steve46

I did see the blotters on the thread you posted. Yes you are correct. I will however be deciding for myself what and where to post Thanks for your comment Steve

Well first of all, my own little thread is called "Ideas for struggling traders"... So before you get upset, take a moment to read the title... I am not suggesting that people trade any of the many ideas I present as complete systems. Instead I am suggesting that they use them as the basis for their own... Since I am not trying to prove anything I don't post a blotter. Steve

As you know its a simple MACD crossover. So when volatility is up, the moves will last long enough for the trader to make some money. When volatility dries up a bit, you are in the trade too late because of the lag. Even with good vol, you will see problems on the entry because of pullbacks....It needs a filter to work and I haven't seen anyone get THAT part of it right. Notice no one posts a blotter... For futures trading, general rule of thumb is don't trade in the middle (I have cleaned that saying up a bit for the audience). This is why I like MP...you trade from the outside in...you either get on and keep the position for a big winner or you get stopped out. Its pretty clean. Unfortunately not many willing to spend the time to see WHERE the real value is on that system (which is trading off the IB by the way). But hey, maybe one or more of you can give it the old smoke test and trade it (on a sim or paper for instance). For those using Esignal, watch how the MACD oscillates as the signal line touches the zero line....You may THINK you have a signal and then boom it reverses on you and takes you out. Your choices are to A.) anticipate the cross or B.) wait for a close where the signal is "through the zero line". (again you will be late to the party). Ain't no free lunches in this business. Good luck Steve

Well my interest in continuing the subject is limited...but I do want to make one final comment; What I heard on the YouTube version of the squawk is what I have heard many times before during more "normal" sessions. If not for the limit market, I would have been looking to do business for several reasons including 1. Paper coming into the pit 2. Specific Brokers coming in on the bid or offer (returning on the same side) 3. Locals short in the hole Like most, you would need some time to learn to see the moves, and to have the confidence to act...So do we all...Its just one tool out of many that you might use... My real point is...its never going to be so clear...so black & white that you have no risk...No resource (that I know of) will provide that to you...The effectivness of this or any "aid" will always depend on the skill with which you use it. Thats it for me...I leave the rest to you folks. Steve

Minoo; Thanks for the kind words. Ben; Appreciate you showing an interest here. I don't think its an exaggeration to say that Traders Audio offers serious traders a lot of value, and all they have to do is invest a little time learning the lingo and become good students of human behavior. Best Regards Steve

