[shooting star] Tweezers & Shooting Stars

[enochbenjamin 10]

My bread and butter trades are scalps of shooting stars and tweezer tops into some sort of resistance.

 

Ideally one of the two candle formations will occur after a nice price move up to resistance. Today there was a $1 move up in oil that gave a nice shooting star in to resistance.

 

 

If I am on top of my game I will short 3 contracts with a 5 tick SL. I will take the first off at 8 ticks, the second at 13 ticks and the third off for 21 ticks. In crude oil (CL) my main vehicle thats $150 risked for $420 in profit. I almost always get the 8 ticks so even if I get stopped out before hitting my next two targets it is only a loss of $20. Very low risk trades.

 

The beauty of oil is that there are 3-4 opportunities to take this type of trade almost every day.

 

I define resistance as any level where price will pause and give you a bounce. In crude oil it is rare for price to just blast thru these levels. Usually price will approximate the level and quickly bounce. Then it may test the level again, completely retreat or blast thru. I am only interested in the initial bounce and tweezers or a shooting star into any resistance level give me the confidence to take this trade.

 

Please feel free to comment and/or share how you utilize tweezers and shooting stars.

[enochbenjamin 10]

Yesterdays crude oil action presented an opportunity to short both a shooting star and tweezer tops.

 

 

In this example both the shooting star and the tweezers occurred at the second SD (VWAP)

[brownsfan019 17]

EJ - can you explain how you enter b/c I'm not sure how your entry level is identified on that chart. Are you anticipating the candle pattern to form or do you wait for some sort of confirmation?

 

Thanks.

[enochbenjamin 10]

EJ - can you explain how you enter b/c I'm not sure how your entry level is identified on that chart. Are you anticipating the candle pattern to form or do you wait for some sort of confirmation?

 

Thanks.

 

It is a little easier for me to enter with a shooting star. I already know and am watching the Resistance levels. In the above example the pivot was 7489 and the second standard deviation was just a few ticks away providing a resistance zone (for me). So as soon as I see the price retreating and the shooting star forming i will enter. I enter before I get confirmation as to keep my stops as tight as possible. In the first chart I posted you will see my stop was 7 ticks and not my standard 5 - that was because I did not catch it fast enough to have my stop above the star.

 

If you want confirmation you could wait to enter below the close of the shooting star candle. This increases the amount you have to risk and is much harder with tweezers.

 

If there is a confluence of resistance levels (R1, 2nd SD, 00, yesterdays high) at/near the same price I have been known to set a limit with a wider stop to account for an overshoot. Then once the overshoot does or does not occur I quickly reduce the stop to 5 ticks and let the chips fall.

[daedalus 10]

Very cool thread. Thanks for sharing with us. This is the kind of stuff that keeps this forum a great place to spend time and learn.

 

Can't wait to see more!

[enochbenjamin 10]

Just wanted to point out that all of my examples will be shorts at resistance. I am a directional trader who firmly believes that deliverable commodities have built in selling pressure so no matter how bullish the markets become there will be ample selling at almost every level.

 

Also for some reason support levels are more "grey" than resistance levels so my tight stops do not work as well at support. I would love to hear from others so I can learn if this is a bias I have or if there is some consensus on the issue.

[brownsfan019 17]

EJ - do you have an EL code you can post for the vwap bands?

[enochbenjamin 10]

EJ - do you have an EL code you can post for the vwap bands?

 

Unfortunately i do not. I discovered VWAP here in the Jperl threads. You might find code over there.

 

i use x_trader and vwap is a standard feature. please note that all vwaps are not created equal. I have tried it in several software apps and found only three to be accurate: X_trader, Ensign Windows and Investor R/T.

 

To be 100% honest I do not really understand how SD works - all I know is that after observing it for over a year price rarely goes much further than the 2nd SD. Since trading is a probabilities game knowing that the 2nd SD is a price extreme gives me a little edge. Add a significant resistance level and vavoom! (felix the cat)

 

Now if I could only be so disciplined to only take those high probability trades :doh:

[enochbenjamin 10]

EJ - do you have an EL code you can post for the vwap bands?

 

Nothing to do with trading - but where did u get EJ from? I have never been called EJ before. My first name is Enoch and my middle name is Benjamin. Just curious???

