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steve46
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Everything posted by steve46
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Here is the last post for the day What we have is a basing pattern....followed by two (2) counters which are reversal patterns...and this is why, when you have a system that works, you TAKE THE TRADES I have referenced this time of day before in previous posts...for me this is the time when price often moves in a range and we play "ping-pong"...today was a good example.
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Here are the reversal setups for the early afternoon session what I like about this these is that they are relatively easy to see once you get some background all you have to do is manage risk and stay focused Best Regards
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I see....the "tape" (for me) consists of 1. the "Time & Sales" strip 2. The NYSE Tick 3 $VOLD & $ADD That combination of data...monitored concurrently...is what I refer to when I use the phrase..."reading the tape". I hope folks will forgive me, but the space between now and 10:30 is when I get to take a nap before I have to come back and do it again in the afternoon..so I am going to excuse myself.. Best Regards to all
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I have tried it...I like watching the time & sales strip roll by a little better...I guess I am used to it and have learned how to integrate that into my system....so it is difficult to change at this point.
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What do you mean "elaborate"? If I agreed with you I wouldn't be able to read the tape....Some of my students use Tradestation (at least at the beginning) and other vendor products...and their tick is off...to put it bluntly... I have been using this basic system for more than a dozen years....it seems to work.. The only thing that is new...is that now I use pattern recognition...I see reversal patterns and they confirm what the tape tells me...or vice verse depending on your bias...I have always needed confluence to trade... and finally "tape reading" isn't just about the tick, Vold & Add...the basis of tape reading is interpreting the interaction of the three indicators along with "the tape" (time & sales)...once you "get" that, you learn that what matters is whether a bid is "held" or not....as I have said before...its not possible (in my opinion) to show folks how thats done in this environment.
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Very nice short at the top Negotiator.... The tape (the NYSE tick) showed an opening reading at 6:46 just above 800....the next bar or candle (I use 2 minute candles) opened lower...."suggesting" that the broader market was going to retrace...$VOLD and more importantly $ADD, showed that commericial interests chose to sell that price...and it was at the top of a "local" distribution .....however you did it...nice trade.....I am done for the morning...
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Understood....and I agree....and yet we open within distributions almost every day because this is a market that waits for direction...thats what we have to work with....so what to do? Well, I read the tape...off the open it "tells me" if there is an opportunity to get on a trade and based on experience I know that there are going to be several moves within the opening sequence....an initial move off the open as the retail and opening orders are processed...a secondary or counter move and a late entry usually aligned with the primary trend.. (depending on the timing of reports)....if you can't read the tape...of course it limits your options this is why I suggest that most new traders avoid the open and pre-position. Those who chose that option (that would be "me") got a bigger reward today...not saying that is always the case, but....
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Human behavior is very predictable....most got up late (for the US open), took the reversal trade for 2 points (mostly because I was there to identify it for them)....and then sat out the late trade entry...a couple of folks acted on their own initiative and got on the long down at 86.75 I think it tells you alot about how and why we win and lose in this and other pursuits in life.
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Today's Open Very straightforward....low stress...we had three opportunities 1. For students willing to get up early, the pre-open position was available this morning at around 5:40am 2. A nice easy to identify countertrend short off the open 3. Price came down to test our primary entry at 1286.75 (long there after a "shake-out" test below) Entry #3 shown on the attached chart (green arrow) Referring back to Negotiator's comment about "sequences"....there are always multiple entries to a "sequence"...and those sequences are the way that I was taught to think about the market. We believe that knowledgeable participants position themselves based on pricing at various points along a 24 hour continuum. Unlike retail participants our starting point is the Globex open. Each tradable sequence has a pre-position entry, a primary entry and a secondary or late entry..this helps us to identify where we are in the markets and to hold our positions (because if we are right in our entry, we can see the sequence unfold in a predictable fashion). Depending on which choice they made, most folks got paid
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Nice....there you go....price trading at the extremes of a distribution and because the volume and interest isn't there (and the news is negative)....where is this likely to go off the open? For me I don't see how it could be any clearer....good for you. Hope you all made some money
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Here is today's open Usually trying to decypher the opening direction is a bit more complex. Today was a layup We knew that Asia and Europe sold off significantly We knew that we had a pending econ report at 7am PST..and that it was likely to be "more of the same" at best... There were two strategies in play...the first was to pre-position (several places to do that in the overnight market) and the second was to short the market at the open (if you had a way to get on at a reasonable cost) We had an immediate short off the opening reversal pattern. and two countertrend trades (we did not take them) For this attachement we put Bollinger Bands in place to make it easier for folks to see the volatility extremes. Normally we eyeball this and use proximity to supply and/or demand to make our decision. No reason you can't do both.... Thats it for the morning...we are going to get some sleep and come back to trade the afternoon session. Good lujck folks