Sure, first you should take some time to get familiar with the rules for limit markets Here is a link to the CME rules https://www.cme.com/trading/files/EquityIndexPriceLimitGuide.pdf Then you may remember from my post just prior to the open that the markets had hit the overnight limit of 855.50. This means that there is not sell activity lower than that AND that a pool of offers is building up on the other side for the open As you listen to squawk, notice that Ben is trying to get an "indication" to his subscribers. An indication is a preliminary idea of where the markets will open based on the best bid/ask. Also if you read the rules you will notice that the limit extends down at the open (again I posted this right before the market actually opened). Depending on the pool of orders waiting to be executed, this means that the market could have continued down to approximately 795 or so.... Ben tells the crowd that the open is indicated at "850 even offer" then he says that the pool bids 840 saying "850 even bid at 840 offer" so the market is expected to open 10 handles wide (850 x 840)....Now to those of us who have seen this before it tells us that bidders expect the market to continue down. They are willing to take the risk of buying inventory (contracts) but to do so (to take that risk) they want a 10 point margin or premium in their favor. In other words if you wanted to get long at the open (if you want to lift the offer) you are starting out 10 points underwater. This is one way of looking at it....Frankly the way I look at it, is that this market could have continued down and so when I see its 10pts wide, I am standing aside until the smoke clears. Also notice that Ben says he has "paper at the offer". The market opens and Ben says "40 even offer, I'm 40 even offer". This tells you that there is going to be a move down at the open supported by institutional paper. Then Ben says "paper sells" off the open and "45 bid", 47 bid comes in", and "48 evens are trading". He indicates that the Dow opens 600 pts lower. About 10 second later, he sees Solomon come in to buy ("Solomon a big buyer") and he calls that move up " "48 evens are trading" "50 even offers coming in" "50s are trading"...."locals have sold up".....Notice this very important comment "Locals have sold up".......To me this means that locals are now net short (the term is "short in the hole") and it is a sign that if you were willing to risk it, you might get long with an appropriate stop and try to establish favorable long position. Get your chart up and take a look at where this market was based on Ben's call (note the elapsed time at the bottom of the Youtube display) where was the market at this point? Remember that this market is several handles wide so IF you were to get long you are starting underwater here...... I wouldn't do it, but I am showing you what the situation is... Now Ben talks about the argument about the "high print" and this is where I will take a moment to refer back to my comment at the time (Posner did business with Joey and unfortunately they didn't call the transaction in). This is mostly a distraction from the real business of the open...we can talk about it at a later time. Now (about 4 minutes off the open) Ben tells the crowd that the "board is late" telling us that the recorded data is out of synch (slow). Also, he tells us that price is trading back to the 50 handle. At this point the market trades down to "47 bid at 51" (4 handles wide)..and it is whipping around pretty good. Right about 5:47 mark, the market is trading "53 bid at 57" and again this tells you that the market continues to be 4 handles wide...Ben also indicates size saying "51 trades 50 times" meaning that he saw a 50 lot trade go through. Then at about 6:20 after the open he says "Paper comes in bid on 100" and that tells you institutional paper has come into the pit, and that they are "on the bid" for 100 contracts (bidding 54). He goes on to say that Solomon (institutional) has been a buyer. What is important is that Solomon keeps coming back and they are lifting the offer (listen to Bens comment on this from 7:30 to 7:50 minutes after the open) "Oh even bid Oh even bid, Solomon a big buyer"....."Solly just paid up for 64".... I am assuming you can follow this on your own and compare to my notes... Hope this helps. Steve

Yes I carry on as normal....Doesn't take long for EMA's to "catch up" as you have already pointed out. I appreciate the kind words....Hope you find some value in the "ideas"

Sorry to be late in replying. Frankly I was taken by surprise Ammo. In your post you start by saying "one of the first things you learn in the pit..." and I assumed you had been there....If that is so...Ben's office is nearby in an office (they remodeled recently so his location may have changed), his business is called "Traders Audio" otherwise known as "The Squawk". He "calls" the market action from before the open (indications) to close in a style similar to that of an auctioneer. Reading "the Squawk" is simply getting used the idiomatic phrases and terminology that is used to describe the action. Naturally it speeds the process tremendously if you have experience work in or around the big pit, the options pit, or perhaps the bond pit. A person familiar with how business is transacted there could listen to the broadcast and do very well. On the other hand, I think it would take a newbie a while to learn to decipher the calls. Like most things in life, it depends on your skills and background.

On the open today we visited 835-840 briefly. Not much going off at those levels except for Posner who bought 1k and then had to argue about the fill (lol). So...buyers came in to mark it up from there with Solomon a big buyer at 850 and later at better prices. I bought equities on weakness off the open and then shut down until the turn. I will be back at the close buying on expected weakness at that point. Good luck everyone. Steve

10 pts wide in the pit (840 x 850 on the open) Solomon a big buyer on the open heeeeheee

Well today is Friday Oct 24th, and we are limit down at 855.25 At 9:30 the limit extends and we should see 795 or thereabouts. Which is right where I suggested we might trade in my previous post. This might be a capitulation scenario and if so, we might see a move to test below the previous multi-year lows. For those who haven't seen much in the way of limit down days, I suggest watching instead of trading as it would be a bad idea to get locked in today. Think of it as a trading "field trip".... By the way, I am mostly in treasuries these days as I am retired, but I have been buying (GE, IBM, and others that have been discounted recently) and I will continue to be a buyer today on weakness. Good luck everyone Steve

