DaddyJohn
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dc2000
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well done split
Well done, You!!
I how did you manage to go short at that level? Well, I think I know. The previous high that my long trade could not break, was there. Still, it looks like a good level for shorting.
Well done Chris. I entered long at the same time but only rode it a short way as it wasn't clear to me that the market was ready for a good run. Good to see you using the 37SMA. It is amazing the number of times it bounces off it.
Great call DC. I was going to give you grief as the futures only made it to 43.5 and not 45, but when I checked the cash market I see it bounced off 45.29.
I keep making notes of all your comments and am putting together a list of DC's rules for Taylor. Who knows we might even get you to write down your top ten Taylor trading technique rules, but I will wait for a weak moment to weasil it out of you. I don't think we will all turn round and become excellent TTT traders as a result, but it may make us understand it better.
DaddyJohn
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have never heard of 37 sma being used.. just looked at it and looks interesting.. where did you hear of this?
Thanks Martin. Still demo trading after an unsuccessful foray into live trading in October, but I'm now just concentrating on price action in and around the 37SMA as I find it quite a strong area for support/resistance. It makes me sit on my hands, and I have to be patient to wait for the right setup to come along. Before this, I was trying to trade at places all over the chart and I realised I was just trying to do too much.
The downside of course is that in a strong trend, price often will not pullback to the 37 but I think I will try to get in on a pullback to a slightly shorter MA in such cases.
DJ - I put the 37SMA on my 1min chart after Martin gave me a heads up about it. It is broadly equivalent to the mid-BB(8) on the 5min chart.
John, the 37 SMA on the 1 minute chart is the equivalent of the 8 period SMA on the 5 minute chart. It just reproduces a line in the sand that if crossed usually signifies a change in trend.
And the 8 SMA on the 5 min chart gives you the middle bollinger band of an 8 period boly setting.
I use an 8 period setting for my bollinger bands on the 5 min chart as it is really good in confirming up or down trends. It works much better than 12, 14 or 20 period settings. ie less fakes, and as I said, amazing how many times the price bounces off it. Many times I will close a trade at this line.
For similar reasons I use a 98 period EMA on the 1 min chart because it matches the 20 EMA on the 5 min chart. The 20 EMA is used all the time on the ES. Not quite as good for the FTSE.
But really a scalpers tool than a swing traders tool.
Chris, you are right about it not always pulling back to the 37 SMA, but as long as you wait for a pullback of any kind, preferably to a minimum of the mid boly or 10 EMA on the 1 min chart, and you enter on the first 1 tick break back in the direction of the trend, you should be okay most of the time. I rarely enter on a limit order at the 37 SMA. I usually want confirmation back in the direction of the trend.
The other critical thing is that once you are filled, make sure you have a stop that is placed 1 or 2 ticks above the high of the pullback (if in a downtrend), and you need to have the guts to let it breathe. If you get stopped out, it is usually a sign that the trend is near an end, and be prepared for a reversal.
Yep I usually wait for confirmation back in the direction of the trend too. I've noticed that the uptrends the past couple of days have pulled back to the 21EMA alot before carrying on.
DaddyJohn
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DC.. I hope you dont mind but for those still trying to get to grips with the taylor method (including me) I thought I would like to have a go and explain what I think you are refering to here.
1) Todays price action will tell us if we have had a SS day or another Z day.. if we get a higher high today then we have had a Z day and tomorrow will be a SS day..
2) However.. currently price action is making this look like a SS day and therefore tomorrow should see a lower price printed perhaps 5207-5239 in order to set in a buy day low which then sets up the next pattern to take us to the target at 5426
????? am I close????
