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MadMarketScientist

Day Trading the E-mini Futures with Predictor

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Exceeded profit targets.. DFD.

---

Market is stronger then I anticipated and that was a difficult short to pull off. One observation is that we had a large imbalance of new open short trade. But, this trade wasn't able to clear lower. When large imbalances in new open trade aren't able to clear then this can create an explosive and contrary movement...

 

What's important in these situations is to recognize that the scenario has changed and react accordingly..

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Exceeded profit targets.. DFD.

---

Market is stronger then I anticipated and that was a difficult short to pull off. One observation is that we had a large imbalance of new open short trade. But, this trade wasn't able to clear lower. When large imbalances in new open trade aren't able to clear then this can create an explosive and contrary movement...

 

What's important in these situations is to recognize that the scenario has changed and react accordingly.. In my case, I didn't. I just kept the trade open and added at the next imbalance. I feel this was a mistake in this case because the OF was extremely dominant and abnormal.

 

If you can keep the leverage down then I think smart/selective averaging can work because every new position can increase the accuracy. However, it only works in some scenarios and only when not over leveraged, often requires holding for long periods. You have to understand the time component of trend and range to do that. I find most of time it works better to add when up or when more confident then less.

 

I plan to eventually try my software on Forex or using currency futures and FX as proxy to see if a scaling strategy can work...

I trade FX futures (euro, yen, and to a lesser extent GBP) when the market reaches "extremes" after a major move (defined as ~ 1% in a given day). It almost always immediately retraces the initial move and proceeds to the bottom of the relevant hourly channel. but as usual, its right until its wrong ;)

 

I did put anything on today. I was looking for a higher high to sell in respect to NFP numbers from last week on the s&p. mini dows were promising leading up to the open and did nothing after that despite a higher high. ended up deciding to stay out based on the low levels of volume since I didnt particularly like the PA leading up to today's high. it appears we are in something of a wedge going into the fed decision on wednesday for several contracts. i'm looking for a short around 2970/80 on the euro to sell. glad you did well today

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rtg.. Thanks. Have you ever watched forex/fx brokers in relation to the fx futures? Do they track pretty much 1 to 1? I can get the volume information from futures. I'm just not sure how the spreads differ/i.e how close it is.

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rtg.. Thanks. Have you ever watched forex/fx brokers in relation to the fx futures? Do they track pretty much 1 to 1? I can get the volume information from futures. I'm just not sure how the spreads differ/i.e how close it is.

 

forex is definitely more volatile than fx futures though the major pairs track pretty closely with futures. forex brokers literally will steal from you with EOD stop hunting spreads, spread manipulation (major events, certain hours of the day, etc) and slippage. personally, i highly favor fx futures. it is a little more smoothed, i never experience slippage with limit orders, it is exchange traded rather than OTC, and has nearly the same availability as the forex 24 market.

 

having said that.. i still maintain a spot account w citiFX. they are the best US broker there is. trading accounts w them used to be FDIC insured to 250k (not sure about this anymore) and not subject to rehypothecation (very important, mitigates counterparty risk. no other forex broker offers this). the only real advantage with forex vs futures is that there is more liquidity on fx crosses. in futures, you will have to do your own cross in certain scenarios or suffer the lower liquidity

Edited by rtg

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H2:1426

H1:1422

L1: 1418

 

My basic hypothesis is that the market is likely to be neutral/slightly bullish in advance of Wednesday Fed announcement.

 

Market is trading at around 1417.50-1418 as of this writing. I will not be tracking it overnight. I may not trade tomorrow. I've had a tremendous amount of enthusiasm for my tape reading software and so the focus is on making it available, as soon as possible. My tentative game plan is somewhat the same as today except I'm going to be leaning heavier on long side. This is subject to change completely if the context off the open is different then anticipated.

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H2:1426

H1:1422

L1: 1418

 

My basic hypothesis is that the market is likely to be neutral/slightly bullish in advance of Wednesday Fed announcement.

