Reaver's Incursion

[Reaver 10]

Okay,

 

What you will be seeing here is a work in progress. It is important to understand that I am not making recommendations or saying that I am any sort of beacon for anyone to follow......this is strictly for my own accountability and also for one to hopefully get some ideas to form their own conclusions and methods from.

 

I contemplated putting this in the journal section, but figured instead I'd post here to contribute to this new swing forum since I have a hard time actually explaining exactly how I trade, no one wants to be spoon fed (even if you think you do, you don't), and I imagine I am not the best guy to learn from anyways....

 

If you see some changes in the method, roll with it, as that is what I am doing. I am always making adjustments and error-corrects to fine tune.

 

The markets are dynamic and I intend to reciprocate that notion.

 

Understand that I am learning this stuff along with anyone watching me...market analysis is a life-time endeavor, not to mention I am moving from classical TA (which friggin works IF USED PROPERLY FOR TRENDFOLLOWING I don't care what anyone says lol)...but unfortunately absolute simplicity works best in trendfollowing TA and that kind of rote simplicity makes for a boring day.

 

I am still going to incorporate some basic trendfollowing ideas for context and also to see if they can augment the auction market analysis...which is the goal, looking for synergy here.

 

USE EVERY RESOURCE POSSIBLE TO GAIN THE ADVANTAGE OVER YOUR ENEMY (yes, the market is your enemy- even the trend is not your friend, it is a mark for you to manipulate and take advantage of! lol)).

 

So with that being said, let us begin.

[Reaver 10]

Okay,

 

To get a start on this, I will explain a little of what I am doing....

 

First, a disclaimer: for my data I am using Cisco Futures data and I do not have permission to post it....no worries though, you don't need to subscribe to it to get my points...I am attempting to recreate the concepts as best as possible using my charts here, which give me a standard look at the market and say similar things that my Cisco Data does....

 

LOL I wish I didn't have to even say this but I am most definitely not spamming, as JayRemy and Ant can attest, Don doesn't play around with his copyright material! By the way, Jay or Ant, feel free to add commentary, since you both studied the same stuff I did for the most part as far as the TCP stuff goes.

 

Anyone else feel free to chime in as well with any questions, concerns, laughter etc. :o

 

Now on to the chart explanation:

[Reaver 10]

Okay,

 

I imagine I will be posting mostly daily charts, though I may drill down some if I feel like it would help explain something, feel free to request it as well.

 

 

1. First, I have a running price histogram using all visible bars on the screen (thanks Jperl for the idea). This gives me a good view of the bigger picture and what the market is doing as a whole. Also, I have a PVP (peak volume price) marker on the histogram, this is the same concept as POC, but POC is only valid in a balancing market, at least in my opinion.

 

2. Secondly, I have price histograms set up for every trading month (appx 20 days) , as this is a good number to use for gauging overall market condition.

 

3. I have a vwap to see what the average price by volume is (of course). Thanks again Jperl. TinGull too for mentioning how you use it as well.

 

4. I have an MMA (no that MMA, Nick1984 ) a multiple moving average set up to gauge short term (3-15 days) and long term (30-60 days) sentiment, if you will. Another way of looking at this is calling blue the traders, and red the investors...not the most accurate description...but it helps, at least for me. Thanks Walter for your posts that gave me the idea to look into this...it's not the same as your VMA, but thanks for the idea of using an MMA....and don't worry I am not encroaching on your territory, brother. :o

 

5. I have a volume breakdown, or buy/sell volume indicator to help interpret the volume indicator below it a little more clearly.

 

6. Lastly, I have old reliable, the classic volume indicator,to let me know what is going on with the transactions and how the participants like it.

 

 

By the way, it would be great if someone would help me figure out how to make the image inside the post itself larger.....

[TinGull 10]

Good stuff so far. Are you planning on a wheat trade? What sort of signals are you looking for to place an order? By the way...I'm writing this post at a live show I'm doing sound for...thought you'd appreciate!!

[Reaver 10]

ha ha Tin you Lucky dog that's awesome man, I would love to hear some live music right now...just something about it soothes the soul. Even if it's loud and hard.

 

Alright, all jealousy aside, as far as the chart I posted, it is just an example of my set up....not necessarily looking for anything in that particular chart....

