ES tonight

[golfer_401]

Hello R_E,

I am new to this board and have been reading your posts with much interest...I am more accustomed to discussions on EW, Fib, Momentum etc... (your skepticism vis a vis these methods has been duely noted ) and find your discussion in this thread to be a refreshing view (I think that I have been suffering from some paralysis of analysis lately).

I noticed that you switched from posting the figures for the 3 different types of PP calculations and kill zones to just one set which you went on to describe in a later post amounted to a weighted average of elements from all 3 methods. With respect to this, could you perhaps expound a little more on the logic behind the weighting? For example, I observed in your example that you have placed 50% of the weight on the FTP followed by 30% on the CAM and 20% on the DEM. Is this your proprietary/favoured weighting or do you periodically revise based on market conditions?...Would an equally weighted average be just as good

Also, myself being more accustomed to indicators for the purposes of pulling the trigger on a trade, when you hit, say, the BOL line that you have defined, does this mean that you have drawn a line in the sand and decided to be long above this line "no matter what" (like if one of those indicators is in the middle of a momentum trend in the opposite direction) so that you are prepared to defend this point on the long side should price repeatedly oscillate around your level?

Thanks for any insight

Regards,

Ivor

 

[rathcoole_exile]

ok, it"s been a difficult session, lots of chop, but price still hasn't got out of the LKZ.
so, for all those of you who have gone long, despite price never getting above RL 918, "what the f;ck were you thinking, you moron ??? stochastics ? pah ! macd ? yeek ! OBV ? perrleeze !

just my humble opinion, of course ......

 

[golfer_401]

HKZ .................... Cam......... DeM ......... FTP
Breakout Long ........ 843.54...... 835.88....... 848.67
Reversal Short ........ 824.77 ..... 826.29 ...... 835.88

PP ...................... 823.08...... 816.69 ...... 823.08

LKZ .................... Cam ......... DeM ......... FTP
Reversal Long ........ 787.23...... 792.16 ...... 801.75
Breakdown Short ..... 768.46 ..... 767.63 ...... 780.42


bit of a clash at 835.88 - DeMark says go Long the breakout, FTP says Reversal Short.

I keep trying to narrow the 3 sets of figures down to just 1, but each time I convince myself to go with say, Camarillas, then FTPs outperform the others and so on.
Is this an indication of a fundamental flaw with this approach, ie that it's crap ? Or do I just continue to treat each set of numbers independently and take each trade as and when it comes ? Dunno :?:

Hi Rathcoole,

In reviewing this post, couldn't one make an argument that playing all three methods seperately would add a level of diversification to the overall basket of trades that are undertaken in a day? That is to say, simulataneously playing a long from DEM level that coincides with FTP level for a short would produce a winner unless the market just chops about that level?

Someone I know who managed an actively traded HF did a back test on S&P data using a rather rudimentary stratgey that was able to beat the S&P in 80% of the historical period (only failed when there was no distinct trend for the year and lets face it, when you can only go long, you are leaving a lot on the table). Essentially, he chose to defend the opening level of the market at the beginning of the year by placing both a long and short trade at this point with respective stops 2% from this level. Once the market broke in a direction, one of the trades was closed and the other allowed to ride. If the S&P would come back down to the level during the year, the same setup would be initiated. Of course, an obvious refinement would be to defend a "level of interest" such as an important S/R line as opposed to the year's open which may not have any meaning.

Just a thought...

Cheers

 

[rathcoole_exile]

couldn't one make an argument that playing all three methods seperately would add a level of diversification to the overall basket of trades that are undertaken in a day?

absolutely, and I do try occasionally to do it. but without automation, it can get very busy very quickly and one needs to be on top of one's game with absolutely no distractions.
With a 2 year old running amok, I often prefer just to take the "easy"option of setting one trade and waiting for it to play out.
But you're right in what you say; if you can juggle it.

 

[rathcoole_exile]

could you perhaps expound a little more on the logic behind the weighting?

