Anyone scalping the INDEX Futures??

[darktone]

picked a trend from dow daily at random, and marked its start and end. 15ema HL/2 (not that it matters lol) with the highest and lowest prices available during the trend. The aim is to follow this trend, the direction is up so long only.

 

[darktone]

heres that time covered on the 15min, same 15ema. the objective is to fade this in the direction of the daily. Ie you buy below the ema. No need to wait for a close, just set your limits to buy under the average and let them fill.

 

[darktone]

trading with the above MO, whats the most likely way someone trading to the long side could have lost money?

 

[timsk]

Can anyone play?

trading with the above MO, whats the most likely way someone trading to the long side could have lost money?

Buying at the top of the trend just as it reverses. I'm really skilled at it. I once bought the exact top - to the tick - of a U.S. stock and shorted the exact bottom - to the tick - of the same stock on the same day. And they were the only two trades made on the instrument. That takes talent!

 

[Dowser]

Wow! thanks for the charts DT, just got back in and sat down - hmmm let's av a look...

 

[Dowser]

trading with the above MO, whats the most likely way someone trading to the long side could have lost money?

Using tight stops?

 

[darktone]

Can anyone play?

Buying at the top of the trend just as it reverses. I'm really skilled at it. I once bought the exact top - to the tick - of a U.S. stock and shorted the exact bottom - to the tick - of the same stock on the same day. And they were the only two trades made on the instrument. That takes talent!

That's top tarding there Tim . I'm not sure I can match exact top and bottom tick on the same day but have come pretty close .
Interestingly, using the proposed method it'd be physically impossible to buy the top tick cos you can only buy below the average.

 

[darktone]

Using tight stops?

 

[Dowser]

That was a genuine eye-opening-light-bulb-illuminating moment for me DT. I've looked at your charts many times and not really understood the MO. But, in the context of the higher time frame trend, the idea of buying low and lower and lower rings true. Cheers pal

 

[timsk]

. . . Interestingly, using the proposed method it'd be physically impossible to buy the top tick cos you can only buy below the average.

Hi DT,
Very fair point - and I like the basic logic underlying the methodology which I think is sound. That said, leaving buying the exact top aside, the point the trend reverses is always the point the trader loses if they're adopting a trend trading approach. I agree with you that tight stops will kill you but, equally, some sort of risk management policy is essential in order to avoid that inevitable trade - or clutch of trades - that are long in a market that's tanking. That, or something along those lines must happen sooner or later because, if it doesn't, then this is the Holy Grail and everyone would do it! I've not tried it - at least not quite as you've outlined here - so I can't say for certain what the exact flaws are. But flaws there will be; sadly there always are! (Identifying the trend and avoiding sideways chop being the obvious contenders.) Like I say, I think it's an excellent starting point for someone that's struggling or unsure where to begin and I don't doubt that with suitable risk management a consistently profitable methodology can be built around it.

Tim.

I've had a closer look at your chart example DT and (I think) I can illustrate the point I'm making above. If I've understood the strat' correctly, if the daily is above a rising MA, only go long and visa versa for shorts. If you look at the bull candle on your daily chart immediately prior to the start of the trend (i.e. 12th Feb' 2016), that is below a falling MA so, presumably, at that time you'd be looking to set short limit orders on price rising above the MA on your M15 chart? Let's say you've got in at an average of 15,800 - then that trade (or clutch of smaller trades) is now 3,000 points offside. Add in the overnight costs for keeping it open for nine months (and counting) - and that's gonna hurt!

 

[Dowser]

I'm assuming that risk is managed by having a well funded account and using very little margin as opposed to the traditional 0.5, 1, 2% risk per trade.

 

[tar]

Hi DT,
Very fair point - and I like the basic logic underlying the methodology which I think is sound. That said, leaving buying the exact top aside, the point the trend reverses is always the point the trader loses if they're adopting a trend trading approach. I agree with you that tight stops will kill you but, equally, some sort of risk management policy is essential in order to avoid that inevitable trade - or clutch of trades - that are long in a market that's tanking. That, or something along those lines must happen sooner or later because, if it doesn't, then this is the Holy Grail and everyone would do it! I've not tried it - at least not quite as you've outlined here - so I can't say for certain what the exact flaws are. But flaws there will be; sadly there always are! (Identifying the trend and avoiding sideways chop being the obvious contenders.) Like I say, I think it's an excellent starting point for someone that's struggling or unsure where to begin and I don't doubt that with suitable risk management a consistently profitable methodology can be built around it.