 

(although the mma could be telling me something right now...as well as the previous histogram.....hmmm)

 

Doggone it I may just have myself a trade set up. LOL didn't even think about that one.

 

Hard for me to explain up front exactly what I look for as it is strictly discretionary....

 

Up front I guess the key things would be using the various reference points together to form an opinion...some of the things I will be looking at of course is the mma to see the overall trend and what the two main time frame participants seem to be doing (remember that's not entirely accurate, but it makes sense to me and is close enough for my purposes), check the overall histogram to see where we are in the grand scheme of things and for major s/r I should watch out for....the shorter histograms give you some great ideas for s/r levels and what you may want to consider looking for...responsive/breakout trade, etc....

 

Volume...well, as that question is coming from the VSA man himself, I admittedly don't have all that down pat yet...so I definitely don't do it justice like you do, but I mainly look to volume to see if I can get a heads up on what price may be getting ready to do weighed against the context of market condition....I plan on developing those skills further by following your threads on it and researching as much as I can....but for now I am just mainly using it as a heads up tool and to help give weight to the other reference points....

 

VWAP, I got that idea from Jperl, and you when you mentioned you used it for overall trend...I use the mma for overall trend, but use VWAP to see it from a VOLUME perspective...compare it to the mma, etc to see of they concur or not....

 

Hope that gives a good enough run down to see where I am coming from so far...

 

Remember, I plan on tweaking this as I get more experience so we'll see where it leads.

 

The goal is to capitalize on what makes us humans function as top of the food chain in the world....the ability to reason and adapt...though it is questionable if many out there possess that trait or not...I am going to at least try. LOL

[chainsawtrader 10]

WOW! This is awesome, heavy duty stuff Reaver. Absolutely terrific and I can't wait to backtest it on ES. Pure genius, I think. Thanks so much and keep this good stuff coming, please. WTG man!

:applaud:

[TinGull 10]

•Intermission right now•

 

Cool, would love to see any examples of trades you've taken in the past to see what you're looking at for entry criteria. I realize you say its really discretionary...as are my entries.

[Reaver 10]

•Intermission right now•

 

Cool, would love to see any examples of trades you've taken in the past to see what you're looking at for entry criteria. I realize you say its really discretionary...as are my entries.

 

Well Tin,

 

To be totally honest with you I haven't really kept any records as far as charts go since I just came up with this chart set up out of necessity to explain how I trade...

 

If you're familiar with Cisco data, I print the graphic off each night annotate the page with the reference points and place trades....hard for me to explain without sounding like a shill for Cisco, but you can check their site out and look at the Visual Graphic and TCP to see what I mean....(delete this if it is out of line) Again, I don't think the Cisco data is necessary, but it speaks to me more than a chart does since it's what I have gotten used to for this method.

 

I am still new at this posting trades in the public thing, but I'll tell you there was a good soybean trade this week (still is). I did not take it, for the record- for reasons mentioned below.

 

I'll go through it on the chart...deal? I think that'll give you an idea of what I look for. Then we'll see everything on a moving forward basis....

 

This chart for the way I trade like I said is something I actually concocted today to a) give me a different perspective on the way I view my trading b) see if the chart gives me some insight that I may have missed by using strictly the Cisco data, and c) give me a chance to explain the way I use auction market theory for trading....the problem I was running into is that I am not allowed to post the Cisco data, as it is a copyright violation....Brownsfan mentioned something the other day about going into detail a little more about the way I trade....and I was kind of stuck, as I didn't know how to explain it without any visual representation...necessity is the mother of invention.

 

That, and with the advent of the swing trading forum....I had to jump in.

 

I like this so far, but if I come up with a better way to translate my data, I may switch it around.

 

I'll get the soybean trade posted to show some of what I am talking about.

 

*I didn't really do much this week because my German Shepherd was sick and needy. Hard to concentrate on trading when your dog won't shut up (And he is more important than trading to me anyway), so I pretty much sat around worthless all week wasting time.

[chainsawtrader 10]

Have you tried this with other instruments on different timeframes? I think you're really on to something powerful here and it may have great potential. Have you conducted any backtesting?

 

Great stuff. Love this forum, too. Definately the real deal. Ty James for creating this state-of-the-art forum and letting me participate.

