Trading Pullbacks Intraday

[joshdance 10]

Yes I've spent week at a time looking at time and sales and a simple chart of the ES. Its just erratic, sometimes you think you've noticed something and then it falls apart the next day. You were right i should stick at it for longer. Is there something that i can look at to aid my analysis? Volume by price?

 

Also I've noticed between platforms that time and sales can be very different, on ninjatrader zenfire the trades generally seem to be split up and smaller and on other platforms it seems to be grouped together and you see far larger order more of the time. Or am i simply missing the point and it doesn't matter.

 

Zen fire has a good feed generally speaking, should be fine. Don't focus on just the time and sales. Just have it to the side, and refer to it if you feel you need to. Just staring at it without purpose will make you crazy. If something on your chart looks interesting, then look at the time and sales then. What is your "simple chart" of ES?

 

Don't worry about volume at price for now IMO; if you need it later, add it. But don't muddy the waters further right now. By the way, today volume has been difficult for me to read, so sometimes it will be clear, others it won't. Should be a bit more normal in the coming weeks as holiday volume disappears. Give it some time.

[Tams 20]

Yes I've spent week at a time looking at time and sales and a simple chart of the ES. Its just erratic, sometimes you think you've noticed something and then it falls apart the next day. ....

 

some people looking at an airplane's dashboard

would have the same comment regarding

the various dials and needles' movements -- they just move erratically.

 

 

 

 

ps. make sure you understand the difference between "comment" and "conclusion".

Edited January 4, 2012 by Tams

[wrbtrader 10]

I understand what your saying and iam trying to read that information through volume and CD. How do you read the volume/interest? However without candlesticks, how do you decided this is point i get, its going to stop around this area.

 

Stick with what you know. If you know Japanese Candlestick analysis and I assumed you did because you mentioned Hammer patterns...there's no explanation why you wouldn't continue using it unless it didn't work for you in the past.

 

Simply, if it ain't broke...don't fix it.

 

In contrast, if you don't know Japanese Candlestick analysis and only mentioned it because someone else is using it or you have been using it without success...post some charts involving that "pullback" price action you've described that have Hammer patterns if you want some help because these are topics that easily get lost in explanations without chart examples.

 

If you're not willing to do that...move on to something else that already contains plenty of chart examples to go along with the explanations to help you understand so that you can integrate (merge) into that price action you've been describing about "pullbacks".

Edited January 4, 2012 by wrbtrader

[phoenix01 10]

some people looking at an airplane's dashboard

would have the same comment regarding

the various dials and needles' movements -- they just move erratically.

 

 

 

 

ps. make sure you understand the difference between "comment" and "conclusion".

 

How is this comment beneficial to me or anyone else reading this thread? Yes i am confused and not sure what to do and what to look for.

[phoenix01 10]

Stick with what you know. If you know Japanese Candlestick analysis and I assumed you did because you mentioned Hammer patterns...there's no explanation why you wouldn't continue using it unless it didn't work for you in the past.

 

Simply, if it ain't broke...don't fix it.

 

In contrast, if you don't know Japanese Candlestick analysis and only mentioned it because someone else is using it or you have been using it without success...post some charts involving that "pullback" price action you've described that have Hammer patterns if you want some help because these are topics that easily get lost in explanations without chart examples.

 

If you're not willing to do that...move on to something else that already contains plenty of chart examples to go along with the explanations to help you understand so that you can integrate (merge) into that price action you've been describing about "pullbacks".

 

Ive spent quiet a bit of time on candlestick and been using them since the start of my trading. But it just seems difficult to get any sort of risk to reward edge with candlesticks on say the 5 minute chart on the ES.

[joshdance 10]

Simply, if it ain't broke...don't fix it.

 

I get the impression that it has not worked for phoenix. In which case, perhaps sticking with what he knows will not help. Perhaps a fundamental shift in how he views the markets is in order. Just my

 

Phoenix, why not post a chart as wrb suggested? It's a good starting point.

[wrbtrader 10]

Ive spent quiet a bit of time on candlestick and been using them since the start of my trading. But it just seems difficult to get any sort of risk to reward edge with candlesticks on say the 5 minute chart on the ES.

