Dow Intraday charts 27/10 31/10

[Skimbleshanks]

sidinuk:

Sandpiper posted a very good summary of days of the week, including trends, etc:

http://www.trade2win.co.uk/boards/showthread.php?s=&threadid=6632&perpage=40&pagenumber=2

 

[Bill]

Rossored

Thanks for the reply and advice about IB and yes it is something I have considered.
I've just got a question. For goodness sake don't take it the wrong way it's not meant to be malicious of offensive, I really am on your side. As you probably gather from my posts I am a net loser using SB mainly because the bad trades ruin the good ones. As you rightly say the spread [and bias?] work against a scalping style which is partly why I chose to learn CM's Dow strategy since it clearly states 'we are not scalping' i.e. we are looking for the big moves.
So the question is this, when you were trading SB did you use the Dow strat [or a close version of it] and were you unsuccessful in making a profit? I note your statement to the SB company "...as I said to my SB broker when I closed my account, I'd rather pay tax on some profits than no tax on no profits." which implies that you weren't.
I'm getting very disillusioned with the whole thing and will probably only give it another couple of weeks before going back to my day job [selling the big issue... jus' need a cute little dog ].

On a more general note has anyone else failed to make the Dow strategy and SB work or is it just me?

Bill

 

[Quercus]

Bill
I'm keen to see what your work throws up in terms of SB bias. I thought it was frustrating me, but really I think it's just down to my having had a string of losing trades with D4F on the Dow. Must work on my patience and as you said WAIT to see confirmation of the pattern/SptRes level breach before trying to anticipate it! Personally I feel that any bias is just what you pay for no brokerage?!
Thanks for all the posts.

CM
Working on improving my charting info from your advice - cheers. I noted your comment about position size with a smile! I'd been thinking about reducing it and probably will now! I think I need to build up some consistency and then revisit my position sizing again later!

Glad I made the decision to go out for a few beers on Fri night and therefore not get up at 3am to trade(NZ time). Looking at the charts I KNOW what might have happened!
Thanks for all the comments
Quercus

 

[Quercus]

Just realised I posted before reading the second page of the thread - apologies.

Rossored
Interesting comments about IB, may well consider a move in the not too distant future!
Cheers
Quercus

 

[rossored]

Bill -

no offense taken, you are quite correct, I hated SB and when I closed my account, there was less in it than when I opened it.

There are people who can profitably do SB, of that I have no doubt. I'm not one of them, partly because I became rather dissillusioned with the SB company I was using, and couldnt see that another would be any different. Hence I switched to direct access as a last resort, and it's a whole different ball game.

Although I actively follow this thread and CM's comments, I dont actually trade the Dow strategy as such. I trade my "version" of it that I have adapted to suit my needs and requirements better now that I can trade direct, but like everyone, I still pick up things on an almost daily basis that CM makes me aware of that I would otherwise completely miss.

I realise I am still very much on the bottom rung of the learning ladder, and the ladder probably doesnt have a top rung. If I can get what I feel is halfway up then I'll be pretty happy, and direct access has got to be the only way to make it in a professional way imo. No disrespect intended to those who do SB, its just not my bit of Tetley.

 

[ChartMan]

These comments are very encouraging for all of us. In my experience ( which is not vast) I have observed the following:-
Beginners using SB are either under-funded or their position size is too big for the account. i.e. they want to get rich quick. You just can't do that and expect to come out on the right side- SB or Direct.
The winners that I have observed have taken a longer term view(as I reported elsewhere). Under these conditions, SB is a perfect vehicle, being tax free and the bias being insignificant. One obviously has to have great patience to trade that way.
I can't see any way round the narrow trading range days using SB- you either are out of the market by luck or patience, or you get crucified with no way out. Even a substantially funded account won't save you from this.
I suppose at the end of the day, if you want to trade intraday, without "bias", maybe the answer is to look at other instruments- US stocks, perhaps?
Could I just remind peeps that this BB was set up to help people become better traders, or at least , avoid the numerous pitfalls that are there for the unwary. To this end, it is very rewarding to see people expressing their gratitude and telling of their improved trading abilities.
Bgold - I don't trade YM....

