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Yep, sorry about the typo

 

1183.75

 

The attached chart makes it easier to see what the mechanism is....basically you want to let the market show you a reversal of momentum, and from my point of view the best display of a change of momentum is seen when price tests a BB extreme, closing at or outside the BB then reverses direction moving back inside the band. In terms of my approach, I want to see this happen at the top of an overhead supply node (blue horizontal block). Preferred entry is just below the red arrow...

 

Steve, when taking these trades where is your stop typically, on the other side of the node? And are you looking for another node for your target? I know in this example you're talking about using BBs, but I'm talking about what you typically do.

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Steve, when taking these trades where is your stop typically, on the other side of the node? And are you looking for another node for your target? I know in this example you're talking about using BBs, but I'm talking about what you typically do.

 

Yes sir you are correct, I want to position my stop just outside the node boundary. The way I position them I generally do not see price come back to take them out if I am on the right side of a trade.

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In response to Negotiator's comment

 

I always defer to the tape...that is to say, I am always reading the tape to confirm not only my entry but whether to stay in the trade and where to exit....

 

Also in past I have put a DAX chart in place to guide my trade selection. Until recently the DAX has lead the ES....now unfortunately with mounting concerns about sovereign debt it seems that the DAX no leads and that means that I have to look less to that index and more to the ES alone to make my decisions.

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It can be difficult to use another market as a lead as relationships come and go. Dollar index is a decent gauge for ES at the moment although I wouldn't take a trade based off it.

 

Anyway, for Tuesday I have had an initial look at the story and attached is a chart for you to look at. No rights or wrongs btw. Just showing you a part of what I am looking at at this moment.

 

So one thing to bear in mind is that the overnight picture is not yet complete as the chart is 3.5hrs before RTH open and as always anything can/will often happen. So you have to have an idea of the other side of the story if the market starts to look strong.

 

Yesterday opened pretty much on Friday's high, failed to enter the range, looked higher and then retested the low. After it failed to go much lower, ES basically trended up for the rest of the day. The point that interested me somewhat was that 1200 initially rejected and on further buying towards close, the VPOC for the day was put in at 1199.50 following by a not unusual close within the initial balance at 1196.50 on what was a neutral day. So the VPOC was put in below 1200 after having moved up into close. I think this shows that there were opposing sellers at this point on the first test. To have a better feel for the market today, I would want to see what the action is by open and on open. Just remember that given volatility, news items, eco releases speakers etc. have the potential to move the markets right now.

Tuesday.thumb.jpg.8fc39a05fcdaa9c06c948f9a356dbea4.jpg

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In all, not much was achieved today. A neutral day to follow a neutral day. Although the price action picked up, the objectives set out were defining in containing the ES. More action in this area does create tension for a stronger breakout of the balance. The tighter and longer the balance, the more likely it is to shoot off when balance is broken. Anyway, here's the after chart today.

Tuesday2.thumb.jpg.af831c46613699310469ace76d8d1572.jpg

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This Thread has given me a lot of information about Trading system.

i'm a new trader and still thinking if its best to choose Day Trading system or futures trading system. which is an advice to my by an experience trader

 

Hope you guys can also give me some advice which system should use, and does anyone know of a profitable emini trading system?

Edited by MadMarketScientist
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Right, interesting day today. Lots of data out. Yesterday, ES really didn't end up doing all that much in the end. Balance range was extended but nothing really changed. Pre-open, we've been testing those levels I had mentioned as important...

 

Breaking through post releases.

5aa7109979238_Thursdaypre-open.thumb.JPG.51e87d93671a5023c0057aee9663ba01.JPG

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Er Philly Fed? All I have to say is OMG! -30.7 exp 2.0

 

Yes, thought it was a typo at first when I read it.. I'm trading oil and we were at a perfect spot technically for a short anyway, but when it plunged that way I knew the numbers were bad, and sure enough, worst in 2.5 years.

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Yup and because of where we are technically, the kind of sell-off moves we have seen recently AND options expiry, panic kinda set in. Two options(choices). One scalp as you probably get the same reward as you would normally, or two really bide your time, wait for good areas and make sure you close out positions quick if they aren't going the way you expected (including how not just direction).

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Er Philly Fed? All I have to say is OMG! -30.7 exp 2.0

 

OMG or "YESSSSSS!" Marv Albert style, since you could just close your eyes and short it. It's gotten choppy down here, but if this base fails we could be back to last week with huge volatility.

 

EDIT: By the way, this reminds me of the first bear move we had in '08 where things would calm down and retrace a bit and get hit by another terrible news release.

Edited by sdoma

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:shrug: Straight over my head on the Marv Albert comment I'm afraid! I did just youtube it though! Lol. At the risk of sounding silly later, there are a few signs that we're starting to find and build value here. The VPOC from last week at 1142, today's VPOC currently 1140 and VWAP closing down at 1144.50. We'll have to watch it closely, but I think it's worthy of noting. What do you guys reckon?

