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TheNegotiator
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Everything posted by TheNegotiator
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In fairness, yesterday had a 5.75pt range until a little after 3pm. If we looked to be doing the same, what would your plan be?
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True, but it's also possible we'll keep making higher lows. So we could break up, we could break down or we could tighten up some more. In fairness, in the first nearly 4.5 hrs we've only traded a 5.5pt range. My opinion = market lame. No need to force it when it's like this and perhaps it's better to just do something else.
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Interesting lack of unity here between the e-minis.
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Thought I'd post a chart on yesterday. The RTH open above the 5-day range motivated seller enough to intially retest the balance high area. When it attempted higher and didn't follow through, a new RTH low brought about a test of the balance VPOC which was rejected pretty quickly. Overnight, this low area of yesterday's overnight range has been explored some more. It will be interesting to see if when we open up we try to move higher or lower. A push up and out of the prior balance high (1403.25) and I suspect we could at least test yesterday's highs. If the rejection at 1397.25 fails to hold, we could roll over and at the very least test the prior balance low at 1392.00 and possibly beyond. Here's the chart:-
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I'm not sure whether I totally agree with this and I believe it's better put as "it depends". I think for the purposes of trying to teach someone a particular method, it's fair to say that you don't have to use x or y in a certain way.
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I think trade management (the "if-thens") pre-trade and during the trade is probably the most important factor to being successful at trading. Of course there's a lot more to take into account however, so few really pay proper (if any) attention to trade management. It's like finding a rough stone then deciding either it's just a rock or that it must be a precious gemstone or looking at the stone, working a little to try to identify it objectively, then if it does look like promising, applying appropriate techniques to turn it into a valuable cut gemstone. One thing that I feel is of use and can help traders slip into better trade management more easily, is that old idea that you should trade to trade well and not to make money. Usually when this is said, lots of people come back and say this is dumb, but really it's important imho. Approaching the market from a standpoint of how it is trading relative to price, time, volume and then assessing whether your trade is still viable or not is extremely simple and a seemingly minor change. But what it will do is make a trader more aware and accepting of market behaviour rather than emotionally focused on their p/l.
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Just looking at the balance (probably now 5-day balance) and thinking about the distribution. It looks like quite a bit of the volume has been done above the VPOC at currently 97.50. We've traded ~5m contracts in the balance. The VPOC migrated lower on Friday from 99.25 to 97.75 and today 97.50 although it could easily change back by close. Looking at the volume further, ~60% has traded above the VPOC and ~35% below (VPOC is ~5% on its own). Although overall the way the market is trading has me thinking that there's a decent chance of an upside break, it's also quite clear from the data that sellers are active in this balance. Now what their objectives are and whether or not there are enough of them to really make too much difference remains to be seen. What is clear is that we are building for a break one way or another and despite the summer trading, the break could be pretty decent. In the mean time however, is it not most sensible to trade the market as a range until it actually shows signs it's ready to break?
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For ES, the overnight high is at a low volume price. RTH high last Tuesday was only broken by 3 ticks and Thursday by just a tick. Indications could be that we get some sort of pullback, but then you just don't know what might happen in quiet holiday-type markets. Nothing really of any note due today either so we just will have to see. I'd be interested if we do move lower, whether or not we get any reaction at the 4-day balance vpoc now at 97.75 then if not, whether the balance starts to get tighter with a higher low. Of course the third scenario for a push lower will be a break of the balance low with 87.50(/86.00) important below. If we were to either hold the balance vpoc or just carry on up regardless, next up beyond the overnight high would be 1407.00, 09.25, 11.25 & 12.50.
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3rd in the medal table as well (before anyone denies this, please read Olympic_medal_table)! It was a great spectacle and overall I was pleasantly surprised!
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Bigger Picture in E-minis Discussion
TheNegotiator replied to TheNegotiator's topic in E-mini Futures
'Interesting' summer trading we're into now. Seem to be floating up gradually. Tight balance near a range extreme often preceeds a breakout attempt. This is what we currently have. But who knows for sure as anything can happen. -
Those balances in terms of RTH volume profiles:-
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Fun and Games for when Trading is Dull!!