 

[oarsman]

There seems to be some correlation between the size of the spreads quoted and SB Bias. Deal4Free have the tightest spreads, buit seem to have the most complaints regarding bias. I use City Index whose spread for the daily Dow Cash is 8 points, but only rarely is the actual cash price outside the quoted spread, except at the opening. However, for some reason they have been quoting a 6 point spread last week (though they denied it when I asked them about it!!) and suddenly the actual cash price was often outside the quoted spread.

This doesn't mean to say that there is no bias with City Index on an 8 point spread, as the actual price is rarely the mid price, but usually to one end of the spread, but it does limit the bias.

 

[mombasa]

Had a look at IB - thx rosso - definately worth investigating - unfortunatley I reckon it will probably be blocked by our corporate firewall - just like D4F. Having a look at CapitalSpreads - tight spread (!) like D4F and it works thru our firewall.

Cheers

 

[Bill]

Oarsman

Im glad you mentined the apparent SB spread tightening because I noticed that last week as well.

Dow daily cash:
I use Finspreads and just for one day they used 6pts, was 7 and is now back to 7.
I noticed IG had dropped to 6 pts [only in hours] from 8.

I wonder if the SB companies are losing custom to the likes of D4F who offer 5?

There is another co. just started as well that I think offers 5pts, can't remember the name tho. Doh!

Still not convinced there is such a thing as bias but I'm looking into it. See previous posts. All the evidence so far is derived from gut feeling rather than hard fact or research. [unless anyone else knows different?]

Bill

 

[V. III]

Bill,

Have you had a look at the ratio between price movements and RSI movmts as an indicator ? Also how this varies across 1min to 10min.

BTW.......I've lost sh*t loads on d4f.

V. III

 

[mombasa]

Bill - it's Capital Spreads - I just posted there :

http://www.trade2win.co.uk/boards/showthread.php?s=&postid=54341#post54341

Yup, I was right about IB - TWS doewn't work thru the firewall

 

[tradesmart]

Hi Guys,
As ChartMan mentioned earlier, you can overcome some of the problems of SB spread/bias etc in intraday trading, by taking a longer term view, swing trading over days using the 10min chart and 1 min chart for fine-tuning entries.

Plainly the type of move you want to catch is typically the 9500-9850 leg that has occurred over the last week. You need to employ a trailing stop adjusted regularly to protect profits.

I am trying to trade these longer moves combined with intraday trades long and short.

The downsides are:-

1. I find I am a little distracted by the £’s progress of the longer-term position on the screen, and this sometimes affects my intraday trades (some traders overcome this by having two accounts on two monitors, and shutting down the screen on the longer-term position)
2. You are at the mercy of the SB’s ‘futures’ (!) price overnight, and they know where your stop is (bigtime cynicism here!) – don’t forget at the whiff of disaster somewhere, they can move the price down 200 points in minutes.

However, it’s a mode of trading that is definitely worth giving some consideration.

Regards, TradeSmart.

 

[Austin&Liz]

Bill,

We have definitely seen "SB bias" with D4F. We've calculated that, on average, we need to make at least 15pts on a Dow Cash trade just to break even due to the spread/bias etc. When you add on your stop loss this can make the minimum target at least 25pts. As a result it is difficult to trade intra-day & means that we need to generally trade over a longer period to get the bigger movements in price. We'll probably forget D4F later this year & trade direct using IB or similar.

We've also investigated the RSI Strength (or RSI Ratio) indicator. We define this as the change in price over a period divided by the change in RSI over the same period. With Sierra software you would need to create an array of the prices in a worksheet & then calc the ratio from there. Unfortunately Sierra cannot do this yet but they have assured me that it will be available in future (they wouldn't say when).

Cheers

A&L

 

[mombasa]

Hi CM,

Seems like a few people are considering switching from day trading to the longer term 10min thing - including myself I might add.

