steve46

On a friday (for me) this last day of the week is pretty easy...I wait (as previously mentioned) for tests of the Weekly Open (one of my "time based pivots") There have been several tests today and the attached chart shows the most recent

Very nice day today....with a couple of gift entries....one shortly after the open and two others in the afternoon The chart is the same as posted earlier...in this one, I simply added arrows as price established a ledge, testing and retesting both value and previous day's high...either way if a trader wished to take the entries they had a nice little profit with what I would characterize as moderate risk (a 1 point stop would have been fine here).

Hello Been working on a slightly new look to my charts. The attached is a 45 sec chart showing nice granularity indicative of automated trading in a tight range. The left most arrow shows what I have pointed out many times previous (a basing pattern that preceeds a move up or down) The rest of it is the usual after lunch range just prior to the last hour close action Back to work Steve

Actually Tom My comment is directed to anyone who may want to mix live trading with sim....as mentioned once previously, if you need to make income, mixing sim with live trading introduces a randomizing component into your system, and that randomizing element could compromise your results. Good luck folks Steve

Like to move on to another item....the use of sim during the trading day... I notice that some of you switch to sim trading during the trading day.....I wonder if you understand what you are doing and the effect that switching to sim has on your system's profitability? Personally after working long hours to make sure that my system is profitable, I can't imagine taking that kind of risk (adding sim trading during normal trading hours).... Edit I can understand IF some of you are hobbyists or don't need to make a living in this business, so if you fit that category please ignore my comment. Best of luck to all

Thats all fine, except that as mentioned, most new traders cannot tolerate risk (at least not for very long periods of time)...and those who can, often do so because they are unaware of the risks that they are exposed to in the markets......What I try to do is to strike a compromise between risk and reward, so that they can make some money, and still feel that they are protecting their capital...eventualy those who stick around long enough learn the value of holding a position over the longer term...in my opinion to teach effectively you have to meet the student where they are, and not demand that they do things that they aren't prepared for. I appreciate your comment. You bring up some valid points.

Hmmmm. I would suggest spending some time getting a decent background....a general background.....choose any exchange (CME, CBOT, NYSE NASDAQ)...and go the website...at the top of each home page you will see a tab titled "education" or "educational resources"....start using that resource...go through as much of it as you can...and just take in the information....but DO NOT TRADE.....and do not get involved with any vendors.....period. Spend your time getting enough education and experience to make your own decisions....instead of asking strangers for their opinion. Alternatively go to Amazon and start browsing book titles....check out some of the classics about trading (Livermore, Marty Schwartz, any of Jack Schwager's books) and read until you have some idea of where you want to go and what you want to accomplish.. IF you spend your time wisely now, you will save yourself a lot of money and grief later... Good luck Steve

or perhaps some "Sucrets"....

No idea if your comment is directed to me so... I deal with students....they have to deal with the limitations they have until they get some experience under their belts...simple For me (as I have said a couple of times) I put on an options position on a longer time frame and trade around it....when I am right it means I am always in the market, and am in effect scaling in....every day...when I am wrong I trade against it and hedge my losses...again it is pretty simple... Not everyone has the capital to do that so I offer them the best alternatives I know of. Hope this helps. Steve

Tom If a trader understands how to characterize a target market, then they can decide whether scaling in or out offers benefits that outweigh the costs...as with all things in finance, this balance between benefit and cost should be examined carefully. For example if a target market displays significant trending behavior, and the trader has sufficient capital, experience and risk tolerance, it may make sense to either hold a position until a target is hit or, if a trade is judged to have a high probability of success, to actually scale in until a target is hit (and that "target" can be a price or a profit target). If on the other hand the trader lacks capital, skills, experience and/or tolerance for risk, AND they are trading in a market that displays reversion to mean characteristics, it may be sensible to scale out....in fact it is probable that this type of trader will HAVE TO scale out in order to tolerate the tension that occurs when they are "at risk"....during any type of trade process. Personally I think the best way to make this decision (if you have the other elements in place) is to do a historical test of your target market....by historical I mean (for intraday traders) you need at least 400 data points. For the ES market, I teach my students to scale out because they lack experience, have limited capital and (understandably) not a lot of risk tolerance. The ES contract displays mean reversion often enough that they can pretty quickly see that the benefits outweight the costs. The second part of your question is about profit targets...so for the ES market I know what other institutional players are going to do...and I like to align myself with them...I work in 10 point increments....knowing that seasonally this needs to be adjusted...and at this late date in my career I also look at the individual day in light of A) pending economic reports and earnings and B) pending news....a strategy that works well in these times is to work a trade and if you think there is the possibility of continuation, to leave at least one contract to run...either to end of day or to a pre-determined target...at times of high volatility it makes sense to hold as long as possible. I hope this helps Steve

Yes Tom that is a 3 min chart The "initial signal" occurs at 8:06 thru 8:09...the "correct" entry is the second or third "test" down to touch 1355 even which occurred at 8:24 There is some variation if instead of staying with the 3 min, a trader switched to the shorter minute or sub-minute charts.....but thats about how it plays out. The attached chart shows what the algo looks like on the sub minute time frame and what the other data looks like to me, when I am reading the tape. As I have said before unfortunately you can't really get the feel of it viewing a static display....from my point of view its clear, but then I have a lot of screen time behind me.

I posted today's patterns (there are two of them today) based on the 3 minute time frame Once I see price approach a node I can either watch on the 3 minute time frame or switch to a shorter chart (1 min or 45 sec). Either of them will show me a process (automated execution), and of course I am watching the tape to see what happens with the bid. Today was fairly straightforward....early on, banks stayed off the buy side because they were trying to determine what the ECB was doing with the private swap....as soon as they determined what the consequences would be for them individually (very little domestic exposure) they did what they always do and that is shear the sheep early, then buy the wholesale value and mark it up into the close. Since not all of us have the same aptitude, I have begun showing folks how to visualize the tape using what I call market "granularity"....for this you need to have a sub minute chart and the ability to interpret the patterns that show up as price gets tossed around by the bots... We use supply/demand nodes as context for this....in the primary pattern as price approaches either underlying demand or overhead supply, if you simply watch patiently you can see price touch a number (usually a node boundary) and the bots respond by intercepting the flow and putting in their own orders. This is what I call the “initial test”....the result of that initial test depends on several factors chief among which is the noise level....if as in present markets, the noise level is relatively low, we would expect to see a shallow pullback followed by a retest. On the retest, once again automated execution (bots) intercepts the order flow, putting out their own size, this time it is usually slightly bigger and for that reason price may stay there a while and bounce....I teach the algo by using a mnemonic "inside/outside...test....test...test.. "Inside and outside refer to volatility moving in and out of an envelope...this is where the automated execution occurs...the test/test/test part is where the temporary balance between buys and sell orders plays out... as one side gets depleted (if the bid holds for example). Obviously I can't go through all the detail however I think an enterprising person could figure it out given a bit of time (couple of years ought to do it) and the ability to observe and synthesize the technical aspects. Based on my work I see this play out on two time frames....3 min and then the shorter time frames (best seen on min and sub min)...so you need a charting program that provides that detail or the ability to aggregate your own bar size. The nice thing about this is that if you miss the primary pattern on the three min....you can switch to the shorter time frame and get on board the train later (to the extent that the trend continues).

Chalk it up to sleep deprivation...you wanted to know if I filter for size on the tape...I do not....I was taught to see the tape "natural" and to estimate size for 5 second bursts. You can't do that accurately if the size if filtered...

Yes Tom "The Tape" (for me) consists of the time & sales strip, NYSE Tick and a combination of $Vold and $ADD (Esignal or equal)...and finally I watch the DAX for "agreement"....simply put, when the market tests a key reference area, I am looking to see if it holds a bid (or not).... When price tests a Key Ref Area, I simply watch the roll (T&S) and estimate totals for short time periods....as price responds I look at the Tick, watching for tests of extremes and for higher highs/lower lows....also try to scan the DAX for agreement....because the VOLD and ADD are slow to respond I look at them last. Unfortunately I don't think it is possible to describe in detail how it looks on a website...I think you have to see it with someone who knows what to point out as it happens.. The thread is "An Institutional Look at S&P Futures" in the Emini Forum Hope that answers some of your questions Best Regards Steve

Okay got a moment now First with respect to nodes....I use the term in a way that probably differs from your understanding. If you take a longer term chart, and simply identify one trending move....then go back in time to the origin of that move (usually you find an area of horizontal development)...that area is what I call an "underlying demand node"....if you go forward in time to the conclusion of a trending move, usually (in the S&P Futures Market) you see another area of horizontal development, and that area is what I term an "overhead supply node" These areas (the origins and terminations of trend) represent areas where a temporary balance of orders existed, and then at some point as the last buy or sell order was executed that balance was tipped in favor of the next order that arrived....an imbalance is created...if that imbalance continues, what you get is the start of a trend....and if that trend continues (what I define as a sustained directional move) then you know that the imbalance of orders continues to exist On a longer term chart this is relatively easy to see....what I have learned to do is to identify areas where an imbalance exists on an intraday basis and to make that system viable I combine it with time based pivots which I talk about in one of my threads..Simply put, each time period from a year, down to a day....has an open, high and low...those data points are "activated" as we get closer to the end of each time period (traders are willing to come in and take action at or near those prices). Value Area High and Low (taken from Market Profile) are part of my "time based pivots". When price tests and area where I have identified a previous imbalance and I see that there is a time based pivot "number" there are well, that is called "confluence"...I read the tape and if it looks good I enter at those points. This is one of the ways that I trade intraday. As you may understand I am not willing to disclose all the details of that system but those are the broad strokes. I hope that helps..(have to run again) Steve

Tom I am glad to answer but have to excuse myself for the moment..please give me a raincheck until this evening Thanks Steve

Hello The attached chart shows the last three trades of the RTH session I am posting this because I think some may benefit from taking a bit of different approach to end of session trades...by "end of session" I mean last hour (approximately) Arrows indicate what I call "algorithmic reversal signals"...characteristically these signals consist of a test of a node....followed by price moving away from that test, then returning to retest....this reflects the programmed or automated component of the market...as bots get in front of the remaining order flow and test it one way and then the other....some of this is experience however when I see it (at this time of day) I look for my entry on the retest and then I am prepared to take a small profit only...and (as can be seen in the chart) I am prepared to reverse if I see the same constellation occur shortly thereafter....unlike a lot of folks I enjoy this last hour of the day.....for me it is a challenge to see if I can get into the flow and read it (read the tape) correctly... I use both supply/demand nodes and the confluence of time based pivots or value to position myself for these kinds of trades.

