JMC

Thanks Brownsfan. That was a monster move and I agree with your comments. I've found the edge in this setup is getting into low risk/high reward trades that are based on typical price action. You hear so much about needing a good risk reward profile in trading. But it is practically useless unless it has some basis in reality, i.e. how the market normally behaves.

Pretty interesting. Definitely no shortage of opportunities there. Oil is really moving today. Nice short entry opportunity in CL this morning at 8:11am EST. Entering at the EMA took little to no heat and moved from 82.35 to an intraday low (so far) of 80.25 in about an hour.

Great opportunity to get long this morning in CL around 10:08 am EST. Pullback test of the EMA area and then off to the races.

Not sure about the 15 minute chart, but I do experience days where the market seems to not respect the EMA (1 minute- 100 EMA) the way it typically does. However, more often than not, I do see a reaction at the EMA of some sort. Though it is not always a great trading opportunity. Today for instance, you can see from about 9:20am to 10:20am EST CL consolidated above a ledge of support at the EMA before breaking hard on heavy volume. Definitely a reaction to the EMA, but not much of a trading opportunity other than scalping. I suppose you could have traded the break of the consolidation but I always prefer selling a bounce back into the EMA. In this case, we didn't get it.

Oil has been tough today. Should have been trading the Russell. Three good entry opportunities so far. Have to see how the long entry plays out as we go into the lunch time chop.

Thanks Pat. ES can be tough sometimes. I'd encourage you to check out CL as there is a much better risk/reward profile. Some nuances I've discussed earlier. I pay attention to the time of day and prefer to trade a market that is moving with volume. Other nuances are tougher to explain. I prefer taking the first pullback after a trend change and am a little hesitant to put on a "with trend" trade towards the end of move. I'd recommend watching the 1 minute charts with the 100 EMA and watching how price reacts to this area. After some screen time, I feel like I've gotten better at being more selective on the trades I take. It may help to read up on some of the roots of this setup including: The Floor Trader Method: The Floor Trader Method Linda Raschke Holy Grail Trade: http://www.lbrgroup.com/images///raschke_pt2_0304.pdf As far as a stop loss on TF, depending on volatility, I usually use a .10 to .15 stop. However, most of my trading these days is in CL.

Three good entry opportunities in CL this morning, two long, one short. First one was an early bird special at 6:57am EST. Next two occurred at 7:54am and 9:25am. Last three sessions have been quite favorable. Getting a little choppy now.

Thanks. I definitely prefer the morning session in CL (appx. 8:30am - 11:00am EST) as that is when the volume comes in and you can almost always expect some larger moves. I also sometimes watch as we go into the last hour of the pit session and start looking for a possible entry if it presents itself around the 1:30pm EST mark.

Great day today in CL using this approach. Another opportunity to get long around 10:57am EST. Stair stepping higher. Wish every day was like this.

Some good discussion being generated regarding the use of the EMA and entry method. Thanks for all who contribute. Looks like were in for a Monday morning rebound. Two nice entry opportunities long in CL this morning. Depending on your entry method, tough to get into the first entry as it turned 2 ticks ahead of the EMA. Also, ES providing a nice entry around 9:22am EST. Took a little heat depending on entry method.

Oil getting sold today along with stocks. Two nice entries at the EMA into a couple of large moves around 8:50am and 11:34am EST.

That's a good observation. There are many winning entries that look obvious in hindsight. However, in real time, there are many entries at or near the EMA that would result in getting stopped out more frequently than you'd expect. Obviously, you could increase your winning percentage by waiting for some type of confirmation (ie. candlestick pattern). But, of course, you get the tradeoff of taking more intial risk, i.e. larger intial stop loss. In terms of MAE/MFE, I think it would be very helpful to keep track of these stats. My experience in CL has been that an intial stop loss of in the range of -.15 to -.20 and a target of +.60 to +.80 seems to capture most typical moves. However, we all know that typical doesn't always happen as every day is somewhat unique.

Brownsfan has it right- 100 EMA on a 1 minute chart. Bollinger Bands are set to the usual +-2 standard deviations. Also, I have my charts set to all sessions.

That's a good question. Wasn't in front of a computer earlier this morning so I wasn't trading. Just scrolled through and posted some setups that worked. The 10:45 entry would have been valid (though a little close to the lunchtime chop period) and would have been a small loser depending on how you handled your stop loss. It's important to note that for every winning setup, there are many that do not work. If you look closely at the charts you can always find instances where EMA support or resistance fails. I think any edge derived from trading off of the EMA area is the ability to keep risk rather limited in comparison to potential reward on a winner. In fact, that's why I prefer trading CL over ES, the risk reward is typically much better.

Not at all. Welcome. A few nice long entry opportunities in CL this morning. And a couple in the ES.

Two other nice entries, both long and short, today on the ES.

Also, looks like gold has rallied up to the EMA and found resistance on the hourly. Pretty volatile today.

A couple of nice long entries in Oil this morning following Bernanke's comments. Hope somebody caught those. Can't get much better in terms of MAE/MFE on those two.

Some nice moves in Gold overnight and this morning. Few opportunities both long and short on the 1 minute chart:

Sorry for the dual post. Must have posted yours as I was typing. Glad to see were seeing the same setups in real time. Great minds think alike.

That's a good looking chart. Oil is choppy this morning. Just had a a couple of nice bounces off of the EMA on the ES. Also, worth noting Gold rolling over after finding some resistance at the EMA area on the hourly.

Also, in case anybody is interested, the 100 EMA setting used on the 1 minute chart seem to work in a similar fashion (though not quite as reliable) on the 1 hour time frame. I've found this particularly true when markets are trending. Hourly Chart of the ES: I don't trade this time frame but I find it somewhat useful when looking at the bigger picture.

Another possible entry short at the EMA premarket in TF. Also, noticing the Dollar has perked up this morning off of the EMA.

No overnight trading for me. Need a solid eight hours of sleep or I'm useless. Looking through the charts I see that pullback as well as a nice one around 3:24am that was a 65+ tick winner. Euro (6E) had a couple of nice entries as well around 2:48 and 3:09 heading into the European open. Wish I had the tenacity to trade the European session.

No real filter other than time of day and experience. I try to keep things as simple as possible. As far as exits, my earlier comment regarding bollinger bands gives you an idea of what I am looking for in terms of the minimum size of the possible move. You could also track your maximum favorable excursion (MFE) after your entries. I've found on most days in CL you are usually best off looking to take a profit somewhere in .60 to .80 cent profit range. Obviously this is not always the best solution. For me, I've had to realize I'm not always (almost never) going to catch the entire move. Got to be happy catching steady, consistent gains over homeruns. Getting back to entries, as per Brownsfan request, another thought as far as filters go. It's been my experience that most of my winning trades at the EMA take little heat. Thinking of tightening my inital stop loss to 10 ticks from 20 ticks. Seems awfully tight for a limit order in CL, but in a way it would "filter" out all but the "most likely to succeed" trades. Just a thought. Would have worked great today. But today was almost ideal day for trading this style.