brownsfan019

Thales - I agree, I am a risk/reward guy myself as well. I didn't make a hard and fast comment there b/c some could argue that they can have a risk of 4 to make 2, but if the winning % is high enough, it works. And it can, but not my cup of tea. We are on the same page there.

That's incredible Frank. That guy is a machine. I'm sure it's like nothing to him now, but just glancing at that is making my head spin!

That's part of what I really like about Thales' trading style - he's searching for the most active issues of the current day and then does it again tomorrow. Doesn't matter what is moving that day or the next b/c it will at least be on his radar. But I agree - if you are staring at GE and it's doing nothing, that can be boring. I would say that the indexes can feel like that at times as well - watching the ES can feel like watching paint dry when nothing is going on.

I caught the tail end of that Robert. Did you happen to see where the initial stop order was? :question: If you didn't, it was a good 4+ pts away. Any idea what that trade looks like if price retraces immediately? Obviously John has no interest in considering risk/reward b/c that trade was horrendous if you looked at what he was willing to risk to make 2 ticks and then 4 ticks, which averages out to 3 ticks. Yes, there was a 'runner' that was subsequently taken out for a small move. While risk/reward is not everything, it can break systems rather quickly if not considered. I'm sure John's account could absorb a few losses in a row and slowly rebuild the account back up, but not sure how many could stomach that type of loss that purchase their courses. The $1200 profit on 24 cts = $50/ct before commissions. All-in-all, that's 1 whole ES point. One point. My question to you would be - how impressive would that have been if he showed you how to make fifty bucks? B/c that's exactly what he did. He showed how to make 1 ES pt by risking 4+. And that very well may work in the long run, I don't know. You just have to be aware of what the losses will look like (and feel like).

If you assume that it will fill the current session 50% of the time, then that is something to work with. The next step would be how many bullets to fire to achieve maximum profit w/ minimum losses. The 50% stat is an interesting one if there was a verifiable source. Like I said, it never worked for me and I thought I'd post to see if anyone is trading gaps successfully. When it works, it's such an easy trade. When it doesn't, it can get messy if you continue to fire.

5-21-09 Not in tune w/ the 6E today apparently.

As my post said: In other words, I have never used this to trade. The reason for the post was to spark conversation and see if anyone using gaps would like to give some ideas.

There was a brief mention of gaps in another thread and I thought I'd throw this one out there and see where it might go. Personally, I've always been interested in trading the gaps, but never developed it into something that I could make regular money at. First, a gap according to investopedia is: A break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as regular buying or selling pressure, earnings announcements, a change in an analyst's outlook or any other type of news release. In stocks, you see gaps all the time. In futures, you can easily see gaps as well if you set your chart to RTH only (regular trading hours). If you set your chart to 24 hours, you will rarely see anything resembling a gap. Second, why discuss gaps? There is a theory or idea in trading that says sooner or later, all gaps get 'filled'. Filled means that price will eventually travel the distance where price gapped overnight to 'fill' it in. The assumption being made on gap plays is this then - if we believe that gaps will fill, is there a viable daytrading strategy there? Here's my personal take on it - some days, you can just buy/sell the first candle pattern you see that would move the price in the direction of filling the gap - other days, not so much. For example, price gaps down, you buy the first hammer you see and set your profit target where the gap would fill. Example from ES 5 Min Chart: End result: 1 trade for +8.75. Not too shabby, right? But then you catch a day like this: In summary, there are days where this gap play is very simple and clean. Other days (such as today, May 21) it can get ugly if you keep buying. Basically, if you get caught into a trend day that is the opposite of the way you are buying/selling, hold on for dear life. With that said, maybe this could work if you give it a limited number of 'bullets' - ie, how many times you are willing to try to pick off the gap. I refer to bullets b/c that term is used a lot in poker when you are bluffing - how many bullets are you willing to fire to bluff? Same idea here - how many bullets are you willing to fire to basically sell the HOD or buy the LOD and ride it to the gap fill. Example of firing 2 bullets: ============== There could be a tradable strategy if you can keep your losses to a minimum. Exactly what that means, I'm not sure. Maybe w/ some discussion here it could help anyone using gaps in their planning. DO YOUR OWN WORK AND RESEARCH BEFORE PUTTING ANY REAL MONEY AT RISK. THE IDEA PRESENTED HERE IS INTENDED FOR DISCUSSION PURPOSES AND NOT MEANT TO LAY OUT A TRADING PLAN. I PERSONALLY HAVE NEVER USED THIS TO TRADE LIVE MONEY ON. Note: for entries, I assumed entry would be using a buy stop or sell stop to help minimize the amount of losing trades.