 

I don't know how your using candlestick pattern let alone pullback price actions. In addition, I don't know what exactly you're having problems with because you're using generic explanations without any chart examples.

 

Anyways, its absolutely critical that you post chart examples with any of the stuff you've been asking questions about or have used along with your interpretation of what you've been doing that's problematic. Without it...you're going to find yourself continuing asking questions whenever someone shows up and mentions another method for using with trading pullbacks.

 

My point is that there's a possibility that you already have a good method of trading pullbacks whatever that may be. Yet, you're just using it incorrectly or you have poor trade management after entry. Further, such can't be verified because nobody really knows what's on your monitors when you trade. That's why when it comes to talking about technical analysis methods...at some point you really need to see it (visual representation).

[:::grimReaper::: 10]

JTrader - have you tried the footprint charts that come with the free GOMI indicator package for NinjaTrader?

 

Where? I believe he doesn't include that as part of the free package.

[BlueHorseshoe 10]

there is only one thing for certain......if you wait for a pullback you will capture every loss when that pullback fails, and yet you will miss some of the winners as the pullback does not pullback far enough, or never comes. Its a trade off.

 

One of the advantages of this style of trading is that you can use limit orders for entry and (profitable) exits (though it's going to be a market order to get out at a loss). Not needing to worry about the effects of slippage therefore makes it much easier to have confidence in the results of backtests where you require price to trade through the limit order - in fact, the such results should represent a 'worst case' scenario.

 

However, the effect that SIUYA describes above will only ever be exaggerated by the use of limit orders.

[DionysusToast 10]

Where? I believe he doesn't include that as part of the free package.

 

It's on the BMT Elite Members version.

[TimRacette 11]

I use a similar strategy to sr100. I also use a basic low of high bar break and high of low bar break to signal shorts and longs. (i.e. we pullback in an uptrend I wait for the high of the lowest bar to break before entering long, vice versa for shorts).

[Patuca 13]

Iam talking about generally trading the first pullback after a strong momentum wave up for down. Wasn't meant to sound like a specific case. For example the ES may have a strong directional move at the open, how can one trade the pullback to this move. Or the market may range at the open and then we get a strong breakout, how does one trade the pullback?

here is an example of how a trade a PB on a 5 minute ES. i keep it pretty simple looking for specific things.

 

first i look at the general context. is the intermediate trend of the day trend up or down. a glance at the 89 SMA generally tells me this. i notice the angle of the 89 sma as that indicates strenght of intermediate trend. also is the trend just a smaller trend within a larger trading range of the day or has it been a bear trend most of the session up to this point? if it is a smaller trend within a trading range then generally not advisable to trade as a continuation of the trend if the pullback is at an extreme of the range as price perhaps is simply near R/S and maybe reversing back up to opposite side of the range. during this general overview i also take note of general context conditions of candlesticks. are they mostly bearish with larger tails at top (in a downtrend) or bullish with larger tails at bottom. plus the size of the bars. all this indicates weakness or strenght thus helps me determine probabilty if a pullback will evolve into a continuation of the previous trend as opposed to price reversing. i also take note on what happended to vol during the pullback. was it may on less or on more volume than previous bars (i.e. last few bars).

 

next i look at more immediate stuff... the slope of the pullback if steep or more sideways. bars in pullback..size? bearish? bullish? followthru ..no follow thru? big tails? small tails. if the more immediate context then validates taking a chance for a continuation of the intermediate trend then i look to enter the trade. usually 1 tick above or below the previous bar but on occasions will opt for a better entry if i think conditions warrant doing so. to not confuse i won't mention those conditions. trying to keep things simple.

 

 

btw the screenshot is ES on april 4th 2012 if i remember correctly. it was in afternoon.

Edited January 27, 2013 by Patuca

[Patuca 13]

will possibly make more comments on trade later

[4EverMaAT 10]

......

 

 

btw the screenshot is ES on april 4th 2012 if i remember correctly. it was in afternoon.

 

I took a look at the screenshot. Can these exact rules be applied consistently?

[Patuca 13]

I took a look at the screenshot. Can these exact rules be applied consistently?

no. nothing is exact in the markets. these are not rules but general guidelines. they will fail at times. hopefully they give a slight edge (which is all you need really). basically the principles these guidelines undergird are:

 

view towards larger intraday context. does the market appear weak or strong (size of bars and bearish vs bulish (more bearish or more bullish bars (indicates where tarding pressure is)? trading near previous support/resistance? trading near previous days H/L. what is general intermediate trend of the day (markets tend to keep doing what they are doing-(inertia).

