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  TheNegotiator said:
GDP out at 2%! was expected 2.5%.............

 

Yes, no real reason for this market to go anywhere but south. Doesn't mean they won't take it up, but econ news sucks, Europe is still a disaster, and only the holiday shopping season needing a boost may keep the market propped up a while longer.

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Hey Josh. I suspect that ES will test at least 80.75 again and perhaps lower early on. FOMC mins may well be something that gives some hope to the market though. So I'm expecting sell-off and then gradual move higher. Could be very wrong though :o

 

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Mondaybreak.thumb.JPG.ca633ce5a797e0cac6dddc581d5a1758.JPG

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Today's Open

 

Very straightforward....low stress...we had three opportunities

 

1. For students willing to get up early, the pre-open position was available this morning at around 5:40am

2. A nice easy to identify countertrend short off the open

3. Price came down to test our primary entry at 1286.75 (long there after a "shake-out" test below)

 

Entry #3 shown on the attached chart (green arrow)

 

Referring back to Negotiator's comment about "sequences"....there are always multiple entries to a "sequence"...and those sequences are the way that I was taught to think about the market. We believe that knowledgeable participants position themselves based on pricing at various points along a 24 hour continuum. Unlike retail participants our starting point is the Globex open. Each tradable sequence has a pre-position entry, a primary entry and a secondary or late entry..this helps us to identify where we are in the markets and to hold our positions (because if we are right in our entry, we can see the sequence unfold in a predictable fashion).

 

Depending on which choice they made, most folks got paid

5aa710b76dfd4_Todaysopeningentry.thumb.PNG.1990b1e5f619ea5028126f4bfbd28965.PNG

Edited by steve46

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  steve46 said:
Today's Open

 

Very straightforward....low stress...we had three opportunities

 

1. For students willing to get up early, the pre-open position was available this morning at around 5:40am

2. A nice easy to identify countertrend short off the open

3. Price came down to test our primary entry at 1286.75 (long there after a "shake-out" test below)

 

Entry #3 shown on the attached chart (green arrow)

 

Depending on which choice you made, you got paid

 

So what did most of them do steve?

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Human behavior is very predictable....most got up late (for the US open), took the reversal trade for 2 points (mostly because I was there to identify it for them)....and then sat out the late trade entry...a couple of folks acted on their own initiative and got on the long down at 86.75

 

I think it tells you alot about how and why we win and lose in this and other pursuits in life.

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Maybe the reason they chose number two does tell you a lot. But it was an option to sit back and not press too hard. We opened right in the middle of yesterday's crummy profile and were still waiting for figures and fomc minutes.

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  TheNegotiator said:
Maybe the reason they chose number two does tell you a lot. But it was an option to sit back and not press too hard. We opened right in the middle of yesterday's crummy profile and were still waiting for figures and fomc minutes.

 

 

Understood....and I agree....and yet we open within distributions almost every day because this is a market that waits for direction...thats what we have to work with....so what to do?

 

Well, I read the tape...off the open it "tells me" if there is an opportunity to get on a trade and based on experience I know that there are going to be several moves within the opening sequence....an initial move off the open as the retail and opening orders are processed...a secondary or counter move and a late entry usually aligned with the primary trend..

(depending on the timing of reports)....if you can't read the tape...of course it limits your options

 

this is why I suggest that most new traders avoid the open and pre-position. Those who chose that option (that would be "me") got a bigger reward today...not saying that is always the case, but....

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Reading the metaphorical tape is not a magical thing, but it is important. I would say more people know how to read the tape than you might think. It's just maybe they don't understand or have a method of employing it in their trading yet.

 

Tape reading is meaningless without continuation of a direction subsequent to the action in question. Often something can look like it's reversing in a place where it isn't necessarily achieving any significant objectives within the auction. It reverses a little, only to go through the point later on. Personally I didn't take the trade off the 86.75 area. I did however, take the trade at the top(sold 1294.00) which was also an area but nearer the edge of an extreme. I closed it out at 87.50. So as the proverb goes steve, there's more than one way to skin a cat.

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  TheNegotiator said:
I did however, take the trade at the top(sold 1294.00) which was also an area but nearer the edge of an extreme. So as the proverb goes steve, there's more than one way to skin a cat.

 

Did you sell it on the way up, or get filled on the retest a minute or two later?

 

I forget N, do you use volume in your analysis? Volume screamed to exit longs but it was quite a strong drive up so I did not want to initiate a short, though had I been long I sure as heck would have flattened.

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Very nice short at the top Negotiator....

 

The tape (the NYSE tick) showed an opening reading at 6:46 just above 800....the next bar or candle (I use 2 minute candles) opened lower...."suggesting" that the broader market was going to retrace...$VOLD and more importantly $ADD, showed that commericial interests chose to sell that price...and it was at the top of a "local" distribution .....however you did it...nice trade.....I am done for the morning...