Gaps are an interesting discussion IMO. I'm sure most have looked at them and I personally have never found a tradable system. Some days look so easy to just buy/sell the candle pattern that is on your chart and ride till it closes the gap. Other days, not so much. Actually, I think I'll start a thread and we'll see if anyone using gaps could contribute.

Getting the thread back on track, here's another great post from Thales:

5-20-09 My head is not here this week. Don't have the focus needed. Back on track Thurs (I hope).

The Futures I-Trade Show is currently going on and a presenter there is Al Brooks. I think there might have been a discussion about his ideas on here. While clicking around, I found that he has a book for sale now as well. I have it on order to take a look at it. These online events are very convenient and could offer some ideas.

You should include volume based charts in the discussion as well.

You are more than welcome to join us! Everyone is welcome here!

Didn't do much in terms of trading on Monday. Small gain, but nothing to get excited about. Had a few other things going on, incl getting ready for a Browns fundraising event that I went to last night. Got 2 really nice pieces in the silent auction, so very happy about that.

Excellent work! Keep it up!!!

Robert - interesting. For the visual learners, throw some charts up when you get a chance.

:rofl: That's good stuff Abe. I don't need your 'corrections' which are actually just your OPINIONS. As you said - you disagree with my statement - but that does not make my statement wrong and yours right. Quite the opposite actually. You obviously don't know how this works or you wouldn't be asking such simple questions. But your opinions make it clear that you really do think you know what you are talking about when myself and others attempted to share w/ you ways to hedge a position. Your opinions come from a very inexperienced hobbyist point of view, but your inflated ego leads you to believe you have this figured out even though you are here asking a basic question. If you actually did have a grasp on this, you wouldn't be asking these questions. So pick a spot and go with it - either you already know how this works (and no need to clutter such a good thread w/ your drivel) OR ask your questions and don't pretend you know what's going on. Can't be both when asking such a basic and simple question that any one that has actually traded knows the answer to.

Since you already have the answers Abe, don't bother coming here looking for advice. You OBVIOUSLY know the answer YOU want, yet you want to continue the banter here. Either trade stocks or don't. The choice is yours. This thread turned into a trainwreck real quick. I wonder if a mod can take Abe's 'discussion' and turn into it's own thread b/c we had a nice thread going here.

Or he can just click the link I provided after find the thread.

Is that all you need today cow? To know whether it's trending or choppy for the day? That's it?

The point is Abe is that you CAN hedge your position. Sevensa told you how - you can buy/short similar stocks or a market ETF or a market futures contract. So let's say you are short RIMM and it halts. If you are panicked, you could go long the NQ, long a Nasdaq based ETF or a stock similar to RIMM. Is it perfect? Probably not but there are options to hedge the position. Same thing if the CME goes down (which a few years ago was happening routinely it seemed) - you could hedge w/ an ETF, but it won't be perfect either.

It could indicate 1 of 2 things: 1) Big buying/selling entering, time to jump on the move 2) Quick profit covering taking place and you want to fade it The WRB thread I linked discusses all of this. Go through that thread and then post some questions.

Abe - that is present in any instrument being traded. It's rare, but could happen whether in stocks or futures. I suppose if you are trading a big % loser on the day you might want to be nimble w/ your profits but not sure how often that occurs to be concerned about it.

For those interested in using the 20 EMA in their trading, here's a couple threads on the subject: 20 EMA and Patterns 20 EMA Article by Bo Yoder