Dow 2007

[hobby]

Well, if you want a good indicator for catching the turn...I'm an uber bear but intend stacking my hand for the next few weeks.....they always say the bull run is over when the last bear turns!

Why?

1. That whip back was well out of order yesterday (especially with mkt closing into the lows on Thursday evening)...kind of makes me think if it can't follow through on that weakness, then there's simply still just too much pent up demand. The DAX in particular was astonishing...by 9.00pm last night, it'd bounced back almost 200 points from its intra day low!!(yep 2.7% in about 6 hours!)

2. Stupidity in the media like this...http://www.marketwatch.com/?siteid=mktw "Investors bet that signs of slowing economy will force a rate cut"....since *when* has a slowing economy been good for stocks?! Even if it does flush out a rate cut earlier than expected, it'd be done from a position of weakness...not good.

Here's a *great* article (which vindcates my stance, but underlines the fact tha I'm just too early).... http://articles.moneycentral.msn.com/Commentary/Experts/Jubak/Jim_Jubak.aspx?msn=1

There's just too much liquidity & M&A activity sloshing round at the minute.

The longer this perpetuates the more convinced I am that the unwinding will be disorderly (ie a monster one day fall, as opposed to prelonged smaller falls). look east as I think China will be the catalyst!

So, this bear is retreating to the sidelines for a few weeks to see what develops....GO SHORT!

 

[Dinos]

Afternoon to all, I took Friday off, hence why very quite from me, hope you all managed to fill your bags on the move , excellent opportunity, have a good weekend all, will be trading next week, speak then

 

[Dinos]

fwiw, imho, my set reads:-

Monthly, bullish from 2nd quarter 2003,RSI now O/B

Weekly, bullish from 7/06, indicators positive

Daily, bullish 24/4/07, recent RSI O/B, macd negative divergence starting to build

60 & 30, trending up, bearish divergences building on macd

How am I going to trade based on this (long or short)

As I have said before, I don't look beyond the day I trade, I don't look to apply FIB, Gann retracements etc, I will trade each day using the charts to enter a trade long or short as they appear, I will not call the market up or down, make your own decisions and trade what you see

 

[watson]

Not a bad run up recently, I suppose, although the brakes seem to have slightly come on:


Possibly interesting divergence between CCI and upward move:


Any comments?

 

[Slapshot]

CV, not only are the area's you've highlighted a switch from resistance to support (or vice versa) but equally important is the speed at which the market pulls back from the low.

All,
If the market was weak (regardless of all the bad news floating around) then we'd have continued south from the lows of Thursday, but we haven't and the YM closed yesterday on it's highs on high volume, that only means one thing = buying. Now, the market may well stay in range for a while but the long term trend is still UP. Yes, we will have retracements of varying degrees & timeframes.

FWIW, the Dow has been flying the face of (so called)adversity for a couple of years now, go back over the Dow2005/2006 threads and you'll find information on bad news posted regularly but it still climbs.

There's an old saying, "The Market can remain irrational longer than you can remain solvent". Let the market, charts, price, bars, ta, whatever you use confirm what's going on. Never try and catch tops or bottoms because it will hurt you. Small consistent wins is the only way to go. Trade what you see, not what you feel.

 

[counter_violent]

Extracts from Jim Jubak

For bears, being right still hurts.

The bears will go on being right. And getting more and more frustrated that the market refuses to face facts. And angrier and angrier that investors who behave irrationally are making money while they're left licking their losses.


So we're left waiting for something to blow up -- and the likelihood that it will blow up big when it does. And a high probability that the blow up is further away than a purely rational, logical analysis of the financial markets indicates. Human nature, good ol' highly irrational human nature, just about guarantees that.

Now theres a chap who has some understanding of what's going on in the markets

cv

 

[counter_violent]

CV, not only are the area's you've highlighted a switch from resistance to support (or vice versa) but equally important is the speed at which the market pulls back from the low.

Thanks Slapshot...what you are describing and what i'm showing are EXHAUSTIONS

All

Exhaustions on any chart in any time frame should be taken notice of...quite simply the whole market is made up of Exhaustions and in order to trade logically we need to know what the probabilities are that a price move will continue or reverse....One of the best ways to analyse any chart is to highlight these exhaustions....trades then become a matter of probabilities rather than random guesswork

V tops V bottoms...continuation or reversal....figure this aspect out and You can trade any market at any time with probability in your favour.

