joshdance

I'm long aussie, let's see if the buyers can hold it.

Nice look on the breakout on GU cory.

Great trade, BUT, when I tried to place the order on my live account I found out, as I have not actually traded TF live before, that I'm not on the ICE exchange, and am waiting confirmation to place trades on it. I have the data from my broker, but I have only placed CME trades. So, I took the trade on sim, a great trade, took off 2.5 points, in the money on the 2nd lot, and waiting for TP or stop hit on the 2nd unit. VERY frustrating yet very good on the other hand I suppose My original buy limit was aggressive at 835.4, only ONE tick from the bottom ... arg EDIT: 2nd contract closed for +2.3 points. So, +4.8 points all together. EDIT 2: Something I can learn from this--not a good stop loss placement, as my stop on the remaining contract was taken out by 2 ticks and now it's broken through the consolidation and moved higher... I suppose with the speed of the move up it was due for at least some retrace. A better placement would have been 837.6, as I more closely examine my tick chart... right below the little consolidation on the move up. Good learning experience. I would be a little more aggressive and move the stop up to 839 at this point though, as it's below the big area of consolidation we just broke through.

Here are my levels for tomorrow for TF. Currently we're at 838.7, and I will be looking for shorts at either 842 or 845, or longs at 836, depending on price at those levels. I'm guessing overnight price will meander towards one of those areas and I'll examine things in the morning.

thales and everyone, I just began reading this thread this morning. I plan to work my way through it (as well as some of db's nice stuff) this week as I get a chance to read it in between trading. Right now I'm on page 20 of 592 so I have a way to go But, I wanted to thank thales and everyone else who has contributed, I've gotten a great refresher and sorely needed shot of "KISS" while reading it. Thanks for keeping me sane. I hope to post some setups here too as I see them. Thales, if you and anyone else would be kind enough to critique my setups and trades, I'd be most grateful. ~josh

Thanks so much Phil, have a great weekend, and happy trading!

Very nice Phil.. Which other tick charts do you use in your analysis? Do you time entries from a smaller one? Also, do you rely much on volume to make decisions?

Thanks BigAl and Phil!

I noticed in the webinar that the nzdusd trade was short at what appeared to be a very key level from a previous drop down.. as Rob said, no magic with the indicator, it's just the average of three stochastics so any oscillator's divergence should show the same thing.. far more important is the context and location in which he took the trade I think. Just my $0.02.

Thanks again Mystic, great interview! This isn't the issue I think, as I have several years worth of history and the stochastics only use up 7 or so bars back I think. But thanks for the suggestion!

I downloaded the Wallaby indicator for ninjatrader, and matched it with rob's chart for a similar trade, and unfortunately they don't match. Does anyone have any ideas? Here is the shot from Rob's setup on metatrader: http://content.screencast.com/users/robbooker/folders/Snagit/media/962ffe05-57d0-4ec6-910e-f64d79c41f50/04.04.2011-19.27.26.png Attached is my screen shot, used with the default settings and it looks much noisier. Any ideas?

Thanks BigAl, So if this were not a reversal but instead a continuation move, would you look for less volume here, more volume, or it depends on the follow through for the move? Basically, I'm looking at how to interpret volume here at these edges (like the low/high of the day,e tc.).

Hi BigAl, may I ask two follow up questions that I've been meaning to ask someone who knows? 1) Is there an advantage to you trading correlated markets, as NQ,YM,TF, and ES are all so closely related? Is it due to volume you're trading or some other reason? 2) On your chart the big volume bar indicated a reversal from the low. In your experience what volume would have indicated a continuation? In other words, what constitutes a good reversal signal here versus continuation?

To the OP--I am a fairly new trader who's not particularly profitable yet, but I'll give an alternative point of view to the above. Many people feel that back testing is a complete waste of time, especially the kind that can be programmed. The fact is many back testing engines don't simulate real trading environments. Look for trading systems that back test huge profits, and watch how in real time they often stink. I'd suggest watching how markets move, it's been a great help to my progress, as opposed to looking to the past for back testing with so much of your time. Again, take my advice for what it cost you...

Good advice, thanks MM.

I watched a webinar where the presenter said what I thought was a good point: "embrace the risk" on every trade. Before you take the trade, you must be okay with the risk, even embracing it.