Every skill can be modeled and learned if one has the basic aptitude and the desire to learn. In my opinion the comment "it can't be taught" really means "I don't know how to teach it" or "I am too busy" or perhaps "Whats in it for me?". I think any good professional could teach this skill. The question is how do you motivate a skilled pro to take the time to teach you?..... The DOM and/or Time&Sales show dynamic processes in real time. Depending on the speed with which the displays change, learning to recognize threshold levels can be confusing. One needs to know what they are looking for. For instance, on a Buttontrader display (Dom) one can see up to 5 levels. As you see the ratio of bids to offers hit 1.2 to 1.4 to 1 it usually signals a move toward the higher level (its counterintuitive as one would think it would go the other way). As one watches that display over time, DOM on one side of the screen and chart on the other, you eventually learn to correlate the movement with the levels you see on the DOM. You can speed up your learning process by using the sim and by taking notes that include time of day and other data relating to the price movement (for instance, when the ratio of bids to offers hits 1.4, how many levels does price move, and how much inventory get taken out as the offers are lifted). Although I don't mind answering some questions increasingly I find myself in the "Whats in it for me?" camp. Although it may seem mercenary, I have been in the position of answering endless questions from folks who aren't willing to put in the screen time. Basically they want a formula to follow. I think one should remember that there are many alternative options to just reading the tape. MarketDelta can be read like a DOM if you take the time to learn it. Time/Price displays can be used the same way if you know how to use them. As I pointed out previously one can get plenty of information simply by using a 1 minute chart with standard volume. I know quite a few professionals who use combinations of data, like MarketDelta and reading the Squawk, or Time & Sales and Squawk, or Time/Price and Squawk. Reading the Squawk is a skill as much as tape reading is....one has to learn how to visualize the floor and to decode the "color" provided by Ben and his colleagues. It helps if you know the local scene and can place the players (knowing for instance who the "top 10" are on the floor helps tremendously). Knowing how the size players "work" the pit is part of the art of trading, one that unfortunately will soon I fear be gone. But for now, it is (for me at least) an easy way to read the market and make a buck...

Generally speaking, the success of retail daytraders is going to be distributed randomly. That is to say, for any single event trade, there are likely to be both skilled retail traders as well as unskilled newbies taking trades. I don't pay much attention to them one way or the other.... There are "fades" but nothing that a screen trader could make use of without having some experience and a squawk to listen to. For instance in the pits it used to be said that specific brokers (Refco for instance) were good fades. So if you saw them coming in to buy you might want to lean on them for a short, thinking the top was in...(lol) and vice versa. Frankly for me, it works best to rely on the positive expectancy of my system and to just take the signals and manage the trades in a disciplined way. Otherwise you are always going to be second guessing yourself. Good luck Folks Steve

I will post these last intraday charts for those who want to see just how easy it can be First look at the open, then scan left to the overnight bars (arrows). The Globex overnight hit a high of 1009.50...That is a particularly important price point on my MP charts. Also it is (just by itself) a landmark that often gets tested on the open. As one can see that is exactly what happened. Market called to open at 1001 and immediately tested up to 1010. It failed to take out the monthly S2 and the 80 period ema. Retail traders would have been tempted to use the Daily Pivot as support....nope...sorry, as I have said in earlier posts, I fade the Daily Pivot precisely because I know that retail is on that one with tight stops right underneath. I know once it fails there, the train is headed south. For the next 4 hours, it was quite an interesting fight to see who would take control. I won't say anymore on that subject, except that there are too many private funds with money ready to drive it down. This one was very predictable. If you got on early and you could control your emotions, you had a profitable day....Personally I don't need the practice. The second chart is long term monthly. As can be seen, we look to test previous lows in the area of 800 down to 767.

