Futures I Trade Show & Brooks Book

[ACS 10]

Once again a trend from the open. In my opinion the best trade was on the third bar. ES opened gap down and formed a bull trend bar. The second bar went below the first and below the low of the prior day then reversed up forming a bull bar and likely trapping bears. Entry was at 894.50 and quickly gave a scalper's profit. Those lucky enough to trade multiple contracts could have just let the swing portion go all day although getting out between 911 and 912 was not a bad strategy when the market went below the 911.50 swing low. Next best trade was at 897.00 when the market dipped below a small bear bar and reversed up also likely trapping bears. H2s after the next two bigger pullbacks came in barb wire and the two that worked were H3s at 903.25 and 912.75 likely leaving behind those waiting for the H4. The afternoon was a mess although the bull trendline was broken by the selloff from the highs and the late rally could have been a test of the extreme. That at least is how I'm marking my charts.

[szubaark 10]

We already had a test of extreme from Long after EMA Gap. Then spike down and another run up. So we went Twice below EMA Gap. The second downspike was just a Flush (Stop Run) U had a lot of people going Short thinking Reversal, then they took it up. Too many games for me.

[forrestang 10]

PC crashed, so I was on my backup.

 

...............................

[szubaark 10]

6/26

 

Today is a good example that you need more then just seups to be Profitible.

 

We had 7pt Range. Below the EMA we had good seups for Double Bottom Bullflag H2&H3's and EMA GAP. THEY ALL WERE FAILURES. Entry candles were taken out immediately following Entry. Average Stop -2. Also If you Reversed for Reversal Failure Failure you would be also Stopped on next candle.

I took 7 Stops in a row for Over -10 Points (1 contract) Day like today could easily wipe out all your Weeks (months) Profits.

And please dont say YOU WERE TRADING Barbwire, because we had good momentum Since OPen, 2 Legs down. You anticipate most bardwire around lunch or around EMA, Price was well below the EMA (momentum was strong)

Edited June 27, 2009 by szubaark

[forrestang 10]

6/26

 

Today is a good example that you need more then just seups to be Profitible.

 

We had 7pt Range. Below the EMA we had good seups for Double Bottom Bullflag H2&H3's and EMA GAP. THEY ALL WERE FAILURES. Entry candles were taken out immediately following Entry. Average Stop -2. Also If you Reversed for Reversal Failure Failure you would be also Stopped on next candle.

I took 7 Stops in a row for Over -10 Points (1 contract) Day like today could easily wipe out all your Weeks (months) Profits.

And please dont say YOU WERE TRADING Barbwire, because we had good momentum Since OPen, 2 Legs down. You anticipate most bardwire around lunch or around EMA, Price was well below the EMA (momentum was strong)

 

Thanks for sharing!

 

I honestly didn't have such a good read on the day either. If you were looking to try to swing any position seems like you'd be in trouble. One had to be quick to take profits at prior resistance levels. Had trouble seeing second entries. Thieving bastards:angry:

 

Morning started off with a good Bull Flag setup that would have yielded slightly more than a scalper's profit to pretty much fill the open gap to the tick before selling off.

 

Next we had a move up to the Down Trend line, but the entry was guarded by BW, so not a great setup. Price then Broke the TL with ok momentum (making me think we'd have a good move up after the test), before coming back to form a HL. Not much follow through at all.

 

Next we had a few hours of sideways price hovering around a flatlining EMA. We had an H2 out of it, but nobody is counting at this point and waiting for further price action.

 

Finally we had a good move up, then a retracement that gave us a H1 followed by H2 at the EMA for entry, which IMO was the best trade of the day. You had to be quick to snatch profits at yesterday's high.

[Gabe2004 10]

6/26

 

Today is a good example that you need more then just seups to be Profitible.

 

We had 7pt Range. Below the EMA we had good seups for Double Bottom Bullflag H2&H3's and EMA GAP. THEY ALL WERE FAILURES. Entry candles were taken out immediately following Entry. Average Stop -2. Also If you Reversed for Reversal Failure Failure you would be also Stopped on next candle.

