phantom

Glad you're not expecting rules, because trade management has always been a "feel" thing for me. Taking money out of the market is the most difficult part of the trade, imho. I will now begin to address this issue in the next series of posts. To begin, I EXPECT a test of my risk stop as soon as I enter a position. This mindset puts me at a distinct advantage over most traders, imo, because I don't have to take the trade off on the first positive tick in my direction after "sweating out" a near stop out. Since I usually exit the trade prior to the close, so I don't have to carry the risk through an opening (my broker LOVES me because of this), all I have to do initially is maintain my sanity as the market does its best to test my resolve. Only today I was in a CL trade where the market came within 1 tick of taking me out at a loss before moving in my favor and making me a handsome profit. And this is by no means an isolated incident. Anyway, the moral of the story is that once I set my initial risk stop, immediately following my entry (I NEVER use mental stops; I ALWAYS use hard stops and I NEVER move them back to give the market "more room") I do not tinker with the risk stop until after the market has done certain things that I will point out soon. If you've followed my posts throughout the thread, you know that I enter on a breakout of one side of a hammer or doji bar and set my initial stop 1 tick past the other side of that same signal bar. This approach is so very important that I will segregate it from the rest of the story and let it sink in before I continue to post on this subject. Luv, Phantom

Granted, the opening price is not equal to the closing price, but hey, if we waited for perfection, we'd never get anything done... The divergence between the 17:45 high and the higher 01:45 high against the descending MACD is another clue that this market is weakening. Luv, Phantom

The moniker is Phantom, not Tradezilla, but I know what you meant.

I like the bean market. Its not uncommon for this market to have a 15-20 cent range intraday and each 1 cent move yields $50. Also, if you are fortunate enough to catch a trending move, "Katie bar the door," because you're looking at thousands in prospective profits.

3-4 points is a day's pay to a lot of folks. But if you only trade report days, you're much more likely to catch a larger move... Phantom

Pre-market hours??? This market trades 23.75 hours a day Tradezilla. Just because the floor doesn't begin until 0830 shouldn't preclude you from making money before they begin. I've made TONS of money on moves that began and ended long before the first floor trader stepped into the pit. Also, how does a floor trader hunt your stop if he's not even at work yet? You need to broaden your perspective on how the markets work if you ever want to go full time in this industry, in my opinion. Not only is the ES "opening bell" NOT the end all-be all, you'll get MUCH more bang for your buck trading the grain markets' opening bell at 0930. I kid you not! Anyway, go back in your charts and look at moves that started between 0700 and 0800 CDT; see if you can find some breakout opportunities off 15/30 minute charts, just like we've been discussing in the EC market. You'll be surprised. Phantom

I'll only say it one more time, TRADEZILLA. If you are waiting for the 0830 opening, you're leaving A LOT of money on the table... How do you expect to make any money off the 0730 report releases, ie trade balance, nonfarm payrolls, initial claims, etc.??? To each, his own, I guess... Phantom

The absolute best book on ES/NQ trading in my mind (and in my library) is TRADING BY THE MINUTE by Joe Ross. His chapter on day trading ES 5 minute charts, well, let's just say that it is unrivaled, period. Luv, Phantom

If you wait until the opening bell in this market, you are making a big mistake. The REAL trading day in ES begins no later than 0600, and probably closer to 0530 MDT. Phantom

I assume you are talking about the emini SP? The upside move began just prior to 5 am MDT according to the 2 minute chart I'm looking at, and it rose fairly gradually until 0830 am. Plenty of time to get in on that move... Are we on the same page here? Phantom

Incidently, I devised this method for futures traders. Forex traders will have to work it out on their own; I have no idea what the eur/usd chart looks like pertaining to this matter. I stay away from forex due to the ridiculous spreads I've seen some of my students encounter. My commissions are way lower than these spreads. One can easily find sub $8 round turn commissions if one does the leg work. A dollar saved is a dollar saved... Luv, Phantom

In my experience, demo account fills experience this nonsense all the time. In a real account, I hardly ever get more than a quarter cent slippage while trading the ZS contract. My brokerage is a Chicago-based firm and I trade through the Ninja Trader platform. Incidently, you should probably be trading the November contract at this point. The August contract is too thin. Luv, Phantom

Reminder: the test bar in the prior example could have been a hammer instead of a doji. Both work great. Luv, Phantom

Hi Jack, Seeing how Paul Tudor Jones is soooooo much more successful a trader than Dr. Elder... You decide. Luv, Phantom

