Strategy development

[dbphoenix]

I'm probably way off beam, but he ho. :cheesy:
Tim.

I'm afraid you are, if you're using TLs, since you're leaving out two-thirds of the trading activity for each day. Therefore, your "trendlines" are breached long before you think they are.

 

[erierambler]

I wouldn't say he's confused. He's interested in the retracement setup. If you'd like to go into as much detail as he has only in regard to a reversal setup, I'm sure many people would get a great deal out of it.

Are you Sulong , LOL ?

As for entering at S and exiting at R, that's certainly an option, but it means cutting profits short. As for the use of NYA and INDU increasing the probability for success, perhaps you could provide data on that.

We disagree, taking a profit on a high probability trade doesn't cut my profits short. I'm not in a trade and have no risk. I'm not interested in overtrading.
As for the use of $INDU , it is below it's 200 ma so buying and holding further than here would be countertrend. Therefore I would look for shorting opps. The 200ma on the $NYA is flat and the recent rally is a retracement so far, unless proven otherwise, therefore for me I'm watching as well. Doesn't cost anything to wait.

Someone else may have something to say.

erie

 

[dbphoenix]

Are you Sulong , LOL ?

We disagree, taking a profit on a high probability trade doesn't cut my profits short. I'm not in a trade and have no risk. I'm not interested in overtrading.
As for the use of $INDU , it is below it's 200 ma so buying and holding further than here would be countertrend. Therefore I would look for shorting opps. The 200ma on the $NYA is flat and the recent rally is a retracement so far, unless proven otherwise, therefore for me I'm watching as well. Doesn't cost anything to wait.

Why, no, erie, I'm not sulong. But he did say that he wanted to stay on the subject of the retracement. You must have missed it.

And, yes, taking profits too soon does cut your profits short. That's what cutting profits short means. And staying in a trade isn't overtrading. It's letting your profits run.

As for the Dow and NYSE, I was asking about data to support your contention regarding probability. If you're concerned about trading countertrend, I'm curious as to your definition of reversal, since a reversal is by definition not countertrend, unless you're confusing a reversal with a continuation.

But since this is all off topic, perhaps it should wait for another thread.

 

[sulong]

Sulong

Not trying to confuse you but your study of a breakout from a 2 day range is occurring while the $INDU, $NYA, and $SPX are experiencing reversals. For me reversals mean that one gets in as close to support as possible and gets out at resistance. (Which is why I study the $NYA and $INDU as proxy for my trades.) It increases the probability for success.

erie

I've been gone most of the day, taking the little one to 2 different birthday party's.( All those little kids can give you the jitters)

Erie,
Understood, I think.
Perhaps I should have mentioned how I enter, and exit on the same day. No holding overnight.

But beyond that, I was intending to study first a pullback trade (intra day) seeing as how one presented it self at the time.

After concluding the pull back (intra day) trade, I was planning to move on to various reversal trades, 1 at a time, to study in such a way that we are able to consolidate the information into precise steps to prepare, to enter and to exit.

And who knows, perhaps a break out strategy after that.

 

[timsk]

db,

"I'm afraid you are, if you're using TLs, since you're leaving out two-thirds of the trading activity for each day. Therefore, your "trendlines" are breached long before you think they are".

Sorry, you've lost me completely. I don't wish to take the thread off topic but, nonetheless, an explanation would be much appreciated!
Cheers,
Tim.

 

[erierambler]

I've been gone most of the day, taking the little one to 2 different birthday party's.( All those little kids can give you the jitters)

Erie,
Understood, I think.
Perhaps I should have mentioned how I enter, and exit on the same day. No holding overnight.

But beyond that, I was intending to study first a pullback trade (intra day) seeing as how one presented it self at the time. .

Forget about what I said then , you are on a completely different timeframe. I haven't been able to understand trading intraday ,but capture and print out the charts every day to study them as well ,in my spare time.

Good for you on your work in progress,

erie

 

[sulong]

db,

Sorry, you've lost me completely. I don't wish to take the thread off topic but, nonetheless, an explanation would be much appreciated!
Cheers,
Tim.

Tim,
The thing is, is that I created a problem from the getgo.
The "prophet.net" charts I posted in the beginning, do not show the whole picture.
They stop showing price action at 4:15pm, and start showing price again at 7:00 am the next day.
The action between 4:15pm and 7:00am is called "overnight action".
The "overnight" action did in fact pass through the trend line I put on the first chart.
Thats why db "cautioned" me about using trend lines, in this study, with his first post to the thread.
And sure enough, it created unintentional confusion.

When I'm doing my analysts, to prepare for the day of trading, first I go to prophet.net and look at their charts to refresh my memory of what has been happening the last few days. and then I go to Futuresource .com, and look at what took place over night.
The chart I use for "real time" is IBcharts.

So thats 3 different charts I look at, to give me as full of picture as I can get.
My mistake was, being too lazy / not prepared, to do the work necessary to attach enough charts to give a complete picture to all, for meaningful dialog,

All is not lost, The important thing to remember, is that the "horizontal lines" (S/R)are more important to focus on than, diagonal lines

We'll see in the future, if I've learned my lesson.

 

[sulong]

Pull back trade wrap up

1. An expansion bar, an a daily basis, ( not required, but helpful) reaching a previous strong S/R area. (1st chart)

2. A contraction of the daily range, with price continually testing the S/R area. ( in this case, for 2 days, but for 1 day, may be enough for a lesser move.)(first chart)

3. After 1 and 2, draw lines across the tops and bottoms of the "congested prices", and wait to see if price breaks out by 5 points +/-.(second chart)

4. If price breaks out by 5 +/-, and then pauses, before coming down, look for the first completed bar in the opposite direction of the break out, to have a lower volume bar associated with it, than that of the preceding bar that closed in the break out direction.( does this last part make sense?) (last chart for the rest)

5. If 1 through 4 are in place, enter at the first break of the of the end of the most recent completed bar, in the direction of the break out.

6. place stop loss at the end of the entry bar. ( +1 tick is your choice)

 

[bracke]

sulong

I am in the process of reading through the dbp files and am wary of posting on this thread until I have some idea of what I am talking about.

However as I would not want this thread to dry up or lose the 'services' of those with the type of knowledge I am trying to gain, I will attempt to make reasonably intelligent comments.

Your post 48 had my brain reeling ( not difficult ) I suspect that the written word makes the read a lot more complicated than it is when you are doing it for real ( like trying to describe playing a musical instrument ).

Your chart shows a red line at 1482. I do not understand the significance of the bar in early July from which the line is drawn.

Assuming that there is a good reason for the red line mentioned above could one not select the red line or the resistance at 1480 as close trade time. This would be in conjuntion with volume not being at high or low levels.

Regards

bracke

 

[Trader333]

Sulong,

On your third chart it says IB Charts so is this a chart using IB data ? The reason I ask is that I have found volume as provided by IB to be so far off reality that it was almost useless although this was for stocks.


Paul

 

[timsk]

sulong

Many thanks for your supportive post (#47), however, whilst a more complete picture is always helpful, I was attempting to provide a rationale for Erieramblers entry based upon the info' / charts provided by your good self. I assumed - perhaps naively that, as Erie's enty was marked up on your chart, that that chart alone was sufficient for us all to draw conclusions from. Certainly, if Erie's entry is based upon price action over and above that shown on your chart, e.g. overnight trading; events taking place on a longer time scale etc., (in fact anything other than the picture presented in your original chart) - then I feel somewhat duped!
Moving on: I completely concur with Bracke's comments: "Your post 48 had my brain reeling ( not difficult ). . . " Perhaps it's a cultural thing: you guys across the 'pond' often seem to be one step ahead of us European luddites. :cheesy:
Tim.

 

[sulong]

sulong

Your post 48 had my brain reeling ( not difficult ) I suspect that the written word makes the read a lot more complicated than it is when you are doing it for real ( like trying to describe playing a musical instrument ).

Your chart shows a red line at 1482. I do not understand the significance of the bar in early July from which the line is drawn.

Look at at where that line starts, see that price gap?
Often times, an unfilled "price gap" will act as S/R, and also an attractor for price.
Price will often return to fill that gap, before deciding where to go from there.
This happens both on daily intervals, and intra day intervals.

Assuming that there is a good reason for the red line mentioned above could one not select the red line or the resistance at 1480 as close trade time. This would be in conjuntion with volume not being at high or low levels.

Regards

bracke

Yes, it could, if thats your preplan.
One could also use the completion of the ave. daily range = tighten your stop, and stay in "just in case price fills that gap".

 

[sulong]

Sulong,

On your third chart it says IB Charts so is this a chart using IB data ? The reason I ask is that I have found volume as provided by IB to be so far off reality that it was almost useless although this was for stocks.


Paul

Paul,
Yes, it's IB data.
I don't view volume as an end all, be all, sort of thing.
I don't care about the exact volume traded, but rather the pressure of buyers and sellers.
If price is reacting to a change of pressure, that is enough information, the exact amount of pressure is unimportant.

