Daytrading - entry exit signals

[Helenqu]

at some stage Helen i would like to show you.

Hi Naz,

Yes and I do want to see it working in real time and I will sometime I promise (I have the CD where you demonstrate it but it's not the same as seeing it used for real in a live market).

But it can only be for "interest" for me at the moment as I can't trade US markets 'cos of the hours anyway


Cheers

 

[kevin546]

Naz

you have mail re Nasdaq Level II.

With reference to exit points and in particular to the FTSE/DOW/S&P500/DAX

what would you all here recommend for intraday stops. I do not set stops with my D4Free because I always trade when in front of the computer so act to market changes. I tend to go for 5 to 10 point deals on the FTSE so a few in either the morning or afternoon. I tend to keep a stop close and try to work from not more than 10 points and close at the first sign of things turning against normally when the price passes the previous close on a 5 minute chart or breaks out of the range presented by the recent price bars.

Recently I have been trying out a few different things such as larger size deals and yesterday I tried extending my stops. The first worked rather well and although the price went against me for 16 points it appeared to be at the top of the range and did eventually at the start of the US open fall back and present me with 11 points profit which I took.

My next was a mistake and should have closed earlier because I misread the chart but it meant I took a bigger hit than usual and was slightly down on the day.

Because of this with my next deal I decided to close for another loss of 10 points but I was to hasty and again the wider stop would have worked well as about 10 points were on offer. This last deal was worthy of a wider stop because there had already been one move up and in doing so the sequence had changed to a rising period and I was in at the half way stage (or the congested period following the first part of a flag).

regards Kevin

 

[Helenqu]

Hi Kevin,

This is just my opinion arising from 700+ spreadbet trades on Dow/FTSE but you really need to go for bigger gains than you are doing to stand any chance of making a consistent profit. 30 point stops and +100 targets are what you really need to look for when spreadbetting IMHO.

I can't bring myself to do that so that so that's why I changed to futures


HTH

 

[kevin546]

Hi Helen

who are you trading through and what stops do you use in your futures

Kevin

 

[Helenqu]

Hi Kevin,

I use IB. I have a £5K account and trade one contract at a time on Eurostoxx50. Spread is 1 point and commission 4 euros per round trip.

I consider myself very much a beginner/learner at the moment


Cheers

 

[sidinuk]

I only trade the US markets, Dow or S&P which are more than twice the volatility of the FTSE yet the spread isn't much more.

I aim to be in on the bigger moves which last 1 to 3 days and aim for anything from 100 to 500+ pts. Keeping wider stops makes more sense to me. I found that tight stops of 10 or 20 pts got taken out so many times I could be 5+ trades and 100 pts down before the move starts.

I use a trailing stop based on current volatility in the market, at the moment its about 75 pts, last July it was up to 150 pts. That sounds loads but believe me it keeps you in a trend and saves a lot of small loses for the sake of occasional big loses.

I have found that larger stops actually maximises the overall return by keeping you in the big moves. If the stop sounds too big, then reduce your stake size!

An example is yesterday, I was long the dow at 7796 and had to watch it come back to 7735 before closing at 7908. Giving a return of 112 pts. If I had used a tighter stop (say 20 pts) I would have lost 20 pts, then reentered at a new high of 7801 (plus 10 pts for comfort, 7811). Giving a return of only 77 pts. Quite a difference.


Of course it all really depends on your style of trading. I don't like to trade more 3 times a day and preferably only once. I have found that there is usually 3 or less major trends in a day and that's all I want!

 

[kevin546]

Helen & Sidinuk

thanks for posts I tried a 20 point stop this afternoon and found myself on the wrong side and close to the limit but eventually it came back and I suppose I would under normal circumstances have taken 5 points but applying this a bit differently today trying to allow the price to move took 2 points so I had something to show for my time here.

After all by the time this happened the signal that I had used to enter had not materlised so on that basis that had gone and was no longer relevant. Using my normal approach I would have closed for a loss much earlier.

I have come away with a small profit but in doing so I have held onto a position that was not working for me and missed the opportunity to follow other deals. For example holding on meant that when the FTSE did turn back it did so from 3605, I was in a sell at 3589 (yes I know I have a knack of entering within 1 point of the thing going in the opposite direction - in fact when I first started I had a bit of a laugh taking the view that when I logged onto CMC and placed an order a light went on in the dealing room so that all could see Kevin had entered the fray and would automatically switch the direction of the price against my position. LOL) Anyway the price came all the way back and just managed to produce a profit before running out of steam but to do so I missed out on selling at the higher price of around 3602 which would have produced 15 points from my usual approach.

Also when the deal first turned I would normally have closed when the price either passed the previous close 3 points or at the next close 8 points. If this meant the trend was still in tact I would also place a buy to get a quick 5 - 10 points depending how many rising sequences had already been seen.

When I got out there would have been another deal before the close albeit for just 5 points so while having a wider spread does have some benefits it call also restrict your facility to follow the new deals as they appear. It was for this reason that I go looking for 5 - 10 plus because there are a number of opportunities and I like to bank the profits rather than think about what I may get.

On a different point I traded at £40 today and they were filled instantly. I spoke to CMC about this issue the other day and suggested I found it surprising they were having difficulty in filling £20 deals that I would consider a direct access broker. At that point I was advised that £40 deals should not be a problem and today that was the case, interesting.

NickW

Thanks for the tip re 34 & 100 EMA put it on 1 min chart today and it provided a good indication of trend for this timescale and did provide a good signal when the 1 min line chart produced a supporting pivot in the early afternoon, so it missed the first position but gets you in close to the move and supports other entries along the trend like other SMA/EMA's.

regards Kevin

 

[sidinuk]

I'm glad it's not just me that CMC have a red "change direction now" light for!

