Dash Riprock Esq. - serious stuff

Open an account with an FCM or get an uncoalesced data feed and trading simulator like Ninjatrader. Working on the grounds that you each already have the basics in chart patterns and candlesticks, get and read the following books (split up into category);

Trading Books:

Mind Over Markets
Markets in Profile
The Secrets of Economic Indicators (advanced candidates only)

Trading Psychology:

Trading in the Zone
Daily trading Coach
High Performance Trading

Technology:

Excel for Dummies (not necessary of knowledge of excel alredy).

Then do this until you are consistently profitable:

PRE MARKET

Pick a contract for which you can be at your desk for either the opening few hours (preferred) or closing few hours.

1) On a tick/volume/range (NOT time bars) chart, mark out the previous days high and low, and any high volume areas (if trading at the close, mark out present day's high + lows too). It also helps to either look at "average" bars or just Hi-Lo bars, dont read anything into the open and close on intra-day bars they just get in the way.

1a) Mark out other points of reference (advanced candidates only)

2) Look at an economic calendar, avoid trading around news announcements.

THEN WHEN THE MARKET OPENS

Look to see where the open is in relation to the levels you have marked out. In the first stages you will be looking for the open type to tally itself with one of these areas (Open, rejection, reverse off yesterdays High volume area for instance. It's all in the books).

THEN

When it gets to one of these levels, Watch the DOM , Time and Sales. Ideally you want to be able to keep a running total of how many contracts are trading at a particular price that refreshes every bid/offer change, but a rolling total/histogram is OK too.

The first thing to watch for is where there are alot of contracts going through a narrow range of prices (so the histogram bars get longer and longer). When this happens consider it a "base step". Once that happens one of 3 things will occur

1) it will keep chopping around and building a "normal" profile

2) It will turn around and go back to where it came from

3) it will go sideways for a bit and then carry on going the way it came.

NOW

in scenario 1) you just wait / call it a day. Advanced traders can do things here but not for newbs

in scenarios 2) and 3) you are going to trade the way it is going. It will be clear which way its going because it's going that way. A fast EMA can help here.

THEN

watch your Time and Sales / DOM and try to pick a good entry and stop. At first you won't have a clue but if you keep at it eventually you will get the hang of it. ints:

* in the beginning, do the opposite of what conventional wisdom suggests (so if you are looking to buy because it's going up, look for selling as a good time to enter).

* look for lots of trades going through on the bid/offer but without moving it

* Filter your time and sales by trade size

* ask yourself where orders are likely to be, and what type they'll be

Run trades until you get to another point of reference or you see another "base step" developing.

Only trade for a few hours a day but make it the BEST quality trading you can. You don't need to spend 10 hours in front of screens to make money, in fact that makes it harder. Obviously keep good records in Excel and a Journal.


POST MARKET

Read at least one chapter of the psychology books after you've finished your day job or whatever. Don't matter if youve read them already, it will sink in more and more and give you motivation for next day. Sports psychology books are also helpful.


THEN

If your trading hasn't improved markedly after doing this for 1 yr, give up.
Obviously this is not comprehensive, it's not meant to be. But it's a start.

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

see charts from todays open

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

post I made on DT's journal - cheats sheet for opening type

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

update from earlier

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

.

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

phwoar she's well fit isn't she.

anyway from the strategy I described Im calling it a day now, market opened 12:20 finish 15:10
will post graph of full session tonight.

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

Good stuff !

re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

OK so here is what happened for the rest of the day. you can see that right after we left (it was just moving off the "base step" at the highs), it went down pretty much in a straight line towards the lows but never gort there, then it was back again. Anyway it never broke out of the range after we left, not that that matters in any way.

So yeah, if you stayed on to trade you maybe could have had a good chance at some shorts, but imo don;t **** about looking at trades you "could" have taken because more often than not you end up staying at the screens all day and end up with death by a thousand cuts.

Dont care about losses you aren't supposed to avoid or gains you aren't supposed to get!

anyway for some traders this would have been a good day just trading the value area (in books) but thats another day.

(you can see in green the high low and high value area for 2moros trading)

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

you will get times like today where the market has no real conviction and just seems to be boring chop. believe it or not you can actually trade when this is happening too.

***WARNING!!!!! THIS CAN CAUSE YOU LOTS OF PAIN IF YOU DON'T CHUCK NORRIS ON YOUR LOSSES******

now what the basic idea is is to find the mean and work on the assumption that price will revert to it. without anything happening in the market assume that the underlying value is fairly represented by where the most volume has been done, and occaisionally because of order/liquidity imbalances it gets skewed away from it.

so the idea is to post bids and offers either side of it and trade on inside prices. as long as there are volumes coming through the market, you can play shopkeeper for a bit (two way trade). basically the aim is to take advantage of other peoples impatience and just have them pay you the spread. Don't ar$e about trying to pick the high of the range and get out at the low, be grateful for the spread plus a tick or 2 (depending on what your'e trading) thats it.

