Day Trading the E-mini Futures

[TheNegotiator 13]

How well planned was the entry at 22? I know that sometimes if you just see a nice place to enter but haven't planned the trade, or at least don't have specific rules given entry criteria, you'll end up either running your losses and snatching your winners, or getting stopped out on most trades which are good for a small loss. You basically are just paying your broker. Plus the market can take two ticks before you've even seen it happen(on most retail feeds and/or internet connections). So you can't react. A tight stop like that virtually requires you to take only 2 ticks profit.

 

Think about where you'd be wrong, then think about how much you could make and if you think there's a good chance of it coming off and the RR is good, go for it. I'm sure you know the good entries, but sometimes we all shoot ourselves in the foot. Trick is to not do it too often lol.

Edited October 21, 2011 by TheNegotiator

[joshdance 10]

How well planned was the entry at 22? I know that sometimes if you just see a nice place to enter but haven't planned the trade, or at least don't have specific rules given entry criteria, you'll end up either running your losses and snatching your winners, or getting stopped out on most trades which are good for a small loss. You basically are just paying your broker. Plus the market can take two ticks before you've even seen it happen(on most retail feeds and/or internet connections). So you can't react. A tight stop like that virtually requires you to take only 2 ticks profit.

 

Think about where you'd be wrong, then think about how much you could make and if you think there's a good chance of it coming off and the RR is good, go for it. I'm sure you know the good entries, but sometimes we all shoot ourselves in the foot. Trick is to not do it too often lol.

 

Don't have the chart in front of me but there was a bullish push up from 22 probably 10 mins before 2pm. After that I put the order in for 22, and the premise was clear--that if we break the low (19.75) that has been established over the last 30 mins or so, then I'm wrong. With 2 ticks risk I doubled my usual size, but the problem is that I did not plan my exits clearly beforehand. 24, 26, and 33 were logical, with a move to BE at 24 (if it came back down again, I had no doubt I did not want to be long)

 

Actually I would like to hear what some of your entries and exits were as I'm still new to ES and am looking for what some good trade ideas were.

[TheNegotiator 13]

I don't have my charts right now either. Maybe later. But from what I remember from my 7 day profile(and of course you don't have to agree), 1222 wasn't a well defined area. I don't think it was great on the balance profile either. It looks as though it may have been something to do with that bit of balance in the 2 hrs before open. Not sure though. However, what was interesting was that it was just under the IB low which there was a gap underneath and yet it didn't break. So on a basis of that, a look back up was on the cards. Incidentally I missed the high being the 'new' balance high which I used with the additional 3 days at the start. 1235.25 I believe and the high was 35.75.

 

The question is what are you trying to achieve with the volume profile? What type of trades are you willing to take using long, medium and short term information? What type of trades are you willing to take off intraday generated information?

 

I wouldn't say outright the trades I take because they depend a good deal on the type of day I think we have and the structure. Then it depends on activity at the point of attack. But if you listen carefully you will notice I am giving you good hints as to the sorts of trades I am taking at any given point in the overall auction.

 

A question I'd like to ask you is are you trading live and what size are you trading?(live or sim). It's just that although if your account size is decent, trading live and learning/recalibrating isn't bad necessarily, I'd still suggest paring your size down to the minimum you need to be able to trade in the way you feel happy with. So if you take 10 scales, maybe trade 10 or even slightly less, but if you only take 3 scales, trade a 3 lot. Just a thought. I'm sure you're well aware of this, but if others see it, they may benefit.

[joshdance 10]

Here's the anatomy of the trade idea:

 

2011-10-22_0940 - joshtrader's library

 

Here's a 5m showing a profile of the move up, and the cluster of activity where the move down was halted:

 

2011-10-22_1002 - joshtrader's library

 

 

from what I remember from my 7 day profile(and of course you don't have to agree), 1222 wasn't a well defined area. I don't think it was great on the balance profile either. It looks as though it may have been something to do with that bit of balance in the 2 hrs before open. Not sure though. However, what was interesting was that it was just under the IB low which there was a gap underneath and yet it didn't break. So on a basis of that, a look back up was on the cards.

