Day Trading the E-mini Futures

[TheNegotiator 13]

Didn't get to the 56 area (yet ) on first swing below 60. Small range so far and not too much going on. IB is only 4.50pts so far (although 15mins left for that to extend). Anyway, this is what I was looking at 56 area for:-

 

[TheNegotiator 13]

Didn't get to the 56 area (yet ) on first swing below 60. Small range so far and not too much going on. IB is only 4.50pts so far (although 15mins left for that to extend). Anyway, this is what I was looking at 56 area for:-

 

 

Looking some more, 56.00 probably quite uncoincidentally, is the VVAH (Volume Value Area High) of the Tues/Weds 2-day balance.

[TheNegotiator 13]

So far, day has been contained by volume leading towards 65/66.50 area and near to yesterday's VPOC. Suggests that despite everything else, there is some balance of opinion up here at least temporarily.

 

[joshdance 10]

So, the LOD was broken in the closing minutes, and proved to be a complete fake.

 

In your opinion, what are the implications of (and differences between) each of the following:

 

1) Market reversing a few ticks above the LOD and moving up (maybe 54.25 or so in today's scenario, 3 ticks above prior double bottom low)

 

2) Market reversing right at the LOD or one/two ticks below (53.50 today), and moving up

 

3) Market making significant new lows, and quickly going back above and moving up. I'll define significant as 20-30% of the day's range, as in today's fakeout at the end--new low by 8 ticks, with a < 40 tick prior range

[karoshiman 10]

Nobody watching/trading the ETH action? It's amazing...

 

Expected price to go up after the cash close... was surprised by the strong down move and reversed...

 

Haven't seen such action so far right after the cash close...

[steve46 12]

Its called an "equalization trade" and it happens because Asia has its own opinion of what is likely to happen in Europe now that Greece is threatening to renege on their proposed budget cuts....anticipating the possibility of more bad news to follow, "informed" participants got short after the close of business.

 

The "tell" was the noon balloon during today's RTH....the half hour from 10:30am to 11am PST was all downhill. Generally, older participants (those likely to control significant capital) use that time frame to get a head start liquidating "parked positions". Today's early up move gave them a chance to get out at a reasonable discount to their basis.

Edited May 10, 2012 by steve46

[joshdance 10]

Its called an "equalization trade" and it happens because Asia has its own opinion of what is likely to happen in Europe now that Greece is threatening to renege on their proposed budget cuts....anticipating the possibility of more bad news to follow, "informed" participants got short after the close of business.

 

The "tell" was the noon balloon during today's RTH....the half hour from 10:30am to 11am PST was all downhill. Generally, older participants (those likely to control significant capital) use that time frame to get a head start liquidating "parked positions". Today's early up move gave them a chance to get out at a reasonable discount to their basis.

 

But Asia was fast asleep, and markets not yet open. On the surface this sounds logical, but there were only about 8000 contracts traded up in 57s, and in the 51-53 area there are only about another 15K or so. So, there are, at best, only 20K or so who hold a basis at 51 or higher, and that's the extreme case. I suppose if what you say is correct, then these "informed" participants will be expecting the market to move lower and not back up above their entry basis (otherwise, why would they open positions so early?). If this isn't logical, I'd like to hear another view on it. Wouldn't the "informed" participants commit more capital, and therefore must have done so much earlier, before the close?

 

If it's not clear, I definitely see the fundamental basis for your hypothesis (that Europe is screwed). However, logically there's just not enough capital that has been demonstrated to have been committed for the scenario to make sense, and that's what I'm trying to reconcile and receive clarity on. Sometimes I hear these ideas, but rarely see it backed up with any real evidence or logical support, and that's what I'm looking to find here steve.

Edited May 11, 2012 by joshdance

[steve46 12]

Personally Josh it seems to me that what matters is what the market does, not whether you understand, agree or disagree with it...

 

For those interested, the top tier firms maintain 24 hour exposure to the market on a worldwide basis, using a team concept, where groups of 5 or more individual take turns monitoring and managing delta exposure.....as each market opens and closes, the teams handoff their obligation to the next group and they only execute as they are told to....by a person further up the chain of command who "sees" the bigger picture.

 

One of the advantages of this strategy is that it prevents any one person from knowing what the firm is doing at any single point in time. Analysis of cumulative delta is essentially useless (as you can see from josh's comment).

 

One thing you can do however is to use simple common sense....if the markets have established a yearly high of 1417.75, that means that someone has inventory parked up at that level.....if you look at where we are today....it makes sense to suggest that there are participants who may be motivated to lower their basis...there are two ways to accomplish this. 1. to buy at a lower cost when the market dips, and 2. to take profits when the market is marked up however briefly. Depending on how much of a committment each firm has at higher levels, you will see this strategy executed as long as firms think that the market is likely to move lower.

Edited May 11, 2012 by steve46

[karoshiman 10]

But Asia was fast asleep, and markets not yet open. On the surface this sounds logical, but there were only about 8000 contracts traded up in 57s, and in the 51-53 area there are only about another 15K or so. So, there are, at best, only 20K or so who hold a basis at 51 or higher, and that's the extreme case. I suppose if what you say is correct, then these "informed" participants will be expecting the market to move lower and not back up above their entry basis (otherwise, why would they open positions so early?). If this isn't logical, I'd like to hear another view on it. Wouldn't the "informed" participants commit more capital, and therefore must have done so much earlier, before the close?

 

If it's not clear, I definitely see the fundamental basis for your hypothesis (that Europe is screwed). However, logically there's just not enough capital that has been demonstrated to have been committed for the scenario to make sense, and that's what I'm trying to reconcile and receive clarity on. Sometimes I hear these ideas, but rarely see it backed up with any real evidence or logical support, and that's what I'm looking to find here steve.

 

 

I thought anyway, that this was timing-wise related to the JP Morgan news... after last Friday's action (at the latest) this could have been also only the reason for the market to make its predetermined move down...

[joshdance 10]

Personally Josh it seems to me that what matters is what the market does, not whether you understand, agree or disagree with it...

 

You are the one who attempted to assign a meaning to this steve, not me. All I'm saying is, if you have a theory, back it up with some data.

[TheNegotiator 13]

As much as the reasons behind market moves do interest me, I think there is a danger of over-complicating things and losing sight of what is really important - reading market activity and properly executing a well conceived plan.

 

Does a soldier need to know why he's going into battle?

 

The fact is that we spent the session in the upper half of the 2-day balance which came after several days of moving lower. Considering that we couldn't didn't take the 2-day high out by more than 3 ticks, it was in my mind a pretty reasonable thing to expect a flush. Whether it was triggered by the JPM reports, contrarian asian players or anything else, it was what it was.

[TheNegotiator 13]

I wanted to provide you with some reference points but to make it clear, we are quite news driven right now so ACH. Main things to watch out for today are the release of Mich Conf just before 10am ET, how financials behave after the JPM news and obviously any news flow from Europe. Don't get yourself in a hole on Friday.

 

[gosu 10]

* * *

 

What do you mean by "10m container"? channel on 10 minute bars

 

"AS" is "after session" or something similar? All Sessions

 

 

* * *

What do you mean with "S"? Support

 

Excuse the late response - currently traveling and away from the market.

[gosu 10]

Horizontal lines are also the only lines which have no slope and therefore are the same on all charts, which cannot be said for trend lines. You might call horizontal lines "objective lines" and trend lines "subjective lines." I know you disagree with this, but unless all people have the same method of drawing a trendline, then they are subjective, and this is a fact. I "KNOW" this gosu.

 

I don't concern myself too much with what other people are doing with their charts. I don't ask if the lines I draw are how others would draw them. My decisions are based on how I draw them and what I KNOW is that every line I put on a chart is dictated by the elements on the chart.

 

What you "KNOW" is what the herd knows, which is why you talk conventionally about "objective" and "subjective" lines. You think like most people do, you get the result that most people get.

 

 

Can you post a shot of the chart you're talking about in your first paragraph? I just can't picture it because of your foreign language. Also, is there a thread which has a concise collection of these terms and how they are applied, short of the black hole nonsense that is the "price/volume relationship" thread?

 

I'm traveling and away from my trading rig, so I cannot meet your request for a chart. No matter, it's not that important. We both know already you are incapable of understanding what I say. Most of the terms I use are adopted from the Hershey lexicon. You already know that. You also know the places where the Hershey people talk about their terms, but you are unwilling to do the work to find out for yourself, and call what they do "black hole nonsense." I would think they are the people in the best position to assist you. In any case, I don't know of any concise collection available that shows how they are applied.

[joshdance 10]

What you "KNOW" is what the herd knows, which is why you talk conventionally about "objective" and "subjective" lines. You think like most people do, you get the result that most people get.

 

...but you are unwilling to do the work to find out for yourself, and call what they do "black hole nonsense."

 

It's pointless to argue with someone like you gosu, who has it all figured out. So, I'll just say this: after multiple reads of multiple P/V Hershey threads over a year and a half ago, I determined, and I'll put it politely, that this method was not for me. I have done the work, yet I thought it would be interesting to get a different perspective from someone using a derivative of it (yes, I've forgotten the terminology as I have not seen it in well over a year). This member of "the herd" had a very good day, even with my waaay inside the box thinking and OLs (that's Herd-speak for "Objective Line", aka "Horizontal Line"), and I hope yours was good as well. I hope you enjoy your weekend, gosu.

Edited May 11, 2012 by joshdance

[gosu 10]

It's pointless to argue with someone like you gosu, who has it all figured out. So, I'll just say this: after multiple reads of multiple P/V Hershey threads over a year and a half ago, I determined, and I'll put it politely, that this method was not for me. I have done the work, yet I thought it would be interesting to get a different perspective from someone using a derivative of it (yes, I've forgotten the terminology as I have not seen it in well over a year). This member of "the herd" had a very good day, even with my waaay inside the box thinking and OLs (that's Herd-speak for "Objective Line", aka "Horizontal Line"), and I hope yours was good as well. I hope you enjoy your weekend, gosu.

 

joshdance, I have no intention of arguing with anyone on a message board. I'm glad you had a good day. I had a good day as well spending time with friends completely outside the market. The market is there for me to extract resources from it, I do not concern myself at all about what others do, and I would say for you to not concern yourself at all about what I do. All the best to you.

[TheNegotiator 13]

Gosu, the thing is that telling someone that they aren't very good (basically):-

 

What you "KNOW" is what the herd knows, which is why you talk conventionally about "objective" and "subjective" lines. You think like most people do, you get the result that most people get.

 

is not only conjecture, but it is also likely to somewhat rile them whether or not it was designed to do so. This thread is not about that in any way shape or form. This thread is egoless as much as it can be and it is intended to discuss markets and help explain to others what may be helpful to you personally. This is something which it broadly is, I hope and I would definitely include you within this bracket.

 

Josh, however someone wishes to approach their particular market is up to them and if it works for them then all the better. There is definitely "more than one way to skin a cat" and I note that you were pointing out that the method in question is just not for you personally. The fact is that it's usually more about the trader than the method anyway. However, I am always interested in methods others use to trade as at the very least, isn't it prudent to see how your competitors might trade?

 

Gosu, personally I think it would actually be quite a beneficial thing if you are happy to do so, to really briefly outline what it is you do and the basic terminology. You could start a thread in the TA section and link it into your signature so that anyone reading your posts can access a really quick and easy reference if they lose you at all. I'd suggest this for anyone's method actually and will do it myself during this week. That way information we post can be as useful as possible to as many people as possible.

 

Finally, let's get back to business of trading these darn markets! That's what we're here for right?

[slick60 10]

For the Diplomatic Negotiator

I know that you use the RTH sessions and wonder what you consider a gap to be in same. Is it from the close of the previous day to the open today OR like Dalton from yesterday's low to today's open?

Also is there anything that you use to indicate that we may get a gap fill or not through the RTH session?

Thanks a lot

 

slick60

[TheNegotiator 13]

For the Diplomatic Negotiator

I know that you use the RTH sessions and wonder what you consider a gap to be in same. Is it from the close of the previous day to the open today OR like Dalton from yesterday's low to today's open?

Also is there anything that you use to indicate that we may get a gap fill or not through the RTH session?

Thanks a lot

 

slick60

 

I lean towards close to open because that is what I have found works better. I am also aware of the range gap and if in a particular case, the range gap provides a much closer test, then I'll be looking at that first.

 

If you look at the stats of session(RTH close to RTH open) then you generally see that the greater the gap the less likely it will close (obviously ). But also if you look at what has happened overnight and whether there has been any rejection in a move in the direction of the current gap, then that can give you more confidence in a gap close. Also there is often a test of one direction or the other before the stronger attempt of direction (gap close or continuation) is attempted. In short, like everything, it depends.

[gosu 10]

Gosu, the thing is that telling someone that they aren't very good (basically):-

 

 

 

is not only conjecture, but it is also likely to somewhat rile them whether or not it was designed to do so. This thread is not about that in any way shape or form. This thread is egoless as much as it can be and it is intended to discuss markets and help explain to others what may be helpful to you personally. This is something which it broadly is, I hope and I would definitely include you within this bracket.

 

Who cares about personalities really? I don't know joshdance from joshsquarepants and the same for him about me. My response was about conventional thinking leading to conventional results which was triggered by his comments regarding my reply to someone else's question to me.

 

Whether or not anyone on a message board is "good" is not my concern. As it goes, a lot of people are not good, and the vast majority simply suck. It is not difficult to observe the commonalities among these people.

 

I don't know what "egoless" means but in any case it was not my intention to be disruptive in this thread.

 

Gosu, personally I think it would actually be quite a beneficial thing if you are happy to do so, to really briefly outline what it is you do and the basic terminology. You could start a thread in the TA section and link it into your signature so that anyone reading your posts can access a really quick and easy reference if they lose you at all. I'd suggest this for anyone's method actually and will do it myself during this week. That way information we post can be as useful as possible to as many people as possible.

 

I am always unhappy to do work that has little purpose. What goes on here is of little consequence to anyone's ultimate success or failure in his trading venture. My usual way of participating is to make comments and reply to questions others ask of me. I do make an attempt to be responsive to honest questions and that is the amount of work that is tolerable.

 

Finally, let's get back to business of trading these darn markets! That's what we're here for right?

 

I'm with you totally on getting back to the business of trading. After 3 days of nonstop socializing, eating and drinking, I'm all for quickly recovering from jetlag and resuming a healthier lifestyle in front of the screens. However, I disagree with you that trading is what we're here for. For me, all trading occurs outside of this message board.

[MightyMouse 12]

A gentleman posted these rules on a different thread to help shut down the after-the-fact trading geniuses. It worked and I thought it might be helpful on this thread.

 

It always seems to me that those who are the most critical of others trades, reveal the least about their own trades. Man up or shut up:

 

1. Since these trades allow more time for decision making, if you would like to post your trade, please post where you intend to get in and out before the fact. So, if you are going to post that you got into a short at 1320 when the market is already at 1315, and then please refrain from posting it here. If you want to post that you intend to get short at 1320 when the market is at 1315, then that is fine. If you entered at 1315 short and the market is at 1320 and you are short, then you can post it.

2. You can make any comment you like, but make sure that it is before the fact information. So, if you think that someone should have gotten out at point B because you are brilliant and you knew it was going to turn there, please refrain from posting. On the other hand, if you know it is going to turn at point B and we have not arrived at point B yet, then please share.

3. If you had an order that you say you had in that should have gotten filled and last minute you mysteriously and miraculously decided to pull it and did not post that you were pulling it, you will get called on it.

4. If you post a chart of what you did, you can do so, but only if you indicated what you were going to do before the recorded events on the chart occurred.

[clmacdougall 11]

A gentleman posted these rules on a different thread to help shut down the after-the-fact trading geniuses. It worked and I thought it might be helpful on this thread.

 

It always seems to me that those who are the most critical of others trades, reveal the least about their own trades. Man up or shut up:

 

1. Since these trades allow more time for decision making, if you would like to post your trade, please post where you intend to get in and out before the fact. So, if you are going to post that you got into a short at 1320 when the market is already at 1315, and then please refrain from posting it here. If you want to post that you intend to get short at 1320 when the market is at 1315, then that is fine. If you entered at 1315 short and the market is at 1320 and you are short, then you can post it.

2. You can make any comment you like, but make sure that it is before the fact information. So, if you think that someone should have gotten out at point B because you are brilliant and you knew it was going to turn there, please refrain from posting. On the other hand, if you know it is going to turn at point B and we have not arrived at point B yet, then please share.

3. If you had an order that you say you had in that should have gotten filled and last minute you mysteriously and miraculously decided to pull it and did not post that you were pulling it, you will get called on it.

4. If you post a chart of what you did, you can do so, but only if you indicated what you were going to do before the recorded events on the chart occurred.

 

Please read my post #1709

 

"N, on the first post of this thread you requested people explain the thinking behind their trades as much as possible, without that it's hard to retain an interest in this thread. Could you make up a thread form with #1entry; #2 target / targets / scale outs; #3 stop and #4 reason for entry. Simple but an interesting reason to follow this thread"

 

I already put in my request, I don't think he's interested in taking the thread in that direction. All the best!