Not really related, but I prefer to trade breakouts anyway, as there is more confirmation, though a poorer entry. At least with oil, they can really run and often never touch the entry point. It eliminates the need to pick a point for a pullback, change in trend, etc. For me anyway, it's my preference.

I confess I do not have time to read the whole post. But, why doesn't Steve keep his same number of trades, and increase his position size? Either way, risk is increased, but at least then he gets to psychologically have the confidence of a good W/L ratio.

The question steve, is, volume fell off... relative to what (or rather, when)? I don't have my charts up but this looks like a time when volume would normally be low anyway. Maybe it was the sunday evening open, or a US afternoon, or...? Volume would necessarily be off at that time. How about comparing the volume of that candle to the last 20 or 30 candles at that time on that day, to get a relative volume?

Thanks MM-- you seem to be describing the buy vs. sell volume in the context of the period of 3/16 to 3/29, and in the context of that move up we only had two down days, and you're correct, both of those days were low volume, and I went to the 240 minute, and the biggest down move we had was the move 2 days ago on the 28th, and that was only 472K contracts on the ES traded, the 2nd lowest volume afternoon we've had in that period. So, I agree, in the context of the up move, that the buying volume clearly wins out. However, another way of looking at it is in the context of the entire period of 2/21 until 3/29, which is a down move, consolidation, another down move, and now back up. In that context, the volume is much higher on the move down as compared to the move up. However, as I look at the 4 hour chart, there are really only 2 or 3 truly nice down moves on high volume, and there are even a few nice up moves on high volume. So what you're saying, if I understand correctly, is that in the context of the current up move, you don't particular consider the heavy down volume on the prior down move, and that while the sellers seem to be absent currently, this alone, coupled with even just a little buying volume, are enough to move price up. Am I correct?

MM, I meant to ask -- I assume the cash S&P volume? Also, I noticed that the whole up move from 3/17 to 3/29 is on decreasing volume, while the move down from 3/10 to 3/16 is on increasing volume. Does this indicate a possible downside correction soon to you? In fact, from 1/31 to 2/18 the up move was on pretty quiet volume as well.

Yes I understand what you mean-- say, for example: 1) Price comes down to the top of a level you are looking to buy, and touches it to the tick, and bounces off. Would you typically wait for price to move a bit lower and then re-evaluate to see if you want to enter long, or will you buy at the market off of a quick rejection of the level? The answer may be "it depends" and of course I understand that each scenario is different. 2) If prices move to the middle of a level you want to buy at, and then shows characteristics of a reversal, you would buy "in the middle" of that area, correct? I'm thinking the level will be small, and you will place your stop on the other side of the level, hence it will be a good opportunity to buy. Am I right?

Do you ever set limit orders in advance and let the trade happen (say, a sell limit at the bottom of a supply area)? Or do you like to be present and monitor the price action in person? Do you tend to look to trade from the middle of the area if price goes that far, or are you comfortable pulling the trigger at the bottom edge of a supply area and the top edge of a demand area, when price touches it?

My short didn't work out at 1311, I only gave it two points, which is small but given the quality of the level (IMO not as good as 1325-1330), it was all I was willing to give it. Good call on 1301 or thereabouts holding, I hope you got your buy! Perhaps you did even better than 1310 and bought the retrace at 1306! I am still surprised that 1300 held, and sooner or later, I believe we will see 1292 and 1280-82 retested, and I think both will likely provide good buying opportunities. I just don't think 1300 has anything going for it other than the fact that it's a nice round number. If I were going to buy, the demand I see evidence of originating at 1292 (in the past granted) would compel me to wait for a better price. But that's the thing, it doesn't really matter what I would do, the train left the station and I got left behind!

Thanks MM, sounds like a very reasonable and logical plan! As an aside, my lower demand area on bonds was touched overnight, the top at 120'05, where I was willing to buy (but not confident to place a limit order, would have bought on the near retest around 7am but I was not quite up yet). Also, my upper area on the euro (range from 1.4118 to 1.4139) was penetrated around the london open and has dropped nicely since then to the first logical target (1.4045 and dropping). I'm just not confident to place an overnight order, not yet anyway. Look like ES also touched that area at 1308 I mentioned and had about a 4 or 5 point move down, which would have been a nice scalp, and I may have been willing to give that a go if I'm in front of the screen but no way otherwise. I'm also watching GBPUSD and the russell, but nothing happened overnight on my charts regarding setups there.