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Maelstrom

Trading the Storm - Methods for the Struggling Trader

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Not to cloud anyone's analysis, but this trendline appears to be spot on..

 

BTW, nice trade, what is that like 65 ticks MFE? Pretty good RR

5aa7108bbb0a5_nicetl.thumb.jpg.0b5f059250e4e00095bd741215013f69.jpg

Edited by ziebarf

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I'm thinking you are stopped out now with maybe 15 tick profit unless you waited for the signal to go long, then you didn't make much at all.

Now it looks like we would be long.

SNAG-0006.jpg.bd2d10e7de955b5e5aa6673bb4648803.jpg

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I'm thinking you are stopped out now with maybe 15 tick profit unless you waited for the signal to go long, then you didn't make much at all.

Now it looks like we would be long.

 

Indeed - a MFE of 67 points, and an exit on the reversal for a whopping......hold on, drum roll please..... 8 points. :crap:

 

Actually, it's perfectly ok with me. This is an excellent example of how sometimes, with my methods at least, when a market meanders, especially after a violent move like this morning, it will just languish and you can give up a lot. But, the runner trades more than make up for these, and I believe in giving a trade room instead of choking it out too soon.

 

Remember, for the risk-adverse.... a 1:2 R:R ratio is perfectly doable with a method like this, and would have served a trader well today.

 

And you are correct - long entry on the first green bar around 1:31 cst. Short week, less than two hours to close on a weekend, definitely a judgement call for most on whether to take on a new trade here.

 

M

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Not to cloud anyone's analysis, but this trendline appears to be spot on..

 

BTW, nice trade, what is that like 65 ticks MFE? Pretty good RR

 

Thanks Ziebarf - great observation on the TL. Things like that have always been a reason I have been unable to believe the random walk theorists - there is usually some kind of structure, we just may not always be able to see it.

 

M

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Out at 12626, my entry was at 12565, so +61 on that one. Exit was simply due to 5 mins to close on a Friday, but I will take it and be happy.

 

Have a great weekend everyone.

 

M

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Out at 12626, my entry was at 12565, so +61 on that one. Exit was simply due to 5 mins to close on a Friday, but I will take it and be happy.

 

Have a great weekend everyone.

 

M

 

You too M, try to stay cool in da Texas heat...

 

here's the 3200 tick ES today with some annotations...

 

what's not on the chart is trade management...

 

so, the failed ICH pattern trade (short) turned out to be a looser... however, it was not too bad because I did manage to get half my position off for a point before it reversed and the stop was just below the entry candle so it was almost breakeven.... if i'm disciplined in following my rules for high probability entries... then getting the first 1/2 of my position off is lilely and then i have reduced risk scenario for the remaining 1/2.

 

in fact there was an earlier IHS pattern that I tried to trade thinking it would move to fill the half gap but my order didn't get filled... good thing cuz it ended up failing too!

 

in fact, by the time the 9:00 zone rolled around one of the scenarios i thought might develope would be the IHS trade to fill the half gap then a sell-off from there to close near the LOD... just goes to show ya...

 

2011-07-08_1614.png

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Phil,

 

In the spirit of the title of this thread, would you be willing to explain your trading method (or at least your take on c&h patterns) in more detail?

 

Thanks,

 

J.

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Phil,

 

In the spirit of the title of this thread, would you be willing to explain your trading method (or at least your take on c&h patterns) in more detail?

 

Thanks,

 

J.

 

Jon,

 

My take on the patterns is really no different than probably anything else that's out there on the subject...

 

and really, C&H, H&S, wedge, flag, etc. are just names for consolidation patterns.

 

the way i try to trade them is to wait for a close past the neckline or b/o line and then a pullback for entry... ideally there's some confluence near my perceived entry point of fib level, trend-line, pivot, etc. and also reversal time zones. also as i mentioned in a previous post i watch market internals and the tick to time entries...

 

if I get filled then it's trade management after that...

 

i like to use a scale out method that gets me out 1/2 position on the first move... so say i have 4 contracts... 2 are off 1st at a target set to a tick or so below the swing high, then my stop is moved up to where if it's hit that i'm only out net a couple ticks... this usually still allows me room for the trade to work...

 

the remaining 2 contracts... 1 i usually set for a tick or two below the 23.6% fib extension above the swing high... or an obvious resistance level... (TL, pivot, key MA, prior day high, low, open, close, gap, etc.) if that's hit, then i move my stop for the remaining 1 contract to break even and employ a trailing stop based on successive swing lows not unlike what Maelstrom has described here.

