Day Trading the E-mini Futures

[CYP 10]

I call it free money - a practically risk-free trade. You have to be present and TAKE IT when it is being offered, and as you point out, you have to be able to see that it is there being offered in the first place. With regard to the seeing part, it is aptly described by the old saying, "There is more than one way to skin a cat."

 

One last thing about the free money part: it's a sure-fire loss on the opposite side. That is to say, a risk-free trade is at the same time an extremely risky trade for unskilled participants. A few characteristics of unskilled participants: (1) they predict and bet; (2) they exit on stops; (3) they never reverse.

 

Gosu,

 

Can you expand on what you mean about exiting on stops? I understand your other 2 characteristics, but need more amplification on the exiting of stops? Could just be my mis-interpretation, but I do use stop points based upon various levels of S/R or "confluence"...

 

Thanks,

CYP

[gosu 10]

Gosu,

 

Can you expand on what you mean about exiting on stops? I understand your other 2 characteristics, but need more amplification on the exiting of stops? Could just be my mis-interpretation, but I do use stop points based upon various levels of S/R or "confluence"...

 

Thanks,

CYP

 

What I mean is that the wash trade is not in the person's toolbox and trades that do not work out are invariably allowed to trigger stop losses. The usual operating procedure in a P&B paradigm is a person monitors for a "set up," enters the market when he sees one, puts in a stop loss and target exit, and then stops monitoring or continues to monitor but takes no action until one or the other is triggered. Hence there is an overemphasis on entries as "set ups that work" are sought oftentimes accompanied by backtesting.

[joshdance 10]

I for one also traded mainly based on the news Friday, and perhaps was lucky but it paid off well. My short basis was 66.50, not quite the 68 I would have liked to have had. But I also exited most at 63s as it became clear that a massive selloff would not happen. It may be guessing, but all of it is guessing. I just couldn't see new highs with Greece looming in the background, and delta volume as well as TICK steadily declining throughout the whole consolidation, indicating the market's anticipation of it as well, I think. My news service announced the CDS trigger around 2:30 I think, and then by 2:45 it seems that most news services were picking it up more strongly, and they said it was being discussed on CNBC, and about that time the rest of the selling came in strong.

[steve46 12]

Good for you Josh....seems to me that your approach was rational and provided a decent reward based on the data....what you call guessing is for me simple estimation of the probabilities....you have to work with the tools at your disposal...you use your own, I use mine and I incorporate experience....my previous comment was simple...you can't buy experience or find it on a chart package....as you can see however you can still get to the same (or nearly the same) endpoint...

 

Today was similar...with important news on the horizon and Greece just finishing its CAC process, many participants are watching from the sidelines....I simply scale back on size and take the signals I see looking for small hits....tomorrow's another day....

 

The attached chart shows the last trade of the day....simple reversal signal occurring right in the middle of a demand node and just below value extreme....in this kind of market, where so many are taking a whipping, what you have to do is focus on a specific opportunity and keep your head in the game....I walk away from the screen right before lunch (NY time) and come back to trade the last hour....works for me.

 

Best of luck

Steve

Edited March 12, 2012 by steve46

[Steve66 10]

Nope, no crowing necessary, this isn't a big deal for me....its a day thats all

 

Basically I have two points to make....ONE, if you know now to trade events, you can pick up some easy money....you have to have an approach that works and then a way to get on board....I was taught to do it....and what I am saying is that the game is played on several levels....YOU don't have to want to play it that way....I choose to.

 

Item 2.....I know of two methods (that really work well) to "read" a market like the S&P....you can learn to read the tape (if you can find someone to show you) OR you can figure out that if you simpy read the "price action" on a minute or sub minute scale...if you try it, what you are seeing is actually a significant percentage of the order flow....in fact you are seeing enough of the order flow to make it possible to determine whether the bid holds (and when it doesn't)....Actually I have already posted in pretty good detail (in this thread) what it is that you look for in order to find a favorable entry...like all valuable skills it takes time and effort, but it works...I do it every day.

