steve46

Well Bob Supply & demand are only a part of my decision making process. I do indeed leave out some areas of overhead supply and underlying demand depending on my judgement. At this point in my career I feel that I have earned the right to use some discretion, and fortunately it usually works out for me. In addition to supply/demand analysis, I look at the available pricing for opportunities to buy wholesale value and sell retail value...Also I monitor time based pivots because in my experience they are honored by institutional traders (who want to make sure they earn bonus money at Christmas), and finally I read the tape...in fact this along with supply/demand analysis are really the backbone of my approach...combining the two elements (supply/demand analysis and reading the tape, trading becomes much less stressful and more like a walk in the park) Today for instance was exactly that kind of scenario as we sold (like most institutions) retail value at the top of the local distribution, and watched it approach wholesale levels at 1327 I look at the markets the same way every day....and it works because there are a lot of other similarly trained individuals doing the same thing...At this late date I would suggest that there is no mystery to it, only the subtle differences that I attribute to skill level, experience and capital requirements (some folks have more capital to move, some less)...Now if you will pardon me I am still short the market looking for a test of 1325.25 at which point I am done for the day.

Do you have a bank account? What is your account number and password? Thaks

Related to the previous post, today in the ES market we happened to see an example where the daily time based pivot was hit....(previous daily low) Rather than post the chart here (again) I will simply direct folks to the thread "Trading Adverse Events"...and you can see towards the end of the RTH session that price tested 1325.25 and then bounced (as it often does)...the first time at 10:25am PST, where a long entry would have made a couple points, and then later in the day at about 11:30am PST, where long entry would have resulted in a nice 4+ pts profit.. To put this in perspective, for me at least....I have already done my homework so I know what my odds are when this "test" comes along...also I know that I can read the tape...and so I the advantage of being able to tell if the setup is going to work or not, early in the process ( I don't have to risk much to take the trade)....one thing I can tell you folks is that a big reason this stuff works, is that there are a lot of other professionals watching the same thing, and moving size when they see it setup....THAT is why the move happens..because others (with capital to move) are getting on board... Good luck.

and here is the chart showing end of RTH for today April 7th 2011 So what I would direct folks to in this chart is the obvious observation that when you see increase volatility, it is often represented in the form of a large wave, and as we move through time the amplitude of each following wave gets progressively smaller...having this concept in the back of your mind as you trade makes it psychologically easier to trade the oscillations that follow the "main event". USING TIME BASED PIVOTS Also for those who are trying out my time based pivots can see that today...at the end of the day price tested the previous DAILY TIME BASED PIVOT open at 1334.50....high of 1336.50.....low of 1325.25 Price tested the previous day's low at 1325.25 at 10:45am PST, and again at 11:25am PST, taking those trades would have provided a nice safe high probability entry. The last one was good for 4+ points into the close.

A couple of comments. Most retail traders look at the chart and think "does this setup look good"? and then if they have some education and judgement they may have a rule for size (most of them simply trade one or two contracts so that is a moot point)...and then they may have a foggy idea of what the potential profit is going to be...and again (as you well know) most retail traders THINK they will hold a position but end up trading for ticks...and watching the rest of the move from the sidelines... Much of this problem is lack of perspective...in that they don't think in business terms...for example time is money...there is an equivalency that you have to respect...within a certain time frame, you need to generate some profit, or you need to close out and move on to the next opportunity. If you have done some homework you know what your average hold time is for a winning trade, and conversely you know (or you should know) what your hold time is for a loser...Clearly you should strive to hold on as long as possible for winning trades and close down the losers as soon as you have identified them as unproductive. If and when you obtain sufficient capital to move some size, you can take that opportunity to scale into your winners...Most professionals do this (in a specific manner) so as to insure that they have their biggest position size on when they are winning. Although I don't have time to provide the blow by blow details, I can say a couple of things that might help in this respect. First, for each trade I take, I KNOW that there are going to be three (3) places where I can add size..I also know that adding size changes my risk profile, so I prefer to increase size as soon as I know that I have correctly identified market bias (as soon as I know I am on the right side). Often I am able to add to a winning trade within the first point or two...and it is often the case that I will double my position at that point....The opposite is also true...and that means logically that I will remove size if I don't see the market acting as I anticipate....and the result is that I will still take my full stop loss when I am wrong, but the stopout is taken on a position that is significantly reduced and thus the impact on my account is relatively small....clearly a lot of this is dependent on skill and judgement... I hope I have given you something to think about Good luck

