as though there are some instructions to install Sierra Chart with Wine in Ubuntu. I have been looking for something like this for a while and so may try it later this week. I think I saw that there's a version without CLR too. It doesn't use .NET in the main version except to for add-on features. I'm no programming guru, but I would think this will make it stabler so long as you don't require external features. Maybe Tams or someone knowledgable could comment on this!

Well, as I mentioned that I would do in the earlier thread on platforms here:- http://www.traderslaboratory.com/forums/tools-trade/10520-brief-comparison-various-charting-trading-platforms.html I had the chance to take a look at Sierra Chart over the weekend. This doesn't really qualify as a review, as I don't believe I have explored the platform fully enough. But it is a summary of what I have seen in it so far. The great features I have found for me bearing in mind that the trial has all the features of the top package available:- Market Profile/Volume profile- comprehensive looking. Seems to be able to do everything you could ask of it. Numbers bars- this is basically what you'd see in Market Delta for the amount of volume traded at a price or the amount traded at bid x ask and other options here too. Delta studies - self explanatory. As well as these, there are more features which are pretty great for anyone. Custom indicator development based on C++ language, Depth of Market trading, Chart replay function, virtually any indicator or chart type you could ask for and this is just what I have come across so far. The other things to mention are that I really like how quickly a large database seems to load. I'm not entirely sure how it handles tick data and how customisable this is in charting, but I think this is more of finding out rather than it not being able to do this. There are a few different data sources you can use. It's cheap. If you want mp/vp and numbers bars, it costs $45 per month and that's if you are paying a month at a time. That can reduce to as low as $35.10 if you pay 12 months at a time. They discount by 2% per additional month paid in advance up to 1 year. If you don't need mp/vp or numbers bars, it's $26-20.28 or for the absolute basic it's $19-14.82. At these prices there's gotta be a catch right? Well the one thing is tel/remote support is charged for at $0.58 per minute. I can't see that being a problem but if you chat say 2 hours a month because you are doing lots of advanced stuff, that'll add an extra $69.60 on your bill. Not bad I still say but on the other hand I can't say how good the support is. The other option is the free support forum. It seems pretty good for most issues. So I would definitely consider subscribing for a couple of months longer myself. I wouldn't just plunge into changing platform but then that'd be the same with any software. I think it's got the lot as far as features go. It seems to be pretty robust from a programming aspect. It's very cheap compared with packages which offer similar functionality. I'm looking at this and thinking it's a buy. It's a real contender from what I've seen so far and so I'll look at it some more. I'd be very interested to hear from anyone else who has tried, subcribes or used to subscribe and moved to an alternative platform so we can get a range of views.

zdo, I have been at, passed through and am yet to arrive at various different crossroads in my trading and my life. This question however, was opened up to members to elicit thought for anyone who trades. It wasn't that I wanted an answer for me, but a discussion for everyone. I think what people who 'make it' eventually understand is that all the complex ideas and indicators about trading and how to identify conditions really don't help much in the end. The most complex thing is how to simplify your trading down to what actually matters. Then you have to realise that being right is really not of overriding importance. Try not to get too hung up on getting the conditions right all the time. Just know when to stop. The other thing which is all too often missed by traders(I know I'm digressing!) is that many do know how to make money and can, but they don't perform on a consistent basis. I don't know if you like sports, but tell me the difference between top teams in the NFL and bottom teams, or anything like premier league football(or soccer to some). The main difference is level of performance on a consistent basis. Maybe some ability. But mostly they are all pretty damn good from a skills perspective. That's probably what will really be the difference maker in many cases. Anyway, thanks for sharing your experiences too and try not to damage your head too much!!

Personally, the way I attempt to go about trading reversion and trends is not a separate method, but a hybrid of the two. I think many people do try to 'run' a small part of a profitable trade where fixed targets(price, indicator, profit or whatever) have been met, but they don't truly treat it like a trend trader would as they are still in fixed mode so to speak. I realise in this way I won't ever really catch the kind of profits on an individual trade that true trend traders take, but also I don't have to endure multiple losses in order to catch a big trend. Most importantly for me, I don't ever have to flip between the two different mindsets. Anyone else a hybrid? Lol.

Here is a chart to look at for the day. Today is the last trading day of a wild Q3 and so there is a good chance the day will be pretty volatile, or at least parts of it. No guarantees though. As this could be the case, I won't be getting too hung up on specific areas and I will proceed with caution!

Pretty much yes. .......................