Ivor, no logic, just what I was playing around with. In fact most days now I just use the straightforward Cam levels

does this mean that you have drawn a line in the sand and decided to be long above this line "no matter what"

in theory, yes and since I don't have any indicators on, there's nothing to say otherwise.

Except "gut-feeling". For example last night price kept bouncing off exactly 911 and wouldn't break through it but it was enough to get me triggered and then stopped out.
So after a couple of attempts, I lowered my trigger level to 910...and hey presto !

 

[golfer_401]

Hello again,
Attached is today's regular session action on the ES with the Daily CAM lines plotted (rounded to the nearest tick). Based solely on the price action (I have removed all indicators just for you ) I believe the following would be an accurate recap of the session :

- 9:30 EST: price came within 1 tick of the RS so no trade would have been taken (too bad because it would have been a nice one...gotta follow the rules)

- 9:45 EST: price touched the RL at 904.25 on the number and the following candle opened higher but came back down to test 904.25...a buy would have been triggered and a max of 2 pts could have been extracted...any/all remaining positions ultimately stopped out.

- 10:35 to 10:40 EST: BDS zone is tagged and broken by a tick...if taken, a losing trade. However, I suspect that this setup might have been rejected due to the nature of the candles (?)

- 11:05 EST: RL zone tagged for a brief moment but clearly not a good setup

- 11:45 to 11:50 EST: BDS penetrated on the close at 11:45. Entry on the next candle with some momentary pain (1.75 in the wrong direction) until the move. Max potential of 5.5 points...I do not exactly know what could have gotten one out of the trade at the max...good reason to have some small targets for some of the lot.

- 14:50 EST: Price blasts through RL...this one might have been missed because of the power rally but there was a lot of oomph leading up to the break so maybe a preemptive buy stop could have been placed. Price goes on to tag the PP - 1 tick (good exit point) for a good 7-8 point run on the remainder of the car after initial shaves.

All in all not so bad (depending on stop sizes and execution). On that note, I am wondering what would be appropriate stop sizes on these types of set-ups...seems like things can get choppy...

Anywayz...cheers

Ivor

 

[rathcoole_exile]

Hello again,
Attached is today's regular session action on the ES with the Daily CAM lines plotted (rounded to the nearest tick). Based solely on the price action (I have removed all indicators just for you ) I believe the following would be an accurate recap of the session :

- 9:30 EST: price came within 1 tick of the RS so no trade would have been taken (too bad because it would have been a nice one...gotta follow the rules)

- 9:45 EST: price touched the RL at 904.25 on the number and the following candle opened higher but came back down to test 904.25...a buy would have been triggered and a max of 2 pts could have been extracted...any/all remaining positions ultimately stopped out.

- 10:35 to 10:40 EST: BDS zone is tagged and broken by a tick...if taken, a losing trade. However, I suspect that this setup might have been rejected due to the nature of the candles (?)

- 11:05 EST: RL zone tagged for a brief moment but clearly not a good setup

- 11:45 to 11:50 EST: BDS penetrated on the close at 11:45. Entry on the next candle with some momentary pain (1.75 in the wrong direction) until the move. Max potential of 5.5 points...I do not exactly know what could have gotten one out of the trade at the max...good reason to have some small targets for some of the lot.

- 14:50 EST: Price blasts through RL...this one might have been missed because of the power rally but there was a lot of oomph leading up to the break so maybe a preemptive buy stop could have been placed. Price goes on to tag the PP - 1 tick (good exit point) for a good 7-8 point run on the remainder of the car after initial shaves.

All in all not so bad (depending on stop sizes and execution). On that note, I am wondering what would be appropriate stop sizes on these types of set-ups...seems like things can get choppy...

Anywayz...cheers

Ivor

Hello Ivor,
wonderful summary !

You're right that some of the entries looked a bit shaky last night.
I've started to look much closer at the YM at the same time to see if triggers match up on both; that's a sure confidence booster.