 

one other thing i like to do is be aware what the range is for the first 30 minutes of trading and also where the close is at 60 minutes in relationship to the mid-point of the 1st 5 minutes of trading... the later usually is a good indicator of the overall bias for the day...

 

ok, so that's more than describing the C&H pattern... but again, whether it's C&H, H&S, wedge, flag, or whatever, it's gonna be different every day and I just try to do the "stand back and squint my eyes" every once in awhile to try and see if anything is shaping up pattern wise...

 

fwiw, and IMHO tick charts are much better at revealling the patterns...

 

it was a real eye opener when i started using tick charts....

 

as I told a trading buddy of mine, the patterns just seem to jump out....

 

not sure if that helps

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Phil,

 

Thanks for the reply. I will probably need a little hand holding for each situation but I will read what you have posted a couple of times and bring up some charts to see if I can apply what you have stated in your post. I need to learn to crawl first before I can stand up and fall down a few times.

 

J.

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Looks like if you were up at about 2:30 or so you would have had your entry.

One of the things I like about this method is the ability to disregard the time...

SNAG-0001.jpg.78095dcf447fefebafd800f8e8829bf7.jpg

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Looks like if you were up at about 2:30 or so you would have had your entry.

One of the things I like about this method is the ability to disregard the time...

 

That's right JEH.... got in on that one, then set some alarms and went back to sleep, so apologies to anyone tracking these that I didn't make any updates. I will post a chart a little later with the complete trade.

 

Also, been working on something else..... maybe TTS 2.0 lol. Will continue to develop it and maybe post some information once I confirm a few things.

 

M

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Maelstrom,

 

I was in the trade last night. Sim account, not live. I missed the initial entry but got in at a better price. but kept the stop that would have been correct had I not missed the initial entry. This raises the question...

 

How do you enter and manage trades when they could be triggered any time of the day?

 

Once you are in a trade, how do you babysit it through the night?

 

I believe I followed you rules for trade management using the extension of the formation as the trade progressed but I also used the Friday close down bar as the first bar of the formation. I will be looking forward to your play by play on this trade.

 

J.

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Maelstrom,

 

I was in the trade last night. Sim account, not live. I missed the initial entry but got in at a better price. but kept the stop that would have been correct had I not missed the initial entry. This raises the question...

 

How do you enter and manage trades when they could be triggered any time of the day?

 

Once you are in a trade, how do you babysit it through the night?

 

I believe I followed you rules for trade management using the extension of the formation as the trade progressed but I also used the Friday close down bar as the first bar of the formation. I will be looking forward to your play by play on this trade.

 

J.

 

Jon,

 

Great questions. I guess I would start by saying I trade 24 hours a day, 5 days a week. I know that sounds a little crazy, and I guess it is, but it's not quite as bad as it sounds...

 

I have a lot of alert conditions set up for my setups. For example, 3 consecutive bars up or down, and I get an alert. I also set up alerts for price extensions and/or when price gets near a stop level. I have a laptop that I keep on the nightstand overnight, and when an alert goes off, I check to see what is happening, and decide whether it is something to watch or to setup another alert. Yes, it sucks a lot of times being woken up several times a night, but as I have mentioned before, there is nothing I hate more than waking up and having seen a great move that began in the AH session and left nothing but chop to try and trade during the day. With that being said, certainly not a trading style for everyone.

 

And apologize for the delay in posting a chart on the trade..... been playing with my new charts a bit to see if I can get alerts set up the way I need them, but I will get that up here in just a few mins. If you can, post your chart also....I would like to see how this trade worked out for you.

 

M

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M,

 

Your trade is the same as I followed. I haven't found an indicator for ninjatrader to alert for the pattern so I may have to mod some other indicator to do this. Let me know if you know of one for ninja so I don't spend time if it's already out there. Ensign is pretty flexible when it comes to creating stuff like that with the DYO study feature. I also agree that if many of the good setups occur outside of the US session, you have to wait until the market is ready to give you a signal and be ready to act on it.

 

Also, if the price gap is not a real gap from Friday close to Sunday open, let me know what fixes it.

 

J.

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Pre-mkt doodling on 3200 tick ES...

 

not set in stone, just the boundries as of the posting of this msg... may add another fork if close below existing fork mid-line continues south...

 

2011-07-13_0711.png

Edited by Phil-n-Texas

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ES daily...

 

i realize this is a "price action" thread but it can pay to be aware of commonly used indicators such as MA's, oscillators, etc. on daily, weekly....

 

lots of convergence right here at the 50% retrace area... 20(red), 50(dk-blue), 150(pink) MA's... many oscillators in oversold territory...

 

2011-07-13_0721.png

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