Mechanical Day Trader - Dow Market Opens

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Old Aug 7, 2008, 4:18pm   #1
Joined Aug 2008
Mechanical Day Trader - Dow Market Opens

Intraday trading of the market opens - I will endeavour to update this for each day for the first hour of trading - let's see how long I keep this up, maybe 5 trading days in a row??

All times will be Chicago - Rules are:
> first trade can be 1/2 hour or so before equity index opens
> 100% technical decisions
> use institutional stops created premarket & after 8:30 Dow Open use stops from previous day sessions
> short stops will be less than 10 points
> long stops will be 5 to 6 points
> trade 2 contracts - 1st contract is typically out at first technical objective; 2nd contract stays in the trend (if there is one);
> If trend, enter another contract with the trend

If I do this for about 5 days in a row, this will give readers a feel for the Dow (historically) - also, since I am an ex-journalism major, I get my typing fix out of me.

KEY:
Green = s1, s2, sx
TOP = 1st profit objective long; if R1 sold, stop is just above here
BOTTOM = 1st profit objective short; if s1 bought, stop is just below here
Orange = R1, R2, Rx
FORM = there are two legal chart formations for buys, two for shorts
REVERSE = there is one legal reversal rule for longs, one legal reversal rule for shorts
STOP = intraday or multiday stop will be mentioned
REVUP/REVDN = there are two types of reversals each direction, they are timed

ADDITIONAL KEY:
TIME = there is one time rule when exiting or entering a trade
POINTS = there are 2 rules regarding Dow Points

The first profit objective will be entered as close to realtime as possible, the "end of trend" reversal may or may not be posted; I seek points - once I hit my points I'm happy to be done for the morning. Those that are hungry can stay in longer.

let's see how it goes !

The Mechanical Day Trader
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Old Aug 7, 2008, 4:42pm   #2
Joined Aug 2008
mechanicaldaytrader started this thread AUGUST 7, 2008 PREMARKET
short FORM - 8:17 11542 LIMIT
cover short - 8:37 11472 MARKET ------ net 70 points (might be some slippage)

long {EDIT -- reason for trade = FORM} GREEN S2 8:45 11485 LIMIT
exit TOP /ORANGE 11520 MARKET -------- net 35 points 1st profit obj
long GREEN S3 8:58 11503 LIMIT (uptrend rule, annc in 2 minutes)
long GREEN S4 9:13 11533 LIMIT (uptrend rule, after annc - this may not be filled if you're not quick)
exit (exit because of points & time & FORM) TOP/ORANGE 9:34 11570 MARKET
---------- net 1st -- 85
---------- net 2nd -- 67
---------- net 3rd -- 37 (may not have been filled)
TOTAL UPTREND PTS (3 contracts)= 189 (X$5 = $945)
TOTAL DOWNTREND PTS (1st trade, 2 contracts) = 140 Points (maybe 5 pts slippage on exit)

This post completed 9:42 am I'm done for the day - exited market at 9:35

The Mechanical Day Trader

Last edited by mechanicaldaytrader; Aug 7, 2008 at 4:50pm. Reason: added reason for long entry at 8:45
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Old Aug 8, 2008, 4:38pm   #3
Joined Aug 2008
August 8, 2008 Dow Jones First hour trading

mechanicaldaytrader started this thread August 8, 2008 premarket
exit short position from 11440ish one hour earlier @ 3 minutes past open (8:33) near 11380 (filled 11385) net profit approx 50 points
-----------------------[always figure the previous trade before entering a new one!]------

August 8, 2008 first trade after market open
long GREEN S3 8:43-8:48 11428 LIMIT (uptrend rule, MKT has already surpassed 1st profit objective, so hold all contracts for end of uptrend)
{9:25 update} the uptrend is nearing a mutli day STOP 11617 and 11672
9:25 exit at ORANGE 11633, filled 11630

profit per contract 206 points, time in market 40 minutes

as per earlier trades, I just take the points and leave..enjoy the rest of the day.

Good Trading!

The Mechanical Day Trader
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Thanks! The following members like this post: trendie
Old Aug 11, 2008, 5:12pm   #4
Joined Aug 2008
a tame monday

mechanicaldaytrader started this thread August 11, 2008
No announcements today, trading a little tame; numbers come out the rest of the week, expect bigger ranges after today.

First trade was a reversal at a multiday institutional stop, that led to two long entries of 40 points and 60 points (total so far 100 pts) , respectively, a couple shorts after each long exit (about 70 points; the 2nd short was nice, about 50 points short , a reversal at today's institutional stop nets a long of 30 points for exiting at the first profit target, as of about 10 am Chicago you stay long for the Uptrend (as of 10:08, the long has yielded 60 pts so far; thus a quiet day yields about 440 points by 10 am Chicago if you trade 2 contracts, exiting the first at a profit objective (you don't know if there is a trend) and exiting the 2nd at the end of the Trend/reversal.

These 3 days should give readers a good view of the intraday methodology. There are only 3 causes of a intraday reversal, the daytrader knows the lowest risk trades and is expecting the reversal and technical confirmation on the chart before entering the trade.

Low stress for all concerned because the stops are tight and you are filled via limit order entering, and exit at market very near the limit resistance/support number.