Never thought I would say this but for the time being I will be standing aside (from intraday trading). For me, these markets are like shooting fish in a barrel.....You get on short (since we are in obvious down market) and you hold to EOD. Unfortunately I don't like what this is doing to our economy, I'm talking worldwide....and frankly I don't need the money. So I asked myself "when is enough enough?" and the answer is this week was "enough"....I am done until after the election. Believe me, I don't want to discourage anyone from taking profits out of this or any market, but if you have other sources of income I have to ask you, "doesn't this feel just a bit like kicking a guy when he's down?" and especially if you have a long term view, wouldn't this be the time to start looking for good long term investment opportunities in American companies. My belief is that this market has not found a bottom yet, and that bottom when it does happen, will coincide with a political decision to make a fundamental change in our banking system. Along the way, I intend to pick up some bargains buying for my longterm portfolio. I wish everyone the best of luck Steve

I like your comment on stops. Clearly the importance of stops is underestimated by retail traders. In addition to this, I think it is important for retail traders and traders who are struggling to learn to stand aside at certain times as follows; 1.) Most retail traders have small accounts. Frankly they are often undercapitalized. This results in trading with small stops in markets they should not be involved in, in the first place.....When markets display increased volatility and you have a small account, stand aside....watch and learn first, and preserve your capital 2.) Markets are likely to act volatile at times of release of economic reports like FOMC, around earnings reports, bond auctions and at many other times (including the first few days of each month and quarter). Know when significant "events" are scheduled and stand aside at these times. One way to do this is to check "briefing.com" or any similar website for market news.

One quick way to manage volatility is to do a better job of planning your entry. For example, I prefer to enter at places where two or more important price "landmarks" exist. It can be any two items on my list including pivots, "singles", Market Profile numbers (value are highs and lows), and EMA's (200 & 80 period). When you enter at places where two or more signals exist together that is called "confluence". Common sense tells you that where two or more important signals exist together, more traders are likely to be entering, so your odds of success are greater. If you are new to trading or struggling, I suggest you restrict your entries to places where you have "confluence" of two or more signals. Now if you are an experienced trader, well, you may not need my help, but if you do, one thing I suggest is to look at how many contracts trade a specific prices. This is the simplest way to find turning points. It is called reading the tape. You can find similar information if you put up a chart with "volume at price" (if your charting software offers it). Finally if you want to learn to see the effect of volume at turning points (where presumably you might want to enter) just put up a chart using 1 minute bars or candles and with standard volume. Look at how volume spikes right before price reaches a "local" high or low. If you choose candles, you will often notice volume spike right before the high or low and you will see the candle form a "doji". If this happens at a local low, the stem of that doji shows you that buying is coming in, participants see value and the market is getting ready to move up. As for charts, I think you are correct, 800v charts can move fast, and perhaps it is better to think of them in terms of how they fit your trading style rather than how I characterize them. I hope this helps you

Hello Mario Thanks for your question. The truth is that these are "ideas" only. Concepts that could be made into a systematic approach. Thinking about your question I realize that for the ES contract, it is not uncommon to see trend in the morning at the open, congestion at the lunch hour, followed by more trend behavior and then congestion in the last half hour (when the big players have left the building). In truth the most important issue for traders is to learn to judge when conditions are right for your system, to learn to know your own strengths and weaknesses (do you trade out of boredom, or because you are impatient and "think" you see a setup?). Really no system except a completely automated one, will do it all for you and let you lay out at the pool. Frankly when I trade I bring everything I have to the game....I prepare like few people do, looking at the overnight markets, checking my Market Profile setups, I look at my pivots, my EMAs and a few other things that I have in my pocket.....After so many years of doing this, I can go through the homework process in a couple of hours and have a game plan ready. If you could see how the best pro football coaches work, you would notice that they go into the stadium with a game plan that covers every play in advance from the kick off to the last play of the 4th quarter. They have it all ready to go, and if it doesn't work out, they also have the skills to improvise and adapt to whatever the opposition tries to do....I never show up without a similar type of plan from the opening bell to the last few minutes of the session. To give just one example, I go into the open knowing that I will trade one way if the market opens "in value"...Another way if it opens "out of value"....I am also looking to see if I can strike a trendline to trade off of the premarket high/low...and at the same time I am evaluating several other options in case conditions change. Because the open is in my opinion the most important trade of the day, I really try to focus and get on the right side early....Most people don't realize it, but the real discipline is "learning how to think"...that is to say, you actually have to learn to think in a specific way (otherwise if you are a newbie, you will probably run out of time or get bogged down in analysis, missing your opportunity for favorable trade position). It is similar to the way a quarterback "checks off" his recievers as he stands in the pocket. Sorry I got so long winded. The short answer is you could just trade the 200 and 80 IF you did enough testing (and screen time) to see how they work for your market. I hope this helps. Steve