 

I don't really use the longer term profiles that much -- from a macro perspective I think they can be useful, but for me it's like looking at a weekly or monthly chart to find s/r levels, yet I'm trading off of a 1m or 5m chart. Much in the same way that once a price level of support or resistance has been "violated" and clearly is not providing support or resistance any longer, then it becomes less important in the current context, I find that also the more recent the profile I look at, the more I valid its areas will be for me. I think that only at the extremes (say, highs and lows) does previous activity really matter a significant amount. For me it's a case of seeing too much forest, and then missing the trees So for me the most useful profiling has been a few days worth at most, and yesterday's, and today's intraday profile (and the overnight globex as well).

 

The question is what are you trying to achieve with the volume profile? What type of trades are you willing to take using long, medium and short term information? What type of trades are you willing to take off intraday generated information?

 

I think this is basically what I responded to above. Basically the answer has been for me, as I am a short term day trader, what is going on NOW? On a larger scale the volume concentration at a given area that happened 2 years ago is quite relevant, but on a minute by minute basis, today, it's more important to me that I see support forming at 22, for example, than the fact that it's not a notable area on the longer term profile.

 

A question I'd like to ask you is are you trading live and what size are you trading?(live or sim).

 

I'm trading live yes, and I'm using a basic fixed fractional size based on how large my stop is, and the smallest size based on whether I want to scale and if so how many units.

 

Do you wait for current price confirmation, even if you have a trade planned out in advance? In reviewing my trades, the dumb ones where I get steamrolled are the ones where I have an idea, and then put the order in, and don't wait for any good reason at the time of the trade, instead of waiting to see if my premise is correct, and THEN placing the trade.

[joshdance 10]

Here is a profile with areas of interest marked:

 

First a 9 day profile showing the 1180 to 1230 ish range:

2011-10-23_2217 - joshtrader's library

 

Now just the last 5 days, the weekly profile:

2011-10-23_2221 - joshtrader's library

 

Areas of interest below:

 

1216 - 1220 (weekly pivot, VAH, s/r for thurs/fri)

1207 - 1208.50 (vpoc)

1201 - 1204 (weekly S1, s/r from thurs/fri and prior week, low volume zone)

1185 - 1189 (pw-low, major support, VAL)

 

Longer term players looking at a 240m or daily chart will only see support around 80-85, IMO.

 

For above:

2011-10-23_2232 - joshtrader's library

 

I don't see anything really until 1252-1259. Projecting beyond that I would venture a guess at 1290, but it's really pointless to look there right now IMO; we need more information.

[TheNegotiator 13]

First of all it depends on how you are trading as to what you might look for. As I see it, longer term players or otf trade on a much longer timeframe. As the volume profile itself is time independent, the only way of incorporating information which otf may be interested in is to look at a profile which includes data from a while ago. The information is useful to me in two respects. From an auction perspective and to see if the level may still act as s/r. The auction's strength can be better gauged imo using long term profiles. Long term profile levels which are clearly important which then hold based on present activity, are likely to be places of interest for otf. OTF moves the market.

 

I think short term activity is important. For certain circumstances and for certain types of trade. In the example of the 1222's I may have taken the trade based on activity, but not on the profile you drew. There was a pause there on the way up, true. But it was really low volume and at a price which I wasn't interested in. Selling simply dried up rather than getting a 'kick' off a level of importance. Activity based trades I feel you need to be very good with your position sizing too. I've had many a trade where I've entered on activity, then it moves to a profile level before turning or breaking. If you don't adjust your size based on structure, you can end up feeling an awful lot of pain.

 

Question. Was the short you mentioned in one of the pics, a gap close type trade?

 

(also, we're really meant to use the TL servers to upload pics etc. please )

[TheNegotiator 13]

Above the high of Friday 1235.75 I would say we are out of balance and exploring price to find value. However, there's also a chance it's a range extension and so the first decent move down will be important as a test of this. Here's a chart for you to look over.

 

[TheNegotiator 13]

Just take a look where we opened - right on Friday's high.

[joshdance 10]

So N, in this intraday profile I see three distinct distributions, with the bulk of time and volume now being at 48.50 -- can you tell me your thoughts as you see this? I entered a long at 40 earlier but stopped out to the tick at 39 BTW, quite frustrating! I see this and I am thinking long, on a pullback to either 46 or 43. Would love to hear your thoughts as you're seeing this.

[TheNegotiator 13]

I actually went long 1239.25(Low Vol/Mid/Open range high all clustered). The market is behaving a little oddly. Coming up against volume often sees a test in the opposite direction, but not right now. The size of the counter auctions have been small. We had an open-test-drive open type. But, we also stopped at 1250 area which I had as important.