I took 7 Stops in a row for Over -10 Points (1 contract) Day like today could easily wipe out all your Weeks (months) Profits.

And please dont say YOU WERE TRADING Barbwire, because we had good momentum Since OPen, 2 Legs down. You anticipate most bardwire around lunch or around EMA, Price was well below the EMA (momentum was strong)

 

 

Why not call it a day after 3 losses in a row? or whatever number you like.

I call it GOING NUTS when I have one failure after another but i still hope that the the next one IS THE ONE.

There are many good days with clear setups that materialize.

On days that I get whacked time after time, I look back at those days and I realize that i was revenge/hope trading and that is a NO NO.

[djohnsonhot 10]

This is my first take on Al Brooks, in this forum, since I read all of his articles and saw the slide show (.mov file I downloaded from the Sanuk forum, which is all about price action).

 

First, let me say that I am trading only two set-ups, based on the same ingredients (long a short):

 

1. I look for the predominant trend that I can determine at the time of the trade and based upon the previous 30 minutes to 1.5 hours of trading, depending on the time of day. I do trade pre-hours, but have lost money more times than I made money doing so.

 

2. So, for example we have a topping situation, where a double top (DT) has occurred and I am convinced we are rolling over......since I use volume and other indicators ON TOP of price action (PA), then I have to be very convinced that we have now gone into a short trend for the time being.

 

Also, bear in mind that I TRY to trade Elliott patterns. I say try, because there are so many ways to identify an Elliott wave. For those of you who understand that WAVE 3 is the "meat wave", then you will understand as well that I am looking for a short downturn wave from the top (zero point) and I am convinced that the first wave (point 1) has been achieved.....I will know that because I will see a pull-back to point 1. Then, I see the PA takes us into Wave 3.

 

With that, here is my set-up.

 

3. I look for Doji to form and place my short trade one tick below the low of that signal bar. These Doji bars (hesitation bars, better if they are Doji Stars) give me pause to wait and see a new lower OR EQUAL open in relation to the Signal bar. That opening PA, with momentum, and I will wait at times for the typical counter move a tick or two, is that I enter with that one tick of continuation into the next bar. I immediately place my stop at one tick above the signal bar.

 

4. My order is placed with an ATM strategy in Ninja. The strategy is I enter with 10 contracts, or 6 contracts in two entries (I often scale IN, not out) and take 1/2 off once my initial six ticks are achieved at +3 ticks past my entry. I often CANCEL my ATM's if I see a swing trade occur on a single DOWNWARD candle bar, that confirms my entry was a good one.

 

=====I hope I am not confusing you all...but, let me say that I often scale in on GREAT entries and double down at twice the contracts (simply by pushing the MARKET entry button in Ninja)....this is contrary to a lot of thinking out there.....I also am very reluctant on a GREAT entry to let the BE+3/ 6 ticks of profit ATM go if I see that I have good swing. I am fast to cancel ATM's in that way===

 

Now, I begin to move my stop order down (to exit) once I see plus 8 ticks fo profit...this is my average exit, should I have scaled in OR canceled my automatic trade stop and target.

 

5. Now, I wait until the next pull-back LONG in this short trend and re-enter for WAVE 4 to 5 in Elliott terms.

 

I only take one of these a day. I will wait all the way thru lunch and if I do not see a perfect topping, as we did on Friday, then I will not trade.

 

I also have a PLT trading auto-signal NinjaScript loaded, with very tight restrictions (Meaning, I want more bars to print to give me long or short signals).

 

My hard and fast rules: NO counter trades, only in the direction of the trend - - which again is a trend I know with great authority is actualized. I will never ever counter trade into pullbacks. I look for DT's and DB's.

 

Finally, I trade H pattern entries. These develop all day long. I also trade inverted H patterns. These are based DB's and DT's and are easy for me to find as I have been trading those for over 2 years. Brook's video touches upon H patterns but he does not call it such. Instead, look for long runs upward or downward, and then look for the second LL (or HH) to be a few ticks beyond the first low or high....then enter a trade long or short and stay in the trade until they exhaust themselves into a Doji, or a top, and then do the same with your pullback entries....

 

I hope this all makes sense.

[djohnsonhot 10]

I made a mistake: I look for Elliott pullback into the POINT 2 and trade in the direction of the trend into WAVE 3.

 

Also, my Signal candles are Brooks' signals (on a short, a pullback to a failure to go long or a HH failure in that pullback).

 

In essence: look for failed reversals (which are range-limited pullbacks) against the true trend (long or short)...these failed reversals are in Elliott parlance 1 to 2's and 3 to 4's....the meat waves in Elliott terms are 2 to 3 and 4 to 5 waves. I ignore the shorter runs, the A-B-C patterns and the 1 to 2's and 3 to 4's because these are all pullbacks or LIMITED RANGE entries.

 

The predominant rule is that I do not trade anything but meaty trend trades and all you need is one a day to make money or easily off-set the small loser trades.....the better the trader, the more limited your losses are because you are hopefully taking losses on failed entries which are limited...if I take a loss and then the trade WAS OK (good entry after all), then I just simply say that another trade will occur.

 

Finally: never trade Triple witching, and beware expiration days and Bernanke hours or Obama hours, and be careful on Mondays and Fridays...all you need are two to three profitable days in a week and six figures is easily achievable.

[ACS 10]

Why not call it a day after 3 losses in a row? or whatever number you like.

I call it GOING NUTS when I have one failure after another but i still hope that the the next one IS THE ONE.

There are many good days with clear setups that materialize.

On days that I get whacked time after time, I look back at those days and I realize that i was revenge/hope trading and that is a NO NO.

 

I have to agree with Gabe. With 1 point wins and 2 point stops (and you do have to give 2 points for the stop) the math is brutal. It takes 3 wins to take you into the black after one loser (unless you are able to trade multiple contracts and get some bigger swing profits) therefore 2 losses are enough to trigger my daily stop. The odds of getting 5 or 6 consecutive wins after 2 losers is not something I want to risk. Discipline!

[BlowFish 10]

6/26

 

Today is a good example that you need more then just seups to be Profitible.

 

We had 7pt Range. Below the EMA we had good seups for Double Bottom Bullflag H2&H3's and EMA GAP. THEY ALL WERE FAILURES. Entry candles were taken out immediately following Entry. Average Stop -2. Also If you Reversed for Reversal Failure Failure you would be also Stopped on next candle.

I took 7 Stops in a row for Over -10 Points (1 contract) Day like today could easily wipe out all your Weeks (months) Profits.

And please dont say YOU WERE TRADING Barbwire, because we had good momentum Since OPen, 2 Legs down. You anticipate most bardwire around lunch or around EMA, Price was well below the EMA (momentum was strong)

 

I am not sure I should post this.....trying to be constructive but not sure there is anything here of help really. it was a tough period for a scalper that's for sure. Here goes anyway.......

 

Easy to sit here with the benefit of hindsight and find reasons why there where failures. Still...... I don't really think there was good momentum off the open, the whole area was kind of 'rangy'. Tim Morge calls this sort of action rolling chop, apt enough description. We are moving down but there is a lot of 'backing and filling'.

 

If the trendline that you drew was the 'boss' not looking at longs until its broken and the extreme re-tested keeps you safer, well a bit safer. The troublesome area was a tight range.....if the market is out of phase with your 5 min bars you get bars going red green red etc. rather than a string of doji's not really possible to know that until it had developed somewhat of course. (I know, I know you said don't mention barbed wire!)

 

Thinking about what potential is in the trade might help, is there a good couple of points to the last SH SL? Assuming that is the likely place that price will go next.

 

To be honest I'm glad I wasn't trading that.

