Direction, please

[bsk6969]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

 

[pboyles]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

If we knew that we'd all be rich.

 

[barjon]

bsk

There are others on here much more knowing than me when it comes to S&P and who can probably point you in the right direction. The thing that stood out for me is that you use "a stop-loss of 6 ticks to allow for any noise" whilst "scalping a tick here and there" at the other end. Bit of a contradiction here don't you think?

 

[bsk6969]

bsk

There are others on here much more knowing than me when it comes to S&P and who can probably point you in the right direction. The thing that stood out for me is that you use "a stop-loss of 6 ticks to allow for any noise" whilst "scalping a tick here and there" at the other end. Bit of a contradiction here don't you think?

Yes, you're probably right, but I can hardly find opportunity to scalp more than a tick at a time before a change in direction without being too risky. Any suggestions?

 

[barjon]

Yes, you're probably right, but I can hardly find opportunity to scalp more than a tick at a time before a change in direction without being too risky. Any suggestions?

If you've decided that it can go 6 ticks against you before you conclude it has "changed" direction, then it seems that you are identifying a "change in direction" far too early at the other end. Test it out and see what would happen if you either stuck with your original stoploss, or trailed it at 6 ticks as it moves favourably. It doesn't sound as if you have a definitive exit strategy?

 

[rathcoole_exile]

bsk, try this - dump all those shyte indicators that you have, that are obviously of no use whatsoever.

Draw a horizontal line somewhere away from where price currently sits.
Your line could be at a round number, previous hi/lo, or just random; anything will do.

You can draw two lines, one above current price and one below.

Decide in advance, what you will do if price reaches one of your horizontal lines - ie go with the momentum, or fade it.
Decide in advance what your R:R will be.
So you know where your target and stops are for an exit should a trade be triggered.

If you're smart, you set all these triggers to fire automatically via the DOM.
(learning how to do this is the only difficult part, and should take all of 10 minutes to master)

Go to the pub.

When you come back from the pub, either price will still be within the two lines and therefore no trade triggered.
Which is a good thing, 'cos it means that while all the other jerks have been trading Stochastic, MACD signals etc and getting churned up and paying spreads & fees etc, your account is perfectly intact.

Or a trade was triggered and it might still be live, ie hasn't hit target or stop, so you can show off to the bird you brought back home from the pub

.........or you might have lost/won an amount according to your R:R.


Doesn't that sound more relaxed than stressing about trends, indicators, ticks, patterns, time frames, commissions etc ?

 

[rathcoole_exile]

and if you're happy enough with the premise above, here's a very simple way to refine it and capture your trend:

if price moved from point A to point B, and has now pulled back to point C, draw your trigger line at point B (as long as C doesn't go below/above A)

 

[bsk6969]

bsk, try this - dump all those shyte indicators that you have, that are obviously of no use whatsoever.

Draw a horizontal line somewhere away from where price currently sits.
Your line could be at a round number, previous hi/lo, or just random; anything will do.

You can draw two lines, one above current price and one below.

Decide in advance, what you will do if price reaches one of your horizontal lines - ie go with the momentum, or fade it.
Decide in advance what your R:R will be.
So you know where your target and stops are for an exit should a trade be triggered.

If you're smart, you set all these triggers to fire automatically via the DOM.
(learning how to do this is the only difficult part, and should take all of 10 minutes to master)

Go to the pub.

When you come back from the pub, either price will still be within the two lines and therefore no trade triggered.
Which is a good thing, 'cos it means that while all the other jerks have been trading Stochastic, MACD signals etc and getting churned up and paying spreads & fees etc, your account is perfectly intact.

Or a trade was triggered and it might still be live, ie hasn't hit target or stop, so you can show off to the bird you brought back home from the pub

.........or you might have lost/won an amount according to your R:R.


Doesn't that sound more relaxed than stressing about trends, indicators, ticks, patterns, time frames, commissions etc ?

YES, that sounds much more relaxed than constantly stressing about trends, ticks, etc...! Thank you. But let me ask you...what is the R:R you mention?

And what are the popular ideas for where to set the upper and lower lines? I imagine that looking back at the past several days or even weeks would be a good guide to identify a trend and where to set those lines, yes? But then what kind of profit can one expect with this idea? I wouldn't expect a whole lot unless the market is really skyrocketing or plummeting during the day.

Thank you for your response. I hope you'll hit me back. I appreciate the feedback a lot.

 

[NVP]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

so dont use them ...........find something else that works for you

look up deffinition of Trend in the Forums , Google etc ........find a good one and use that as a guide

N

 

[timsk]

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

Hi bsk6969,
If you're going to use TA indicators such as MACD etc., it's essential that you use them correctly. Have a read of this FAQ: Essentials Of Technical Analysis which, hopefully, will fill in a few gaps in your thinking. If you don't want to read it all, at least scroll down to post #2 and read the section entitled: Indicators and the Mechanics of TA.