I look at the close for gaps but I also will look at profile gaps too(i.e. gaps from one day's range to the next) if there is enough difference. Btw just look where that 1161 is. Pretty close to midpoint and the base of that little area I circled which built just prior to the 1157.50 being taken out for the first time. Just shows how if you monitor the market properly, in tells a story. Not just some numbers on a chart so to speak.

I wanted to share a little trade with you noting how an area is approached and how non-reaction to the area can be just as important as reaction.

Btw I missed an arrow in the chart to the close of gap to yesterday's close 49.25.

Here's a simple idea for me in ES today. 1162.75 is key. It was 2-day low which was tested twice before it broke yesterday amd it was also where after the break happened, we pulled back to before continuing the sell-off.

I know this is slightly off topic, but it a really important point which people need to acknowledge when they are looking to see whether a strategy works or not. That's that looking simply at historical charts to get a feel for whether an idea is good or not can be very misleading. The eye tends to be drawn to where the strategy seems to have worked or at least clearly failed. So many things happen while trading that strategies can easily give signals which just get steam rolled in real time. Many people use backtesting(and forward testing) to really work out whether the strategy might work. I'd trial the strategy simulated to be sure though. I think the strong or weak extremities as you put it, in order flow terms are rejections and tests, or responsive activity and the market drying up. They definitely will create different conditions after they have been put in.

Exactly. But try it and try ES again and just see whether either feel right.

All through my time as a trader so far, I have heard of trend traders, position traders, scalpers, faders and numerous other styles of trading. What it all seems to come down to though is you either go with the market or you go against it. To me, this rather pidgeon holes traders. It tends to lock them into a certain market with certain tendencies and when changes come about, it will give pretty lean spells to them or kill them entirely. This is kind of a self regulating structure I guess. I have over the course been more or less a reversion position trader if you like. Some markets are better than others for this, but at the moment, I am finding more and more we have these short term trends. It's really just overall balance but on a pretty big scale(in index futures). But generally speaking I just don't like to think of myself as a trend trader and the fact that I don't run trades overnight is somewhat limiting in this respect. All this said, there are upsides and downsides to being a trend trader. You probably have a good deal of losing trades but your winners should be huge. You have I would say, to trade across multiple products and so get a great overview of the 'whole market', but also you're probably never going to be an expert in any. Your exits are in some cases a killer as you'll be trailing fairly wide, so you may end up 'missing out' on say 30% from your MFE. You're exits are very rule driven so perhaps less stressful(not to say non-trend traders exits aren't rule driven). When you have the right conditions you absolutely cream it. When you have the wrong conditions you'll probably get stuffed then stop trading just as there is a breakout leading to a trend! Anyway, so my question to you guys is do you feel you can be both? Can a trader truly transcend trend and reversal and just be at one with the market in all conditions? I feel this is possible but more than anything is fraught with psychological issues. Switching seemlessly from one mindset to another can be quite challenging. I saw a funny thing in TT recently which I'd not noticed before. You can actually invert the DOM to show lower prices at the top and higher prices at the bottom! This tells me how strong the psychological tendencies we have can be once we have got used to something, as they put this into their program! Of course there is a very clear other path to take here. Avoidance on recognition. Just stop trading in a sideways market if you are a trend trader or in a trending market as a reversion trader. Just seems to me that it's possible to be more than just a specific condition trader. What do you guys think?

Hi Josh, We've all been there, questioning what we are doing when things aren't going as well as we hope. There are times when we mess up and there are times when the market is just damn hard to read I'm afraid. Everything thing is context based and relative to what an individual is used to. Trading ES after CL I'm sure seems calmer. But you'll see that to gain the same sorts of profits on a trade you'll trade bigger size, so smaller volatility increases become amplified. I wouldn't jump out of trading oil, but if you have auction basics down and you seem to know vp, there is no reason to suggest you couldn't trade a different product. Maybe one step at a time though. Have you looked at the russell? Also YM/NQ. I'd definitely suggest looking at the russell though (@TFS# I think) due to the way it moves. It might just be that happy medium for you. Btw, don't trade it live until you are comfortable with it! (I know you know that though )

Did you sell it? There were a few chances to jump on the move down and it was a nice big move. The 1162.75 low is actually a low vol on the blue big balance profile. The fact that there was a pretty strong reaction prior to the gap and the massive 1157.50 high vol being touched says we could be wanting to test higher. There's a chance the gap will be closed first or indeed that PIIGS related news will come out and put that idea to bed. I still want to see development and a close in that 4-day range if we are to move higher. Ultimately I would like to see a test of low volume around 1231 area.