[Kiwi 16]

Good point Blowfish,

 

Sometimes you just have a day that doesn't suit your strategy. Today, by my definition of trend HSI had 9 trends ... 9 ... and you can guess that when I say my strategy is a little like Brooks and I only do the trend trades it was a tough day.

 

On the other hand Midknight is (from my definition of trend) mainly a countertrend trader and he had a fantastic day today.

 

So its not that you need more than setups ... you just have to accept that some days won't suit some setups. Such is life. Tomorrow is another day.

[forrestang 10]

Today was an awesome day for learning. I feel as though I learned a ton from trading today. I actually wound up slightly in the red, but that was mainly due to stupidity. I knew what had to be done but got impatient into placing orders.

 

The chart should be self explanatory.

 

But there was strong reversal in the morning. Not sure how to catch these without some reversal pattern, at the very least a DBBF? Then into nice sideways action. When this happens, we want to fade the range.

 

In particular we want to fine SMALL bars occuring near the extremes of the range. When we see a fbo of some sort, we can then relax and expect two legs toward the opposite side of the range which happened several times, as opposite traders who entered the fbo will now be trapped, and their covering will help our position. All other fades were generally quick scalps it would seem.

 

On another note, on Wednesday, I will be in the "Pure_PA" chat room if anyone else is capable of dealing with the distractions of the chat room.

 

Forrest

[szubaark 10]

I hope you realize that most of these FBO were +5,+4 Failed Tick Scalper Profit. So you woudnt be able to even get your Scalper Profit, then it would turn back on you and Whack you for -2 Point Stop (What Al recommends)

 

That range was a Tight, Controlled 1PT Range.

 

Also that SHort u missed by 1 Tick, was HUGE COUNTER TREND NO NO.

U had a Doji at Top of a Strong Bull day, i was looking for a Long 1 tick above High of that Doji. inside bar formed instead, and i was afraid of WHIPSAW both ways which USUALLY happens LOL

 

anyways, another shitty day. At end of day, it looks all CLEAR of course.

[Kiwi 16]

At end of day, it looks all CLEAR of course.

 

LOL. Aint that the way. :crap:

 

My day (Tuesday) starts in 1.5 hours ... and I've just had GOOD NEWS. Torchwood will show in Australia only a couple of hours after it plays in the UK. Life is good. The world is fair. I think that even the markets will be kind on this last Tuesday of 2008/09.

 

Happy New Financial Year everyone

[forrestang 10]

I hope you realize that most of these FBO were +5,+4 Failed Tick Scalper Profit. So you woudnt be able to even get your Scalper Profit, then it would turn back on you and Whack you for -2 Point Stop (What Al recommends)

 

That range was a Tight, Controlled 1PT Range.

 

Also that SHort u missed by 1 Tick, was HUGE COUNTER TREND NO NO.

U had a Doji at Top of a Strong Bull day, i was looking for a Long 1 tick above High of that Doji. inside bar formed instead, and i was afraid of WHIPSAW both ways which USUALLY happens LOL

 

anyways, another shitty day. At end of day, it looks all CLEAR of course.

I'm a bit confused at what you're pointing out?

 

All the fbo's yielded @ least a scalper's profit. And 2 out of 3 on the top had two legs down for well more than a scalper's profit. The last one at the top of the range moved all the way down to the other side of the range in one leg .

 

The first fbo on the bottom had two legs up to the other side of the range. The 2nd fbo on the bottom (also a failed Low2) moved all the way down through the bottom of the range and failed to break further......THEN moved up back to the top of the range. The last one would have been a funky entry as you'd have to have waited for the close of the bar as suggested.

 

None of these entries would have hit a 2 point stop. You could have gotten stopped out many times by adjusted your stop beyond each bar, but with a 3 pt range, Brooks suggests givng your trade room to work if it hasn't moved at least 4 ticks.