 

Bottom line, its a day like any other, except that I was prepared to trade this event....and based on the posts, I didn't see anyone else "on it". From my perspective its as though someone dropped money on the sidewalk and I walked up and saw it there.....am I gonna pick it up...yep

 

Steve, enjoyed your post. Problem is most traders cannot read price action or time and sales. they rely on patterns. By the time they act, we are out, they get stuck

[TheNegotiator 13]

Yesterday may not have afforded the greatest number of trading opportunities, but as a context day it is an interesting one. It ended up very close to being an inside day at the recent upper high volume distribution. The dwindling range coming into the FOMC announcement today means any break one way or the other, could be decent in magnitude. So far overnight trading has attempted higher. However, things can end up quite different by RTH open and often do. We are sitting close to the current recent RTH high at 1371.50 with about 30mins until open. It would make sense that it opens around here for a test of 71.50 considering ES's propensity for opening at or near to test points more recently. After that we might get a move in one direction before settling into a pre-release range.

 

Anyway, here's a chart for those who are interested.

 

[TheNegotiator 13]

We haven't quite managed to take out the overnight high yet at 75.75, but failure to close that gap with responsive selling could end up fairly bullish.

 

Here's another chart:-

 

[joshdance 10]

We haven't quite managed to take out the overnight high yet at 75.75, but failure to close that gap with responsive selling could end up fairly bullish.

 

Didn't close the gap as you mentioned, and on quite heavy selling as well.

 

N, are you running IRT C1 yet? If so, what does your profile show for the total volume (RTH or ETH doesn't matter)? Mine is way underreporting volume, says 700K when it's actually 1.1M .. I emailed Chad but curious as to what yours says.

[TheNegotiator 13]

404k rth. Are all your DST settings correct?

[joshdance 10]

404k rth. Are all your DST settings correct?

 

 

I just examined the volume bars and that is correct, but for some reason my T&S is showing a lot more than that... hmm will investigate this.

Edited March 13, 2012 by joshdance

[TheNegotiator 13]

Ah, that magical VPOC shift again. Anyone had any more thoughts on that for the VPOC Shifts thread?

 

[TheNegotiator 13]

I just examined the volume bars and that is correct, but for some reason my T&S is showing a lot more than that... hmm will investigate this.

 

What is your time and sales showing?

[joshdance 10]

What is your time and sales showing?

 

My T&S and daily bar are showing 1.1M+, but a 1440m bar shows 700K+

 

N, what does a daily bar (like an actual daily bar, not a 1440m) show for total volume so far?

 

EDIT:

I compared for yesterday as well and a discrepancy there as well. Seems like I have gone down this road before, having a deja vu moment, and will simply not worry about this at the moment. I will ask IQF.

Edited March 13, 2012 by joshdance

[TheNegotiator 13]

I noticed the same on mine too. Take a look at the cme site. Shows the same. Don't know what's going on as thought it could be a bug showing both h12 and m12 but no. Maybe they're showing OTC too?! No idea.

[TheNegotiator 13]

EDIT:

I compared for yesterday as well and a discrepancy there as well. Seems like I have gone down this road before, having a deja vu moment, and will simply not worry about this at the moment. I will ask IQF.

 

Let me know if you get an answer.

[roztom 10]

I'm still on the older version until it gets out of Beta... been down this path before... distracting... I am looking forward to some of the new features though...

[roztom 10]

Guys: I was holding a long which I bailed on when the Delta dropped hard around 10a cst what is your opinion on that?

 

Price stayed in a tight range... I thought it was profit taking also we had hit the GBX high & stopped... Of course we are moving on to my target but that is ok...

 

Every so often the delta goes bonkers...we dropped about 8,000 contracts in about 5 min... of course price was holding up pretty well... SO I was interpreting it as selling coming in and potentially being absorbed but with it dropping it confused me..