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For me the main problem these days is boredom....Attached please find our last screen capture for this evening..... As you can see price tested down, taking out the previous low (a simple shake out move) and then retracing back up to re-test the previous week's low at 1206.50 Depending on your understanding of how the Globex works, you could have taken trades a several points on both sides of this distribution. I am guessing a trader with a small account could have generated oh, $500 to $1000 in about 4 hours.... I've had enough for the evening and I am going to go watch TV Good night folks
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Here's another chart with the most recent entry (right most green arrow up)
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Thanks Josh...I was entering this screen capture into my blog and I thought why not put one more example onto this thread as well As I mentioned previously I look to identify a distribution....once I do that my game is to play the extremes of that distribution, because that is where the highest probability entries are located. On this chart what you see is how a market establishes a distribution...right off the open, we see a gap down...immediately I am looking long, why because we are at the beginning of the week (not the end/re-read my previous post if you need to) so this market is likely to shrug off any bad news from last week and at least for the moment, try to fill that gap...now the question (just as before) is where do you get on the bus....and the first place is the reversal pattern (the left most red arrow)....the next is the re-test....(again...once I see something work, I will continue to hit it until they make me pay) and then up we go until we test the previous week's low at 1206.50....yes they take it out...but they cannot find buyers to continue the move AND you can see where that move ends as it tests overhead supply....this is what I call a layup short....and now I have a distribution and I am going to play ping-pong until they prove me wrong....and even if they do I have already made a few bucks.. I hope the message is getting through...different day....same story..... Good luck this week... Steve
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On a more serious vein if the gentleman wants help...there are a number of threads on this site that provide help and direction to struggling traders....some of those threads even have the words "struggling traders" in the title..... If as the gentleman suggests, this isn't an "emergency" he should be able to take a few months to read the threads and study the resources that are already in place here on the site...
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Wow, so the guy puts his family at risk, without having a viable system in place to trade the markets.....At first glance thats what it looks like (to me) I think the guy's choices are limited; He can get up off his ass and find a system that he can execute profitably....it takes a bit of research....some testing and sufficient capital to trade and withstand the drawdowns or He can find someone to teach him how to do it...and HOPE that A.) he finds the right person, and B.) he can learn a system that he can execute in a disciplined way...(and of course he has the same issues to overcome as above) or He can go back to working at a regular day job I think he ought to start by getting a new job and then (when he has time at night) try to do the research to find a systematic approach that works. Depending on his funds, he will have to make a decision one way or the other in the near future. Finally I wonder if a guy who displays this kind of judgement is going to have the capacity to make good trading decisions....?
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OK so the local distribution is what you make it....depends on your training I guess. There are a lot of ways to visualize distributions, but the simplest is to look at the developing range...See the attached 10 min chart with blue rectangles showing the upper and lower extremes.... Can't go into how I place supply & demand...took me quite a long time to get it right..to evaluate each trade I use simple hierachy of data....first I look for price to show me a reversal pattern...next, the pattern must occur at or near the extremes of supply/demand, and finally I prefer to have this all happen at (or near) specific times of the trading day....after a lot (and I would like to emphasize that) of testing, I found that when all the planets line up....the odds are greatly in my favor, and when I "free lance" the odds of a winning trade are significantly worse Initial entry at 19.75, again at 19.25 and if I wasn't testing new software I would have added more a few ticks lower....simply because (again through testing) I have found that when I am right price doesn't come back to press me. My stop is between 2 and 6 points depending whether I am day or swing trading. Today it was two (2) points. My profit target for this trade was 10 pts.. When deciding whether to stay with a trade, I look at several data points, first I think about the big picture...Do I want to be in a short trade on Friday late in the day, in a news driven market where any bad news might drive it down......answer is clearly yes....then do I think the current price action is bullish or bearish....answer is we have a low volume market and most of the professionals are gone after the lunch hour...so the price action is neutral to bearish...and finally I read the tape....all the data says to prefer short entries and stay with them as long as possible....without being impolite, what I notice about retail traders is that (probably because of lack of experience) they are overly cautious...and because they are unable to quickly and accurately evaluate the data, they lose favorable position on entry (late entry kills you in this market)....in contrast professionals tend to take the trade, because experience tells them that aggressive behavior pays.....In this market once I find a positive bias I continue to hit it until they make me pay up..and by that time, I have made enough money that it doesn't matter....