[karoshiman 10]

A gentleman posted these rules on a different thread to help shut down the after-the-fact trading geniuses. It worked and I thought it might be helpful on this thread.

 

It always seems to me that those who are the most critical of others trades, reveal the least about their own trades. Man up or shut up:

 

1. Since these trades allow more time for decision making, if you would like to post your trade, please post where you intend to get in and out before the fact. So, if you are going to post that you got into a short at 1320 when the market is already at 1315, and then please refrain from posting it here. If you want to post that you intend to get short at 1320 when the market is at 1315, then that is fine. If you entered at 1315 short and the market is at 1320 and you are short, then you can post it.

2. You can make any comment you like, but make sure that it is before the fact information. So, if you think that someone should have gotten out at point B because you are brilliant and you knew it was going to turn there, please refrain from posting. On the other hand, if you know it is going to turn at point B and we have not arrived at point B yet, then please share.

3. If you had an order that you say you had in that should have gotten filled and last minute you mysteriously and miraculously decided to pull it and did not post that you were pulling it, you will get called on it.

4. If you post a chart of what you did, you can do so, but only if you indicated what you were going to do before the recorded events on the chart occurred.

 

 

I do definitely sympathize with this request. However, I've realized that for some folks (including me) it is a disadvantage to their trading if trade calls are being made. I personally start to worry about my trades more than without making a call and get attached to my earlier call and am not flexible anymore

 

But on the other hand, it's interesting to see how other traders see the same market I am observing and how their methodology works. So, for me personally, it is okay to see hindsight comments about how they perceived the market (less where they got in and out but more their "logic" behind the market's movements). It is up to me to judge the about the value of the respective comments. In some cases, these might appear useless to me but in other cases I can possibly see some value in them. But this depends whether I can relate to that person's view of the market, I guess. Also, you can evaluate such comments quite well over time.

 

Now, having said that, the style of writing and personal attacks are a different matter and not related to the above. And I agree that we should try to be polite in such forum irrespective of the different views we have on the same thing.

[TheNegotiator 13]

I want to clear something up about the nature of the thread. Although I wholeheartedly agree with the principle of posting intention before the fact (and btw unless you immediately post on entry, even this is a pretty futile exercise), this is not the goal for the thread. This is mainly because unless you post all your trades and your orders/fills reports, all it is is subjective in its nature of describing a method/trader. One person would likely post so much as to render the thread useless. Posting without explanation is helpful to nobody, whether any particular individual believes it is or not. Period.

 

The intentions of the thread are to:-

 

1) Discuss methods and provide relatively easy to follow explanations by way of examples. You can post trades which have worked and trades which haven't. If you want to, post the trade in realtime, but don't bother if you can't explain it at the same time. Imho, doing so is very difficult if you're to make the post useful for others.

 

2) Discuss the current markets in general and in particular the e-minis. Talking about specifics helps some to understand and others to have a level of accountability.

 

3) Camaraderie among traders. Have a place to go to discuss things with other traders that many retail traders do not enjoy.

 

4) NOT to post trades saying "bought at price x as it was point y on the third cycle of ew chart z" without having at least described what these things are previously. I don't believe that helps anyone in any way.

 

If anyone wants to post realtime trades without explanation, I've no problem with that if that is what they wish to do. I can start a "Realtime Trades from DTEF" thread if anyone would like and we can establish some proper rules.

 

Anyway.

Edited May 16, 2012 by TheNegotiator

[TheNegotiator 13]

Here's a brief explanation of yesterday. I don't need to tell you what I personally traded or didn't, but just point out that the important information was mostly there before the RTH session opened and that reading the day as it developed pointed to the test of the 25.25-26.00 area. It's important to say that the information (at least how I read it) didn't say that the low would be 25.25-26.00, but that it wanted to test it and on a break of the balance formed with Monday's profile, it was likely that the test would happen. It's also equally important to say that although Monday had fallen out of the 4-day balance and the 46.75 had been tested in the overnight session and rejected, had we tested that area again, the picture being painted might have been very different. Lastly, it is important to re-iterate that the market has been broadly news driven. This is not to say that technicals get thrown out the window- far from it. Just that perception can change very quickly and without prior technical basis. E.g. We could have failed at Monday's low putting in a fairly poor low, important news on a new pro-austerity Greek government being formed come out, then rallied straight through the rejection at 1346.75 area without a second thought.

 

Anyway, here's the chart:-

 

Edited May 16, 2012 by TheNegotiator