 

[sulong]

Many thanks for your supportive post (#47), however, whilst a more complete picture is always helpful, I was attempting to provide a rationale for Erieramblers entry based upon the info' / charts provided by your good self. I assumed - perhaps naively that, as Erie's enty was marked up on your chart, that that chart alone was sufficient for us all to draw conclusions from.

Tim.

There was nothing wrong with Erie's rational, using the charts I provided, But..( get ready, I'm going to shout )

WE ARE DOING A STUDY ON A PULL BACK, NOT A REVERSAL!

So you see the problem?
We were not studying the best price, but instead a pull back.
It is not an issue of taking sides, or what ever, it's an issue of focusing on the topic of the thread.

 

[timsk]

No need to shout sulong . . .

. . . after all, it's Sunday! Tranquillo!
Okay, the message is loud and clear, let's focus on the PB. Attached (i hope) is a line chart with a pull back entry following the breach of the downtrend and 10 period EMA followed by a PB to same.
Tim.
(Sorry if I'm lagging behind the rest of you, but at least I'm trying!)

 

[dbphoenix]

. . . after all, it's Sunday! Tranquillo!
Okay, the message is loud and clear, let's focus on the PB. Attached (i hope) is a line chart with a pull back entry following the breach of the downtrend and 10 period EMA followed by a PB to same.
Tim.
(Sorry if I'm lagging behind the rest of you, but at least I'm trying!)

I'll broach this one more time, then leave it alone since I don't want to change the course of the thread.

Using a "breach" of a TL drawn on an instrument that trades 24/7 if one is using only one-quarter to one-third the data is a disconnect from the reality of the chart, i.e., prices paid, no different in theory from using a weekly chart that leaves out Mondays, Wednesdays, and Fridays, or a yearly chart that plots only January, May, and September. Clearly you get a reasonably accurate approximation. But to use a TL break as any sort of signal is really no different from throwing a virgin into the volcano every spring to ensure obliging weather.

Breaking a line that exists only in the mind of whoever is annotating the chart is completely irrelevant. Trendlines do not provide S/R. Moving averages do not provide S/R. S/R is provided by levels or zones of previous trading activity. To go further with this would involve a great deal of copy and paste from the S/R thread. Therefore, I suggest that anyone who wants to pursue this should work his way through the posts in that thread that deal specifically with S/R.

Sorry, sulong.

 

[sulong]

. . . after all, it's Sunday! Tranquillo!
Okay, the message is loud and clear, let's focus on the PB. Attached (i hope) is a line chart with a pull back entry following the breach of the downtrend and 10 period EMA followed by a PB to same.
Tim.
(Sorry if I'm lagging behind the rest of you, but at least I'm trying!)

Before I comment, I want to make sure of "where" you're looking.
Are you speaking about the area directly "above" your arrow, for entry via pull back?

Or an entry at the first break of your "horizontal line" that you've drawn?

 

[sulong]

Therefore, I suggest that anyone who wants to pursue this should work his way through the posts in that thread that deal specifically with S/R.

Sorry, sulong.

No problem, Thats why I was asking for clarification from Tim.

Regardless of Tim's answer, my response would be to focus on S/R.

 

[timsk]

Time to Bow Out!

sulong,
". . . Or an entry at the first break of your "horizontal line" that you've drawn?" Yup, in theory, this is where I'd enter. In reality, I don't trade futures at all. I was looking at this as an abstract exercise which, in light of dbp's comments, was a mistake.
I think it's time for me to bow out as I sense that my contributions aren't helpful to the overall gist of the thread. Nonetheless, I shall continue to follow it, with interest.
Cheers all,
Tim.

 

[bracke]

sulong

Thank you for your reply ( post 49 ) to my post 52.

Fully understand the reason for the red line, you have filled the gap in my knowledge.

Also understand your explanation of adjusting stoploss to account for gap.

timsk & non-posting viewers

If you have not already done so I strogly suggest that you read the dbphoenix files which are available gratis and for nothing on the yahoo and elite trader sites.

They provide the best information I have yet found on supply/demand - price/volume, and I have been looking for some time.

If you print them out you will need to read through them more than once ( or at least I did ) I have also found it useful to precis them into note form - but each to their own.

Reading the files is illuminating and interesting and unless you are knowledgeable about price/volume it is almost a prerequisite to read them.

As I said in an earlier post I am still working through the files but I am prepared to post on this thread in an effort to prevent it drying up. If you are serious about trading in this manner please join in.

Regards

bracke