It sounds to me, Kevin, that you are trying to scalp the market for a few quick points. In my opinion that's very difficult to do profitably with the SB co's because a) the spread is too big and you can't buy on the bid and sell the ask with limit orders like you can with direct access and b) you can't see the market depth so you can't see where the support is and as Naz would say 'who your going to hit' should things go wrong.

With SB you can't avoid the spread so on the FTSE thats 3 pts down as soon as you put on a trade. That's a lot to beat if you are opening and closing positions every few minutes.

Use the spread bets for longer term positions (hours not minutes) and use direct access for the scalping, it will be a lot easier!

 

[kevin546]

Sorry to keep posting but I am trying to find my way here I have been in contact with esignal and have come away a bit confused they offer different charting packages and the one that was suggested costs around £60 per month and has access to the the FTSE/DOW/S&P/NAS etc and you can have this without the need for LIFFE exchange and still get access to FTSE data ?

The LIFFE exchange is a further £20 per month. When I view historic charts such as on www.bigcharts.com the FTSE data shown is from the cash price which I think is what is included in the first package mentioned by esignal. If I am to trade futures through Interactive Brokers do I need this data for my charting or will the first package be sufficient.

Re EMA what setting would you apply with a 5 min chart. Just added a few charts so you can see what I was rambling about earlier.

Kevin

 

[ianp]

> Naz,

Hi, I saw in a earlier post you spoke of £7000 for margin on
a nasdaq trade, I thought you had to have a $25,000 min
deposit, to day trade us stocks, which has put me off a bit !!!!
Do you know any company that has a lower deposit ?

thanks ian

 

[kevin546]

Hi Sidinuk

thanks for info and yes I have taken this on board I have not applied the likes of alternate limit and stop orders before but essentially I try to trade in line with the present price cycle following a supporting pivot

Would show you CMC chart for example but do not appear able to attach image to post.

Kevin

 

[Helenqu]

Kevin,

If you are trading through IB you might want to think of using Sierra charts as you will already have the data from IB. Might be cheaper for you.

You WILL need the liffe feed to trade FTSE futures.

 

[kevin546]

Hi ianp

I have no personal experience in this but have recently been looking into direct access brokers and when I spoke to Interactive Brokers they only required £2500 for a contract on the FTSE and the DOW etc were less. It maybe worth checking them out for US shares.

regards Kevin

 

[JonnyT]

Hi Kevin,

Don't use ESignal, much too expensive. Try SierraChart with IBs feed or if you want backfill MyTrack.

JonnyT

 

[DanielLambert]

Helen.


You trade Eurostoxx 50 thro IB, do you ever trade FTSE and DOW/S&P futures.

I currently use SB firms , but am looking at direct access. I have been filling in IB application on line and and there is a long list of exchanges to subscribe to on a monthly basis.

How much are u paying per month?


Did u have to sign the US IRS w8 form as well?

 

[Helenqu]

I have only sim traded both of those not for real.

FTSE is too expensive for my current experience/risk level and I don't like the way the S&P moves. The only one that I MIGHT try is the YM but not at the moment. I'm very happy that Eurostoxx matches my current level of skill

I just pay 8euros for the STOXX feed to IB,the ACE feed for YM is free. I also pay Mytrack UK stock feed and Eurostoxx and Silver plan. Comes to about $50 a month.



HTH

 

[NickW]

Kevin,

Try 20ema on a 5min. Check out this idea, its not mine but from Larry Connors a well known trader: on the same chart look at a 3 period RSI. If the ema is heading up look for longs only, look to enter long when the RSI shows oversold. This is a setup Larry Connors uses for intraday trades - I don't - but you might like it.

 

[Trader333]

IB FTSE and Nasdaq Margin Reqts

Hi Kevin,

If you wish to trade the FTSE on IB you have to pay the subscription fee of £20 per month to Liffe. The reason I know is that I tried it but without subscribing you cannot place any orders for the FTSE.

Hi Ianp,

You can trade the Nasdaq with $10,000, (£6,500 at todays £/$ rate) in your account but you will be restricted to 3 days trades in 5 days. This means opening a closing a position in the same day. You can however trade any number of overnight trades.

I hope this helps


Paul

 

[kent]

3 major trends per day

Sidinuk

In an earlier post you mentioned that often there are only" about
3 major trends per day" to trade on Dow / ES ,can you offer any advice to identify these trends, recenty I have been using Vert. Horiz. Filter with varying degrees of success. but as usual, good for some of the time!! (heard that somewhere before )

Regards

Ken. T.

 

[sidinuk]

Hi Kent,

I don't know what you mean by vert. horiz. Filter, perhaps you could explain that for me please.

I have noticed that over the course of a day the dow/s&p generally has 1 to 3 overall trends.

For example on Tuesday 25 Feb, the trend was down until 10.08 then up for the rest of the day. Ie 2 trends.

On Monday 24, one trend, straight down.

On Friday 21, the initial trend was up until 10.05 then down until 10.29 then back up. 3 trends.

On Thursday 20, one trend, down.

If you look at the charts you'll see what I mean. This is why I limit myself to 3 trades per day to try and capture the mayor trends during the day.

The difficulty is identifying the change in trend (obviously, that's what we're all trying to do!). I use a trailing stop based on volatility which I have found in the past to be a reasonable indication that a trend has changed. It's not fool proof though, I haven't found that yet!

Hope that explains what I meant by 1-3 trends a day.

I only look at the major trends, obviously within those there are loads of minor trends for only a few points, but I think I'd go mad trying to trade all of them!

Also, note that after a big move the next day tends to consolidate and become a little choppy, look at today after yesterday afternoons rally. Is that the markets revenge for giving us a good ride!