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Lookie here, we're working our way back to the lows, and so late in the day! Traders have been playing for a rally since we made the lows. Very interesting.

 

EDIT: In the 30 seconds it took me to type that, the dow popped like 25 ticks. Guess they're still going for that rally.

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Again I appreciate the idea of using MP concepts to find potential "target" prices that the market may want to take out (I assume this is the point of the previous post)

 

What traders may find difficult however is the execution, especially when markets get volatile

 

And so I suggest that you may want to consider a method that accomodates intraday volatility. When we see the Vix come into the 30+ range I prefer Bollinger Bands set to 2 SD with a 20 period EMA midpoint....

 

To obtain volatility based intraday targets I simply review my time based pivots to find the nearest local extreme (today it was 1184) and then I read the tape and looking for price to test the upper band (or close above). On the next close below a band, I look for a favorable short entry...reverse the process for longs. The virtue of this method is that it adapts immediately to local vol...

 

Using that method today we got filled at 1139.75 (right at my target) in what would normally be a very difficult open to trade

 

Good luck traders

Steve

 

So I posted this earlier in the thread and thought today particularly it would be a good idea to look at what happened when I put that technique into use (see the attached chart)

 

If you were watching the S&P futures you saw it come down, hesitate, then resume its move down....and I am guessing that some of you either tried to take a long trade, or wanted to but did not know where to get in with a reasonable risk...

 

Look at the chart. As you can see price closes outside the BB several times however it doesn't open INSIDE on the next candle (my setup)....when it does, you are near to a bottom and at that point it is a matter of deciding what kind of stoploss you can afford and whether you think the retrace will justify the risk....

 

In this case the entry could have been anywhere in the range from 1135.50 down to 1134.25

 

It sure beats getting chopped to death on the way down...

 

 

Steve

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Did you mean to post a chart at all Steve?

 

Anyway, in an attempt to decipher possible intentions of the ES, I have a longer term chart with a profile including all data to the 2009 low (yes there is a difference as it is a continuation contract). Given that this is what is more relevant, the green composite will be from this date going forward(for now). So, very simply I have highlighted the 2 major zones of price acceptance. There is also a smaller zone shown at 1163 ish. Now volume-wise there is some under-development between these 2 zones. So long as the market doesn't spiral out of control, there is a chance that we will see some 'filling in' of this area. Although the market may seem really crazy right now, it's important to keep things in perspective, plan for alternative scenarios and monitor for changes in baseline view. So with that said, take a look at my chart and see what you think.

 

Edit: I forgot to mention why I had pointed out the minor balance at 1163. That was the first point on the way down which we saw a significant reversal attempt from.

5aa71099a6473_Longtermview.thumb.JPG.33d9f073241370638f93e7f660e0c72a.JPG

Edited by TheNegotiator

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So what about today? Well, news flow is high, data is low and options boys will probably be going crazy! Overnight at this point, ES has tested 1117.50 which is significant as it's the high of the highlighted lower acceptance area in the previous chart, it's a low volume point on long term profile and it's a highish volume price on last week's profile. If we were to consolidate over the next few days and contract, building up for a new move, it's also pretty much the value area low from last week. So there's some significance potentially. I'm not suggesting btw, you just blindly trade at the points I am mentioning here, in past posts or in future posts. You really have to see what is happening in those areas and work your plan into it.

 

Yesterday I noted that perhaps some value was being found around 1140-44 area. A further foray lower followed by a retracement back to this area into close strengthened this view. However, it's always possible that perception of value could change. Overnight did push lower and ES stopped at an important point imo. The move way away from this perceived value wasn't actually that unpredictable. Volatility and news are moving the markets right now, so it'll be interesting to see how trade develops throughout RTH. Options expiry will muddy things somewhat. Currently ES is hovering around yesterday's low and although there is 30mins to go before open, it may want to test around the 1128.25 before deciding where to push initially. We'll have to see where we open...

5aa71099d1330_ONView.thumb.JPG.3d5de21158d66e551520262e9286ae0f.JPG

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Here's a little chart for anyone who's around. Looks like value is still roughly where I had posted before(red lines on 2nd chart today). Interestingly though,on a RTH session profile, volume seems to be somewhat reflecting what is on the long term profile. I feel maybe we're underdeveloped so far a work is still to be done.

5aa7109a4ddc5_fridaysofar.thumb.JPG.f1e297196c2b5026bf96dcfcbf60c875.JPG

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Well looking at the current 2-day profile there is plenty of reason to suspect balance. However, the market is news driven and so could potentially push up quickly if there is sufficient strength. The volume high for the 2-day balance is around 1140. Key initial reference points will be last Mon-Weds balance low 1177.50 and Wednesday close 1189.50. Closer by is the 1163.25 high volume and 1161.00 Thursday high. Stay alert and be open minded about how price can move. Imho.

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