steve46

Here are the pre-market opportunities for today's distribution... Couple of things I really like about this as follows As the process of developing each distribution evolved, I learned a lot....interestingly I direct the readers back to the first page, where "Predictor" (with his vast knowledge of statistics) suggested that this simply wouldn't work....lol...is that right?... I think a person would have to be blind, deaf and dumb not to realize that this stuff works.. The entry opportunities are shown...yes you would have to get up (or stay up last night) to trade...clearly this isn't for everyone... I've included my worksheet...this is what I keep in front of me as I trade...notice that it shows two (2) sets of numbers....one called the "5 day" reflecting the actions of short time frame players, and the other, the "10 day" reflecting the actions of the longer time frame player....the more I do this, the more I see that it really helps me to break things out this way.. Its been a long (profitable) night I am going to get some sleep. I hope everyone has a nice weekend. Time Based Pivots Friday August 31 2012.docx

These are good common sense questions...first, it seems to me that the question of determining value is critical if you want to consistently stay on the right side of the market...and again this is only one man's opinion, but it seems to me that it is easier to determine value in a static (range bound/balanced) market where the majority of participants have had the opportunity to "vote" as to what fair value is (and is not)....in contrast, in a trending market you have both short time frame and longer time frame participants, and I think it is correct to suggest that a trend continues, it is the longer time frame participants who start to dominate that "voting" process because they are the ones who are likely to come in to buy or sell at the extremes... The distributions are very important...the process takes a significant amount of my time to create so I need to find a way to approximate them....so that I can show others how to do that without having to go through a lot of math..until then what I can say is that I am using data from both a 5 day and a 10-20 day time period...one data set represents the actions of short time frame participants....the other represents the actions of longer time frame participants...I create them and merge them into one set of lines on my screen...the blue rectangle represents the intersection of the data sets....the result is that I capture significant swings and areas where both long and short term participants are likely to act...while the distributions are important, the logic of what to do (to look for long or short entry) is just as important... and finally to really make it in this difficult business I think a person has to develop what I call "local knowledge"...meaning you need to become familiar with how your target market trades...this afternoon was a good example...I know based experience, that long term participants were mostly standing aside today...(they took care of busines yesterday)...and today it was short term players trying to take some profit, and near the end of the session you saw just that, as traders rode the market up in the afternoon, then marked it down at the end of the day (classic short term profit taking) in anticipation of Bernanke's comments. That strong mark down move happened because participants believe that his comments will probably be disappointing to the market. Clearly some were "taking a shot"....positioning themselves short in advance of that event..... Hope this is of help

and this is how the trade finished...at least for me...I usually enter looking for 5 or 10 and this one is not going to 10 because we are running out of time.....this turns out to be the best trade of the day... Typically I get out just before the cash final, because of the possibility of automated spike or "sweep" trades that occaisionally pull the rug out from under folks at times like this.. One more thought...I would like to help folks but clearly there are some out there who would like to spend my time and theirs arguing...I would prefer otherwise..I notice that at the bottom of the screen it shows many folks simply lurking and reading but not participating...thats fine.....if you want to do it that way...but for those of you really struggling, please feel free to PM me if you need extra help..and don't want to get into arguments with the ones that seem to want to resolve their personal problems here... Good luck

Here is the day's last trade. This last setup is fairly easy to anticipate. With folks waiting for Bernanke to speak, it is the short time frame participant who is in control today...knowing that I waited for this time period to get a final short in as short time frame participants continue to take profits. The initial signal (wide range "up" candle followed by a reversal candle) occurred at 12:30 which is one of my "preferred" times to trade...the pattern is completed by the three "test" candles, and notice that last one has a little wick....they couldn't find buyers so down they went.....

Well John....I have to admit I know nothing about this problem of Bollinger Band Addiction that you mention....I willl give it some thought...Thanks for bringing it up Best Regards Steve

John the BB are simply a visualization device....not everyone has the ability to read a description and then see what I am talking about...so I try to accomodate a range of skills, experience and aptitude.. I hope this makes it clearer

I tested this distribution calc over a range of markets, so its not surprise that it works well for the NQ futures Here is today's screen

Here is the result TO THIS POINT IN TIME, of the distribution for today... Interesting that I am now getting inquiries from old students and folks wanting to know how I calc the lines.... About today's action....either you had a way of getting short early or you didn't....if you didn't, you had choices....A) try to get on board as price moved south or B) wait patiently for price to reach a wholesale level (where institutions like to buy inventory back at a discount)... For the chart of the right (the ES) you can see two things....the extremes hold when tested and the logic works well as price tests but cannot take out the extreme...our logic system (down & up arrows on the chart) indicate areas where longs and shorts can be initiated.