TheNegotiator replied to TheNegotiator's topic in General Discussion
Of course there's that ol' nugget miniclip.com if you're really bored! -
No worries Rob, glad they are useful . Okay, so I did a brief explanation on a chart of what I was seeing. Btw, I'd think if the 98's IBH can't be held above we'll be looking at mid/open again.
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Even though we're hardly trading a massive range, the actual way it's trading is okay so long as you're sticking to a solid plan. Like you said Rob, no sellers into 92's (and the retest delta was a little clue there) followed by a building up for the reversal. Was personally looking for a test of the balance vpoc @99.25 and it's as good as done that for me so I'm out. If we can maintain above 95.50, probably a decent chance of a gap close (if not this time around). Could also be a one/two move type day with the rest of the morning and early afternoon dead until possibly a move into close. You never know though.
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I actually prefer to steer away from long term levels when they are well into the low volume zones on the far extremes. I look at the areas but give the lines less weighting -they are auto generated by irt. I could do them myself and perhaps I should as some might not see them in the same way as I do. The other question is whether or not to change the start date of the chart to improve definition. That depends for me on whether or not I have reasonable other levels already to look for and how far back the additional data goes. The data needed here is back from '07 and so I'm less keen on it although will extend it I think if we close today above 1400.
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So you think this is the calm before the storm then? Summer Doldrums or Calm Before the Storm?
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You may get it now by the looks of things. But, if the 95.25 area cannot hold, it's more than possible that it'll slide lower.
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This would be my thinking anyway:-
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Not to criticise too much so i'll only point out one thing. Your target is 2 ticks below yesterday's rth low and 1 tick below the overnight vpoc. Frequently, we see this of pattern where s/r breaks, price reverses back through, then same s/r holds on the retest (kind of h/s pattern although I don't like naming things as such).
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Summer 2012 so far has seen a good deal of tradable movement in the markets and this is perhaps much more than usual. However, these last few days have really ground to a halt though. So is this just the calm before the storm, or has everyone had enough for the summer and bunked off to watch the last few days of the olympics (which btw, I'm pleased to see "Team GB" :puke: doing exceptionally well in)?
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First off, I don't think humans are "too stupid" as you put it. I think there's a long way to go though in maximising our potential and creating then harnessing tools to help us do so. The arrogance of man (and lack of ability/desire to accept new understanding) has clearly been observable throughout the ages. However, there's a more important point to make. I'd like to point out that I'm not religious in any way whatsoever but, Seven Deadly Sins is man's problem in a nutshell. In many ways, it's also a trader's struggle to be successful in the markets. Perhaps we should put all the successful traders in charge of the world. Oh no :doh: I don't think that's going to work somehow :rofl: Anyway, my point is that man's actions are rarely motivated by any good intentions for the benefit of the world rather than themselves. Maybe we should change your intelligence pill into some emotion pill like in Equilibrium. Although as in the movie, that creates a whole new set of problems...
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Mean Reversion Strategy
TheNegotiator replied to svobifx's topic in Swing Trading and Position Trading
Depends which product you trade, what the product is currently doing and over which timeframe you trade it. Just like any other strategy. -
I'm actually glad you disagreed with the sim part. There are those who say you must take trades in your plan no matter what and I wasn't sure of your stance on this. It's better for a beginner to stand back and watch so they can try to be objective and this really should be part of the way the market is observed. None of this screentime = experience bs. It does, but only if you're focused and objective about what you see. Beginner or otherwise. Plus an important point imho, is that if said beginner is struggling and probably frustrated, taking the same trades on the sim is in no way going to change this, only it could add to the frustration and have an additional detrimental affect on emotions.
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Db, perhaps I didn't articulate myself particularly well. Having and following a plan for a beginner is crucial to developing method and consistency and understanding. I may be wrong, but I don't believe Josh was suggesting that a beginner should trade 'planless' either. The point is that there are times where given what the market is telling you, you know your plan needs to be adjusted realtime within your risk parameters. Then of course it's important to subsequently study what happened and whether or not your plan needs to be fixed, added to, slimmed down or whatever. Again, this isn't for a beginner to try. However, if it's clear that a plan isn't working to a beginner, it's perfectly fine to sit back and not trade at all or at least sim trade it.
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That sounds like a good plan.