Personally, I'm not a huge fan of TA indicators and restrict my use of them to the bare minimum (moving averages mainly). However, what I do like and find very useful for trading U.S. indices are market breadth indicators - sometimes referred to as sentiment indicators. The key thing about most of them (but not all) is that they don't lag the market and either confirm or negate what price is doing in real time. If you're not familiar with them, you can read about them here: Introduction to Market Indicators

Which ones to use (if any) is a matter of personal choice. I'm a particular fan of $Tick and the NYSE Volume Advancing / Declining Ratio. You can read more on each here: NYSE Tick and Tick Strategies by James Okada Lee and Trading with the NYSE Tick Indicator by Larry Swing. I use the volume indicator in the way designed by fellow T2W member isatrader in this post: NYSE Volume Advancing / Declining Ratio. In addition to the StockCharts page, I recommend you read the whole of isatrader's thread to get a good feel for the range of market breadth indicators and how they may assist your trading.

Another increasingly popular one - especially with day traders - is Cumulative Delta. These two articles will give you an insight into what this is and how it's used:
Interview with a Market Delta Trader by Christopher Koozekanani
Trading with the Cumulative Delta 'Indicator' by Peter Davies (aka DionysusToast here on T2W).

Lastly, and by no means least, there's a very good thread on day trading the ES with contributions from some of the best and most experienced traders on T2W. Well worth checking it out: Trading the E-mini

Hope that helps!
Tim.

 

[timsk]

Hi bsk6969,
If you're going to use TA indicators such as MACD etc., it's essential that you use them correctly. Have a read of this FAQ: Essentials Of Technical Analysis which, hopefully, will fill in a few gaps in your thinking. If you don't want to read it all, at least scroll down to post #2 and read the section entitled: Indicators and the Mechanics of TA.

Addendum . . .
A member has commented to me privately that there isn't really a correct or agreed way to use indicators and, if there was, it would probably be a bad idea to use them in that way!

I agree with the first comment and certainly see where s/he's coming from with the second. I expressed myself badly in my last post - apologies for that folks. What I was getting at - which I think the FAQ highlights - is that there is a wrong way to use TA indicators. It's down to each trader to decide what the right way is - and that will be borne out by their PnL.
Tim.

 

[Eurex]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

I would suggest to use Delta Indicator to find if market is long or short. It has its shortcomings like if someone is absorbing at limit order then it will five false picture but in a Trending market it will be much more clearer. Get it from LinnSoft IRT charting package.


Scalping is not recommended because of cost of commission. If you are in an arcade or an exchange member with dirt cheap commissions then scalping will be profitable. But what you can do is shop around for cheap commissions and cheap trading platform and improve entry exit and do fewer trades with big wins.

 

[OrderFlowDashPro]

Yes, I would recommend focus on the driving factors of your market. I think spending more effort on pattern recognition would also be helpful. I'm also biased toward our own platform, of course, OrderFlowDashPro's AlphaReveal for reading the tape. Many traders have found that taking a profit works better then trailing a stop especially for intraday trading.

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

 

[darktone]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

Imho and experience it pays to keep things as simple as possible.
Junk all the indicators you are currently using and stick an MA on the price. Doesnt really matter which one as long as you stick with it (10 EMA was good enough for Marty Schwartz).
With regards to "identifying" trend duration beforehand.. Look in the mirror and say "I know nothing!". Repeat until you finally accept this fact. It may take while! About 10 years for me!
In my experience, the best you can do is concentrate your efforts on identifying the time when a trend has begun, what follows is unknowable, imho.

Trade with the trend!
Up trend = closing above ma. Down trend = closing below ma.

Method:
1) Signal to buy/sell is first close above/below the MA.
2) Use a limit to enter.
3) Use a limit to take a profit.
4) Use a limit (not a stop!) to take an initial loss. Ie Youve positioned and the trend changes. Use a break even or + 'x' ticks/points stop when it starts to run to your profit limit.

You may want to filter the direction, ie only take trades that align with the daily trend.
If costs are still a problem and scalping doesnt work out for you, try moving out on the timeframe. Ie Swing trade the 4hr/daily/weekly but use a smaller timeframe to position/take losses.

In all cases you have to find what best suits you.

GL
Cheers D

 

[yellowfloyd]

Good day to all. I am a beginner and practicing with the S&P emini, but having the hardest time identifying longer trends using MACD, Stochastics, DM and MFI. I am able to scalp a tick here and there, but once any kind of charge from a broker is applied for a trade, that tick in profit I make will be minimal. So I am looking for direction in identifying trends that last longer than only 3 or 4 bars and of course where I can make more than a tick in profit!

I am using a stop-loss of 6 ticks to allow for any noise, but haven't used the trailing stop b/c I haven't been able to identify longer trends.

So how what can I watch for specifically to help me identify trending direction for longer than a few bars? All input is appreciated. Thanx.

Trying using Stochastics/RSI to identify when market is overbought/oversold (this can be done over any time frame) and watch for bounce back down/up. Then look some proof in price (eg. break of trendline) and anything else supportive to give you a chance that the next move has some legs. Watch also for divergence between price and MACD. Price rising and MACD falling can mean price losing momentum. Any break of MACD or its signal like can also be helpful. Look for potential moves which are a multiple of your costs so that the winners will cover losers and all costs. Good luck

 

[tmefutures]

BSK -- there are many questions I have here. Such as, what time frame chart are you looking at and trying to trade? Trading the ES contract for futures is a very orderly market but it is also very hard because unless you understand certain things you can get eaten alive. I am happy to discuss things in more details with you.

 

[HedgeFounder]

SP500 emini

Hi there,

You don't wanna look for trends in index futures. Especially the US-based ones are counter-trend markets.
If you want trends, you may wanna try currencies with low leverage.