Day Trading the E-mini Futures

[TheNegotiator 13]

Good morning folks! GDP out in a few mins followed by FOMC minutes at 2pm EST. Probably why overnight action has been a little muted.

[TheNegotiator 13]

Good morning folks! GDP out in a few mins followed by FOMC minutes at 2pm EST. Probably why overnight action has been a little muted.

 

GDP out at 2%! was expected 2.5%.............

[joshdance 10]

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.

[TheNegotiator 13]

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

 

[joshdance 10]

Yday's VAL 85.50, rejected that pre-open and tested 85.75 and back up. Could be an inside type of day at least until 2pm.

[TheNegotiator 13]

Yday's VAL 85.50, rejected that pre-open and tested 85.75 and back up. Could be an inside type of day at least until 2pm.

 

85.50? For which session? There was a strong reaction at the low there from what I saw.

[joshdance 10]

85.50? For which session? There was a strong reaction at the low there from what I saw.

 

Globex session-- yes quite bullish from the open until now

[TheNegotiator 13]

Globex session-- yes quite bullish from the open until now

 

I see. It's from the 24 hour session.

[steve46 12]

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

Edited November 22, 2011 by steve46

[TheNegotiator 13]

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?

[steve46 12]

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.

[TheNegotiator 13]

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.

[steve46 12]

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....

[TheNegotiator 13]

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.

[joshdance 10]

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.

[TheNegotiator 13]

I sold just as it was moving back from high. I didn't have a resting limit order if that was the question.

[steve46 12]

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...

[joshdance 10]

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?

[steve46 12]

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 November 22, 2011 by steve46

[TheNegotiator 13]

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)?

[steve46 12]

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.

[joshdance 10]

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?

[TheNegotiator 13]

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.

[steve46 12]

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 November 22, 2011 by steve46

[steve46 12]

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