[brownsfan019 17]

Have you tried this with other instruments on different timeframes? I think you're really on to something powerful here and it may have great potential. Have you conducted any backtesting?

 

Great stuff. Love this forum, too. Definately the real deal. Ty James for creating this state-of-the-art forum and letting me participate.

 

Welcome to the forum saw.

 

While you seem to really like what Reaver has presented here, feel free to do the same. As you'll see in your time here, TL is a community of giving and receiving. You should start a thread and introduce yourself to the forum and tell us about your trading. What are you hoping to gain and provide the forum?

 

Once again, welcome to our little forum my friend.

 

:cheers:

[Reaver 10]

The soybean trade this week:

 

 

 

 

Okay bear with me, as this is something you may want consult your own records of Market profile for, since Ensign apparently doesn't let you select the exact days per profile....oh well...

 

Alright if you look at a five day merged profile you will of the 4th-9th you will see that the market was in a bracketing or balance phase (one distribution)....coincidentally, you may have noticed the MMA short term (blue) lines showed an "agreement" on price/value, while the underlying trend remained strong as dictated by the red lines.

 

You will see that price is right around the vwap, though still above, price and vwap are both well above the PVP/POC (whatever you want to call it) .

 

If you refer to the volume for the day, you will notice a very significant increase from the couple days before it, and a slight increase from the previous day...this tells me that things may be coming to a head...I refer to the buy/sell volume and I see that there is a huge jump in buying vs selling from the day before and recently.

 

If you watched the price you will have seen a jump in volatility as well...notice the bar for the 9th...quite a change from the past couple days...and in a balancing market? hmmm...

 

Even if you used many of these "set ups" separately, you would have noticed some signals....refer to Jperls threads about using statistics, you will see that you are smack dab in the middle of one of his bread and butter setups.

 

At this point you may have considered getting in on the night session, looking for a breakout.....

 

There are factors besides that I am going to look for, or maybe not...just depends on various things....

 

These are a few ideas you may consider for using auction market analysis in your trading.....

 

I had considered whether or not to give away this much, as figuring this stuff out wasn't a walk in the park (maybe I am slow) but there are a couple reasons why I decided to. The fact that I would not have been the first one to share some very important ideas for trading is one, there has been some very high quality material put out by some of the members here. I owe a lot of the guys here for helping me see some things I would have probably missed otherwise...this forum was built on the principles of education and sharing of ideas. It's the least I could do. This isn't my exact edge, but it may give you some ideas for your own trading development.

 

Another thing to remember is that there are many more factors that go into making a decision to put on a trade. Not all "set ups" (I hate even calling them that, it's not very accurate in my opinion)....are anywhere near this cut and dry....and even if you knew exactly what I look for, it wouldn't mean you would see the same thing as me...

 

that's the beauty of discretionary trading....there is no secret method or system to it...AND I am always looking for my trading to evolve, so what I look for now, may not even be applicable or the most appropriate in the future.

 

More to come.....Again remember, by no means am I putting myself on a pedestal, as I have a metric ass ton to still learn in my trading...but hey it's my edge that I have earned, however little it may be right now doesn't matter...I am just glad I found a niche and I am going to exploit it to the fullest extent possible.

[Reaver 10]

Any questions so far? anything I have been unclear on? More to come....the purpose of this thread is not to teach anyone to trade...but to show you what I look for and for you to pull bits and pieces as you see fit for your own methods. Of course I want to make sure I am not confusing anyone by leaving out details I may take for granted. So let me know if I should clear anything up.

 

I am going to be posting upcoming trades moving forward starting Monday (assuming of course, that there ends up being a viable trade on Monday).

[walterw 10]

Nice stuff here Reaver ¡¡ love to see your charts, specially clean... keep them coming ¡¡ cheers Walter.

[TinGull 10]

Very nice stuff. I'm sure I'll have some comments to post when I'm not so groggy.....still early here.

[Reaver 10]

Nice stuff here Reaver ¡¡ love to see your charts, specially clean... keep them coming ¡¡ cheers Walter.

 

Thanks for the compliment Walter! Let me know if you have any questions or ideas....

[Reaver 10]

Very nice stuff. I'm sure I'll have some comments to post when I'm not so groggy.....still early here.