Here's a very nice setup for those interested in learning to operate in the Globex market (trading the ES of course) So the concept is simple (the way I like it) and direct (ditto)....you want (I want) to see a market move to wholesale levels (my definition), preferrably gap one way or the other and then test an underlying level where I might see what I call an "algorithmic reversal pattern"....for me this is the safest and highest probability trade On the attached chart what you see is the Globex opens and sits there until Asia opens...at that point what you have is a gap down on news and sentiment.....I take the time to investigate (using my bloomie) and then if the situation looks good I will take that bet In this case we have all the planets lined up the way I like it....price gaps down...I look for a reason and find nothing to make me think we will see continuation (at least not immediately) the setup I am looking for is a test of A) underlying demand (blue rectangle) and B) Value (the green arrows) As you can this is a decent long entry and if it breaks through 47 half I would simply hold it the DAX open. if it comes back to the entry I will simply take my scale out and leave it at that... Steve

Could I ask you a question? What appeals to you about buying a system rather then developing one yourself? I am asking because you express some concerns about the ones you name...yet you still think they might be worth buying (at least thats how I interpret your words) Thanks Steve

If you are capable of critical thought and you take the time to obtain a good general education as regards the markets, there is information in the threads that could help you...I would suggest you take the time to read, and stay away from the forum and posting for a while...Just one man's opinion. If you have time, I would also use the Internet to hit the exchanges (NYSE, CME, CBOE....etc) each of them has an educational section that can be helpful to you.. Stay away from vendor offers and other service providers until you have some background on which to judge... Develop a reading list and hit your library (or Amazon)....it can be done provided you take time and stay away from live trading until you have a solid sense of what you want to accomplish. Good Luck Steve

Feel sorry for her family....most folks know she had problems with drug use....I am guessing thats what happened....if thats the case, its pretty sad....maybe this kind of news will motivate some folks to "seize the day" so to speak...

No catalog of questions...I have a general idea of what will be asked....I am PREPARED to act based on a specific question...if I don't get that one, I don't trade...Its an important point you bring up.... No concern for who asks....the people who react to the answer don't care and neither do I As mentioned in a previous post several days ago (in response to a comment by Negotiator) I preposition using options and trade around that Seems to me there are several ways to do it and if you have a way that works for you, thats great...thanks for sharing your method.... Best of luck in the markets Steve

I prefer to simplify...right or wrong that is my primary goal when trading....the reason for this is that I believe that the folks who control the markets are simple people with simple motivations.....primarily "profit" and what I call "direct action" meaning that these folks, if given two choices will prefer to take the most direct route to making a profit. As an example if there is an opportunity "now" to take a profit, they will take that profit immediately, rather than wait and think about the future ramifications....I try to put myself in that mindset (in their heads) So...prior to the event (Bernanke speaking) I ask myself "Can we anticipate what Bernanke might be asked"? (for me the answer is yes, I believe I know some of the questions that will be asked)...."Can we anticipate his response to these questions"? (again my answer is yes and in this regard the question that I am waiting for is about the Bush tax cuts) As Josh pointed out correctly, we already know what "the markets" think about this subject....the market is "for" anything that supports the ongoing economic recovery...by extension we know that whenever this subject is brought up, there are participants who will hear and respond in a knee jerk fashion....how do I "know" this....experience and observation....I was trained by folks who said the same thing to me that I am typing in response to your question...it was good advice then....and (apparently) it still works.... Finally, in terms of being a few steps ahead of the crowd, I mispoke....what I want is to be ONE step ahead...all I want is to be able to anticipate that one comment, and then be able to hit my buy button before the rest of the crowd....in my opinion this is relatively simple (as it should be) and all that is required is that the participant take the time to think it out and prepare ahead of time, recognize the opportunity then execute without hesitation.... Part of your question is "could I be wrong"...sure...but again this like any process requires practice....you could certainly sim trade it anytime an event like this occurs and at some point you can see if you have a way to approach it that works...from my point of view this type of trade appeals to folks who have some experience and the ability to accurately estimate the crowd's reaction to news. Hope this helps Steve

Yes I can see that it has really helped you to express yourself clearly...you're much improved.

I see, so to clarify for those who may not speak English...what I am saying is that ALL the comments relate either directly or indirectly to the subject of the thread...YOU sir or madam may not understand that...