Dow Intraday charts 20/10 - 24/10

tradesmart

Experienced member
1,286 22
So much for the C&H theory - the handles just fallen off!!

Just giving the meths a try........LOL! :LOL:

Regards
 

ChartMan

Legendary member
5,580 46
Yes LockStock.
Big fallover today, leaving guesswork as the next move.If 9600 fails, we can look at 9550/9500.....
 

Attachments

  • dow 22-10-03 10.gif
    dow 22-10-03 10.gif
    37.4 KB · Views: 486

ChartMan

Legendary member
5,580 46
A simple day just sitting short. If you thought the second Bear Flag was a bottom, check RSI and the fact that the third peak never got anywhere near the resistance line... Triple bottom at 9580 only gave the short cover, RSI continuing to stay weak on every bull attempt.
 

Attachments

  • dow 22-10-03 1.gif
    dow 22-10-03 1.gif
    25.6 KB · Views: 493

oarsman

Junior member
21 0
CM

I'm either thick or missing something, but these days when there is a large move at the open I find very difficult. What often seems to happen is once the move has finished the market tends to trade sideways, or slowly continue up or down over the rest of the day with an occasional reverse towards the end of the day. The problem therefore is do you jump in and join the original move with the possibility that you have missed the majority of the move or wait for the reversal?

Yesterday as the bear flags were unfurling I was thinking is this the beginning of a bounce? Your comment that the RSI was weak was the clue that this was not a bottom. From 14.40 to 15.20 the dow rose about 30 points and the RSI about 50 points. To me that means that the RSI move was stronger than the dow, but I must have got this totally wrong! The RSI is still a bit of a closed book to me. I have been through your Trading the Dow but the seem to have a mental block about the strength of the RSI. Could you clarify if possible?

The basic question is what was the entry signal once the open move had happened orwhat other signal should we look for?

Many thanks
 

bgold

Established member
532 5
CM
Oarsman's query is spot on. While I did recognise the RSI tops and weak market rise, I felt a no point comfortable putting on a short trade (without feeling a gambler).
Today, we may have another one of those days. YM is down 80pts (0.8%). SPX gap (3Oct) is on verge of being filled. Market could go either way. Bouncing of current lows or continue its dwonward slide. Especially, in case of slide, do you have any tips on what indicators give extra attention?
Thanks
 

ChartMan

Legendary member
5,580 46
Getting in at the open is mostly difficult. Not the least that the SB co's will have their bias maybe 20 points ahead of the price. Direct access through, say, IB may be easier. Anyone clarify that?..

Now, RSI. You need to keep an eye on each up move and down move and calculate the ratio of RSI to price move. This won't predict a big move, but it WILL tell you whether to stay in the trade or not. In a down trend, we're looking for moves that, for a given move in RSI, will produce less points in the up move than the down move.( and vice verca)
In the example, we're short, and looking for a cover, or continue. The price went up by 28 for a rise in RSI of 47. So 28/47 = 0.59. RSI ratio < 1 = weak so we know that up move was weak. Now the down move = 48/44 = 1.09.Much stronger. So we can now decide there is little point in closing our short. That doesn't mean to say that the next move will not be huge!You never know what the next move is, EVER. But you can base your decisions on probabilities of likely outcomes based on historic evidence. The likely outcome at 15:50 is that either the down move will continue, OR there will not be a big break to the upside, so we stay in. Add to that a rigid stop loss plan. In this case, a move above 9670 and the trade is closed.Period. That's your safety net for when the market decides to go against your best decision, and everyone else's probably.That's why we have stops.

Work out the ratios from 18:50 to 19:40. Did you get an increase in the RSI up move strength? Good. There's three clues here. RSI strength, CCI divergence, RSI Divergence. All before the price made a higher high.
Hope that helps.
 

Attachments

  • rsi_price.gif
    rsi_price.gif
    54.9 KB · Views: 429

Austin&Liz

Junior member
21 0
Hi CM

RSI strength seems to be an important indicator & we've seen it discussed quite a few times on these boards. It would be useful for us if we could graph RSI strength on Sierra as this would then save on calculating the values by hand. Have you tried to do this? - if so can you let me know how its done.

Thanks

A&L
 

rossored

Senior member
2,103 56
CM, ref your comment about it perhaps being easier jumping in trading direct rather than via SB - personally I dont really think its any easier, because you know how much more choppy futures are than cash.

I find I sit there and think "Hmm, should I short this?" and you hesistate a second and the price whips back through where your stop would have been....so you dont take it. Then of course the market turns and goes where you originally thought. So then you think "Ah, shall I get in now?" blah blah blah.

In the end I ended up widening my stops a little and it makes it somewhat easier ; OK so if you go short at, say, 9525, you're in profit - technically - at 9524, but you can be back out again and down in a flash. It still takes me some doing to press the button on occassion, but I wouldnt say its actually any easier than SB, just more profitable.
 

Austin&Liz

Junior member
21 0
I personally think that SB trading, particularly for intra-day trades, is becoming increasingly more difficult due to the relatively high spreads & the "skew" that SB companies such as D4F always seem to have. Lately it's been easy to lose & very hard to win, even though you use a consistent approach. As a result we expect to move from D4F to IB shortly & trade futures direct. As rossored says, trading direct is no easier than SB, but at least there is potential to make more cash. :)

A&L
 

oarsman

Junior member
21 0
CM

Thanks for the RSI tutorial, I think I am getting there!

As far as big moves on the opening are concerned using SBs and this system means that you are almost always going to miss the initial move. Firstly because the SBs will have factored the move into their price before the open, so the only way you can get the move is by placing your bet out of hours before the futures have moved too far, which is a gamble. Secondly because you should not enter a trade if CCI is <-200, >200 or RSI <20, >80, which it usually is on a big move. ( CM I am right on this?)

So coming back to the other problem when do you enter? Looking at yesterday's chart should it have been at 15.30 because it had hit the magic 64 and not broken through and RSI was weak? Or is that too easy in hindsight?
 

ChartMan

Legendary member
5,580 46
Austin & Liz

RSI is a strength indicator.... What you really want is an RSI Ratio indicator. I'm sure some wizz kid could write a DLL and enable you to have it as a "custom indicator". Sierra allows you to do this. Sadly my programming skills are zero, so I can't help. Any offers? Maybe it's just not possible.... :(
 

ChartMan

Legendary member
5,580 46
Looks like 9550 is a bottom out, with divergence coming in strong. Come back 9900, all is forgiven. :(
 

Attachments

  • dow 23-10-03 10.gif
    dow 23-10-03 10.gif
    35 KB · Views: 350

ChartMan

Legendary member
5,580 46
Solid resistance from yesterday at 9620 held up nicely today, making for some easy pickings, especially the H&S top @ 17:30. A half chance entry for a long off the theoretical support near 9550 and a close as resistance test failed. Next long coming off 9550 again, as the price bounced off 9564, with an out at the H&S top. ND set in , but was too short at under 20 mins, so that helped confirm the close.
 

Attachments

  • dow 23-10-03 1.gif
    dow 23-10-03 1.gif
    31.3 KB · Views: 306

mombasa

Established member
561 1
Hi chaps,

For those of us who are using lycos charts for various reasons - u may want to use them in conjunction with bigcharts - found that i'm picking up the TA and seeing the bigger picture much better using bigcharts.

Plus, u can expand to longer time scales, draw trendlines. S/R and narrow down to 1 min with the lines scaled accordingly - just like sierra - downside is it's not streaming - use lycos for that.

http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=djia&time=1
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock