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Update on my previous trade: I took half off at 1389.25 and am letting the other half ride until around 1394. I feel my trade management is the weakest part of my trading approach, and I am currently working on scaling into/out of trades instead of holding all-in/all-out.

 

Honestly, I took the first half off the table solely because I began to fear losing my gains.Taking half off and moving my stop to my entry point is my compromise to myself.

 

So where would it have to go or what would you have to see to get you out of the other half?

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Possibly. It's a good place to start imho. I would then read "Markets in Profile". ..

 

Personally - I'd read "Markets In Profile" THEN "Mind Over Markets". The latter can be a little daunting and I think the former gives a better framework. At least it did for me.

 

The CISCO link I posted a week ago has a lot of information on it and if you scroll down that can be a good beginning source. As well, don't forget the orginator's CBOT website.

 

I continue to buy pullbacks even though "I think" the market is extended. So what ! Market doesn't care what I think.

 

My system says buy and I am buying. One of them will get stopped I'm sure but until it does I'm a buyer and a believer in 1400. Prove me wrong by selling an see how it works for you.

 

Ok, I did take a recent short in the EURO but scalped it with a 12 tick gain.

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Personally - I'd read "Markets In Profile" THEN "Mind Over Markets". The latter can be a little daunting and I think the former gives a better framework. At least it did for me.

 

The CISCO link I posted a week ago has a lot of information on it and if you scroll down that can be a good beginning source. As well, don't forget the orginator's CBOT website.

 

I continue to buy pullbacks even though "I think" the market is extended. So what ! Market doesn't care what I think.

 

My system says buy and I am buying. One of them will get stopped I'm sure but until it does I'm a buyer and a believer in 1400. Prove me wrong by selling an see how it works for you.

 

Ok, I did take a recent short in the EURO but scalped it with a 12 tick gain.

 

Definitely cisco and cme handbook are good to start with. Just don't get obsessed with market profile imho.

 

I think we're building for a squeeze up towards 1400 probably later. I'm thinking we might get a shakeout first though. Just an idea and an opinion...

 

Edit:sorry it's the cme handbook now but originally was the cbot market profile handbook.

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Are you still in that same trade as you were earlier btw?

 

Yes, I am still in. I move stop to 1384.75 as the 1385 has showed some support. so far 1388 has held nicely. I'm thinking I may as well ride this up as much as I can.

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So where would it have to go or what would you have to see to get you out of the other half?

 

Good question. I am keeping an eye out for 1400, and instead of pushing the trade right to that point, I will exit the other half at 1398 (yes, that is arbitrary) if we get a good push. Otherwise, i'll probably exit on the next strong push (if it doesn't reach my target) or if my B/E stop is hit on a downmove.

 

Edit:

Here's my introduction post: http://www.traderslaboratory.com/forums/introduce-yourself/13794-hi-everyone.html

Edited by papageo

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Offering at 88.50.... looking for 85 to possibly come into play and lower. Not going to push this one as against the trend.

 

.... We rarely don't get strong reversals when market is this strong at least for a few days. I'm testing the waters to speak.

 

 

I've went to market..

Edited by Predictor

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Re-entered back to full size on a buy stop order at 1388.75. Target is 1396 on half. Moved stop up to 1387.00.

 

Rationale: The slow trend upward has not showed signs of changing, imo. i'm looking for a strong continuation move late in the day and I think it could be getting near.

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pag... Interesting... my read tells me that institutions are selling but there is still a strong bid. I need for this bid to drop to clear.

 

So far trade hasn't shown any FA but I still see indications the trade can work.

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My read tells me LQ providers are getting overloaded with sells...

 

but equities are still strong... strong oil might be bad for market.

 

One of difficulties on shorting on a day like today is that we get can some strong rallies on any pull back... This makes it difficult to get full value for the short trades that to do work.

 

Knight really soared today... I was actually surprised that anyone cared to fund them with retail trading drying up.

---

Institutions looks to have exhausted the equities bot.. looking for a drop here..

 

---

 

Pulled out.. have other appointments today.

Edited by Predictor

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Back in at 1388.75. The short that shook me out did not provide any followthrough, and for better or worse, i am still looking for another push.

 

In order to prevent repeated losses based on the same idea, this will be my last trade for the day.

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There is my 2nd target. It was only a small loss. I'm not sure if I would have held or not but I had to leave. I didn't want to leave it on and possibly be stuck over weekend if I didn't get back in time if my stop or target weren't hit. That's why I really closed the trade. I really don't like to lose... But on other hand, I gave the trade a lot of time and did see some evidence it wasn't working.

 

I closely track the order flow, intermarket relationships, the way the tape moves, and I'm going to start tracking various measures of open inventory. I think that one of the difficulties in reading the tape is that the HFT bots are always front running the institutions.. so they get a bit ahead but then they clear immediately. The frequent "clearing" makes it more difficult to read how the actual positions are building. This clearing action also allows the LQ providers to hold the market up for very long time... as they run stops and so forth. Part of this dynamic is just how the market is built... when too many traders take to market on one side then the limit pressure becomes heavy.. providing a floor and/or making it difficult to clear.

 

In my case.. when I closed trade due to an external event.. I became one of the noise traders but in all honesty I had lowered the probability of that trade working.

Edited by Predictor

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Downsloping median line told the tale of the tape for me. The 4th Lower High and the failure to take it out on the push up... Algos came in and provided an iceberg.

 

Break of the downbar of the 4th lower high on a sell stop entry. Also short the NQ but foolishly scalped out of it at +12 +20 ticks.

 

Normal pullback in the scheme of things but that's it for me this week. Too tired listening to music now.

 

Ninja platform is a demo for me.

 

attachment.php?attachmentid=30330&stc=1&d=1344023286

2012-08-03_1538_ES_10K_Median_Line_off_top.png.c0ad3248c9593c31311ee720e2938bf4.png

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It's all about timing. Had we pushed up a little above the balance high at 87.50 and moved back down fairly soon, that would say to me that the balance was still active and higher prices were motivating sellers. Stay up there for a while and the chances are they're gonna squeeze any shorts. Stay there too long and given it's a Friday and the big move from yesterday's close, the chances are that some longs are going to cover.

 

Edit: when I say "stay there too long" I mean without moving much higher.

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Neg.... the LQ providers can "clear" short inventory for days on end... they are very good at this game...

 

IMO.. the later we go into the day the higher the odds of reversal.. I can share this edge because I haven't been able to profit from it and I think it is known. But during the intraday session the day trader builds inventor and must close it before end of day. When the trade is too imbalanced then we will often get a reversal late day..

 

Mark Fisher talks about these patterns. It is very hard to get these to work though unless you're willing to hold overnight because the other factor is that many funds will run orders late day. It may be they have in mind that they can run orders after the day trader inventory is mostly cleared and get fairer prices.. imo they are just fooling themselves. The other risk is that many funds get privileged information throughout the day and then run the orders as soon as they complete their analysis and the end of day is the last chance.

 

 

It's all about timing. Had we pushed up a little above the balance high at 87.50 and moved back down fairly soon, that would say to me that the balance was still active and higher prices were motivating sellers. Stay up there for a while and the chances are they're gonna squeeze any shorts. Stay there too long and given it's a Friday and the big move from yesterday's close, the chances are that some longs are going to cover.
Edited by Predictor

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Speaking of the late day reversal pattern, sometimes traders will anticipate this and try to front run such a pattern which creates actually a new sort of pattern. basically as soon as enough traders anticipate something happening then something else happens.. surely a reason that many successful traders don't share their edges.

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Area came right back into play when it did break lower...

 

Indeed. Attached chart shows a larger picture. Nothing fancy, but no surprise that 85 proved to be an important price to hold above, which it did on several occasions today. If you profile those four days together (not shown), you will see a VAH of 84.50.

profiles.thumb.png.6da97915195994baf146e86fec9fabdd.png

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One of the opportunities I look for is this "last hour trade"....I call it last hour because the setup happens at (or within a few minutes of) 12:00 here on the west coast....Its the same algo pattern that I have posted before (just turned on its head because its a short trade)

 

The horizontal line marks the hour (12:00 noon PST)....the ellipse marks the algo pattern

then we have another element that I really find useful....the green arrow shows what I call a "probe" up to find buyers...I like to see this because when it is unsuccessful, it means that an entry in the other direction (in this case a short) is more likely to be good for a few points.

 

So in summary.....last hour signal....unsuccessful probe up to find buyers.....entry right after that (red arrow)....manage the trade down a couple of points...

 

Edit....I was taught to be an observer of human behavior....because that behavior, especially the habitual stuff that we do without thinking can be used to our advantage when trading...as an example....it is friday...and when I first started working in the business I used to be the guy who (every friday) called the car service for my bosses....who as chance has it wanted to go home "early". so they would put on a last trade at or near the top of the hour....they would close it out about a half hour later and leave the office.....remembering this I always like to take this "last hour" trade......

5aa711266404b_Lasthourtrade.thumb.PNG.c07c2f26385bc5e28cfba4bd3e246cca.PNG

Edited by steve46

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One of the opportunities I look for is this "last hour trade"....I call it last hour because the setup happens at (or within a few minutes of) 12:00 here on the west coast....

 

The BOND market closes at 3PM which can cause this liquidity shift. Linda Raschke called it the Bond Market wiggle (or something like that)

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