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I am testing new order execution software today and taking it slow The attached chart shows a nice reversal trade at 20 (arrows) The logic is simple (just the way I like it)...you wait for price to test the extreme of a local distribution....I look a reversal pattern...once I get that I read the tape (and take the trade of course) and then its up to the Gods... Today that reversal went favorable for 5pts then reversed a bit, and now is putzing around as folks decide what they want to do.....I am betting they are going home flat...and that the market is heading south....a bit more than this...took half off at 5...letting the rest run... Best of luck folks
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Actually it has nothing to do with announcements..the top 10 (locals) on the floor know who the brokers are likely to be representing when they walk on....after a while you know who is doing the buying (or you can find out quickly)..... The information becomes public pretty quickly inside the pit and shortly thereafter most interested locals have a good idea of who is buying and who is selling. For those willing to take the time and learn the language it is possible (at least it used to be possible) to get the info slightly ahead of the rest of the world by listening to the squawk. Now as the pit gets smaller due to more electronic trade, that edge is slowing going away.. Finally for those interested, used to be that a person who worked at the exchange would pick up a phone and talk to a buddy on the floor...and get what we used to call "a look" at what was going on in the various pits....in exchange the unwritten rule was that you brought your business to that person. Generally speaking if you were considered "good to the deck" you were entitled to a couple of "looks" and then you were expected to do busines (put an order on)...I am sure its not happening anymore however.... Good luck everyone.
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Nice day today....orderly, although news driven as is often the case these days. On the open we had an attempt to close the gap and a subsequent failure (the first candle tells that story...TICK, VOLD and ADD are useless so we are simply reading the action at this point. Buyers came into the market at 6:50 and the tape is in play at that point. Test of our demand node (and the tape confirms) shows a nice buy there....if you were in the trade you looked for it to close the gap (and it did). At the top we show a reversal pattern (red arrow) that we posted earlier....it is a high probability short. The profit target is always back to the demand node... For me the important issue is that we are in a news driven market....if you know that...the terminology we use is that we "prefer shorts"....we are trading a thursday (near the end of the week) and the news (of the IMF reluctant to provide funds) was all that was needed to push it lower...My attitude is simple..if you do take a long position look to take profits quickly (say three points), conversely if you have a favorable short entry stay with it......if you do take profits, leave something in the market in case it runs...Protect yourself with a castastrophic stop loss placement and you're good to go. Good luck
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Its been a nice day...I am done and thought I would post this example I am using a simple sequencing technique that revolves around a basic reversal setup.. The attached chart shows the basic "micro" setup....for today...it works long & short and seems to be consistent...I still read the tape to confirm....othewise its another day in paradise.
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Does trading get enjoyable Yes of course....once you have done all the basic work...the preparation, the planning, the research.....the maintenance of your system....the logistics, putting in a software order program that is reliable....putting your risk management in place....testing your system.....obtaining a track record that shows you are profitable... Yeah it can be enjoyable...because you have done all the work and you know that in the morning you are probably going to make money.... Yes....it comes at a price...and if you are willing to pay up....(see above) then it can be very enjoyable....
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How to Determine When the Market is Really Trending
steve46 replied to tradingadvantagetm's topic in Futures
Here is the trade as it stands now...at 10:47 PST I am really tired and will cut this one short, even though it is not quite at my 10 point target Clearly not all of them work out like this but...this is one example of how one can use the concept of reversal, continuation, trend and then reveral....as the basis of a systematic approach to markets. Now I need to get some sleep Best of luck to all -
How to Determine When the Market is Really Trending
steve46 replied to tradingadvantagetm's topic in Futures
Markets, like people have much in common AND also have characteristics that set them apart as "individuals". Trend is sustained directional movement....simple...and depending on the individual market that sustained movement can be a few ticks or 20 points....Does it matter?....I would suggest that if you do not understand your target market.......yes it does.....however to the extent that you DO understand your target market.....then no....it matters not....in fact to the extent that a participants really KNOWS a market, all that matters is identifying when that market is getting ready to reverse direction.... For folks who understand markets.....eventually they get to the point where they recognize a circular logic that operates on every level... reversal.....continuation.....trend......reversal.....continuation....trend.....and so on The point I make is that if you understand (really understand your market) then all you have to have is an entry or starting point (mine is the reversal)...and the rest takes care of itself.... In my case I can anticipate or "see" the reversal and knowing that it is going to happen provides me with a point of entry at a reasonable risk....once that happens, all I care about is whether the subsequent "continuation" (which eventually turns into a trend).....lasts long enough to pay me reasonably well. In the case of my market of choice (the S&P Futures) once I have my entry, I am know I am going to have one of four outcomes....3 point win.....5 point win...10 point win or 2 point loss..... The attached chart shows a recent reversal point...my students use a similar process and they tell me that they are right about 50% of the time....for this orientation, I am seeing about 65% winners...(defined as hitting at least one of my profit targets). -
Hi Negotiator This may interest folks...I use a screen that displays the DAX and ES side by side Although there have been some problems associated with the Euro crisis, the DAX does help me get some visibility as to direction.. The attached screen capture shows divergence between DAX and ES here at the end of the morning Good luck in the markets Steve