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gosu
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Everything posted by gosu
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What I mean is that the wash trade is not in the person's toolbox and trades that do not work out are invariably allowed to trigger stop losses. The usual operating procedure in a P&B paradigm is a person monitors for a "set up," enters the market when he sees one, puts in a stop loss and target exit, and then stops monitoring or continues to monitor but takes no action until one or the other is triggered. Hence there is an overemphasis on entries as "set ups that work" are sought oftentimes accompanied by backtesting.
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I call it free money - a practically risk-free trade. You have to be present and TAKE IT when it is being offered, and as you point out, you have to be able to see that it is there being offered in the first place. With regard to the seeing part, it is aptly described by the old saying, "There is more than one way to skin a cat." One last thing about the free money part: it's a sure-fire loss on the opposite side. That is to say, a risk-free trade is at the same time an extremely risky trade for unskilled participants. A few characteristics of unskilled participants: (1) they predict and bet; (2) they exit on stops; (3) they never reverse.
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I'm not sure what your point is Stevie. Are you crowing about your knowing there was news coming out of Europe at noon that might affect US equities? So you made a bet based on a prediction and you got paid off. What's the big deal? You act like you're new to it. I didn't know about the news but it was preceded by the indicies being in centering/du - a high risk period. News or otherwise, there's no need to predict and bet during this period. By the time news hit, there was already a BO of yesterday's carryover channel (dotted red upward slope) and a return move with vdu. The BO of vdu on a reversal bar (gold) was with volume and it was on to p2. The solid red trendline as well as the red dotted channel were drawn in advance before the day started. Knowing the news is nice but the charts are good enough.
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I agree with you. Gaps don't exist at the start of RTH because that's not when trading begins for the day. The start of RTH is important because it presents a certainty in the market: there will be an increase in volume (participation) at that time. I admit that this is not of much use to a person who doesn't want to see that the market has already been trading before he what considers the beginning of the day.
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For simplicity, let's just say that all those differences you mention are true for the market outside of RTH - different character, players, reasons for trading, etc. What do these differences have to do with altering actual price data to match the close to open? What if there's no trading between close to open such as for weekends and holidays? There are no differences to account for but the open is matched to the close regardless. Moreover, you state that the last 15 minutes of the day is also a different environment than the rest of RTH. Again for simplicity let's say this is true. Why is this period not disregarded and the open matched to the price 15 minutes before yesterday's close? To stay consistent, all periods during RTH that are deemed to be different environments, such as midday lulls, the period before major announcements, the PM before a major holiday, etc. should be lopped off. But that approach would be an obvious absurdity. The simple fact is that the same market exhibits different "character" all the time, within and without RTH. Is that reason enough to disregard actual data and shift price to conform to some consistency? That's for every person to decide for himself. It's not my business to tell anyone how to trade but I do get curious once in a while and so I asked. Thanks for the response.
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Thanks for the examples. I have no trouble visualizing the material. In the two examples you give, I do not see anything gained by degapping and to me the fact that there is a sizeable gap at the open is quite relevant to how to trade the AM. At the risk of pointing out the obvious, if there is a carryover channel from the prior day, matching the day's opening price with the prior day's close will guarantee that the day's initial trading will be within that channel. Whether or not this is useful for a contract that's traded overnight is the question. If indeed the RTH opens near yesterday's RTH close after trading all night, this is useful information, just like it is useful knowing that the RTH open is far away from yesterday's RTH close because of overnight activity. IOW, knowing what happened overnight is useful; the result of what happened overnight is either a gap, big or small, or the lack of one. Your link states that there is a school of thought that says "today's price action is just a continuation of yesterday's." I'm not disagreeing with this statement and it is perfectly consistent with the reality that there will be a gap between RTH close to RTH open. Degapping goes beyond your statement and I think a more accurate description of its school of thought is "today's open is exactly where yesterday's close left off in both price and the volume gaussians" (the r2r, b2b stuff). So far as I can observe, no rationale has been offered for this view. The mantra GAPS DON'T EXIST! doesn't count.
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I still do not follow the rationale behind matching the RTH open with yesterday's RTH close, the "degapping", which not only discards very useful information but is a distortion of what actually occurred overnight. Anyone have an idea how many Hershey traders all over the world are subscribed to TN? Just curious what number of subscribers makes it worthwhile for a software vendor to implement a feature like that.
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I don't know exactly how you trade but I get the feeling it's similar to the way I do in terms of focus and attention at all times. Totally understand what you mean about it requiring lots of energy.
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Anyone else enjoying the market activity of the past 3 days? Had midday BO all 3 days...by the time PM comes around I'm worn out... LOL. I guess I've become an old man. Damn. Need to work on my stamina.
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Zoomed out one fractal.
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No one stated the principles better than The Gambler himself, Kenny Rogers. Pay particular attention to the second stanza about the secret to survivin', starting at 1:41. Modified for trading: Ev'ry [trader] knows That the secret to survivin' Is knowin' what to throw away [wash] Knowin' what to keep [hold] 'Cause ev'ry [trade's] a winner And ev'ry [trade's] a loser Etc. And the key word throughout is KNOW.
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Since the markets are now picking up, I will be curtailing my activity here going forward but will check in from time to time outside of RTH. I enjoyed the back and forth on here and seeing how others trade. Good trading! Last chart for the day...
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riding the LTL, which i anchored, of the day's container (lavender)....without volume surge..no VE is possible and es will just "ride" the edge of the container... yesterday's lo is there on the es....which would signal to the interday players of a reversal on the daily bars.....ym has already reversed on the daily.......
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you're getting it..............................
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see volume decrease further (prv)....so lateral possibility...lats can be "tilted" toward either direction as well as horizontal....if trend is strong, tilt is toward trend side and can "ride" the LTL...meaning will not reach RTL soon... drew in traverse RTL - red dashed line - to monitor for bo of this full r2l traverse.... volume is going into dry up...good time to relax and count the money.. calling it a day...not used to this activity..lost a lot of stamina...LOL
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chart with volume showing.....see volume slowing after bo on fbp..so fbo...unless V comes in heavy, no VE...therefore l2r
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at LTL on es...so either a VE or a left to right travers (retrace) toward RTL...only way we get VE is with increased volume - need heavy V!!!
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just a classic p3 on the fed minutes... days like today is what makes trading fun... no worries if not doing well...we're only in february....got the whole year ahead....do not hurry.......
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looks like the IT party is over..... like yesterday, midday bo on the container (blue)...unlike yesterday, this is a reversal on the day....
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another pov...........
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now that's what i call a "shazam!" heh but no surprise on the pm activity...as it was telegraphed by the midday bo on incr. V...and the nq just refused to keel over all day....
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you may get your shot in the pm... midday bo got some attention no doubt...the fbo made me smile...too early for a mad dash to the close... nq has yet to keel over...feels like it wants to test the hod...if it shows weakness in the pm...shorting es or ym is a good play...
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an atypical day... just had a sighting that's been very rare this year...a midday BO... increased V in the pm would definitely make it worthwhile..
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eod..................
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i was eating lunch and was sidelined the whole time after AM...no proof either