Sure, first the trendline process I illustrated in this thread is for the open only. Looking at that process, you can see that identifying the local high or low is not particularly difficult, waiting for the open can cause a bit of tension if you are a newbie, but the real difficult is identifying the anchor point. By definition you must have a straight shot from the local high/low, to the anchor AND to obtain favorable trade position you have to have a retest which is your signal to trade. So you can see where the "art" is, and there is plenty of opportunity for error. This is why I like a slow chart (729V or 800V) on the open. When the planets line up, you see an arc or curve, from the local high/low, past the open, to the anchor point. If things continue to go your way, you see another arc or curve from the anchor point to the point of retest. Now the most common problem is putting in the trend line too soon. If that happens you're going to get stopped out. Its as simple as that. Go back and look at the examples that I posted, and see what happens if you act too soon, if you aren't patient. You may get a test, but then price takes out the trendline. This is why I like to keep a chart up that has the 200 and 80 period emas in place. This can help you to see whether price agrees with the placement of your line. If you want to look for other time frames, you might experiment with slower ones, like 343V for example. Holding both charts up on the screen in front of you may give you a clue early in the game, as to whether you have made the right choice placing your line. I hope some of this helps. Steve

I am going to post two charts today. One is a daily chart (candles) with 200 and 80 period emas in place, the other a 570 minute chart (candles). Each type of trading has its challenges. For short term (intraday) traders, the challenges are numerous, including finding a context in which to view the markets, finding a framework that gives the trader something to lean on when he or she pulls the trigger, finding a way to manage risk, learning the importance of account size and proper bet sizing, learning risk management and finally and perhaps most importantly acquiring mature judgement (what some call "market feel", learning the nuances of your market). Longer term or "swing traders" also need to find an appropriate context for viewing market action. Like short term traders they need a "line in the sand" that allows them to know when to act. The other challenges are identical. My point is that for longer term traders, the opportunities are fewer, and once those opportunities have past, the remaining challenge for that trader is to learn to wait patiently, to control to urge to act out of frustration, out of boredom, or because they just need the temporary gratification of "doing something".. For those who have seen these charts before, your first impulse will be to say, "so what, I have seen this. In fact, I see it all the time" and my question to you is "Do you really see it at all?" "Do you really see what is in front of you?" If so, how many of you acted to short this market back in June?" There were several chances to make a decision, and to act If you happened to miss those or you found those entries problematic for some reason, this 570 period chart below provided additional short entries on 8/11, 8/18, 8/28, 9/02, and most recently at 9/19 (where most would have been stopped out). If you are a newbie and you need a context, my thought is, try looking where most folks aren't looking....try approaching the markets in a slightly different manner, and take a long hard look at your own behavior. Markets after all are just the manifestation of group behavior. What you see in these charts is the aggregate behavior of all the participants. Depending on the way you approach these markets, you can be just one of the participants (cannon fodder) or you can control your destiny by taking note of what happens and being ready to act in a disciplined way when your opportunity comes along.

