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Dogpile

Dogpiles A-B-C Trades

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This thread is to chronicle a few set-ups... Comments welcome.

 

I use a combination of:

1) pattern recognition

2) market profile based 'value' concepts to filter trade ideas...

 

Set-Up 1:

 

Pattern: A-B-C Pattern

 

Filter:

If Current VWAP > Yesterdays Closing VWAP -- Look Long but only if ABC forms BELOW Todays VWAP Level

If Current VWAP < Yesterdays Closing VWAP -- Look Short but only if ABC forms ABOVE Todays VWAP Level

 

I am not going to spend time on exits as those are too complex...

Just Entries and Initial Stop Levels

 

http://bp2.blogger.com/_5h-SWVGx6Ms/Rp5_v0AHGOI/AAAAAAAAAUk/tDK8HkaaCyk/s1600-h/July+12+ABC+Pattern.bmp

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Ok, this one is a set-up for a 'coil break'.

 

Title: Bollinger Band Squeeze Play

(Lifted Partially From John Carters book 'Mastering The Trade')

 

Settings:

Use 15-min Chart

Both 2.0 Std Dev Bollinger Bands narrow to the point of being 'inside' the 1.5 Keltner Bands

 

Statistical Set-Up:

This set-up defines a market that is in tight 'balance' and poised to break hard in one direction or the other. A market 'in balance' is a market profile concept which means that buyers and sellers have agreed on the current price level. The Bollinger Band Squeeze play is when the market has become balanced for a period of time that is long enough such that a big move might be forthcoming. While the chance of a breakout to the upside or downside is considered to be 50/50 -- the reward of catching a directional move makes the trade have a high reward relative to the risk of 'stopping-out'. You must use a stop as the market can fake one way and then go the other way.

 

Pattern Filter:

You must be able to draw a well-defined Triangle (converging trendlines). If you can't draw a triangle, then the chart set-up is probably too wide-and-loose. This visual pattern is a crucial variable to the set-up.

 

http://bp3.blogger.com/_5h-SWVGx6Ms/Rp6PSEAHGQI/AAAAAAAAAU0/tjPrtvhgLNk/s1600-h/July+18+BB+Squeeze+Play.bmp

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Notice the 15-min 'Structure' which takes you out of the lower timeframe 'noise'.

 

There is generally support/resistance around the VWAP level. When VWAP is below previous day VWAP -- the odds are that the market will resume its trend back down. It is important to monitor the 're-testing' action after this signal -- if price does not break lower in convincing fashion, then its likely the 'down auction' is over and a new 'up auction' may begin. Thus the play is to short for the test down and then monitor how price responds.

 

http://bp2.blogger.com/_5h-SWVGx6Ms/RqIT0-vXazI/AAAAAAAAAVE/OzuqegzYhY8/s1600-h/July+20+ABC+Patterns.bmp

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<<same entry? buystop above last 2 bar high?>>

 

Hi Bubba,

 

I have played with lots of short-term entry techniques and currently have a few I select from. I try to find the one that seems to best capture the pattern I am trading but also has low risk... here is the one I used for that YM trade.

 

http://bp1.blogger.com/_5h-SWVGx6Ms/RqU2u-vXa1I/AAAAAAAAAVU/nrQvUvwUoCk/s1600-h/July+23+ABC+Lower+Timeframe+Entry.bmp

 

I like the '2-bar high' technique for NQ but not for YM. The focus of this thread is just to capture the higher timeframe pattern. The entry and stop technique you use are crucial for risk control but for me, these change over time depending on what is working and what isn't. If you are right on the pattern, it won't matter much what the lower timeframe entry technique you use -- but certainly, it is nice to get into a profit position soon after entering --- or take a small loss and look to re-enter.

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<<same entry? buystop above last 2 bar high?>>

 

Hi Bubba,

 

I have played with lots of short-term entry techniques and currently have a few I select from. I try to find the one that seems to best capture the pattern I am trading but also has low risk... here is the one I used for that YM trade.

 

http://bp1.blogger.com/_5h-SWVGx6Ms/RqU2u-vXa1I/AAAAAAAAAVU/nrQvUvwUoCk/s1600-h/July+23+ABC+Lower+Timeframe+Entry.bmp

 

I like the '2-bar high' technique for NQ but not for YM. The focus of this thread is just to capture the higher timeframe pattern. The entry and stop technique you use are crucial for risk control but for me, these change over time depending on what is working and what isn't. If you are right on the pattern, it won't matter much what the lower timeframe entry technique you use -- but certainly, it is nice to get into a profit position soon after entering --- or take a small loss and look to re-enter.