Well, I do have some acquaintance with those data points....but, I think they are of limited use primarily because most folks do not know how to evaluate the data. I think for retail traders, simple is best, provided you have just a little bit of guidance.. For example..what you need is a concept...and that means you need an organizing principle that has a common sense advantage...I like to use a simple principle like "time based pivots" and then you zero in a little bit more....and from those pivots I like to see if there is a tendency for the market to "respect" the weekly open...For me this means, between Monday and Friday...what happens when price comes near to, or "tests" the weekly open...Simple idea right...? In a trending market like we have now, one assumes that when price tests the weekly open, that other participants will come in to defend that price point...and try to lift the market higher... One way to find out if that concept is viable for trading is to go back through your charts and see what happened each time that time-based pivot (the weekly open) was tested... In the popular literature, you hear that 30 data points is all you need to trade...I guess you could start there...although I prefer to have about 100 data points as a minimum sample size for evaluation. Once you have that data, you have some idea of what your odds of success are if you decide to take the trade... By the way, there's another nice benefit for people willing to put in the time to do the testing manually, and that is that you learn about how price acts when it tests a particular price point....like the weekly open...for instance, one might learn that when price tests the weekly open, it is likely to retrace and then "re-test" before continuing upward...If in the course of your research you found this to happen a lot, then you have discovered a nice setup, that increases your confidence in that trade....just a thought. Rinse and repeat for the next concept...

and here is a follow-up to the previous post, where you can see how the S/D nodes work and how trades taken on these tests would have work out for both longs and shorts. For those interested I put my S/D analysis in place at the start of each week. I review the placement of each node at the end of RTH and before the start of the Globex, and of course I put in each Globex session about 30 min before the Globex open...Its part of a more comprehensive approach that I was taught quite a long time ago by a very gracious gentleman at a Chicago firm called Gelderman. For the ES contract this is all I need, two charts, NYSE tick, the Time & Sales strip, and my execution software..and it all fits on a laptop

Personally I know of a simple way to deal with the gentleman's problem Jaysmith, it depends on your motivation...PM me and I can fill in the details...it dosent require that you buy anything, or do much more than commit to a simple discipline...over a short period of time... The ball is in your court.

I've been doing quite a bit of training in my office lately...and as a result I have discovered a lot about HOW we learn... Some of the obvious and not so obvious things to note...HOW we learn depends on our senses and what we like to depend on for information...for instance some folks rely primarily on visual cues....some on tactile (how it "feels" to do something...I notice that some folks can learn by just "hearing" a description of what to do (reliance on hearing)...then they go and work it out themselves... In this office because we use specific tools, screen time is critical to the success of the operator....especially in the bond market because it is dominated by professional interests and the one needs to react swiftly in order to take advantage of an opportunity. In that situation, we try to replay data sets so that the student can learn by seeing things in slower more relaxed environment. Finally, where I see the greatest benefit of "screen time" is when I am teaching folks to read the "Time & Sales Strip"....Because that technique requires the operator to monitor multiple data sets concurrently and then make a decision, screen time and having an experienced person monitor and direct the student's attention at specific times in the process in critical. The nice part about it is that at some point it all "crystalizes" and you can see that the "light go on" as the student realizes what is happening...from then on its just a matter of repetition... Hope this helps

Alright then, I'm interested...what is the "test"....what are the test parameters....how many samples do you need in your test protocol...I am always glad to learn new things....

With respect to today's event. The attached chart shows the reaction and the spike down to a previously established demand area on both my long term and short term charts. The process is relatively simple. Prior to the open (the evening before), we establish these areas representing both the RTH distribution and the short term or Globex distribution. We expect the distributions to capture about 98% of all price action, even in extreme events. Then if a news event occurs, whether it be anticipated (unemployment for instance) or unanticipated (this morning's recent quake in Japan), we have a way of framing the event and reacting to it using both the distributions and reading the T&S "strip"...Today the system worked quite well. The operational "take away" here is the efficacy of the S/D distribution as opposed to simply support and resistance lines.

The concept of supply/demand analysis seems to work better than simple support resistance. Probably because it provides a range of prices instead of just a "line in the sand", and in part because of the way I frame the market....I have charts posted on several threads including "An Institutional Look at S&P Futures"....using that concept requires some background and the operator has to understand the related concept of balance and imbalance....most retail traders don't really get that...but if you ever have a chance to look at the display boards around the perimeter of the CME exchange you would notice that a lot of participants pay close attention to the balance/imbalance numbers that are published there. My approach allows the operator to estimate balance/imbalance pretty accurately and get on the right side..... Good luck

Hello Cory Mr. Jones has a natural talent....he was born into money and learned how to make it, but looking at how human behavior affects the markets....at this point in his career I am guessing his estate is worth about 5-6 billion...You don't get to that point by careless or wild speculation. Like yourself, I find it interesting that people are willing to comment when they don't even know who the decsion makers are within his organization. Its just laughable... If you study his moves, you will see that he is disciplined. If you have the opportunity, take a look at some of the charts for his holdings. The disclosure documents for larger holdings can give you clues as to when and under what conditions his managers pull the trigger...and the same for exits....it takes some effort to get the data but it is worth is if you are a long term investor. In terms of risk, he has a good feel for portfolio limits (max risk on a portfolio level) and he knows the individual issues well enough that he has managed to stay out of trouble (look at what happened to Julian Robertson for instance). Best of luck to you