This is why the probability for Dow to continue up is higher than for a crash...monthly/weekly charts in LHS phase of a possible V top.

Anyone care to try pick the top.

c v

 

[lurkerlurker]

Sorry for delay, I was in a tricky long. but it finally did what was expected...breaking clear of the clutter around 13,300....took it's time !!!

So yesterday and todays price action is typical when in a rampant market......who can go short when price action is like this ? answer....only traders with the right mindset...traders who can see both ways...the truth is...most can't see both ways and it's how most fail...gain Five small trades and go backwards on One bad trade.... therefore why try to make it more difficult than it ought to be...fighting against self and market is hard work and very tiring..


The markets can be beaten....today £901 over 5 instruments...the best being ftse and dow.

What is the significance of the highlighted areas on the charts?

cv

You are obviously an experienced trader, and I am quite flattered that someone who is so successful in the markets would take the time to help me learn - for that, I thank you.

Firstly, I am quite glad to see that you spreadbet through CMC Markets. I'm getting used to the MM interface myself, and had a few bad fills and a few quibbles about aspects of the software. I'm pleased to see that someone can profit from this. I've heard a lot of talk about SB firms being unfair to their customers, and while I've never experienced anything but good customer service and fair dealing, I've never been consistently profitable. It appears they know how to limit their net exposure through hedging (and I would expect with many losing traders around the net exposure is rather small).

£900 in a day. I'm impressed. I'd be more impressed if you were trading less than £10pp, and were taking sensible risks in relation to your account size. My most profitable day was +£194 (on an £800 account, using £500 for margin) - but in view of the stake size I was using (£5pp / £6pp) and the amount of my account that was at risk at any one time (£300) that isn't a very good result at all. I am working on my money management at the moment (or trying too).

I accept that the markets are hard work - if they weren't I wouldn't even consider being involved in them - I really relish a challenge. I hope I can learn fast enough to be in the markets next week, next month, and next year.

I've studied the charts you attached. I see the highlighted portions are V shaped, and you highlight the top of the V with a horizontal line. I can see that sometimes price action breaks this line, and other times it acts as resistance. Covering the right of the chart, I can see nothing which indicates to me whether price will continue or reverse. I notice there there are gaps, which are quite unusual in a 10 min chart.

The price action in the V area has quite a wide range of ~50 points, and seems to occur around key S/R points. Beyond that, I just don't see.

Can I ask how many pips you made on the £900 day?

Furthermore, have you considered getting a dual display configuration. I find more space for news and charts (and order tickets!) really helps.

I have another question, which I hope you know the answer to. As far as technical indicators go on MM, how much are they skewed by price action in the time the market was closed? Take the Dow cash contract for example - I use a 150 period CCI - however, the reading this will show on a 5 minute chart at 1500 BST will include price action from CMC's quote before the market. What effect does this have on the reliability of indicators, and how could I reduce those effects?

I'll check the board over the weekend, though I doubt most folk will be around.

Thanks for your insight CV.

And if you could let me in on what you are showing us on the charts, I would appreciate it. Very strong, fast, wide movements anyways.

 

[lurkerlurker]

I was wondering if you have any fixed rules for exiting a trade. Are your signals clear so that if you were to give them to somebody else that has no knowledge whatsoever of trading, that person would be able to exit the trade based on those rules? That's basically a check to see if you leave out any emotion that comes in when you have a small profit and prefer to take it, instead of letting it run.

I am really enjoying the feedback and questions from everybody here. Not only are more opinions helpful, it is creating an expectation of accountability in my thought process. I don't really discuss my trading with people. This board is helpful - I now think things like "how would I explain my reasoning for this trade". While that hasn't produced beneficial decisions yet, it has stopped me from taking some bad trades!