Gripes seem to be with the Spreadbetter's bias/spread making it very very difficult to come out on top. In my specific case, I'm now too busy at work to concentrate on daytrading - just can't do it!

Any chance of coming up with a few pointer on 10min trading - I know a lot of your 1 min strategy applies to 10min, but which in particular and which to ignore?

I'm currently looking at RSI/Price divergence with confirmation (either by crossover or close approach) of 10, 30 and 100 MA as well as Price/EMA crossover.

For example, I think (as per your last chart) it's probably a shorting opp sometime over the next few days (if not today). The RSI/Price divergence is quite extended and the 10,30 EMA are very close to crossing over.

Regards

 

[Bill]

V.III & Austin + Liz

RSI/price ratio.
I've done some work on RSI strength if you look at my earlier posts on this thread.
I have used Excel for my studies and the RSI strength seems a difficult one. If I simply divide price by rsi on a one minute basis the plot is not very meaningful. What I really need is to find the significant highs and lows and check the RSI strength for those. 10 minutes might be helpful but I'm working on the Dow strat at the moment which is only 1 min analysis. The other ideas are still on the radar though. Thanks for your comments, most useful.

On the subject of bias did you have a look at http://www.trade2win.co.uk/boards/showthread.php?s=&postid=54341#post54341
where I asked Capital spreads for the price algorithm?

At the end of the day I suppose it doesn't matter whether there is or isn't a bias the fact is by the time I push the button the price has already moved. I can't change that can I! [Ok Ok use IB yes]

If we work together I'm sure we could crack this stupid game.

Bill

 

[mombasa]

Ok - today was not the day to go short on the 10 min chart - just as well I ignored myself

maybe tomorrow? Seems to bouncing of 9890 resistance?

Or maybe I'm looking to hard for a short .......

 

[Austin&Liz]

Bill,

I had a look at your previous postings regarding RSI strength/ratio. I can't work out whether you have used the difference in price & RSI or their absolute values.

Using MyTrack/Sierra I can read in an updated price into a worksheet cell but it's not possible to automatically calculate the difference between the max/min of this price over a certain period.

Have you been able to calculate/obtain price changes automatically over a specific period? - if so could you let me know how you did this.

Cheers

A&L

 

[Bill]

A&L

I have to admit the idea is a bit half baked.

What I did was look at the RSI and pinpoint all the reversal points i.e. when the RSI value changes from a string of incrementing numbers to a string of decrementing numbers [and vice versa].

Next I select any string of numbers that is greater than say 8 [this can be varied] So this means that RSI has moved up [or down] for at least 8 consecutive minutes. Then I take the RSI value at the end of the period from the beginning. Take the corresponding price values away from each other and divide price range by RSI range.

So you see the period is variable and always at least 8 minutes long.

This can produce a lot of data so I filtered out and showed only the ratios that are >= 0.8.

I have to admit though there is a mistake in my spreadsheet and the previous posting suffers from that mistake but it seems to be finding SR levels OK so for the moment I have left it as it is.

Don't ask me to post the spreadsheet as it's got loads of stuff in it and it's a bit of a mess. I would though post an example if pushed, but it might take me a while to do.

Ultimately this is not adequate. What I really need is to be able to compare RSI strength from discreet maxima and minima. If I can establish that this is a useful indicator then I will write a program to do it. Thing is it is easy to waste lots of time developing indicators that in the end are no use. I try to avoid that if I can.

Bill

 

[ChartMan]

Bill, I think maybe one more step is required, leaving the others behind... Take a + price rise and get a ratio. Take the next fall and get another ratio. Display a signal if the difference in the ratios >0.5 ( maybe). Or price drop then rise.To refine it, you need to make a decision at the point when the second RSI move in points has equaled the first move. Could get complicated .

 

[Bill]

A&L

You're bound to ask so I did an example for you anyway. I spent the last half hour doing it and missed the sell off

It shows 6:30 to 8:00pm today and the RSI indicator [which is actually upside down but I prefer it this way]

Let me know what you think.

It was created using office xp excel. Don't know if that matters.

Bill