So "big players" are superficial.....interesting....and they enter the market because "decisions were made"..... So what kind of "decisions" sir....you seem well informed...could you be more specific please? and what exactly do you mean by "inputs"...(to the NQ)....could you be more specific please? Thanks

Yes I certainly understand your comment MMS and perhaps 2 years losing is not that bad (from Method's opening post)....As I recall, what "motivated" me to make a real decision about trading was that I was getting close to the bottom of the gas tank (trading capital)...and didn't have many other options....I think its nice if a person has the luxury of taking their time to get it right.... Best of luck to everyone in the markets.

A couple of others have made similar comments....and so I will restrict mine to the bare minimum First, I wonder if the gentleman really wants to be a winning trader....I am not getting that impression....it seems to me that the gentleman wants to trade...certainly, and likes the action, but is either a.) not knowledgeable as to what winning is about, or b) not willing to do what it takes (its just not that difficult)...Ultimately what is required is that the "losing trader" make a conscious decision to abandon everything that he as been doing, in order to find an approach that works. I am thinking that my thread "an institutional look at the S&P futures" might hold the key...particularly the concepts of TBP (time-based pivots), supply/demand analysis and wholesale/retail value...the FESX, and the Eurostoxx for example are dominated by professionals who use similar approaches with excellent results...and I use them successfully trading the DAX, S&P futures, Bond, and Currencies (exchange traded not forex). I certainly understand if you want to continue chasing your tail like a puppy, but if you decide to get serious, I would start by reviewing "An Institutional Look at the S&P Futures, and then perhaps consider looking at my comments about event trades...to see if it fits your personality. Good Luck

OK so I have a limited amount of time, and I want to bring my participation in this thread to a close Seems to me folks decide to do this for a variety of reasons, with money the foremost motivator...thats clear... Also clear, most folks approach this business thinking they can get their charts up, learn about the markets, find an indicator or a setup that works and voila they have a magic ATM machine on their dining room table.... The fact is, unless a person makes a conscious decision to think and act in an adult manner, they won't get to their goals...unless they learn to take responibility for themselves and their actions, they will aways be watching from a distance, looking for an explanation "why they can't get where they want to go".. Everyone is entitled to read all the books they want...take all the seminars....pay people to tell you why you are doing what you do....but in the end it comes down to YOUR DECISION TO TAKE ADULT RESPONSIBILITY FOR YOUR ACTIONS. Next week I intend to start working with a group of folks willing to make that decision and go for it...I intend to show these folks what it takes to get to their financial goals with trading....I expect to win some and lose some, but in the end I also expect to make a positive difference in their lives.... I hope you all reach your goals as well.. Seeya

This is an interesting comment and one that frankly I did not expect to read here... For Maxima; Actually Sir or Madam, the "news" in terms of scheduled economic report releases comes in various "flavors"...that is to say, there are reports that are released on a rigorous schedule and cannot be seen in advance, and then there are reports that are released in advance to "subscribers"....Those of us who do this for a living know which is which and as the gentleman has stated, we plan our moves in advance...I guess the only thing I would like to correct is the timing...actually Maxima, most professional offices have an idea of what the report bias will be and we establish our longer term market position anywhere from 10 days to a month ahead of the release, and then we trade around it as the "event" draws near....Splitting the trade this way allows us to hedge and lay off risk when we feel we might be wrong, and to add deltas when we want more risk exposure....Now I wonder if anyone will get this and comment? Oh well. (once again I refer people to Ben Warwick's excellent book on Event Trading). Good luck everyone.

It seems as though almost everyone is petty to you sir or madam...From my point of view that means A.) you might be right, or B) you may have a significant emotional issue to deal with (look up paranoia for example).... I think its been quite a long time since I acted in a "petty" manner, but I will leave that distinction to others where it belongs.... and thanks for this revealing demonstration of how Rande's concept has benefitted you...

Nice to receive a complement from an intelligent observer...I am sure you are making your own good luck... Edit You know, I was going to close up shop for the afternoon and then I thought "why not post this just in case someone out there likes to trade the Globex"... The attached screen shot shows a couple of important data items for those interested.... First....if you check the long term chart on the left...you can see what the market bias is (clearly its up) Second, if you look at the shorter time frame chart (15 min) you my see where I have my supply/demand nodes in place...The important "take away" from my point of view is that these S/D areas continue to be viable into the future....thats why I leave them in place... Today when the Globex opened I waited for price to test the upper boundary of the S/D area and I jumped on (knowing/accepting that I had risk down to 1325.75) For me this is a high probability entry, because my long term chart shows significant market bias. Also I interpret the previous move down as an unsuccessful attempt to find sellers....once I see that there is no selling interest..well.... Hope this is of help to someone out there..