Regarding my "rules" for exiting a trade. I generally exit when a divergence in indicators (over a 15 minute period or longer) supports a weakening or reversal of the price trend I am trading. I also sometimes exit before key S/R levels, in case there is a rapid reversal. I exit when the price momentum weakens for any reason - if the range of the bars starts to contract into a trading range, I tend to exit. The motivation for this is uncertainty regarding a potential breakout. I exit if I don't know why I am in a trade. Sometimes I exit to return to cash and reduce my exposure to risk. Sometimes I exit out of boredom, or because I can't bear to sit with a trade for another two hours so it can make £5. But most of all, I exit because there is some profit on the table, usually with price action not reaching my target, and in the absence of indicators suggesting a reversal. I am trying to let my profits run more, and have succeeded in the some trades (held on for another 5 pips).

I know some of those above rules are downright stupid, and others aren't the best they can be - I am not standing behind these rules nor advocating them - I am just giving you a frank response indicating how I actually trade.

Could I leave these rules with a non trader and have them cover my positions? I could write down indicators of divergence, trend reversal, etc, but the truth be told my exits are quite discretionary and sometimes I exit for the wrong reasons.

I don't make any predictions, but just for fun: DOW flies above 13500 and a possibility to see 13700. If I'm right, you owe me, if I'm not you probably won't remember this post anyway

Have a great weekend.

The Dow may well do that. It may not. In 20 years, it will have done that. It may not in 2 months. However, I have learned to stop shorting for the wrong reasons, and I am to be taking a long or cash approach in the near term (if it breaks support at 13000, I'll have to review it). According to CV, we are still in a blow out phase and I am nowhere near experienced enough to think about trading this market both ways. I am inclined to agree.

I'm having a great weekend being away from the markets. I am busy the beginning of next week, but I intend to do a full session of the Dow Wednesday, Thursday, Friday and see if I can make better trades.

 

[Slapshot]

I have another question, which I hope you know the answer to. As far as technical indicators go on MM, how much are they skewed by price action in the time the market was closed? Take the Dow cash contract for example - I use a 150 period CCI - however, the reading this will show on a 5 minute chart at 1500 BST will include price action from CMC's quote before the market. What effect does this have on the reliability of indicators, and how could I reduce those effects?

lurkerlurker,

I've used CMC in the past and still do for some charts. What must be remembered your watching CMC's "version" of the market, i.e their price, therefore the indicators are based on their prices.

Can I ask why you're using 150 as the setting for CCI? Are you following the system detailed by Chartman on the KB?

 

[lurkerlurker]

CV, not only are the area's you've highlighted a switch from resistance to support (or vice versa) but equally important is the speed at which the market pulls back from the low.

All,
If the market was weak (regardless of all the bad news floating around) then we'd have continued south from the lows of Thursday, but we haven't and the YM closed yesterday on it's highs on high volume, that only means one thing = buying. Now, the market may well stay in range for a while but the long term trend is still UP. Yes, we will have retracements of varying degrees & timeframes.

FWIW, the Dow has been flying the face of (so called)adversity for a couple of years now, go back over the Dow2005/2006 threads and you'll find information on bad news posted regularly but it still climbs.

There's an old saying, "The Market can remain irrational longer than you can remain solvent". Let the market, charts, price, bars, ta, whatever you use confirm what's going on. Never try and catch tops or bottoms because it will hurt you. Small consistent wins is the only way to go. Trade what you see, not what you feel.

Thanks for explaining CV's charts to us. It is very interesting. I am taking to heart the advice to stop trading against the trend. Price and volume are important, and both are up. This isn't going down soon, and I recognise that now. Regardless of the long term trend, there are many pips to be made in an intraday session.

Good luck bagging them!

 

[counter_violent]

You are obviously an experienced trader, and I am quite flattered that someone who is so successful in the markets would take the time to help me learn - for that, I thank you.

It is only help if you are prepared for certain self realisations about market price behaviour, or in other words, you have to do the work.

Firstly, I am quite glad to see that you spreadbet through CMC Markets. I'm getting used to the MM interface myself, and had a few bad fills and a few quibbles about aspects of the software. I'm pleased to see that someone can profit from this. I've heard a lot of talk about SB firms being unfair to their customers, and while I've never experienced anything but good customer service and fair dealing, I've never been consistently profitable. It appears they know how to limit their net exposure through hedging (and I would expect with many losing traders around the net exposure is rather small).