 

Wouldn't you think that if the selling was being offset with buying that the Delta wouldn't have dropped so hard?

 

You guys got any opinions on what was going on there?

[joshdance 10]

Let me know if you get an answer.

 

Will let you know -- I won't compare now, but possibly they are adding some volume from the March contract since it is still receiving pretty heavy volume, presumably until expiration at the end of this week.

[joshdance 10]

I'm still on the older version until it gets out of Beta... been down this path before... distracting... I am looking forward to some of the new features though...

 

Yes but this is definitely a data question, not IRT as I originally thought...

[joshdance 10]

Guys: I was holding a long which I bailed on when the Delta dropped hard around 10a cst what is your opinion on that?

 

Price stayed in a tight range... I thought it was profit taking also we had hit the GBX high & stopped... Of course we are moving on to my target but that is ok...

 

Every so often the delta goes bonkers...we dropped about 8,000 contracts in about 5 min... of course price was holding up pretty well... SO I was interpreting it as selling coming in and potentially being absorbed but with it dropping it confused me..

 

Wouldn't you think that if the selling was being offset with buying that the Delta wouldn't have dropped so hard?

 

You guys got any opinions on what was going on there?

 

Well I'm just armchair quarterbacking here, but you have a consolidation that broke out, and then was met by selling--pretty standard stuff. But the market only ticked down 4 ticks high to low... not exactly a strong reaction in price for such a strong wave of market selling. No reason to exit the long IMO but hey, I was flat so it's easy for me to say in hindsight.

 

I don't understand your question: "Wouldn't you think that if the selling was being offset with buying that the Delta wouldn't have dropped so hard?" ... -- ??

[roztom 10]

We're basically talking Buying & Selling, Cumulative, etc..

 

If the selling is higher than the buying at that time then I consider Delta divergence which I was thinking but on the other side those contracts have to be absorbed..the tip off is price holding...to me the depth of the drop was disconcerting..

 

If there is an extreme selling in relation to buying - which I think we can agree was being shown at that time...if that selling was being offset with buying - wouldn't that counterbalance the Delta.. I know it can fluctuate..the point is an 8,000 contract drop..

 

How do you interpret that? Looking for your perspectives..

[TheNegotiator 13]

Imo, the market wasn't moving freely as such at that point. Meaning the bids were racheting up. Strong selling into the bids without a break lower meant exactly the opposite. Buying was strong after that failed gap close, yet showed no urgency after the initial push higher. At the point you mention, the selling just fueled a move higher.

[joshdance 10]

...if that selling was being offset with buying - wouldn't that counterbalance the Delta.. I know it can fluctuate..the point is an 8,000 contract drop..

 

Simply put, the bids were dominating. Buyers were choosing to bid, instead of pay up. The buying came in the passive form, instead of the active. And the delta is just reflecting that. Market selling was NOT being offset with market buying; instead, buyers were bidding.

 

And sellers, after that failed push which gave you the big delta drop, simply were not sitting on the offer as they realized it was going higher, hence, not a strong delta on the subsequent move back up.

 

This is why delta is no magic -- price can rise quite happily with falling delta, though it will not usually do so as freely as when buyers are paying up, indicating their urgency to be in the market, and chasing the market.

[roztom 10]

You know, Delta works pretty good for me... probably over 98%..but from time to time I see these anomolyies (sp?) and I get fooled... When I get confused, I tend to exit... sometimes, like today it means getting off the train just before it leaves the station... :doh:

 

BTW: A long set up pretty nice..There was GBX Support 71.25 down to a Single at 70.25... LOD.RTH..

[joshdance 10]

BTW: A long set up pretty nice..There was GBX Support 71.25 down to a Single at 70.25... LOD.RTH..

 

I think N referred to this, but the double top two weeks ago was the location of the buying this morning. I took a +1.5 on a short this morning and was hoping for a near fill to 69, but should have had my eye out for a long due to location.