 

That last one missed by a tick, I don't think that was a bad trade? Definetely questionable, but not a horrible setup. It was a doji bar, but....it was at the top of the sideways range we'd been in all day. I wouldn't call this a strong bull day, I actually would ignore and disregard that strong trend early int he morning. This wasn't even a spike and channel bull where you get a strong move up and then at least an increasing channel, it was absolutely flat with no encouragement from the bulls.

[szubaark 10]

Today was safe giving your trade room and not letting next candle High Low Stop you out since the Range was so tight. BUT you NEVER know when we could get out of the Range on a 5-10PT Spike (happened last week), then instead of -2 Point Stop, your Stop would have been -5.

 

If you Shorted the Top of Range and Bought Bottom then u got your Scalp Profit, BUT if you waited for Signal Entry, they failed. Even small candle at bottom after spike next candle made lower low to take you out UNLESS you didnt scale by next candle high/low.

 

I prefer to scale Stop by next Previous candle high/Low because you never know when it can Spike against you.

[BlowFish 10]

I hope you realize that most of these FBO were +5,+4 Failed Tick Scalper Profit. ....snip....

 

Funny you should mention that. Here'e the thing I don't think the ES is a great instrument to scalp (well sometime isn't). Al talks at length about how many ticks move you need to get a scalp etc. and the ability to trade 200 as easily as 2. I have traded the ES on and off for a while and can remember when 10 point (and less) daily ranges where common.

 

If the distance between the BO (break out) and the previous swing (see enclosed chart) is not enough for a scalpers profit you might want to consider passing the trade.

 

Anyway sometimes the ES is kinda lifeless and with holidays upon us there will likely be some pretty lack lustre days. Another thing to look at is the infamous 'bigger picture' after a couple of days of momentum (especially if the last one backs off from the extreme on high volume) you might anticipate a day (or three) of narrow range listless low volume trading. I don't have anything formal along those lines in my plan but certainly something to be aware of.

 

Anyway here's a DAX chart from this morning. I thought the action is kind of similar to the ES chart that was posted. Not unreasonable to take a short at the bottom there which gave a comfortable 8 or 9 ticks to the previous low the actual move went a wee bit further despite the fact that you would have been on the wrong side of the market from the point of view of a swing. Maybe other trades there....I woke up late.

 

Long story short the ES sometimes lacks volatility for scalping (imvho).

 

EDIT: <doh> actually the entry should have been a few ticks better triggered off the 2nd white candle

[djohnsonhot 10]

I waited all day on Monday, the 30th, to pick up the quickie profit when we broke the range...made $725 in less than a couple of minutes...I also caught the pre-market action.

 

Today, news may drive some break-outs...beware that action. Sometimes I will trade 30 seconds into the news. I also am looking for bullish or bearish action 45 seconds to a minute prior to news releases because the insiders will sneak in with buying or selling...I will take the other side of those trades for 3 ticks, and 10 contracts. Fast money, heart-stopping, pure Las Vegas trades...not for the faint of heart.

 

But, then again, this entire Emini trade takes stamina. If you are not clearing 4 points a day, then another job may be in order.....

[szubaark 10]

"I will take the other side of those trades for 3 ticks, and 10 contracts. Fast money, heart-stopping, pure Las Vegas trades...not for the faint of heart."

 

Yea and you probobly had 3 heart attacks already and your hair is falling out.

[mbfromla 10]

Hi guys, I'm almost done with the book, and this is what my understanding about trading price action, the chart is for 06.29.09

 

I've been trading for a while, and from what I understand, 80% of so of a time, if a trade doesn't immediately work out, most likely it will go against you. Therefore 90% of a time if a trade is over 4 ticks against you, most likely stop will be hit. So im thinking to have a 6 tick stop in a regular volatility day.

 

Also, If anyone is serious about trading price action, a few of us could form a chat room on yahoo to discuss it live during market hours, if someone is interested please drop me an email at job858@yahoo.com below is the chart,, comments will be apreciated,,,hope it's not too confusing

[mbfromla 10]

Here's a chart from 6/23 I'll get better at explaining the charts, but this is so far what I see as potential trades.