£900 in a day. I'm impressed. I'd be more impressed if you were trading less than £10pp, and were taking sensible risks in relation to your account size. My most profitable day was +£194 (on an £800 account, using £500 for margin) - but in view of the stake size I was using (£5pp / £6pp) and the amount of my account that was at risk at any one time (£300) that isn't a very good result at all. I am working on my money management at the moment (or trying too).

These trades were of varying stake according to the set ups. Ranging between £4.00 and £20.00 and some were more than One trade/instrument.

I accept that the markets are hard work - if they weren't I wouldn't even consider being involved in them - I really relish a challenge. I hope I can learn fast enough to be in the markets next week, next month, and next year.

I've studied the charts you attached. I see the highlighted portions are V shaped, and you highlight the top of the V with a horizontal line. I can see that sometimes price action breaks this line, and other times it acts as resistance. Covering the right of the chart, I can see nothing which indicates to me whether price will continue or reverse. I notice there there are gaps, which are quite unusual in a 10 min chart.

See my last post ref EXHAUSTIONS
Time frames on the posted chart are irrelevant for this demonstration the picture would be the same on 30/15/10/5 etc.

The price action in the V area has quite a wide range of ~50 points, and seems to occur around key S/R points. Beyond that, I just don't see.

Well, price moves fairly rapidly into a top or bottom....consider what happens to price after it completes a V exhaustion....

Can I ask how many pips you made on the £900 day?

I have no idea and frankly I have no idea why this is important but it will be less than most would imagine.

Furthermore, have you considered getting a dual display configuration. I find more space for news and charts (and order tickets!) really helps.

5 screens in total...4 on 1 pc and 1 on another pc.

I have another question, which I hope you know the answer to. As far as technical indicators go on MM, how much are they skewed by price action in the time the market was closed? Take the Dow cash contract for example - I use a 150 period CCI - however, the reading this will show on a 5 minute chart at 1500 BST will include price action from CMC's quote before the market. What effect does this have on the reliability of indicators, and how could I reduce those effects?

You may not like the answer, but indicators are only for comfort....none of them will tell anything useful in the grand scheme of things....all of them are driven by price action as you know.

I'll check the board over the weekend, though I doubt most folk will be around.

Thanks for your insight CV.

Your welcome.

And if you could let me in on what you are showing us on the charts, I would appreciate it. Very strong, fast, wide movements anyways.

See previous post

c v

 

[lurkerlurker]

It is only help if you are prepared for certain self realisations about market price behaviour, or in other words, you have to do the work.

I want to do the work. I consider trading one of the most challenging and interesting things out there.

I have no idea and frankly I have no idea why this is important but it will be less than most would imagine.

It is not important per se, but I was just curious how many pips it was. 900 pips at £1pp and 90 pips at £10pp give the same profit, but one set of trades is more "right" than the other. It doesn't really matter anyway - you may be trading a £5k account and that was your best day in awhile, or you could be trading a £100,000 account and that is a usual day for you. Who knows. But still, being able to take £900 out of the markets in a day is pretty encouraging for the rest of us, whatever that figure means to you.

Am I correct that there is no way to view volume on MarketMaker? I would really like to see volume as well as price on the same chart.

Thanks a lot for your insight, and I wish you well for next week. Out of curiosity, may I ask how long you have been trading for?

Everyone - I feel that comments on this thread are becoming more about my trading and less about the Dow - I don't mean to take this thread offtopic, but I do appreciate all the helpful comments. I have created a new thread, a trading journal and a place to solicit feedback on my psychology and methods. If any of you are interested, please feel free to take a look from time to time.

Cheers

 

[counter_violent]

I want to do the work. I consider trading one of the most challenging and interesting things out there.

It is not important per se, but I was just curious how many pips it was. 900 pips at £1pp and 90 pips at £10pp give the same profit, but one set of trades is more "right" than the other. It doesn't really matter anyway - you may be trading a £5k account and that was your best day in awhile, or you could be trading a £100,000 account and that is a usual day for you. Who knows. But still, being able to take £900 out of the markets in a day is pretty encouraging for the rest of us, whatever that figure means to you.

Am I correct that there is no way to view volume on MarketMaker? I would really like to see volume as well as price on the same chart.

Not to my knowledge.

Thanks a lot for your insight, and I wish you well for next week. Out of curiosity, may I ask how long you have been trading for?

