Dow Intraday charts 12/07 to 16/07

[melsmail]

Hi CM
I thought there was a P/D from 18.07 to 18.34 on Dow also on ES. CC at -300 and a nice round bottom from 18.07 to 18.54. Looked as though long had won battle at 10232. The only negative I could see was MA close at approx 10245. The Dow reached just short the MA and retraced. I closed quickly with not much financial damage ( profit on day ). My question is did I overlook something ie should I have waited for the MA to have been crossed or was there a more obvious indicator I had missed.

 

[ChartMan]

No Mel. I see nothing wrong with that call. You can only trade what you see. If the market doesn't want to do what you are doing, it won't.!!! The clue to failure was the inability to break through the 100MA.
Health warning! You should always take care when bottom picking. :cheesy:

 

[ChartMan]

Well, that was a big move.... over 200 points... but went nowhere.

 

[ChartMan]

Easy call for tomorrow. It should be long>T1 ie 232 and short <200.
Mel- that PD call on closer inspection was less than the minimum 25 mins required. If you take the four peaks, the went just over 30, but the three were at 20- both the first three and the last three. With a short time PD or ND you can only call a short term reversal, as in this case.OK for scalping, no good for SB..... I have to admit, if I was trading it today, I may well have got suckered in. IT IS NEVER EASY to remember all the tricks. I'd like to think that the closing PD will come good tomorrow.....

 

[eddyjo]

Hi C.M. referring to Mel's thread regarding going long on the basis of a PD assuming it was a legitimate indication is it wise to go long while the 100 ma is still trending down ?

 

[ChartMan]

Depends on your risk strategy and whether you are an ultra safe player or cautious.... On average, taking these will be more profitable than waiting for a 100 MA break. I guess it depends on your persona.... but at the end of the day, it was a mistake because the PD was less than 25 mins, albeit well "hidden".
When you pick a bottom bang on, the 100 MA is always going to be above you....

 

[TraderTony]

100ma pullback entries

CM - if you were looking for cautious 100ma entries yesterday, which would you have taken? Or, in other words, how close to the 100ma do you look for? Around 10.30 est there was a pullback after the 100ma cross, but it didn't get closer than about 10 points to ma. Would you say this is close enough, especially in view of the strong upwards momentum at the time? Had this one been missed, would you have taken any of the subsequent pullbacks, none of which actually reached the 100ma until the one that crossed at around 12.50 est?

I later took the short on the pullback just before 2pm est, which was a great entry, but what would have been your exit signal as there didn't seem to be a clear three peak PD? Also, do you generally look at exits any differently near the end of the day?

Best regards,

Tony

 

[ChartMan]

I would generally take any pullback outside the 100MA, especially yesterday at 230/232. The failure to drop through 232 was a solid signal that the break was likely to be sustained. Generally, you will find that a nice solid rise will get the 100MA tracking the price between 20 and 30 points away. A rocket rise can leave the 100 trailing by 40 to 50 as in Monday's rise.
Exits towards the close are pretty boring as the price moves very slowly and are unpredictable but I don't treat them any differently or think they are any less valid.

 

[bansir]

Hi Folks,
Interesting comments. Here's my take on it, just in case it helps anyone (how not to!).
I thought the pull-back on 100ema break-through at 12:50 'ish was a nice signal to go short and allowed a target of 15pts.
I got very nervous during the jitter which followed, the little flat bit just after the main pull-back. (only paper trading too!).

I got in short at 10,258 using D4F's bid/offer as a reference. (Not perfect I know, because you never can tell what fills you would have obtained in a real trade.)
I wanted to stick to a risk/reward ratio of 1/3 so I had a mental stop placed just 5 points above my entry. Too tight I guess in practise, baring in mind how volatile the price movement can become. Using the official system I would have had the stop hovering at 20pts above the 100ema, with an 'emergency eject' stop at +35pts from my entry price in case of a slow drift upwards (right CM? ).

I took the failed PD as my exit signal. To be honest, I was looking for any excuse to exit, which is the emotional challenge I face. The target was made and in fact I came out +23pts allowing for spread but not slippage.

Cheers,
Neil

 

[eddyjo]

Hi Neil, As you are aware I am only now getting to grips with Dow trading but a few things stick out for me once I am in I stay with the100ma everything else are just alerts of what may happen, if the 100ma is trending at approx 45 deg I am happy. I would class the consolidation from 13.15 to 14.00 as a continuation pattern purely because of the angle of the 100ma. On exits I think a rule of thumb might be when the price goes beyond 35 ticks from the100ma. Please tell me your thoughts.

 

[debs]

Easy call for tomorrow. It should be long>T1 ie 232 and short <200.
Mel- that PD call on closer inspection was less than the minimum 25 mins required. If you take the four peaks, the went just over 30, but the three were at 20- both the first three and the last three. With a short time PD or ND you can only call a short term reversal, as in this case.OK for scalping, no good for SB..... I have to admit, if I was trading it today, I may well have got suckered in. IT IS NEVER EASY to remember all the tricks. I'd like to think that the closing PD will come good tomorrow.....

Hi Chartman - I am a newcomer and have just started following your system this week. Can you please explain where the 'closing PD' occurs on yesterday's chart. I can't see it.

You also mention in your message at 8.10pm last night that there was a move ..."over 200 points". But according to my system the high for the DOW yesterday was 10313 and the low 10129 i.e. a total move of 194 points. Are you referring to the moves in the quotes figures rather than the index?