I didn't trade the open today, but I have a chart that illustrates the idea of waiting patiently....not only for a re-test of the 200 but for the 80 period ema to change position relative to the 200 period ema As can be seen in this snapshot..the price moved below the 200, retested once, twice, three times...each time the 80 stays above the 200....then on the last test (which is really a double top that doesn't quite touch the 200) price takes off down the line for a nice 10 point bump... So the lesson to be learned in my opinion is patience and judgement. You've seen it here, you will see it again, IF you are patient and willing to wait....of course you could have anticipated (bet that the 80 would continue down) and just put on the position earlier, but the risks would have been greater as well. I leave it to your judgement. Good luck

Your comments are well taken. I think that these concepts are just that, only ideas that a trader might want to consider, and perhaps incorporate into a trading plan that fits their personality. As regards the confidence issue, I have addressed that a couple of times, most recently in my suggestion that retail traders draw up a detailed business plan that included backtesting of specific setups. In fact my original business plan is updated every year (sooner if conditions warrant) and one of the things I include is an updated backtest of signals that I HAVE TO TAKE....this is very important. Before I even boot up my computer I have behind me a record of testing that tells me what to expect in terms of my projected P&L. I know how many consecutive wins and losses I can expect on each of my setups. I know if I experience more than that....that I may be seeing some fundamental change in my edge, and that I better take a closer look at the next review date. I treat each setup as a profit center. I keep records of how each setup performs every day, and I tally the results every weekend and make a report that I review at the end of each month. every 4 months, if one of my setups doesn't perform as I expect, I take a very close look, going back in the intraday charts and trying to see what the reason might be for that divergence from expected results. I am guessing that most retail traders don't go to the trouble of doing this...yet it is one of the reasons why I can pull the trigger with no hesitation, and I am thinking that it is the main reason why I was able to retire in my 50's..... Another important idea that you may have missed is the importance of "confluence". What this means is that I place special significance on situations where I see two or more signals line up together or in the same general vicinity. The reason for this is simple, more folks are likely to be taking similar signals giving me better odds of success. As for the debate of whether to use WMA (weighted moving averages) or EMA (exponential moving averages) at this point in time, I think it isn't a big deal either way.....In the light of significant experience, I suggest that when you take a trade based on any signal, you have to realize that these markets (particularly the S&P) are noisy.....This is why you need to adopt a realistic stoploss related to local volatility. I know there are folks who suggest they can trade using tight stops...I have never seen it done consistently and I suggest to you that it can't be done. Even when I incorporate Market Profile levels in my setups, I still have to give myself a 2 and sometimes 3 point stop.......Thats just the way the game goes nowadays. Hope some of this helps. Steve

Another relatively easy day The 800v chart shows nice detail. The origin is pretty easy to see. The anchor point is where the "art" lies. It is more difficult to determine in real time however, I think if one is patient and watches closely you see where the possible anchor point is....Once you have that in (if you are correct) the rest is pretty easy. This one got 10 points pretty early in the session.

You have choices You can enter "at the market" on the re-test (I do this all the time) or you can wait for that doji (pin) formation and enter on the open of the next candle (again using a "marketable" order). I use "marketable" orders about half the time. I don't really care what the slippage is, because I am in the trade for 10 points (or more). After all these years, I pretty much know when I have a good entry point and I just want to get filled. If you decide to wait for the open of the next candle (after the re-test) you have less desirable trade position, and frankly just a much chance of getting stopped out (in my opinion). There is a lot of nuance to the entry, for instance, if you take a moment to look carefully you may see that in some instances the 80 period ema penetrates the 200ema just prior to the signal (you would probably want to use a limit order there). If you wait for this feature to occur, you get fewer but more reliable signals. One thing for certain, you are going to get stopped out periodically, thats just how the game goes. Hope this helps Steve

Here is another example of use of a trendline pre-market (origin) and then watching the market open, selecting an anchor point and waiting for a second test. The long trade that follows used a retest of the 200 ema as a signal. Just those trades and you would have been done early, or you could have looked for additional signals (there were several).