I think you make the mistake of thinking that I care whether a retail trader directs a comment TO ME OR "AT" ME..... IF YOU HAD PAID ATTENTION at some point you would know that I don't use traditional TA In fact most skilled professionals do not use it.....or more likely, we "use" or knowledge of it, to trade failures of traditional TA rules....its actually quite profitable to use it that way... For example the distributions I am using now reflect my own understanding of market action not traditional technical analysis..

Thank you Sir (or Madam)

I have a lot of respect for folks who follow their own path...I can't know what you have experienced but I can guess that there have been plenty of ups & downs along the way I wish the best of luck and I will try to help as best I can

excellent idea...good luck

Blue Horseshoe Its not a donchian channel...and yes I have a logic that is similar to what you suggest. The general outline is about right....I want to trade inside out or from the outside toward the middle and ultimately to the other side.... As I have stated there are two distributions and what sets them apart is not only the characteristics of each distribution but the way that price acts as it probes and tests the various levels...for example...when we have trending price action, several things are in play...for one, as we get to the extremes, longer time frame participants are more likely A. transact at or near the high/low....in contrast if we have a balanced market, we are likely to see a smaller distribution, and price will act differently within that distribution... Another issue to resolve is as regards to "value"...with the 5 day distribution, if short time frame players are controlling the action, then it is more likely that "value" (as in "previous day's value area high and low") can be determined by the range extremes.....in contrast, when markets trend and are "imbalanced"...it is virtually impossible to accurately determine value... The simple logic I have developed shows me who is in control helps me to decide whether to stay with a favorable trade anticipating continuation, or to get ready for a reversal Best of luck to you

and now I want to continue to show what the distribution looks like at the end of the day... Again to remind folks this distribution is created at the end of the previous session, from the past 5 & 10 day periods...the 5 day period represents the action of short time frame particpants, while the 10 day represents the actions of longer time frame participants....I create them separately and then combine them on my charts....the logic (the arrows pointing up and down next to the lines serve to remind me where each group is likely to act. Notice if you will that today, price stayed mostly within the midpoint, probing each way periodically to look for buyers and sellers.... In markets dominated by professional interests, it is not uncommon to see this occur as participants wait for news (primarily Euro news) before making a committment to a long or short position. The general drift of this market is up (obviously) and if you go back to my first post today, you will see that I include the comment that the initial trade sequence is called "short to long sequence".....the phrase "short to long sequence" means that after the open, we want to prefer long setups just below or at the bottom of the blue rectangle (represents the midpoint of our distribution).....

Nothing wrong with any of this..I absolutely agree.....except with respect to the idea of stopping trading....stopping and then what? How do you fix it....what interests me is that people want to offer profound comments about my thread but cannot provide the additional value add that is needed by real struggling traders how are having a tough time trying to make a living in this market.....Anyone can say what you have said...great wonderful...now how about putting on a bit of information about how to interpret and fix the most common issues facing traders (how about starting your own thread where you show us all in detail how this is done)? Thanks so much Steve

Really now The point isn't to prove that I "nailed the market" (I go to the bank to do that) But to add value so that other folks can learn something... When it becomes a matter of proving that I can do this let me know....and I will leave the field to you and others who think thats important. and now if you don't mind I really do want to try to make a few dollars Good luck

I have explained the concept many times sir....but for you....once more as follows Clearly about 2/3 to 3/4 of volume is automated....of that a significant percentage uses a technique whereby they intercept order flow and act on it in a number of ways....including adding volume to bump the market in a direction (to activate other bots) or to ghost orders (to probe in order to activate stops)...the result of these many different programmed actions is a characteristic pattern that shows up as a move up or down, a slight retracement and then a retest (or series of retests of the same price point depending on the time frame)....I have posted many examples of this here in this thread...by all means do your own research... And now...I think I done my "duty"...and in addition let me say that I don't see everyone else doing the same....posting that the market is going up or down doesn't do more than display uncertainty... but by all means carry on as you were...gentlemen.. Good day PS By the way, one more thing has to be said....when you say you're not "convinced"...lets be realistic...who among us has complete certainty about any single trade...I certainly don't...in my world there are high and low probability entries and thats the best I can do...moves out of the POC are written about in Dalton and other texts...so this is not from "left field"....we are paid to take risk and manage it intelligently...thats the game...if I may suggest... I hope this explains my comment to your satisfaction Best of luck to you all

The problem tiger is that you have very little of substance to say, so ultimately your "real time" calls are of no value to anyone trying to learn how to do this... "I think its going up, but it might be going down....so I will read the market".....?