[TheNegotiator 13]

I probably wouldn't be going long right now, these things being true. Also 1246.25 is the IB high. Quite a bit of volume accumulated near 1250 there so we may need to auction down to allow some rebalancing before we decide to push futher or not.

[joshdance 10]

I actually went long 1239.25(Low Vol/Mid/Open range high all clustered). The market is behaving a little oddly. Coming up against volume often sees a test in the opposite direction, but not right now. The size of the counter auctions have been small. We had an open-test-drive open type. But, we also stopped at 1250 area which I had as important.

 

39 was low vol on which profile? Remind me again, you use 30 minutes as your OR right?

[TheNegotiator 13]

If you look on the chart I posted earlier, 1250 is the base of a buying tail from the last balance area we saw here. Btw, last point is have you notice the grinding higher? No really counter moves of any size before now(even now really). So if that activity stops, it could be an selling sign for the moment. I'm waiting to see.

[TheNegotiator 13]

Okay so it was at 1239.50! But there was plenty of stuff around there to take a long.

 

 

Edit: sry forgot to say. Initial Balance is first 60mins of RTH. Open range is variable and based on the first buying then counter selling action(and vice versa). Need to look at a tick or a volume chart for it. I had 1235.00-1238.75(actually it's visible on the 1min chart above).

[joshdance 10]

Okay so it was at 1239.50! But there was plenty of stuff around there to take a long.

 

 

Indeed -- I got in that mode where I'm pissed because I sold the low tick--I'd rather get run over and be dead wrong than miss my targets (42 and 48) by a 1 tick stop out. :doh:

[TheNegotiator 13]

Midpoint comes in at 4275 if we get there. Low vol and 2 swing extremities(9:51, 10:52/:55 EST). Also 1242.75 was the overnight high.

[joshdance 10]

Midpoint comes in at 4275 if we get there. Low vol and 2 swing extremities(9:51, 10:52/:55 EST). Also 1242.75 was the overnight high.

 

Good timing, I just put in my order to buy 43.25

[TheNegotiator 13]

What would you say is your 'normal' stop size at the moment in ES Josh?

[joshdance 10]

What would you say is your 'normal' stop size at the moment in ES Josh?

 

4 ticks -- I know you'll say it's too small and I do agree but having issues making it larger

[TheNegotiator 13]

What sort of issues? Without telling us your size, how many scales would you take on a winning trade?

[joshdance 10]

What sort of issues? Without telling us your size, how many scales would you take on a winning trade?

 

Either 2 or 3 usually, though I did 4 the other day but that's unusual -- issues just that I feel that when I let me stop be quite wide, that it often will go and test anyway, and so instead of a small loss, I wind up with a larger loss for no good reason. That's probably a case though of bad entry timing, PLUS a larger stop. With a good entry like I had this AM at 40, a larger stop (1 tick in this case) would have saved me and made a very profitable trade opportunity.

[TheNegotiator 13]

Timing is important definitely. Btw, if the market does move down to 1243, if it were me I wouldn't just sit on an order at 1243.25. I'd want to see how the market acts on approach. Up to you though. I think 4 ticks is very small a stop unless you are amazingly accurate with your entries. Do you trade enough to maybe reduce your size a little to still allow for 2-3 scales but also increase your stop without increasing overall risk? I knew a while ago some guys who used to increase their size through the session. They'd trade a set size, but start off small to see whether they/market were on form. Another thing traders do is they might try to take a couple of smaller trades first to have something on the board before they go for the big hit. That way you're playing with the 'house's money'. Of course you have to be able to pick off the 1-2 point trades consistently to benefit from that.

Edited October 24, 2011 by TheNegotiator

[TheNegotiator 13]

Not much new to offer early on today. Some less positive news for stocks and waiting on news from Europe tomorrow could see ES check itself or perhaps just rest. Of course given that it's still out of balance it could push up some more- plenty of targets still marked up on the chart for that.

 

So I'll be watching for signs of checking(pullback)/resting/continuation today.

 

[TheNegotiator 13]

Wow, that open really shows you what the market is fixated on right now! (Europe)

[TheNegotiator 13]

Just amazes me how frequently a strong move retrace is good for fading at the 78.6% fibonacci.