 

 

I like to see this specific timing Dog... thanks Walter.

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<<I like to see this specific timing Dog... thanks Walter.>>

 

I will try to post some more of those too. Specifics are indeed crucial to futures trading. Was just trying to re-iterate/explain my key point: short-term techniques ('trading tricks') generally are going to be a coin-flip without some analysis of higher timeframe 'structure'...

 

but one without the other is kind of useless as you can't enter good reward-risk trades without the lower timeframe entry technique.

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<<Are you considering the parabolics on 2 min for exits ? they look very nice...>>

 

Not usually, I generally just put limits out in pieces and see what fills and what doesn't. I like the CONCEPT of parabolics a lot (start with wider stop and exponentially move it closer as time passes). But I have found playing for # of ticks to work better... ie, play for 15-20 ticks with 15 tick stop. usually though, I will take 1/3 to 1/2 off after the first good push -- somewhere around 11/12 ticks... and exit other piece(s) on 2nd good push...

 

today I entered and stopped for 15 ticks... it ran up another 26 ticks above that stop-out level -- then I re-entered and made 34 ticks back down... so on that 15-min I was 1-1 for +19 ticks....

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Just awesome trading environment right now. Huge swings and clean patterns...

 

This is an incredible 1600-tick pattern that set up this morning on NQ. Look at the follow-through here. Needless to say, I didn't catch most of this as I didn't manage to save a piece and play for big move (bad exit technique)-- but the entry was excellent...

 

(Note that 1600t chart is similar to a 15-min chart but the 1600-tick chart is used for 24-hour pattern trading when volume is lower. I use both to scan for patterns... have found both to work).

 

http://bp2.blogger.com/_5h-SWVGx6Ms/RqfGOuvXa5I/AAAAAAAAAV0/pmAAy0lrUo0/s1600-h/July+25+NQ+ABC+1600t.bmp

 

here was my entry:

 

http://bp0.blogger.com/_5h-SWVGx6Ms/RqfFPOvXa4I/AAAAAAAAAVs/AX0OywkaeB4/s1600-h/July+25+NQ+ABC+300t.bmp

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<<same entry? buystop above last 2 bar high?>>

 

Hi Bubba,

 

I have played with lots of short-term entry techniques and currently have a few I select from. I try to find the one that seems to best capture the pattern I am trading but also has low risk... here is the one I used for that YM trade.

 

http://bp1.blogger.com/_5h-SWVGx6Ms/RqU2u-vXa1I/AAAAAAAAAVU/nrQvUvwUoCk/s1600-h/July+23+ABC+Lower+Timeframe+Entry.bmp

 

I like the '2-bar high' technique for NQ but not for YM. The focus of this thread is just to capture the higher timeframe pattern. The entry and stop technique you use are crucial for risk control but for me, these change over time depending on what is working and what isn't. If you are right on the pattern, it won't matter much what the lower timeframe entry technique you use -- but certainly, it is nice to get into a profit position soon after entering --- or take a small loss and look to re-enter.

 

ok.. great charts and commentary.

i really like the setup!

:D

 

thanks again

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YM was awesome today with very clean patterns -- I made a lot trading YM today. Here is the very nice ABC up in the morning session:

 

http://bp3.blogger.com/_5h-SWVGx6Ms/RqkXYevXa7I/AAAAAAAAAWE/De4D4kZHD4Y/s1600-h/July+26+YM+ABC+UP.bmp

 

The morning move in NQ was very complex and I did lose money trading NQ today. In the morning, I really didn't understand what was going on in NQ at the time --- I got nailed on a short and then made that money back on another short -- but I don't think I read the pattern right -- the short-term trading technique was good enough to make me a profit. My net loss came later in day when I tried an entry for a potential overnight down-move but I stopped out on the little extra push up.

 

Here is the NQ 24-hour chart. This is a pretty wild chart and very difficult to figure out the correct 'spots' for high-reward, low-risk trades. The second magenta circle in retrospect would have been the best spot for a short in retrospect --- I just couldn't figure this pattern out in real-time. Only later could I put it together.

 

http://bp1.blogger.com/_5h-SWVGx6Ms/RqkcP-vXa8I/AAAAAAAAAWM/2N0fDePUARc/s1600-h/July+26+NQ+Trend+Reversals.bmp

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