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  steve46 said:
Very nice short at the top Negotiator....

 

The tape (the NYSE tick) showed an opening reading at 6:46 just above 800....the next bar or candle (I use 2 minute candles) opened lower...."suggesting" that the broader market was going to retrace...$VOLD and more importantly $ADD, showed that commericial interests chose to sell that price...and it was at the top of a "local" distribution .....however you did it...nice trade.....I am done for the morning...

 

FWIW, my TICK shows a high of 731 or so at that time. Data feeds show different values for TICK, which is why I place little value on it. Also, the trend of A/D, UVOL / DVOL, etc., I feel are important, but nothing significant at 9:46 from VOLD --just the usual ups and downs IMO. Care to elaborate?

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What do you mean "elaborate"?

 

If I agreed with you I wouldn't be able to read the tape....Some of my students use Tradestation (at least at the beginning) and other vendor products...and their tick is off...to put it bluntly...

 

I have been using this basic system for more than a dozen years....it seems to work..

 

The only thing that is new...is that now I use pattern recognition...I see reversal patterns and they confirm what the tape tells me...or vice verse depending on your bias...I have always needed confluence to trade...

 

and finally "tape reading" isn't just about the tick, Vold & Add...the basis of tape reading is interpreting the interaction of the three indicators along with "the tape" (time & sales)...once you "get" that, you learn that what matters is whether a bid is "held" or not....as I have said before...its not possible (in my opinion) to show folks how thats done in this environment.

Edited by steve46

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  steve46 said:
Very nice short at the top Negotiator....

 

The tape (the NYSE tick) showed an opening reading at 6:46 just above 800....the next bar or candle (I use 2 minute candles) opened lower...."suggesting" that the broader market was going to retrace...$VOLD and more importantly $ADD, showed that commericial interests chose to sell that price...and it was at the top of a "local" distribution .....however you did it...nice trade.....I am done for the morning...

 

Thanks. If like Siuya says, "context is king", confluence is queen. (Lol. If that makes sense)

 

Question though. You refer to tape as the NYSE tick? Also, when you're trading ES, do you ever open an S&P tick chart(not a chart of the s&p with candles based on ticks but net tick of all s&p constituent issues for anyone who doesn't know)?

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  TheNegotiator said:
Thanks. If like Siuya says, "context is king", confluence is queen. (Lol. If that makes sense)

 

Question though. You refer to tape as the NYSE tick? Also, when you're trading ES, do you ever open an S&P tick chart(not a chart of the s&p with candles based on ticks but net tick of all s&p constituent issues for anyone who doesn't know)?

 

I have tried it...I like watching the time & sales strip roll by a little better...I guess I am used to it and have learned how to integrate that into my system....so it is difficult to change at this point.

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  steve46 said:
If I agreed with you I wouldn't be able to read the tape....Some of my students use Tradestation (at least at the beginning) and other vendor products...and their tick is off...to put it bluntly...

 

and finally "tape reading" isn't just about the tick, Vold & Add...the basis of tape reading is interpreting the interaction of the three indicators along with "the tape" (time & sales)...once you get that you know that what matter is whether a bid is "held" or not....as I have said before...its not possible (in my opinion) to show folks how thats done in this environment.

 

Actually I've never heard of reading the tape associated with TICK, VOLD, etc... it's time and sales, only, perhaps with some glancing at the DOM. Others are just market indicators, and I use UVOL DVOL, but it's not really good IMO for immediate market sentiment, as if the market has gapped down, ADD will be negative, period, no matter if buying is going on or not, for example.

 

Who is your data provider?

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  steve46 said:
I have tried it...I like watching the time & sales strip roll by a little better...I guess I am used to it and have learned how to integrate that into my system....so it is difficult to change at this point.

 

Sorry steve. The question was what is it that you are refering to specifically when you mention 'tape'? NYSE tick is what I think you were saying.

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  TheNegotiator said:
Sorry steve. The question was what is it that you are refering to specifically when you mention 'tape'? NYSE tick is what I think you were saying.

 

I see....the "tape" (for me) consists of

 

1. the "Time & Sales" strip

2. The NYSE Tick

3 $VOLD & $ADD

 

That combination of data...monitored concurrently...is what I refer to when I use the phrase..."reading the tape".

 

I hope folks will forgive me, but the space between now and 10:30 is when I get to take a nap before I have to come back and do it again in the afternoon..so I am going to excuse myself..

 

Best Regards to all

Edited by steve46

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Here are the reversal setups for the early afternoon session

 

what I like about this these is that they are relatively easy to see once you get some background

 

all you have to do is manage risk and stay focused

 

Best Regards

5aa710b77719b_ReversalsetupsearlyafternoonNov22.thumb.PNG.fde102a73f65da70dc99ef940ee28fea.PNG

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