Approx 6 yrs...part time as and when ....I already have a Job which i'm not about to give up...pays too well

Everyone - I feel that comments on this thread are becoming more about my trading and less about the Dow - I don't mean to take this thread offtopic, but I do appreciate all the helpful comments. I have created a new thread, a trading journal and a place to solicit feedback on my psychology and methods. If any of you are interested, please feel free to take a look from time to time.

On the contrary, this is everything to do with the Dow and the traders who trade it, at least on this thread. With every Instrument there will be a whole spectrum of differing opinions on the state of play.

The goal is for the individual to find a way through and arrive on the next day/week/month with an increased account balance.

My way is only One way and I know there are others here who also make profit....you can tell by the words used and in what context etc.

Cheers

Have a good week lurker
c v

 

[Paul71]

Evening guys!

Here's my little guestimation for a trade on Monday.

Cash currently at, 13326.

Local support, 13282. (stops below)

Looking for a retest of, 13371.

Any thoughts? Just thought i'd pop something on the thread for a bit of analysis on a Saturday night.

Thankyou.

 

[lurkerlurker]

Evening guys!

Here's my little guestimation for a trade on Monday.

Cash currently at, 13326.

Local support, 13282. (stops below)

Looking for a retest of, 13371.

Any thoughts? Just thought i'd pop something on the thread for a bit of analysis on a Saturday night.

Thankyou.

Looks interesting - you made me look at the Dow charts and spend a few minutes thinking about price movement, so thanks!

I would add to that that I would only consider a buy if price retraced to around 13,320 and then continued north. There is some resistance at 13,344 so I would rather enter a buy at a lower price.

So, how does this sound? Buy @ 13,321, stop @ 13,280. Target around 13370.

Risk / reward = 41/49 - doesn't sound too good.

How about waiting for a retest of the local support, and buying when it heads north from there?

Add 10 points to the support for a confirmed support of price. Buy at 13,290 with stops at 13,275 and the same target.

Risk / reward = 15/80 = 5.3:1. Thats better!

How does that sound for an entry, and what confirmation should we use if 13,280 is tested and holds?

 

[Paul71]

Hi LL. (Cool J)

To give better R:R, we have 2 options, or three if we just scrap the trade and wait for another set up, we could move our stop up or wait for the market to move towards the support area mentioned, the market may not decide to retest the local support area though. What do ya think?

Taking into consideration how the market has been moving of late is it more probable that it will need to retest the highs or the lows?

Thanks.

 

[Paul71]

I would like to see other opinions, Fire Walker, Counter V and the rest of you. I know we are all busy with other things, but what about getting together on this thread and collectively comming up with a weekend Dow trade for Monday?

Monday is always a nice up day for the markets! (just kidding).

We get the general concensus, agree on it and take the trade.

It's probably a crap idea, i know there is the FX comp, unfortunately for me i don't do FX.

Any thoughts? (no booing, please)

 

[firewalker99]

I would like to see other opinions, Fire Walker, Counter V and the rest of you. I know we are all busy with other things, but what about getting together on this thread and collectively comming up with a weekend Dow trade for Monday?

Monday is always a nice up day for the markets! (just kidding).

We get the general concensus, agree on it and take the trade.

It's probably a crap idea, i know there is the FX comp, unfortunately for me i don't do FX.

Any thoughts? (no booing, please)

Hi sniffer

No important US figures on Monday, but a lot for the rest of the week, so I'd be looking at DAX to lead DOW into higher territory. Depending on the strength of DAX in Monday's AM (however DAX likes to fall in AM sessions...) I think DOW can break the resistance.

Another scenario is that DAX retraces slightly so when US opens it will be on support and we can buy there. I'm definitely looking for longs with Monday or Tuesday a trending day where I'll try to maximise profits by staying in as long as possible!

But the market can do anything and I kind of act on what I see rather than what I would hope to see so... this post probably isn't worth much

 

[Paul71]

Hi FW.

What you have stated is worth a lot, imo anyway. The other factor i look at is the Nasdaq, i think that will retest it's highs tomorrow so it may drag the S&P and Dow with it, unless there is divergence.

Do you ever find that if the dax opens up it takes the US futures up with it, basically taking points of the table?

Thanks.