I apologise if these are 'stupid questions', but sounding 'stupid' might be the price I have to pay for learning. Kind regards, Debs

 

[ChartMan]

closing pd was from 19:37 until 20:32.
Now these highs and lows...... you have to be very careful here. Taking yahoo data ( or similar|) they publish the 'theoretical' highs and lows of the dow. This is completely different to the dow cash intraday data, which is what we all use ( or the dow futures). If yo look at the chart, you will clearly see the high was 282 and the low was 172 give or take a couple of points. I get my 200 from the opening low of 190 to the high at 282, ( 98) then the high to the low of the day - 282 - 172 ( 110) and then from there to the close - 208. this all adds up to the theoretical number of points one could have made with perfect hindsight trading. Never ever possible. If you get half, you're doing well......
HTH.

 

[debs]

CM - many thanks for the explanation. I should have noticed that the highs and lows reported on my system for the daily chart were different to the intraday chart. I would also like to thank you (and others) for the commentary on this thread. I am finding it very helpful. Best wishes...Debs

 

[leeshindig]

Hi..

just been updating my site and have added new live index tables for a quick overview of the market.....as well as all the other live index/forex and commodity charts...

good for referance if your on the move......all free....plus csv historical data...

http://www.livecharts.co.uk

 

[TraderTony]

Exits - am I missing something?

I'm new to the CM strategy and just paper trading it at the moment but wonder if I am getting something wrong. I missed the first hour of trading today but went short on a pullback to the 100ma at 16:20 (11:20 est) with a price of 10200. The entry looked good and it went 20 + points in my favour before a sharp reversal. However, I saw no clear CM exit so ended up holding until the 100ma +20 was hit for a 25ish point loss.

I then went long on the next pullback at 10220 at about 17:50 (12:50 est). Again it went in my favour before a sharp reversal but (as far as I could see) no CM exit. Like the long trade, I was stopped out at 100ma -20 for another 25ish point loss.

My third trade was short on the next retracement at 10201 about 19:00 (2pm est) which I held all the way to the close for +36 at the 64 level.

Did I miss any obvious exit signals on the first two trades or was it just a tough, choppy day?

Many thanks for your observations,

Tony

 

[ChartMan]

There's a hundred and one things you have to be aware of and most of them are easy/obvious with hindsight..... Nothing wrong with the pullback entry , but try a wave count.... this was wave 5- usually the last. Also there was support at 172 yesterday. No reason why it shouldn't be support today..... RSI was divergent here too. But why did it fly off? Who knows... Quite often you get two or three chances of an exit if you miss the optimum, but not today.From yesterdays final comments, long >32.short<200.The d top at 28 should have been enough to take the short at the open.. As for no signals, you are right. There was no PD bottom. but with hind sight , it wasn't the low of the day. ..... Having said that, the price performed as if it was a bottom...
I'm not being rude when I say this, but a little knowledge is a dangerous thing. On any other day, you may well have faired much better. The 100MA rules form a general solid strategy, but nothing works all the time.Take the time to dig out the archives of the intraday charts( there's a few years worth in the archives) and practise your entries and exits according to the rules. When those rules let you down, try and discover why, and if there were other clues that would have helped prevent a loss, or increased your gain. It will take a long time...
There was a serious flaw in your second trade. You can see that the days high was 328 and no breakthrough of 32. on this uptrend, you should have waited to see what happened at 232 again. Your entry was too close to this and therefore high risk. Clearly it broke through 232 for one bar and gave up.The formation from 17:40 to 18:15 formed a bull triangle that immediately failed below 232. Big short signal !
Your third trade came in late, but safe as houses. There were three entries- the first mentioned above, the second at the pullback under the 100MA at 214(18:53) and the third that you took. Well done for managing that trade to the close,despite the double frightener at 210 ( 19:55). With your two bad trades, you did well to hold out and stick it out correctly.Most would have panicked at 210 and closed out for a third loss.
Stick at it and don't judge your effort from one day.
Did you miss anything? Not really.....

 

[ChartMan]

160 for a short but watch out for 150 support below so worth waiting......

 

[ChartMan]

Another possible take on that failed short....enabling an earlier exit instead of waiting for the 100MA out... clue 1 failure to drop through yesterday's support at 172. clue 2 the reversal off 175 clue 3 the pullback to the new support line at 185 (17:00). Might just have squeezed a break even trade here on the short.

 

[bansir]

Hi Neil, As you are aware I am only now getting to grips with Dow trading but a few things stick out for me once I am in I stay with the100ma everything else are just alerts of what may happen, if the 100ma is trending at approx 45 deg I am happy. I would class the consolidation from 13.15 to 14.00 as a continuation pattern purely because of the angle of the 100ma. On exits I think a rule of thumb might be when the price goes beyond 35 ticks from the100ma. Please tell me your thoughts.

Hi eddyjo,
Yes, you're ideas are probably worth testing out cautiously; very often in this game finding a good exit is harder than finding a suitable entry point. This is a truth many of us struggle with initially.
I now like to look at the set up carefully and try to plan my exit before I get in. I strive to do this via risk/reward ratio plus target setting.
i made no paper trades today; it just looked too choppy for me, also I had a game of five-a-side footy on, nothing like smashing a ball around to work off that temptation to over-trade! :cheesy:

All the Best,
Neil

 

[TraderTony]

CM - many thanks for the comments. Don't worry - although new to your approach I have traded the indices enough to realise that nothing works all the time (!!) and I'm not worried by losing trades. I was just curious to know if I was (i) completely overlooking something fundamental, (ii) missing some more subtle nuances or (iii) if it had just been one of those days. I take out of your answer a bit of of (ii) and a bit of (iii), which is great.

I will continue to work through the past commentaries.

Your generosity in sharing is much appreciated.

Tony