Tim.

No holy grail here i am afraid , most retail traders just fade and they keep fading as the latest trend/move gets stronger . Please go to IG website and see how retail traders are positioned you will notice the stronger the trend the more are fading it . For example currently 85% of gold traders are long Gold at IG and 90% are long silver !

 

[timsk]

No holy grail here i am afraid , most retail traders just fade and they keep fading as the latest trend/move gets stronger . Please go to IG website and see how retail traders are positioned you will notice the stronger the trend the more are fading it . For example currently 85% of gold traders are long Gold at IG and 90% are long silver !

I agree this isn't the holy grail tar - but not for the reasons you provide. To be fair to darktone, this strategy is very much trading with the higher time frame trend - not fading it.
Tim.

 

[tar]

I agree this isn't the holy grail tar - but not for the reasons you provide. To be fair to darktone, this strategy is very much trading with the higher time frame trend - not fading it.
Tim.

Agree there , if one wants to follow the big trend then entering at pullbacks on lower time frames by buying low for bullish trends selling high for bearish trends is a good idea .

 

[darktone]

That was a genuine eye-opening-light-bulb-illuminating moment for me DT. I've looked at your charts many times and not really understood the MO. But, in the context of the higher time frame trend, the idea of buying low and lower and lower rings true. Cheers pal

This is just one way of seeking value within the context of a basic trend following setup, thats palatable, its easy to be repelled mate .
Glad somethings clicking, one step one step

 

[darktone]

Hi DT,
Very fair point - and I like the basic logic underlying the methodology which I think is sound. That said, leaving buying the exact top aside, the point the trend reverses is always the point the trader loses if they're adopting a trend trading approach. I agree with you that tight stops will kill you but, equally, some sort of risk management policy is essential in order to avoid that inevitable trade - or clutch of trades - that are long in a market that's tanking. That, or something along those lines must happen sooner or later because, if it doesn't, then this is the Holy Grail and everyone would do it! I've not tried it - at least not quite as you've outlined here - so I can't say for certain what the exact flaws are. But flaws there will be; sadly there always are! (Identifying the trend and avoiding sideways chop being the obvious contenders.) Like I say, I think it's an excellent starting point for someone that's struggling or unsure where to begin and I don't doubt that with suitable risk management a consistently profitable methodology can be built around it.

Tim.

I've had a closer look at your chart example DT and (I think) I can illustrate the point I'm making above. If I've understood the strat' correctly, if the daily is above a rising MA, only go long and visa versa for shorts. If you look at the bull candle on your daily chart immediately prior to the start of the trend (i.e. 12th Feb' 2016), that is below a falling MA so, presumably, at that time you'd be looking to set short limit orders on price rising above the MA on your M15 chart? Let's say you've got in at an average of 15,800 - then that trade (or clutch of smaller trades) is now 3,000 points offside. Add in the overnight costs for keeping it open for nine months (and counting) - and that's gonna hurt!

The daily trend ID is a close above/below the EMA, the 15min is buy below sell above the EMA in the direction of the daily trend.
The risk you are at is purely your size in relation to the account, this would be worked out before the play.
Getting chopped is possible and is the bane of any trend following strat (which is why i dont do it ), confirmation costs. Well get into a bit more detail later, you might be surprised that normally things dont get as pukey as you might imagine.

 

[darktone]

No holy grail here i am afraid , most retail traders just fade and they keep fading as the latest trend/move gets stronger . Please go to IG website and see how retail traders are positioned you will notice the stronger the trend the more are fading it . For example currently 85% of gold traders are long Gold at IG and 90% are long silver !

Agreed, no grail here.

Is not the long term trend of gold and silver up then? Maybe their stops and need for confirmation are killin em .. Even so, the pro scalpers can and do fade all the time.

All my scalps in GBP today were longs

 

[tar]

Agreed, no grail here.

Is not the long term trend of gold and silver up then? Maybe their stops and need for confirmation are killin em .. Even so, the pro scalpers can and do fade all the time.

All my scalps in GBP today were longs

Didnt know that cable is trading at 1.47 today

 

[darktone]

It wasne, but it were ont may 3rd

 

[counter_violent]

Agreed, no grail here.

Is not the long term trend of gold and silver up then? Maybe their stops and need for confirmation are killin em .. Even so, the pro scalpers can and do fade all the time.

All my scalps in GBP today were longs

Ding ding ding ding ding.........ding ding.....ding ding ding ding