US Daily Trades

As this is an advanced forum I am happy to explain in greater detail the reasons behind trades that I have taken. So here goes with the first one:

I only traded the afternoon session today as I attended an evening class but during the afternoon the Dow was up by more that 50 points so that allowed program trading to be initiated.

When the Dow is up, (or down), by 50 points or more the opportunity for pair trading is very much reduced as the market is more likely to trend. So I was looking for an opportunity to go Long and got one at just about 5.30pm on MXIM. But at the same time the Dow, Compx and S&P future were either declining or static. As the indices were doing this I was watching MXIM and noted that it was holding its price while the indices and futures were still in decline so I decided to take a Long position once the Dow MACCI just turned up from its oversold position.

This happened at 6.05pm and although MXIM was slightly above its lower VWAP band there was still nearly 40 points of potential profit in the trade from entry to the target at VWAP.

So I entered a Long position at $54.31 and note that the MACCI on MXIM is also at the oversold position and just turning. The trade lasted until MXIM hit VWAP and I exited at $54.69 for + 38 points.

Charts of the trade are attached:


Paul

Dow Index as confirmation:

Paul,

Nice trade!

How reliable is MACCI on a trending day in your experience? Normally a banded indicator such as this generally regarded unreliable on a strong trending day.

You not mentioned the use of L2 to support your setup.

Zahid

Zahid,

Yes my apologies, I always use Level II as confirmation and to optimise the point of entry. In this case there was good support on the bid and the same with the Island book. My risk was around 12c and the market went against me by 5c so if it had gone 7c more I would have been stopped out.

The potential reward was 40/12 = 3.33 to 1 so a good reward to risk ratio target. As it turned out I made 38c so my final reward ratio was less at 38/12 = 3.16 to 1 and this is still acceptable.


Paul

Excellent Trade Paul. I see you are using MACCI there. I just did a quick research and see that it is a MA of CCI. Does anyone have a TradeStation Program for this. Also, what are the settings that you are using.

Many Thanks,
Steve.

Paul,

I support your trade because you now have a strategy which trades in the direction of the general market and sells into strength.. Sooner or later the users of this BB will see the reasoning behind such a strategy and will change style..

MACCI is moving average of CCI but a better version of it would be the AUTO REGRESSIVE MA of CCI which I will have it coded and post it here when it is ready.. I am using this version onrealtick as standard.. It is a far better indicator.

Regards

Paul - You mention WHY you took the trade, but what about HOW you found MXIM?

Do you have a watchlist of stocks you keep on your radar screen at all times, or did you come across this as it matched a screening criteria during a search?

BBB,

I have around 160 stocks that I constantly monitor throughout the trading day with automatic alerts set to let me know when a stock meets a particular trading criteria.


Paul

What software do you use to monitor the stocks Paul?

IanH

Ian,

Tradestation.


Paul

Is this what most people use now?

I use esignal & Quotetracker, but sometimes find they are a bit restrictive.

I track VWAP on esignal using EFS, but it is not as accurate as I would like it.

QT gives VWAP, but I dont think I can add the MPD lines?

A new thread about what everyone uses & why might be a good plan.
Or would it just have one post? TRADESTATION!

IanH

Ian,

I have had Tradestation for 4 years now and yes it is useful for VWAP trading because of the fact that you can write your own indicators. That said I still use QT with money.net for Level II and also to track futures with the IB interface. You are right that you cannot plot the MPD bands using QT and this is a restriction. I am not sure what others use but once I decided to give VWAP a proper go I just switched back to Tradestation because it can do the job. Selecting the stocks to monitor was a manual operation and just sorting through many hundreds of stocks that met volume and price criteria. I will need to do this again occasionally to make sure that I am up to date with the most appropriate stocks to monitor.



Paul

So in your opinion Paul or Grey , would you say that Tradestation is the best option for trading using VWAP, which I assume most of us on this forum will be moving towards.

Ian

Ian

For me it is because I already have it but Grey1 uses Realtick for most of his vwap requirements.


Paul

ian,

VWAP is a bench mark that all pro's watches it during the day .. VWAP,HIGH,LOW, are primary indicators for daytrading and yesterday high ,low,support, resistance are the secondary bench marks..

I use TS and Realtick for VWAP strategy but you only need one of them..

You certainly get an edge and I must insist an edge over the market.. If you lose a trade using this strategy then you have lost fair and square.. How ever the string of wins will soon put smile on your face..

Thanks Paul & Grey,
I have been watching the VWAP bands for the last few weeks using esignal EFS, & am amazed at how many of them work as you have described in the earlier posts.
The problem is I have to have a lot of charts open at the same time, & the ISDN connection is struggling to keep up, even at 128k
(No Broadband here yet)
I must look at TS or RT to make this simpler.

Ian

Paul, I just used to the system you posted to pull off a perfect trade in GENZ. Nice sell at 54.50 and we just had a kiss of VWAP. The selll signal was confirmed by MACCI on SPoos.

Wishes,
Steve.

Steve,

I have just checked the chart and it does look a good trade. Just a word of caution, if the Dow had been strongly up today then we would be looking for Long trades. Did you use Level II at all ?


Paul

No, I've never really looked into playing L2 - Would you recomment it ?

Steve.

Steve,

Personally, I would never take any position without using it as the risk potential without it is almost unknown.


Paul