 

ha ha yeah no worries there. You and me both. I stayed up til about 4 for no good reason. I'd definitely like for you to check it out and see if there's any commentary from you.

[Nick1984 10]

Nice stuff there Reaver. You're system is completely different from mine so nice to see someone else! I'm hoping to get back into swing trades once again cause that's where I started out!

 

One your MMA's, I have a question: On your soybean trade the blue cluster dips and you considered that to be the traders agreeing on current price, how do you interpret the dip as an agreement?

[Reaver 10]

Nice stuff there Reaver. You're system is completely different from mine so nice to see someone else! I'm hoping to get back into swing trades once again cause that's where I started out!

 

One your MMA's, I have a question: On your soybean trade the blue cluster dips and you considered that to be the traders agreeing on current price, how do you interpret the dip as an agreement?

 

Nick,

 

Thanks for the response. Pardon my terminology, as it's not the most accurate description (I mentioned that fact earlier) regarding the mma....

 

The purpose of any market is to facilitate trade, not to trend...trend is the search for new value once it breaks out from a previous agreement....basically what I see in the dip of the mma, or perhaps the better word for it is convergence....is that the short time frame participants are agreeing on the current price...ie price is ranging, or bracketing.....Basically when you are in a ranging (balancing, bracketing it's all the same thing) market, time frame participants are agreeing on the price relative to their viewpoint, if that makes sense.

 

Usually (at least from my experience) if you look at a profile of the market at the same area you see a convergence of the mmas you will see a balance area....

 

Another important thing to remember is that I do not use this chart set up to make my trade selection...this chart set up merely allows what I see in my data to be visualized easier....I use 5,10,and 20 day profiles among many other things in not displayed on the charts in my research....therefore reading my charts directly vs what I say may end up being a little different as far as direct comparison...

 

There are many reference points to study such as relative volume, volatility, trade facilitation, longer term profiles, etc lots of stuff.....

 

I hope I cleared it up a little. If I didn't or if you have other questions feel free to ask....I am using my charts for this log mainly to help illustrate the data interpretation I am posting to make trades on if that makes sense.

[Reaver 10]

Okay I see a potential trade coming up. I will post the info a little later tonight once my volume data from Friday comes in. And I get a chance to re-evaluate.

[Reaver 10]

I was looking at wheat for a trade....I would normally be looking for a break to the downside around 8346...but that would be a counter-trend trade...I am not totally against them but I prefer to stick with the trend. Maybe after more experience I will be more comfortable with a counter-trend play, but for now I am going to sit on the sidelines.

 

Note: For the time being I will be watching 30 yr Bonds, Corn, Soybeans, Wheat and the YM.....I may extend this universe out a little further in time..but this is what I am comfortable with for the time being.

 

So...sidelines it is. Good chance to observe wheat to see what would have happened in a CT trade....maybe it will help build some confidence in taking CT moves....or maybe it will reinforce my feelings against taking them.

 

Time will tell..for now, this is a chance for me to sit down, shutup and learn.

[Reaver 10]

Here is a chart for my previous post.

 

[TinGull 10]

Nice. With "drunken rallies" I never can go against the trend. I'd rather wait for the pullback to pull through and buy a ticket on that gravy train.

[Reaver 10]

Drunken rallies, isn't that Jackie Chan movie? LOL

 

Yeah I agree with you there...I have major issues trading against the trend...traumatic experiences with the counter-trend boogieman when I was younger. LOL

 

I really what I think I will look for is a rejection of the lower end ...and get ready to for a long breakout....

 

I'll watch and see.....will post more as knowledge becomes available...

[walterw 10]

Hi Reaver, it is certainly risky to play against this strong trends, but eventually it will exhaust...

 

My view of a posible "less risk" entry in terms of a countertrend would be playing the "false break trade"... would give you tighter stops and best spot for entries...

 

 

 

thats my two cents on counter here... nice job man ¡¡ keep it up ¡¡ cheers The Chimp.

[Reaver 10]

Walter,

 

Thanks that's a really good idea. I am going to put that into my notebook of possible solutions to situations...

 

I'll watch for that and see how it would have played out...especially at the end of the day to see what direction the reference points are hinting at....

 

That does look like a good stage 3 to me so far.....