Trading ES (Q1 2004)

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Sand

Interesting how you look for divergence between the ES, YM and NQ and how look at market timing against what I would call horizontal areas of support and resistance. In this case, 1093.25 being the PC. I have been looking at away to asses the internals for ages but you make it sound really simple.

You mentioned a Value area. Would that be the area price where we had the greatest volume.

Cheers
Andy

 

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Tick 23/3

Bgold

What stands out today for me is how the price action was dominated by the DH, DL, PC and lower gap fill. Therefore before you even start to look at the what was happening to the Tick, you have to see what the ES was doing.

My original Tick Chart was messy because I kept having to re think my strategies. So what I will do is give you two charts. One with the primary direction and one with more short term momentum entries.

We did get a W pattern. It was at the LOD. The move up was far from smooth but that is when I look at what is happening in my other time frames. The time of day did not help to be fair,

 

[sandpiper]

Andy,

Value Area:- Yes, where 70% of yesterdays volume was traded. Although there are other ways of doing it based on time rather than volume.

Apart from the obvious point that good moves stem from all three indices being in sync, I certainly find it helpful to be able to "assess" the relative strength or weakness of each against the others. As you observed, I use areas of horizontal support/resistance, but you could use anything. The example I used earlier was the open, so:

When the ES popped up to test the opening range at 10:58, YM was above the opening range and NQ was below it.

When the YM dropped to 10040 at 11:37 (10038-40 being a cluster of support including pivot, 50% of yesterdays range and yesterdays close) ES found support at yesterdays close but not at yesterdays pivot or 50% of range and nor did NQ.

When the NQ went to take out yesterdays low at 12:37 ES was 2.5 points off yesterdays low whilst YM was miles away from testing yesterdays low. Based on this (to me at least) the odds didn't favour a clean break of yesterdays low by NQ.

All the same issues were present with that early afternoon rally, i.e. when YM and ES broke the opening range NQ was still comparatively weak.

 

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Tick curling

bgold

Not sure if this a correct technical term and I would not suggest you use this method as you are going to over trade.

What I want to illustrate is how the tick curls round by either making a LH at a top or HL at a bottom. I have started to watch for this as I like to see where the Tick will curl over and compare it to the previous move in Tick and price (wave).

Yesterday, I started to use for the first time, 1 minute tick charts. I am also watching this as a heads up to what is going to happen in the 5 minute Tick. Yet again, this may make you over trade so therefore, it's really important you watch the your 5 and ten minute set ups. Count your HH's, HL's, LH's, LL's, watch for price patterns like the H&S. If you waited all day and traded the 15.36 EST one, you should have a big grin on your face.

m8, once again, I am not that experience a trader so these are only the views of another green horn. Test this out for yourself before you commit your hard earned cash. I don't want you beating me up on Saturday. :cheesy:

 

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Sand

Thanks for getting back. Got brain damage from sitting in front of the screen all day. Just realised what time it is. Reading what you said but not going in. I am sure it will make sense in the morning.
Also my flat m8 has just walked in from the pub and he is stuffing his face with a cheeky chinky. Making me v hungry.

BTW, what's the eSignal code for the YM and NQ. I suppose it makes more sense to look at those as well. Gonna need more screens.

Good night all

 

[sandpiper]

Andy,

Esignal code(s):

YM #F
NQ #F

"Don't go changing, just to please me".... good ole Barry White. Seriously, don't mess with what you've got if it works for you. As Skim says, take one set up/pattern and make it your own.

I think you have to take heart from what Mark Fisher says though, i.e. if everyone can see it and get in at the price you got in, how good a trade can it be? In other words, you need to be looking at something that hardly anybody else is.....

Speaking of which, if you haven't already, have a look at these if you get the chance:

http://www.clicklive.com/NYMEX/symposium_2003/fisher-1.htm
http://www.clicklive.com/NYMEX/symposium_2003/fisher-2.htm
http://www.clicklive.com/NYMEX/symposium_2003/fisher-3.htm

Enjoy the chinky..

 

[bgold]

SL, thanks for great reviews. Analyse tomorrow and see how it can work for me. In stead beating up, look foraward buying you pint!
Sandpiper, great links to the Mark Fisher symposium. Inspirational stuff, in my view plain truths with which I struggle on a daily basis. I can't hear the message aften enough!
How long are these tapes?