[mbfromla 10]

This chart is for today 06.30.09 Perhaps I'm missing some points, but overall was a very difficult day to trade except the large down at the open.

[BlowFish 10]

..... if a trade doesn't immediately work out, most likely it will go against you. ......

 

This is a function of taking a BO of the previous bars high/low. You are always entering with the immediate trend (in respect to the last 5 minute bar) and so would expect momentum to propel the BO.

 

6 ticks has always been a popular point based stop on the S&P though as you observe the current volatility is whats key.

[ACS 10]

I've been trading for a while, and from what I understand, 80% of so of a time, if a trade doesn't immediately work out, most likely it will go against you. Therefore 90% of a time if a trade is over 4 ticks against you, most likely stop will be hit. So im thinking to have a 6 tick stop in a regular volatility day.

 

You save 2 ticks on your losers but every trade that would have been good with a wider stop is a swing of 10 ticks in the P&L. You really need a large data base of trades to make the right decision. Al mentions smaller stops in some of his articles but the presentations and book all stress 8 ticks for normal markets. I defer to his experience.

[djohnsonhot 10]

The best traders I know of enter with 3 tick stops. Period. They get out fast. I am not that good.

 

The subject, and debate about how many ticks of heat should we (lesser experienced) take SHOULD be based upon how you assess your entry at the time of your trade entry. Sounds easy, huh?

 

Let me tell you that when you do find that magic entry, and your profit is immediate and obvious, I would say that you can see it with your own eyes, and your entry is clearly a winner. Most of the time, when I have nailed a topping point (let's say for a roll-over to a short trend from a day high, and volume confirms it, and momentum is clearly on your side) then I loosen my stops and let a runner run. I use the PULLBACK strategy that Brooks KIND OF describes: an attempt to go higher on short that fails.

 

I'll actually SCALE IN on those entries. I'll start with 2 to 5 contracts and then re-enter on the next break level until I hit my max contract size for any entry.

 

How many times a day doe this happen? Twice, maybe. ALWAYS on the second leg..always...after a major reversal. Those are those magic runs that you say, "wow, I missed that one." And thus: I tend to lose on the entries where I was late to the game (did not recognize the trend in fact did change or rolled) and did not clearly see that wave three was well on its way ....in Elliott terms (or, as Brooks says it, the second "leg" from a bottom that he mentions at about 45 minutes into his Static Slide show).....

 

If we have a choppy day, as we have seen lately after a single run-up or whatever, then I move my stops to 3 ticks...remember chop is essentially just that: limited in range.

 

For example, If your average daily range for the last 5 trading days has already declined to low point for the past 30 days, and then you enter a chop zone of 2 points, then your entries at the bottom and tops of these zones are already limited in potential, so your entries SHOULD be limited anyway (there is very little profit potential in chop). You can chew up profits or put yourself in a losing net for the session and walk away disappointed for the day.

 

When you see chop forming, walk away! Put a shade box around it. Don't trade those zones. In my opinion, you are better off writing checks to the homeless.

 

One is far better to enter during pull-backs in a nice swinging trend upward or downward and as I mentioned earlier, if you find that turning point, then your initial stop SHOULD be loose, and you should move your trailing stop more slowly to take advantage of waves within waves. What I do is wait for each positive price action bar in your favor to complete, and then move my stop to one tick ABOVE that bar for a short trend and below that bar in a long trend. Then wait for the next bar to close and take that stop to a tick above or below the open again.

 

On 5 minute charts, there is a way to determine that you are in a good swing and thus SHOULD be looser in your trailing ATM: stacking candles or candles that open at the same price as the closing price, pull back no more than a tick or two and CONTINUE in your favor....just keep SLOWLY moving your trailing stop candle to candle.

 

I am not a teacher, and thus I am struggling with the language here. I hope this made sense.

 

The best traders I know of enter with 3 tick stops. They manage their entries better than newbies or the lesser experienced.