 

more immediate context i.e.PB itself). is it a flag? wedge? slope? size of bars? bearish/ bullish bars. tails on top or bottom of bars? volume on pullback (generally you want to see less vol on pullbacks for a continuation of trend)?

 

is there followthrough on the bars of the immediate context i.e the PB context? for example in the chart we see pullback starts with what appears to be a fairly large bullish reversal bar but 3 bars later we have a bullish bar still but a large tail on top. this indicates sellers coming in the market. next bar is bullish..makes a lower low than previous bar and has a tail on top. this indicates selling pressure still there and PB may be ending. I would place an order to short 1 or two ticks below this last bull bar because if market continues down, and i get in then, then chances are i can make at least a 1 to 2 point scalp to the next pullback. i lock in profit on next pullback and wait to see what that pullback does and if favorable i re-enter short. in this case the pullback was a 1 bar pullback it was favorable for an additional 3 pts. an alternative is to hold through second pullback, however one runs the risks of the second pullback retracing to far and taking away the first 1.5 to 2 point profit. another alternative is to unload part of postion at first pullback and let the rest run to the next pullback. however, there was a good reason for doing this. will explain in next post.

 

in summary:

1) larger intraday context

2) PB context

3) PB volume

4) PB follow through

 

certainly not perfect. trading is always an uncertain business. you just have to look for an edge and basically take a gamble you "might" be right. i am ok with that. it is a foggy world. if you don't like the word gamble you can substitute "risk" for it.

[Patuca 13]

case for holding thru 1st PB

 

1) 20 ema running at a nice slope down on first leg down of the measured move and is also trading under the 89 sma

 

2) urgency on top half of measured move. fairly large bear bars slight to no overlap.

 

3) small to no tails on first half of measured move

 

4) increasing volume but not excessive vol

 

these observations lead credence to a possible measured move 2nd leg down at least as big as the first leg of the measured move down. as mentioned earlier in previous post different ways to trade it. whatever floats your boat. you just gotta take the gamble (risk if the word gamble annoys you).

 

nothing is certain. but you got place your bets when odds favor your desired outcome. you also have to know when to fold up and get out of the trade.

 

1) taking too long to pan out

2) to many doji bars indicating both sides battling it out and neither in control

3) PB's too big or too many bars (if too many bars then action to the left of PB is losing its influence on price.

4) pain level too much (that is subjective..each have their level..use stops to control that for yourself)

 

in this case 2nd PB of this measured move down was a one bar pullback and trend immediatley resumed in direction of previous trend with urgency. notice largest bar in 2nd half of measured move has quite abit more comparative vol than previous bars..indicates move down may be exhausting itself...time to start looking to possible get out as measured move as also been reached or close to being reached.

 

bye

Edited January 27, 2013 by Patuca

[4EverMaAT 10]

no. nothing is exact in the markets. these are not rules but general guidelines. they will fail at times. hopefully they give a slight edge (which is all you need really). basically the principles these guidelines undergird are:.....

 

Price is exact. But how do you test a method that is inconsistent? Especially when the inconsistent parts are not equally applicable in each repetition of the method?

 

It is difficult to share a method or strategy with someone if it requires a unique point of view.

Edited January 27, 2013 by 4EverMaAT

[Patuca 13]

Price is exact. But how do you test a method that is inconsistent? Especially when the inconsistent parts are not equally applicable in each repetition of the method?

 

It is difficult to share a method or strategy with someone if it requires a unique point of view.

the world isn't. Price may not be. Vol certainly isn't. You aren't. Science isn't. Even applying the most perfect science to the markets aka as math will render different results because the market is not aware of math :missy:

 

The best i can tell you is printout 100 charts from last 10 years. Look at pb and price action around them and you might observe what i am talking about. If you are looking for perfection or the perfect system or perfect back testing then you are in the wrong business. All methods are inconsistent. That is why there are SL.

 

Just when you think you have the market figured out it will kick your ass. :rofl: :rofl: :haha: