How ES`U,NQ`U and INDU pan out

This is a discussion on How ES`U,NQ`U and INDU pan out within the Technical Analysis forums, part of the Methods category; Take a look at the 3 charts, NQ and ES futs, and the dow. ES and NQ show 10 ESA ...

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Old Aug 10, 2002, 4:57pm   #1
 
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How ES`U,NQ`U and INDU pan out

Take a look at the 3 charts, NQ and ES futs, and the dow. ES and NQ show 10 ESA (light) and 21 ST MA ( dark). In this particular instance, ES was leading NQ by virtue of the MA crossovers. On the dow( not shown) the MA's crossed over at 15:38 at 8606. The MA shown on the dow is the 100 ESA - "the safe buy level".
The ES shows on the left hand side the 2 MA's crossing at just below 894. This is the 5th tick in from the left and is an up tick. The dow is still doing a down tick.NQ has also done an up tick.
The buy signal will come from the fact that the 2 MA's are about to cross and the first sign of an up tick in ES. The NQ Ma's didn't cross until a few ticks later. Now you're in. The trick is now to find the pullbacks and add to your position. These are arrowed on the ES chart. Look how the volatility on ES compared to Dow. Assuming a nominal 10 points worth ES to dow 1 point , you can see that a particular move on ES DOES NOT get reflected back to the dow's move. You must allow for the fact that the dow is "happening" about 1 tick later than the ES/NQ.
You can't quite see it on this example, but a big pull back occured just after this.( dow dropped from 8682 to 8655). ES dropped the equivalent ( 903 1/4 to 900 1/4) but at this low, the two MA's never crossed and there was not one full down tick below the 21MA. The first <MA crossover on ES was at 16:40. that was at dow 8720. Entering/exiting this move at the ES MA cross was worth 120 points. Taking an overall view, trading the 10/21 MA cross from just the dow will cost you 20 points or so. Trading it from ES will just give you the edge on the bias BUT you have to be quick. If you are nervous or not sure, you will still not beat the bias. Remember there are occaisions in a big move up that the dow is ahead of the SB's. You will see that the SB bias is barely above the dow cash price and fails to move for several ticks. Dont be fooled into selling just because the bias has dropped back. It just means that the dow stocks are leading the way, and ultimately ES ( and hence SB's ) have to follow. I have seen SB's fall 15 below the uptrending dow, without the down tick in ES and been tempted to add at the bargain price. Next time....
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Old Aug 11, 2002, 3:55pm   #2
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Very good post as usual Chartman, us poor spreadbetters need all the help we can get!!

cheers

Hugh
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Old Aug 11, 2002, 6:41pm   #3
 
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ChartMan started this thread I'm sure there are plenty out there that have useful info to divulge. They need a bit of pushing....not everyone is prepared to divulge their trading secrets. Beats me why , but there we are. JPwone has a good one documented- based on 6/10/30 MA's and ES
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Old Aug 11, 2002, 7:49pm   #4
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After nearly 12 months sp the Dow, im not sure that their are any trading secrets!

Having read everything i can find re trading i think that many methods will work, ma,s , macd etc, however they must be applied consistantly.

Once, having decided on a "method" and preferably back tested it over a few years then you should stick with it.

I think the problem for many of us is that we spend to much time searching for the "Holy Grail" which of course dosn,t exist instead of concentrating on what can be proved to work.

However i suppose their is no harm in looking for a better mousetrap!!!

Have a look at Wealth-Lab.com re backtesting software, excellent site!

cheers

Hugh
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Old Aug 11, 2002, 8:20pm   #5
 
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SYSTEMS

here's a couple for the TA buffs:

http://www.dacharts.com./smax.php

http://www.stockhits.com/site/id62.html

Should keep you busy for a while

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....Indicators show the past. Price Action "Indicates" the future.
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Old Aug 11, 2002, 11:26pm   #6
 
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Back testing will only show what worked earlier. In hindsight.
You can't trade on those results. It bears no comparision to actually taking trades on. What worked then may not work in real time now.
In the heat of the moment everything goes out the window.

CM, where is JP's article please?

Options.
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Old Aug 12, 2002, 12:48am   #7
 
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Neil,
Good links m8, thanks.

Options
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Old Aug 12, 2002, 10:22am   #8
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We need a point(s) of reference to base our trading decisions on.
What else can we use??
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Old Aug 12, 2002, 10:55am   #9
 
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i think JPWone posted his website link somewhere options. If you search through his posts from his personal details in "members" section, then you should be able to find it.....
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Old Aug 12, 2002, 11:00am   #10
 
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Cheers P,
Didn't think of doing that, doh.

Options.
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Old Aug 12, 2002, 11:20am   #11
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How about this "system" from the elitetraders board!

inandlong

08-08-02 01:42 PM

1) Pick any trading vehicle with good volume

2) Draw a horizontal line at the current price

3) Be long above the line and short below it

4) Use the 10 tick (or whatever) trailling stop


You don't need trend finders, indicators, Level II... just trade. Look at a chart of anything..... how long does it stay at any one price, or cross the same price repeatedly more than a few times until it runs one way or the other.

You must be in to win!
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Old Aug 15, 2002, 1:15pm   #12
 
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Hi Chartman et al,

Excellent post - again cm.
Certainly where intraday short-term scalping is concerned, you have brought some very valuable observations to the fore. I've certainly benefitted from them recently, when the market has turned extremely volatile. Yesterday evening, the dow andx s&p seemed to be followong the nasdaq, an observation which made it very easy for me to enter a position before the sb's. Many thanks for that post - please keep them coming.
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