Well John I am not at all confused. It took me years to learn a simple lesson, and that is ....to the extent that we can THINK and ACT in a specific way..we can obtain a non-random outcome in our lives...by their actions, people in effect choose to be winners or losers.... Now I don't expect everyone to agree, or for that matter to understand what that means, but I know that it works....in our lives and in terms of our possible sucess in the markets...and I am able to demonstrate it every day..... Random chance (what most people call "luck") is a part of our lives, and on an individual basis NO ONE can know how it will play out....but for a longer series of events, if a person prepares intelligently and makes smart choices, they can in effect "make" their own "luck"..... I am hopeful that people will make good choices in life and I intend to help if I can. That is why I wish everyone "Good Luck"...

Pardon the late reply...it seems to me (admittedly I have limited experience with the Hang Seng), that I remember volume surges and associated issues with fills as participants return from lunch or find themselves near to the end of session (and still have orders to fill)...This is one reason why I avoid split session markets. It makes sense to me that a marketable order executed at these times could recieve an unfavorable fill... You also mentioned that the market "never traded near" the fill you received...if that is true you may have a technical glitch in the simulator...and you should inquire about it with Interactive Brokers. Finally you may also want to contact the exchange...the Hang Seng is interested in maintaining volume and liquidity and they might have an English speaking person at their offices interested in helping you with this problem...If I were going to do business at the exchange I would certainly explore that avenue. I think the key to obtaining a prompt result is to suggest that you are thinking of moving size in that market...(you are aren't you lol)...just a thought. Good luck

Tradewinds you don't seem to get it...If you benefit from applying Jungian principles to your trading or your life, then go do that....and God Bless you....problem solved For me, this forum is part of a "screening process"...evaluating this thread and the author (Rande) I noticed that his example and his advice, would actually be counterproductive for some traders (as mentioned in my previous post)...This and other similar posts suggests to me that Rande is either incompetent or ignorant....I have learned that to succeed I need to have the best possible advice and tools...so unfortunately I have to cross the gentleman's name off my list.... Good luck in the markets everyone.

I certainly do make assumptions Rande but they are not hidden...The first very open assumption I make is that you do not know what you are talking about....For instance, you indicate that you do not trade....so, how is it that you have the ability to classify the person in your example as a "great technical trader". The inconsistency doesn't lie with your example sir, it is with YOU...and the false claims of expertise that you offer in this arena... Further the artificial distinction you make between fear and worry is simply a word game...and of no importance to those of us who actually put themselves at risk in the markets...that fact is...the emotion we experience is a warning "message" that we don't have enough experience or knowledge to deal with the situation....That message is clear to me...."warning.....(flashing lights and sirens)....warning.....possibility of loss.....step away from the computer...... Sorry Rande....not my intention to make fun of your example...but it seems to me that YOUR lack of background in trading is showing...so to speak..and I will go a step further to illustrate. In markets like the S&P futures for instance, it is common to see participants monitoring the same or similar data to make decisions....one of the data points many professional monitor is Market Profile "value"...for this reason, we often see price move to test previous value, only to take off "early" as participants front run the value price (usually this happens at the previous value area high and low)...If the person in your example possessed enough experience and technical expertise (they don't)....they would know to expect that and (perhaps they would be able to read the tape thus telling them when this is occuring)....and get on board NEAR that value area instead of demanding a specific price.....The issue mentioned in your example happens for many reasons but this is ONE.... In contrast.....if we go to other markets...the bond market for example or exchange traded currencies...we have an entirely different environment.....one that you (Rande) are unfamiliar with and in those markets...this is less likely to happen....(for many reasons)... the gentleman in your example would actually be doing the right thing by demanding a specific price before taking action..... THIS (among other things) is why your lack of experience trading betrays you Rande.....because you dont have the experience to know the difference.. Good luck

Siuya I apologize if I am interfering, but your comment is very important to me....I maintain a presence in the overseas markets, including the DAX futures....I remember a colleague asking me if I would help him to learn that market...(he wanted to participate)....okay, so I said "look, the DAX has the potential to act in a very volatile manner...(at the time that was particularly true).....and if you get caught on the wrong side it can spike on you and really hurt you....he wasn't deterred, but wanted to get going....(of course)....well I think this was an example of a person who lacked sufficient fear......he simply did not take my warning seriously AND he did not understand (until he found himself in a losing trade....in a market spiking down on news...with no buyers to take him out....sitting there looking blankly at the screen while his account took a beating...)