I don't have time to post all this twice...I actually trade this market...lol http://www.traderslaboratory.com/forums/e-mini-futures-trading-laboratory/9773-day-trading-e-mini-futures-681.html Look for post 5447 Notice the entry screen design...I think retail traders should try this out since it provides all the data on the three time frames (10,3,1 min charts) that are important to me right there in front of you.... Whats important here aren't the trades....look past that and get to the part that provides strugging traders with value....its the pre-market preparation (I will go into it in more detail in this thread), that will 1.) put you on the right side of the market, and 2. keep you out if you can't see a high quality entry... Good luck folks

Okay so it can go up or down....good to know Here is my entry screen, showing the sequence for today Our "pre-open bias" is based on two things...the first is an analysis of the previous day's action (I will talk about it on my thread) and the next is pending reports (Pending Home Sales and Beige Book)... On the open we tested the previous day's POC at 1408.50 and that (for me) is a pretty high quality initial entry right off the opening move The second entry (two "down" arrows") shows our algo signal...the initial signal comes at approx 6:40....and we take it because it is a preferred time to enter (based on our system) The next is the retest...we call this our "2nd chance" or 2nd entry because if we missed the initial signal, we get this second chance to get on board...(alternatively the trader can "recharge" an existing position if they took partial profit earlier) We call this a "short to long" sequence and it is common for the broader market primarily due to the new driven nature of things these days...It is one of the things I cover when I show folks how to "characterize the market".... and the last occurs just after the release of Pending Home sales..The release showed unexpected strength for sales in the western US...the initial market response takes less than a minute so you have to be ready to act....the doji's show the indecision as participants decide how to respond to the release data...for us it is a fairly high prob entry at the bottom of a node...and now the market bias turns up... Good luck in the markets folks

Herre is our distribution for tomorrow (Wednesday)

http://www.traderslaboratory.com/forums/e-mini-futures-trading-laboratory/14045-steves-basic-system-retail-traders-4.html ....post #30 As for Predictor, he just posted a request for a "quant" to help him do what he can't do himself.. and finally.......early in this thread, when I wrote that I used Bollinger Bands as "training wheels" only, apparently you two "rocket scientists" never got the memo..... So my comment for both of you is as follows....if you can't stay on the subject...if you can't contribute something positive (and that seems a very distant possibility)....point & click yourselves somewhere (anywhere) else... Thank you and Goodbye

and this is my final trade for the day Again I am focused on a couple of things, first general drift of the market is up, though not strongly...so I am trading small... Second, I am looking for a pullback and then a nice entry pattern as before Third, my initial goal is to get a point or two, and reduce my risk, then ride the rest for 5 points. The chart tells the story...the entry signal occurs near to an important time based pivot at 1407 and today's distribution tells me to look for longs above 1402.375...so rounding up I am looking to get long ABOVE 1402.50 whenever I see a valid entry pattern.....The pattern occurs right before 11am (near enough that I consider it to be a "preferred" entry)....The $tick spikes down to neg 600 and that gives me the confluence I need to pull the trigger... This is a difficult one to trade because I can't get my first point right away and retraces quite a bit....but eventually it does move enough to book that important first point. Once we get there you can see that it turns into a nice trade... This by the way is typical of summertime low volume trading...at any other time of the year my first scale out would be at a minimum 2 points.

Excellent example of what happens when it goes against you If you trade.... eventually you see this happen...you put the trade on.... it goes your way for a few ticks and then reverses... As mentioned previously, if you take a small profit up front, you can scratch the trade with little or no damage to your account....then you go on to the next opportunity.

and here is a third valid entry pattern today As can be seen price penetrates the BB then moves back out, then retests Generally speaking I am always watching the tick, the VOLD and the ADD so that I can see if the pattern is "supported" by the broader market....what this means is that I am trying to judge whether the broader market (the Dow) is set up to move in my direction once I get on board... Its called reading the tape As can be seen this entry has moved favorably about 6 ticks...which is all I need initially...once I take a small profit, I have in effect "bought a stop"...meaning that if it comes back to my entry point, (and I think the market is going against me) I can exit without taking a loss. It becomes a "reduced risk" transaction. Good luck folks