 

Market is trading at around 1417.50-1418 as of this writing. I will not be tracking it overnight. I may not trade tomorrow. I've had a tremendous amount of enthusiasm for my tape reading software and so the focus is on making it available, as soon as possible. My tentative game plan is somewhat the same as today except I'm going to be leaning heavier on long side. This is subject to change completely if the context off the open is different then anticipated.

 

gm Predictor,

 

I am enjoying your ES posts, please keep them coming.

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"Boehner to give update at noon" So far BN has been jawboning that they can't make progress. Anticipate any changes? This could put a dent in rally. Always concerned in these situations that others have inside information...

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"Boehner to give update at noon" So far BN has been jawboning that they can't make progress. Anticipate any changes? This could put a dent in rally. Always concerned in these situations that others have inside information...

possible but his bearish comments did not take any fuel out of the NFP rally last week. risk is all to the upside today.

 

i'm sidelined. it is too late to get long and picking a top here is not worth the risk.

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Was able to catch a bit of that BN reaction but market looks resilient.. Shutting down as I'd be at risk of hitting daily loss limit if continued... gl

 

CL.. I trade both trend/momentum and counter trend.

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Trend trading is not the same as trading momentum. But hey its your account trade it how you like

 

Hi there,

 

I would still like to know why you selected the 33 area ahead of time if you are willing to share.

 

thanks

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was able to catch a bit of that bn reaction but market looks resilient.. Shutting down as i'd be at risk of hitting daily loss limit if continued... Gl

 

cl.. I trade both trend/momentum and counter trend.

 

lol !

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I have tams on perma ignore. I will trade my way. Everyone else can trade their own way. If you want to buy at 33 then buy at 33. I've traded in many different ways over the years. So, I'm familiar with what it takes to win/make these styles actually work.

 

---

 

Today I noticed a change in the order flow... its a different style of market. Very momentum driven.. While perhaps not surprising, even to the downside though there wasn't much back and forth. ES seems good and thick but the price behavior is different...My belief for this is that most major institutions are trading on new/event driven flow and acting in concert.

Edited by Predictor

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I have tams on perma ignore. I will trade my way. Everyone else can trade their own way. If you want to buy at 33 then buy at 33. I've traded in many different ways over the years. So, I'm familiar with what it takes to win/make these styles actually work.

 

---

 

Today I noticed a change in the order flow... its a different style of market. Very momentum driven.. While perhaps not surprising, even to the downside though there wasn't much back and forth. ES seems good and thick but the price behavior is different...My belief for this is that most major institutions are trading on new/event driven flow and acting in concert.

 

market conditions are tough. do you get to "lol" at tams since its rallied back 10 handles in his face? obviously, he and all other shorts covered and went long at the perfect time.

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rtg... what makes you think tams even trades or took a short trade? For the record, I'm not competing against anyone here. I took a long reversal trade near the lows but took it off for a small profit due to short time. I think maybe tams was lol at my daily risk limit.. No idea.

 

This thread works best when traders share their analysis and not question other peoples trade or try to showboat. Anyway, I traded according to my principles.. didn't lose as I much as I could have.. didn't make as much as I could have, either. Not too bad.

 

market conditions are tough. do you get to "lol" at tams since its rallied back 10 handles in his face? obviously, he and all other shorts covered and went long at the perfect time.

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H2: 1438

H1: 1434

L1: 1428

 

If the market turns south then we could see a retest of 1408-1410. My sentiment is that at the current price levels that the risk to the downside is higher then usual. However, the momentum makes shorting difficult for the weak stomached. In this environment, the ideal trade is I think to sell a risk limit bear spread. If I had an options account I think holding such a spread short could offer a good way to play to the downside.

 

For the Fed announcement, one potential game plan is to fish with limit orders far off the market... in the 1408-1410 region.