 

[sandpiper]

bgold,

They last about 30-40 minutes each. I watched 'em two or three times each (so that's another few days gone out of my life....). Even though his approach is based on trading multiple markets and catching a few good moves in two or three, I believe that there are still some very good points in there.

I do often wonder why so many of us (and I definitely include myself in that) repeatedly bash our heads against a brick wall trying to trade the spoos when there are any number of markets that are considerably easier (particularly if you trade them in conjunction with each other).

I suppose it comes down to the saying that 90% of us are more interested in being right than making money. It isn't very glamorous chipping away taking a bit of every move with lots of small well managed losses and a few decent wins but it isn't a quick route to the poor-house either.

In Mark Fisher's terms, I suppose for whever reason, a lot of us aren't happy with the idea of being "rich idiots".......... .

 

[bgold]

Sandpiper, Understand what you mean. I got hooked and ended up watching tape until 1am. I am afraid i do subscribe to your observations. After almost 1 1/2 yr full time trading, I still have to tell myself on daily basis that I "don't want to be right but rich" (I believe a quote in one of Elder's books.

 

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Hi Sand

Thanks for the links. Lookiing at them now.

 

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Sand

I viewed seminar 1 and 2. This chap is really funny. Need to suss out ABCD pattern he is talking about so going to view it again. The pivot area he talked about worked today. Going to post later but first need to take the piss out of my flat m8 who is a Gooner. Chelsea just gone 1, 0 up. Come on you blues. Lehmans a clown and I am not talking of Lehman Bros.

 

[sandpiper]

Andy,

Yeah, strange that the pivot zone worked today 'cos it didn't actually reflect yesterdays "meat" very well..... The ABCD is straightforward enough. I wouldn't use it though unless I was trading lots of different markets though. Today is one of them days where ACD would have stopped you out twice on the spoos and then you would have given it a rest.

 

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Got ya, if the Pivot and yesterdays Value area are in the same zone, then this has more importance. With the value area, I assume you just look at the previous days Price and Volume Chart for a visual indication or can it be obtained some where else.

I can't believe how jammy those Gooners are. Looks like Real Madrid in the semi's.

Cheers
Andy

 

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Todays 1 minute MACD

The MACD again performed very well today giving good divergence signals.

The Pivot area is interesting. The price goes all wobbly when it hits it. I suppose it may be wise to exit the market and only re-enter once the price moves away from this area.

 

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Tick 24/03

Quick chart. Not all divergences are playable but here you go anyway.

 

[sandpiper]

Andy,

Well, the pivot zone is Fishers way of avoiding calculating the value area without using cqg, etc. He maintains it corresponds with previous days value 95% of the time. That's really the point, the pivot zone itself is meaningless other than as a representation of something else. Yesterdays value was actualy between 1093.25 and 1100 (yeah, you can gauge it by eye on a 30 min chart or look at e-signals market profile). Yesterdays pivot zone was between 1092.25 and 1095.25. So it was a bit skewed to the low side.

 

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Sandpiper

I am going to start looking at the ES, YM and NQ at both 1 and 5 min levels. The 1 min chart will be used to compare these MACD divergences and the 5's to look at Fishers Pivot Area, Value Area and PO, PC, TH, TL, PH, PL.

I am probably over loading myself with Charts and I will revert to a simpler set up at some stage but it will be good to do this as a learning exercise. I will tell you how I get on.

Thank's again for the snip bits of information. It is really helping me get to grips why price is moves how it does.

 

[china white]

early test of 20 ema/5 min

another rather rare occurence when with super trend internals and leadership u got an early (within 1st hr) test of 20 ema/5 min (yellow line). Only 2nd time this yr if I recall correctly.

I think such days shud be called "La Mano de Dios" - easy 10+ pts in one early trade :cheesy:

 

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The long grind up

A bit of a weird day for me. All my indicators were showing lower highs but the lows were not lower lows. This can be seen really clearly on the 1 min ES, MACD.

The Tick was interesting. We kept consistently above zero. With the internals being macho bullish, all the dips were an opportunity to enter on the long side. However I have to be honest, I kept trying to pick the top.

This is were those W and M patterns really pay off. The M's being short scalps, apart from the last one which was more pronounced and picked the top right at the end of the day.

Also a good day for trend line breaks to the long side.

 

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China

Just noticed that you are using that Directional Movement indicator. I had a look at it and found it too much like hard work.
I am thinking of an internals analyser. It looks at all the internals and gives a positive, negative or neutral value.