Just curious, how does anyone, yourself included, know who is buying and who is selling? Do you work for a major hedging firm? Are you just guessing because of the time zones? Did you hear this on CNBC? Again, just curious.

ak14987, I feel your pain... See my latest post in the following thread (post #142): "What Really Works for Technical Traders" http://www.traderslaboratory.com/forums/technical-analysis/9764-what-really-works-technical-traders-18.html In fact, read the entire thread when time permits... Luv, Phantom

I received a PM asking about this trade. I missed this trading signal last night because of its timing, but for those of you around the globe who were up and monitoring the EC, I thought I'd go through it for you... The euro market had been channeling for several hours. Just after midnight (GMT +7) the market broke upwards out of the channel. We see the price action waiver around for awhile and then retrace to the breakout zone, followed by a quick move upwards and back down. The market proceeded to move through the channel and downward, followed by a test of the lower channel zone. A doji formed at the test point. A downward break of this doji around the 1.4220 area led to a sharp decline to the 1.4120 area, a $1200 (plus or minus) profit per car for those involved. Not bad for a $200 risk... Notice how waiting for the doji test of the channel zone kept one from taking the breakout to the upside and getting stopped out. Similar signals in this market happen all the time. Question is, are you getting these R/R ratios in your trades? Luv, Phantom

Yes, it's tough to enter the market without some kind of test (after your entry) which threatens your risk stop. And since the markets consolidate roughly 85% of the time, this only exacerbates the problem... But if, say, for arguments sake, you are using a 20 period MA as your trend filter, the slope of that MA is rising or falling as adversed to going sideways, you are much more likely to be in trend mode than in consolidation mode, especially if each new bar is rising/falling outside the previous bar's range... I fully understand the concept of hindsight is 20/20 but the market leaves its clues to the watchful eye. Luv, Phantom

Which is worse - ego or fear??? You've all given good reasons for your perspective. Here's my perspective: they're both worse... Luv, Phantom

In my mind, we should NOT deal with periods of consolidation, unless we already have substantial profits built into the trade. Why not stand aside and let the market give clear indication of its intent, i.e. resumption of the trend? If you need to trade, find another market to invest in that isn't consolidating and wait out the initial market's indecision. No need to take unwarranted losses... Luv, Phantom

I believe Ed Seykota is the man you're referring to. He'd pin his charts to the wall and then stand across the room. If he could see the trend from there, he knew he was on to something... For those of you who are getting knocked out all too regularly due to bad entry levels, you may want to try waiting for a volatility breakout (extended range bar) of a 3-5 bar sideways channel in a trending market. Just a hint. Luv, Phantom

Well said, my friend. Well said. Luv, Phantom

Jon, I never really concerned myself with the reasons behind price movement, be it psychology of traders, supply/demand, someone trying to corner the market, WHATEVER... It is what it is, and my attempts (or any other person's for that matter) will not produce one single iota of change to what is going to happen in the future. Those folks that tell you they know why the market did what it did or will do what it is going to do are only kidding themselves and you, if you choose to believe it. My best advice to you is to stop looking for the why of price action and focus on the fact that the market is doing what it is doing, anti-dis-irregardless of the reasons behind the events. Furthermore, don't kid yourself into believing that you'll need a report to drive the markets. Although it is true that reports have a tendency to create hyper-volatile moments, most of my success on report days has come from being in position BEFORE the news release. If you have a way of consistently beating the markets after the news release, I'm all ears. Anyway, if anything this thread reveals has rung true to you, just focus on the cornerstones I mentioned in my last post: volatility, channel breaks and price rejection. In my mind, nothing else matters. Luv, Phantom

MACD: I use this to filter trades. I only sell contracts when the fast line is below the slow line and I only buy contracts when the fast line is above the slow line. I use a 5,13,13 setting on the MACD for reasons beyond the scope of this training; just take it for what its worth to you. RSI: I told you how to use this, but I don't use it any more because I use market price as it relates to the Bollinger band as a proxy for RSI. Bollinger band: I look for pinches in the BB to show me that volatility has decreased prior to my entries. I NEVER chase the market; if I miss a breakout opportunity, I close shop because I know that there will ALWAYS be more opportunities in the future, as long as I haven't depleted my trading account by trading in an undisciplined manner. Other than that, I use price rejection and clear channel breakouts as my cornerstones to making money consistently. If you're looking for more than this, you'll have to look elsewhere... Luv, Phantom

I haven't spent any time with volume bars per se; I am looking into range bars for specific applications and I do trade tic charts in some applications.