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New contract tracking is nice... I can see the short balance increasing. We had some buying come in the first low we made but new selling has entered on second touch of low... keeping an open mind.

 

----

 

Market seems high probability to test 30.25.

 

---

 

Traders don't like to trade into these book imbalances (heavy orders on limit side) but eventually arbs will do it for us.

Edited by Predictor

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Traders don't like to trade into these book imbalances (heavy orders on limit side) but eventually arbs will do it for us.

 

hi Pred,

 

Can you please explain who the "arbs" are and how we will know they are at work other

than the ask-bid spread and the price will begin to move in harmony again.

 

To me, it is the same thing as "the bots did this and the bots did that"

All I can ever see is the cum effect of vol at the ask or bid and the spread and the spread of levels above and below price.

 

I must be too simple for this game because I cannot tell a bot from a human and so I need

your help to show me how to spot an "arb"

-----------------------------------------------------------------------------------------------------------------------------

 

Right now, all I see is the cumprice for the session rising faster than the cumdelta and this makes me think that the limits are losing their grip.

 

But I would not know if this is the work of an "arb" or a left handed midget

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johnw... My sense is that these are correlation traders. The order book dynamics will cause a certain set of dynamics. For example, if many weak hand traders go short/long at the same time then often the market will instant reverse, hit stops, then drop. The reason is somewhat contrary but they created greater demand then was available below them to cover.

 

HFT algorithms might for example try to buy in front of this imbalance (demand area) and resell it for a few ticks. Sophisticated traders use algorithms that can detect such characteristics as well and are reluctant (or their bots are reluctant) to execute into the "pocket" or the hands of the short term traders.

 

However, at times its almost as if the market is forced too move there. The reason is that eventually due to other markets getting out of whack there is a risk free opportunity to take the orders. At that time, the order book imbalances become irrelevant.

 

This is just the way I interpret it. Another interpretation was that the market was going to go there anyway but that it takes some time for the majority to recognize this. During such interval of uncertainty, the market pauses.

 

I don't claim to actually know what happens. I just use descriptions that help me to trade better.

Edited by Predictor

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hi Pred,

 

Can you please explain who the "arbs" are and how we will know they are at work other

than the ask-bid spread and the price will begin to move in harmony again.

 

To me, it is the same thing as "the bots did this and the bots did that"

All I can ever see is the cum effect of vol at the ask or bid and the spread and the spread of levels above and below price.

 

I must be too simple for this game because I cannot tell a bot from a human and so I need

your help to show me how to spot an "arb"

-----------------------------------------------------------------------------------------------------------------------------

 

Right now, all I see is the cumprice for the session rising faster than the cumdelta and this makes me think that the limits are losing their grip.

 

But I would not know if this is the work of an "arb" or a left handed midget

 

John

 

As you may have figued out, the gentleman uses jargon, but has little (if any) real understanding of what he is talking about.

 

You have pointed out correctly that it is difficult if not impossible to know who is doing what...I would add that even if you did know "who" was acting, it offers little or no value to the trader.

 

Looking at the posts you can see that everyone here is having difficulty figuring out what to do....where to find an opportunity to participate and still manage risk in a reasonable way.

 

I use a method that doesn't require special software or mentor....you simply look at what the markets are doing and change YOUR behavior....I've attached a chart...

 

Look at WHERE price hits its highs and lows...take notice of the timing....quite often it happens late (or early) in the evening before the markets open...if you know that this is the case, why not enter your orders at these times...when you are wrong, you cut your losses and come back the next day....when you are right, you know it pretty quickly and you simply hold on until the markets open....while the rest of the crowd is slugging it out, your biggest problem is whether to take profits or continue to hold...and you can do it with as few as two (2) contracts.

 

and now back to Predictor's comedy act....

5aa7118d19bf0_Todays130minchart.thumb.PNG.785bbaa6ac741d4b5abbd0b2d3f02bf7.PNG

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