Day Trading the E-mini Futures

[TheNegotiator 13]

Ants,

 

Please stop posting links. This is a thread for ideas. If you want to criticise any contributor I suggest you start an alternative thread to do so. Contribute or kindly don't comment.

 

Thankyou.

[joshdance 10]

At the time of me writing this, ES is currently sitting at1265.75 bid having tested the first higher volume area of 1266.50 and retreating slightly from 1267.50. It is 08:13 EST and so there is plenty of time for the market to move back into the 3-day balance before RTH open. However, if we were to open above 1260.50 or get above it, the next important price other than 1266.50 is 75.25. Remember that we need to see development higher for the move to be sustained and not just tests higher. This means trading going on. Anyway, I've noted a number of important prices in the long term chart with the thicker dashed lines being my important prices for today. Not that they are automatically more important than other prices like the 1302.75, just that I'm more keenly watching reaction at them today.

 

75.25 because it's the "boundary" before the next high volume balance? And 66.50 because it's the "peak"? Kind of like, we have to get over the top of this peak, and then up to the next peak, before we can move on?

 

Also, when you talk about seeing development and not just tests--how do you determine this? For me I look for a break of an area and then both trading activity, AND passage of time, which I feel is important. How about you?

[TheNegotiator 13]

Basically yes to all of what you have said. Development is just horizontal filling out of the profile. With regards to the 66.50 and 75.25. Yes because they are major high/low volume respectively, but also because they are the first major levels on the way up to the upper major VPOC.

Edited November 8, 2011 by TheNegotiator
75.25 not 74.25!!

[TheNegotiator 13]

Here's a quick visual for you.

 

[Ants88 10]

Ants,

 

Contribute or kindly don't comment.

 

Thankyou.

 

I did comment. Did you read the comment? I am contributing and commenting kindly...

[TheNegotiator 13]

I did comment. Did you read the comment? I am contributing and commenting kindly...

 

Okay let me be a little clearer. This thread is for discussing anything directly related to how we might trade or look at the E-mini futures contracts. So techniques for analysing the market, or even specific trading ideas.

[sdoma 10]

Negotiator, today's action is nice, eh? Opened outside of 3, 5, and 10 day value, couldn't auction higher and reverts back in towards the POC. Classic responsive action. By the way, if you don't mind, I'd like to explain a couple of things to Ants before we put this to bed. If you don't like what you see, edit my post.

 

 

Thanks steve46 for the response. A couple questions, and I'm not trying to be an idiot or jerk. But, why do you have students? I assume they pay you for the privilege...

 

So, why do you have paying students, if you can produce an income trading with the professionals?...are you trading for a living or teaching for a living? If you can teach for a living, why trade? If you can trade for a living, why teach?

 

Trading is risky. If he can do both, he now has a second source of income which isn't volatile. It also makes getting financing for various things much easier. Banks do not like to lend to traders. It's OK that you don't know this, you probably don't know any successful pro traders.

 

 

We are amateurs in comparison to Goldman. Period.

 

You give Goldman too much credit. They make money on grey zone information and HFT, which depends on access and speed. Their trading operations don't do all that well otherwise.

[joshdance 10]

So, we have a value area for today (right blue box) and now that price has dipped below that, the volume is noticeably lighter.. yes there's development, but not like we saw earlier. YET, we are spending a good deal of TIME in this area. Buyers are not quick to reject value below 57.50 (VAL). So, in terms of time, we have more acceptance than in trading activity. Thoughts?

 

EDIT: for kicks, the second picture uses TPO instead of volume.

[TheNegotiator 13]

sdoma, the other thing was the big delta around 10:30. Pretty decent clue that more downside was due.

 

josh, I'm not pinning everything on further downward pressure yet. The current move down did stop right on the last swing low from yesterday. Also, we are coming into lunch so volume lower because of that, but also activity possibly lower because of that. Think of it like this. We've seen an attempt higher and an attempt lower. Participants likely to say to themselves "okay, gonna take lunch now and see what things are like when I come back". The other thing is are we gonna get back into the IB? Didn't go just then so we'll see. If it doesn't, then that's more info even if you didn't trade against the attempt. I didn't actually see the current low as I was distracted, but a cursory look was that it was testing the level rather than rejecting. So it could well be revisited later on. Also lots of news these days.

[steve46 12]

Here we are at lunchtime and yes it is a news driven day....mostly participants concerned not with Greece, but with what is happening with Berlusconi and Italy....they need to remove him and get a budget in place (and it looks like that will happen here shortly)....the political vacuum however is a drag on the markets. Looks to me as though participants are moving to the German Bund and to industrial "B" paper because the spread is improving there.

 

The attached charts show some nice time based opportunities....and as always traders have a couple of choices, go with the intraday trend, go counter if you have a way of seeing the reversals or stand aside while the market waits for Italy to act....

 

I put some bands in on these charts because I am experimenting with them. What I notice is that they make it easier for the trader to see intraday variation in volatility. Personnally I like to eyeball the patterns but this is one way that a trader trying to learn to use volatility can obtain a set of "training wheels" so to speak...Notice how price moves outside the band then back in just prior to the periodic reversals....now the obvious question becomes "how do you know which of the reversals to take"? and for me the answer is that I read the tape, and look for confirming data from the DAX....and of course there are other data inputs that help (once you are in the trade) including $VOLD/ADD and TBP.

Edited November 8, 2011 by steve46

[steve46 12]

and just now on the news that Berlusconi is out.....the market reacts as expected

[TheNegotiator 13]

Yeah, nothing too unexpected there. A point worthy of noting is that over the prior few days the pattern has been the same. Sell off then rally into close. What's the betting that we'll make new highs today then?

[joshdance 10]

Yeah, nothing too unexpected there. A point worthy of noting is that over the prior few days the pattern has been the same. Sell off then rally into close. What's the betting that we'll make new highs today then?

 

I count from memory and a brief glance at chart four days in a row where we've had basically the same thing: brief rally to start, then selloff, then rally into close. Something tells me we can't keep this pattern up every day from now till eternity :-) Wish we could though :-D

[steve46 12]

Just for the heck of it, thought I would post this example from tonight's Globex market

 

Ironically I used to make my living trading the Globex market, and when I stopped I thought man, this is going to be much better, no more overnights/sleeping during the day...didn't think I would miss it until I stopped..

 

Anyway the Globex is a different animal altogether....actually it is a collection of markets opening one after the other throughout the evening into the morning and the open of US markets. To trade this market, we divide the larger market into several individual markets based on each "primary".....Not here to put on a seminar so to cut to the chase. I follow each primary market as we move through time, at the same time I am looking at the ES on two time frames, one longer, one shorter...

 

Attached you can see the shorter (2 minute) and the volatility based entry earlier in the evening

 

Nowadays, I don't stay up all night, but I do stay in the market until bedtime...and yes I do have a monitor in my bedroom (got one in my living room, kitchen and outside on my patio as well)..

 

In the overnight market I am looking for a minimum 5 points, and I always leave something in place in case it runs.

 

Good luck

[joshdance 10]

Nice job steve, hope you left some on for that monster selloff

[TheNegotiator 13]

You still short any ES Steve? Market tanked so far in the European session! Euro isn't doing too well. Anyway, did anyone notice the high yesterday? 1275.25 which was exactly that important low volume to the tick. It's a shame it happened late on for me otherwise I may have shorted it. Oh well. My head is fuzzy today due to being under the weather so I won't be trading. One scenario I might look for though is if market opens and tests the 1241.50, fails and moves back up towards 1266.50. Just one option though. Could also move to test yesterday's low 1251.50, fail and then look for buyers towards the 1229.75 area. Just another option. Anything I am saying is just about possibilities. You always have to judge for yourself, assess the situation and take responsibility for your own trades.

 

That being said:-

 

Edited November 9, 2011 by TheNegotiator

[joshdance 10]

So far your 41.50 test worked -- was that just because it was the lowest volume node on the long term profile?

 

My vote if we do go up is for significant resistance at 59-60 again

[TheNegotiator 13]

Yup, that's pretty much it! We'll see what happens now though. Watch that Euro!

[TheNegotiator 13]

Bit of an Open-Auction type opening here. Whichever way we do break, I'd suggest there may be a decent move.

[TheNegotiator 13]

I know there was news out at the time, but this is how I read the action there at the low.

 

 

Edit: That is a 2500vol chart for anyone who's interested.

[joshdance 10]

N, missed your daily commentary this morning, I guess you are still not feeling well. Hope you are feeling a little better as noon rolls around my friend! Get better soon!

[TheNegotiator 13]

N, missed your daily commentary this morning, I guess you are still not feeling well. Hope you are feeling a little better as noon rolls around my friend! Get better soon!

 

Thanks buddy! Not that I have been watching too much, but I'd say low was a rejection. So long as 29.75/IB Low isn't re-breached I would think there's a good chance of new highs. Gotta keep an eye on news though. Also quite a clear downtrend currently needs to be taken out(and lower lows halted)

[TheNegotiator 13]

Of course there's also the chance that we sit here and do nothing.

[TheNegotiator 13]

A new week, a new PM. Well for some people anyway. Friday looks to have been pretty slow compared with recent days. Lower volume, smaller range. One move and then sideways. We'll have to see what happens today, but here's a scenario in my chart.

 

[TheNegotiator 13]

Well so far the scenario gave a nice little entry for a move from 58ish to 52ish. If it takes it properly, next test on the way to 37 area is 49.25 then 44, followed by 41.50.

 

Edit: 44.75 is also last weds VPOC too.