You expect the reversal 5 to 10 minutes before it occurs
. If it blasts thru it, then you continue riding the trend; if it generates one of the 3 reversal critiera, you exit your current position and reverse.

You do not trade by having the market behave to your expectations, you let the market decide what it is doing and take low percentage trades (there are 4 legal trade setups only) that the market gives you. The market is boss, we are mere slaves taking what the market gives us, with no bias or opinion ourselves. This lowers the stress level immensely, along with the tight stop losses.

Good Trading!

The Mechanical Day Trader
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Old Aug 11, 2008, 5:56pm   #5
Joined Aug 2008
mechanicaldaytrader started this thread To see charts accompanying these trade journals, navigate to my profile

The Mechanical Day Trader
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Old Aug 12, 2008, 6:16pm   #6
Joined Aug 2008
August 8, 2008 Dow Jones First hour trading - Updated @ Noon ET

mechanicaldaytrader started this thread August 12, 2008

short about 100 points from 8 am Chicago
quick long about 50 ups during the downtrend (optional counter trend trade)
long about 70 points from the AM Low
2 shorts in a row after the uptrend - first short nets about 30 2nd short nets 20

total so far 1 min methodology: 100 + 50 + 70 + 30 + 20 = 270 pts total (1 counter trend trade included)

As of 12:15 ET market is in a trading range with a bias to stay short for a lower low.

The Mechanical Day Trader
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Old Aug 12, 2008, 7:33pm   #7
 
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Joined Jun 2002
Quote:
Originally Posted by mechanicaldaytrader View Post
August 12, 2008

short about 100 points from 8 am Chicago
quick long about 50 ups during the downtrend (optional counter trend trade)
long about 70 points from the AM Low
2 shorts in a row after the uptrend - first short nets about 30 2nd short nets 20

total so far 1 min methodology: 100 + 50 + 70 + 30 + 20 = 270 pts total (1 counter trend trade included)

As of 12:15 ET market is in a trading range with a bias to stay short for a lower low.

The Mechanical Day Trader
These are my program Trade for to day ,, All automated.

I will post all trades for next few days,,, The attached result is up to NOW trades > The program Trade stops trading 1 hour before market closes,, It only scalps the consolidation .( this is the most difficult time to intra day trade if you are not automated and the best time to day trade if AUTOMATED.

Grey1
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Old Aug 12, 2008, 8:06pm   #8
Joined Aug 2008
Congrats!

mechanicaldaytrader started this thread
Quote:
Originally Posted by Grey1 View Post
These are my program Trade for to day ,, All automated.

I will post all trades for next few days,,, The attached result is up to NOW trades > The program Trade stops trading 1 hour before market closes,, It only scalps the consolidation .( this is the most difficult time to intra day trade if you are not automated and the best time to day trade if AUTOMATED.

Grey1
So far today your winners are about double your losers. Scalping gives you lots of trades, the downside is you don't let your winners run, and your losing trades are about equal your winning trades dollar value wise. But these are all trade offs, if this works every day like this, you've got a nice program and your broker is buying a bigger yacht! LOL

My kudos to you Grey1 !!

My goal for my program is to use discretion for entering trades [but have simple graphical rules] and make 200% of intraday margin ($500) per contract within the first two hours. The Dow trading range is now around 250 points from high to low the past few months so trading all day the numbers get pretty staggering profit wise.

Again, my compliments on your scalping automation!

Regards,

The Mechanical Day Trader
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Old Aug 12, 2008, 8:22pm   #9
 
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Joined Jun 2002
Quote:
Originally Posted by mechanicaldaytrader View Post
So far today your winners are about double your losers. Scalping gives you lots of trades, the downside is you don't let your winners run, and your losing trades are about equal your winning trades dollar value wise. But these are all trade offs, if this works every day like this, you've got a nice program and your broker is buying a bigger yacht! LOL

My kudos to you Grey1 !!

My goal for my program is to use discretion for entering trades [but have simple graphical rules] and make 200% of intraday margin ($500) per contract within the first two hours. The Dow trading range is now around 250 points from high to low the past few months so trading all day the numbers get pretty staggering profit wise.

Again, my compliments on your scalping automation!

Regards,

The Mechanical Day Trader
The first and last hour is shark infested and very difficult to model using current state of mathematics unless one uses FUZZY maths to code the uncertainty.
Most program Trades that I know including the one we used to run in the bank are cycle based and ignore the first and the last hour. In fact the reason for traders losing most during this period is because of the activity of program trades.. ,, ( just like playing a computer Chess )

The trade off between Trend code or a cycle code is well documented and i have had much more success with the cycle code than a trend code.



Grey1
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Old Aug 12, 2008, 8:35pm   #10
Joined Aug 2008
The Marina was a mile away...

mechanicaldaytrader started this thread Agreed..I don't know how any automated program could figure out the opening and closing hours; however, using discretion one can capture the big trades in those hours because they are always retracements of known institutional stops within 'x' hours or 'x' days ....... crossovers and moving averages are useless on intraday during these two hours [that's my experience] so using some grey matter between the ears and some good cycle analysis + technical stuff, it can be done.

I've been around this trading business a while, I can't sit there all day....when I was a boat owner, I would be on the water by noon most days, cuz I made a killing in the morning hours -- then trade the reversals before the market close after returning from boating in the Gulf of Mexico...

Regards,

The Mechanical Day Trader
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