[ochie 10]

"EJ - do you have an EL code you can post for the vwap bands?"

 

Here is the link to the VWAP/SD ELD:

http://www.traderslaboratory.com/forums/f46/vwap-indicator-1sd-2sd-bands-2175.html

[brownsfan019 17]

Nothing to do with trading - but where did u get EJ from? I have never been called EJ before. My first name is Enoch and my middle name is Benjamin. Just curious???

 

I guess EB would be more appropriate. I just grabbed the E and the J I saw in your name. Easier than typing the full thing out.

[enochbenjamin 10]

[enochbenjamin 10]

Here is a video I shot of me missing my setup (over 1 tick):

 

CL_trade_1.29

 

It is a small (technically not a shooting star) just above the negative SD. I draw a trendline which if broken coincides with SD. price almost immediately drops 30+ cents.

[Zunaa 10]

Here is the link to the VWAP/SD ELD:

http://www.traderslaboratory.com/forums/f46/vwap-indicator-1sd-2sd-bands-2175.html

 

Have you checked the ELD, because the code is not accurate...

[Tams 20]

Have you checked the ELD, because the code is not accurate...

 

 

..... ..... can you elaborate?

[enochbenjamin 10]

Late afternoon trade in ES - I got out quick as I am not 100% comfortable with ES but a nice trade nonetheless:

 

[Zunaa 10]

..... ..... can you elaborate?

 

 

I really dont know what the intend of the person who coded those bands is/was, maybe for their use that code works fine.

 

That said if the intend is to have the bands above/below the VWAP by x SD then it is not accurate. See the screen shot below. The VWAP is accurate but the bands are not accurate, they dont line up.

 

Regards,

zunaa

[ochie 10]

I really dont know what the intend of the person who coded those bands is/was, maybe for their use that code works fine.

 

From what I seem to recall, the intent by the programmer was to have the tool match what Jperl was demonstrating in the Market Statistics thread as close as possible. Comparisons were made to other implementations and it most closely matched the Ensign ESPL code used in the Market Stats thread.

 

What are you comparing in your screen shot?

[Zunaa 10]

From what I seem to recall, the intent by the programmer was to have the tool match what Jperl was demonstrating in the Market Statistics thread as close as possible. Comparisons were made to other implementations and it most closely matched the Ensign ESPL code used in the Market Stats thread.?

 

Fair enough, I was not aware of this fact. My comments were made in reference to someone asking about VWAP Bands in post that was not involving Jp work.

Im not familiar with jprl work, All though I know of a trader with that handle that used to log in a trading room which I participated in. from what I recall, he posted charts with somehting similar to VWAP and some SD bands. Yet I dont know him personally i.e. My focus was Price Action with a concentration on volatility and him being very focused on Statistics, our style of trading was very different so we didnt really have much in common to talk about. I guess The only thing we did have in common was Voltility. Thats as much I know of him.

 

 

What are you comparing in your screen shot?

 

The screen shot shows the ELD you referenced over my VWAP and (3) SD Bands. This why I said that ELD is inaccurate... That is if ones intent is to project SD bands from VWAP.

 

 

 

Regards,

Zunaa

[sevensa 10]

The screen shot shows the ELD you referenced over my VWAP and (3) SD Bands. This why I said that ELD is inaccurate... That is if ones intent is to project SD bands from VWAP.

 

How do you know that yours are correct and not maybe the other one with yours having the incorrect SD Bands?

[enochbenjamin 10]

[enochbenjamin 10]

Tweezers at any significant support or resistance level are usually pretty reliable.

 

 

note: in the image i mistakenly labeled S as R. The tweezers formed at support.

[enochbenjamin 10]

[jack411 10]

 

 

What are you basing your S/R levels on? Just wondering if these are major levels (ie. daily monthly) or just intraday levels? Earlier you mentioned you use VWAP intraday as well, correct?

[enochbenjamin 10]

What are you basing your S/R levels on? Just wondering if these are major levels (ie. daily monthly) or just intraday levels? Earlier you mentioned you use VWAP intraday as well, correct?

 

I use VWAP + pivot points. The green line was S1 which because price was below acted as resistance.