WHEN THE MARKET GETS CLOSE TO YOUR ORDERS WATCH THAT MOTHER****ER LIKE A HAWK

If you get given and the market immediately goes offered, be ready to scratch/bail. Look at the size of the orders going through the tape, these are the traders that are filling your orders. When the market gets to the extremes of the range, watch the tape to see if's its backed up by sizeable orders going with or against the grain. Have some circuit breaker working so that if there is a spike and one of your resting orders gets filled too fast for you to notice you can puke before its too late.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

redart said:

Regarding the shopkeeping, you talking about putting in a limit order on the bid and on the ask and at a time where you expect the market to be chopping around and looking for both to get hit and making a tick or 2?
The concept of earning the spread is a bit cloudy to me, I guess because I have only ever really known spreadbetting.
What's to stop you from getting hit for your long on the bid, and then the market carries on dropping and then you're stuck with a bad long position. (this applies to 'scalping' in general and not just your example)
The way people describe this type of trading, they always make it sound risk free which makes me think im clearly not getting it!!

anyway, I saw this bird on Smallville. I like. You like

Click to expand...

well yes mate you are bang on - there is absolutely nothing to stop the mkt taking straight through your bid and getting steamrollered in the process (the worst ones are when you have an order working away from the market and then all of a sudden something kicks off and it races straight through your offer and before you know it it going bid miles away from where you got filled. that's why I think its important to have a circuit breaker).

So that is the risk.

FWIW I doubt a local doing this would have the bid and offer next to each other unless you are looking at say front month serial bor right close to expiry or something. typically I try to pick the 'fair price" and work orders a bit deeper than that either side.

So anyway because of the risks when it gets close to your order you can look at some things to try and give you an idea if your fill is because of just general market flow (what you want) or because something is changing (what you don't want).

So when it gets close, you can be looking at things like:

- the amount of contracts being traded at each level before it changes
- the size of the trades hitting the tape
- the size of the orders in the book and how many of them trade
- what happens immediately after your filled
- the balance of trades between the bid and offer
- how fast orders are coming through
- what is happening in other markets outright (in your asset class)
- what is happening in the spreads

to give you a clue whether it is business as usual and you are OK to get out nearer the middle of the range or whether something has happened - either in terms of news or in terms of activity - that mean you should be flat asap.

its a bit like fading a breakout i spose, you are looking at the same sorts of things to tell you if it's going to follow through or not.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

I wanted to show this yesterday because I was BANNED I couldn't.

basically day like yesterday if you don't make money trading like this then you should give up now.

(the yellow lines are as normal, yday High, Low and POC's, green stuff is just my annotations not strategy)

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

Dear everyone at trade to win,

If you are not too busy, you can see in this thread I have described two strategies. One that only trades in one direction after a " base step" of high volume areas, and another that picks a " fair price' and makes makes two way prices either side of it, in the anticipation that price will go back to the middle.

In both of these cases, the specific entry, exit and atops are taken from the time and sales which I described earlier on. So that is pretty hard to explain on a forum.

As scose was talking about a similar strategy to this, I thought I could explain one of the very hard things to do. What is very important is that you know when to use the first way of trading and when to use the second. Using the wrong strategy at the wrong time will lose you lots of money so it is important to get right.

In the 1st graph ("10" ) I have shown what it can look like when it isn' t very clear which strategy is the right one to be using. It has built up a high volume area at the overnight high (grey line) and now it could either continue going down (so 1st way of trading) or rotate back up (2nd way of trading), and before you start to make trades you need to know which one to use!

Well, when this happens, something that can help is if you look at another future in the same asset class and the spread between them (I can't show that here). So the other graph ("30") is of another bond future. Because of arbitrage, if one goes up alot the other must follow at least a little. They don;t have to go up (or down) by the same amount (infact they don' t have to go same direction at all) but as a general rule of thumb it can give you guidance.

Anyway the thing to look out for is that both of them should be doing the same sort of thing. So like it looks like the 10 could be going down, but the 30 actually is rotating around high volume. So when this happens its best to do nothing and wait until it is more clear whether the market is trending or ranging.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

Dont you get one of those spread matrix thingies with your platform? Post one.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

so if you wait a bit you can see that both now look like they are building "boring" days so you can either scalp the range (I put in purple lines just for general idea) or wait for breakout or go home. Just something else to note is that we're nearly 2 hrs into session and still trading in 1st half hour range.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

scose-no-doubt said:

Dont you get one of those spread matrix thingies with your platform? Post one.

Click to expand...

nope I am using free thinkorswim

and anyway, that sort of " spread matrix" is really for trading that just tries to cross a spread somewhere. in this type, sometimes you can see order on one affect another (so look at 2 DOMs) but really spread is just to give an idea if moves are parallell or steepening/flattening or what mix of the two.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

DashRiprock said:

so if you wait a bit you can see that both now look like they are building "boring" days so you can either scalp the range (I put in purple lines just for general idea) or wait for breakout or go home. Just something else to note is that we're nearly 2 hrs into session and still trading in 1st half hour range.

Click to expand...

It would be nice if you included time line at the bottom when showing two separate charts.

I believe 10yrs have more volume, so they give a better idea of what people are doing.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

Depth Trade said:

It would be nice if you included time line at the bottom when showing two separate charts.

I believe 10yrs have more volume, so they give a better idea of what people are doing.

Click to expand...

OK will do next time

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

well you wouldn't have to wait long for a breakout so this is v good example why you need to be sharp about knowing which to use and CHUCK NORRIS ON YOUR LOSSES.

so if you weren't concentrating you could just be sitting on our bid waiting to be filled and then all of a sudden like loads of ticks underwater. That is why trading like this is dangerous if you don't know what you're doing.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

see you have to chuck norris on your losses and switch from one style (making bids and offers around a "fair price") until something changes and SHIIIIIIIT you go to the other style of ONLY selling with entry from the tape.

Re: Get Long My Schlong, by Dash Riprock Esq. - serialisation

I didn't see a calendar spread matrix it was between STIRs. I don't even know anything about it I was just saying cos Dash was talig about watching spreads. Cheebus Teh Annointed!