For exits I use +1 and +2 for the first lots,
you're right the exit for the "runner" is much more difficult to plan.
If I can't see a logical target (like RS to RL or RS to PP for example) I often try to use pit audio as a gauge for when the tide is turning against me (ah, an "indicator" !! )

Another useful target is if the DeMark extremes are outside of the BL or BS then I try to move my stop out there as quick as poss to take profit there if price reverses.
I have to admit that finding a suitable exit for the Breakouts/Breakdowns is the biggest flaw in my trading plan, a little easier with the Reversals.

But despite your wonderful summary - you would choose the one night of this week that I didn't trade :whistling, so we can't compare exact notes like for like !

Actually, I was in bed trying to shake off a cold before my forthcoming trip to Europe.
If I'm still unwell tonight, I miss give trading a miss again, as I need to be right for my trip.
If I do trade tonight, it will be my last for about 12 days anyway, I don't like trying to trade when I'm on the road.
But just for reference, tonight's figures (Weds 13 May):
918.5
912.5

901
895
( I always round up/down to the next quarter point in the direction of the trade.)

Many thanks for your interest, I'm flattered to receive such intelligent well thought-out feedback and questions from you. If I'm not back trading tonight, I hope to catch up with you here towards the end of the month.

best regards,
Garry

 

[rathcoole_exile]

Max potential of 5.5 points...I do not exactly know what could have gotten one out of the trade at the max...

/QUOTE]

it's hard to say, i don't want to be accused of Blue Peter trades 'cos as I said, i didn't trade last night, but looking at it, the logical exit point for the 5 handles may have been 895.25, the Weekly BDS extreme .......
at least it may have been a good idea to move final TP stop to that area in anticipation that the Breakdown on the weekly failed.
Or looking at it perhaps more logically, in anticipation that the R4 extreme functioned as ultimate Support.

 

[rathcoole_exile]

always interesting to note whenever a Daily and a Weekly level match up as we have tonight at 895.

It could mean
a) ultimate Support
b) freefall once price breaks down through it
c) none of the above, f:ck all significance and that's trading for you !!!

 

[rathcoole_exile]

the exit for the "runner" is much more difficult to plan.
If I can't see a logical target .....

I have to admit that finding a suitable exit for the Breakouts/Breakdowns is the biggest flaw in my trading plan, a little easier with the Reversals.

btw, I'm open to suggestions - perhaps I should take another look at Fib levels or some other tool that could help with exits, any thoughts ?

 

[golfer_401]

Hi Gary,
Thanks for all the info and pointers. I am very intrigued by the notion of price action because, as I mentionned in an earlier post, my knowledge of trading has been centered in Fib, EW, indicators etc... (I may have seen the light thanks to your journal!). I intend to follow this closely for the next little while and hope to come up with a better method than that which I have been using recently. I am also curious to see whether there is a way to maximize the probability of the trade so as to avoid unecessary whipsaws (and in this regard I think back to your experiment with the Keltner channels as a trade confirmer) however one step at a time for a novice like myself.

I think I have looked at too many charts and S/R/PP lines today so I am out for the night...sorry to hear that you are ill...have to watch out these days...apparently there is some bug going around.

I will most likely be posting bits here and there on your thread while you are on vacation to keep the spirit alive...and I think it will be instructive (for me at least :cheesy

On that note, have a good session and a good trip and I look forward to continuing the discussion.

Regards,

Ivor

 

[golfer_401]

btw, I'm open to suggestions - perhaps I should take another look at Fib levels or some other tool that could help with exits, any thoughts ?

I intend to explore this notion further (as per my last post) though I fear I may tread into non price action waters to do so.

Now I am logging off for real (we've got a big time zone differential!)

Cheers!

 

[Trader333]

btw, I'm open to suggestions - perhaps I should take another look at Fib levels or some other tool that could help with exits, any thoughts ?

Why change something that is clearly working and very well for you ?


Paul

 

[rathcoole_exile]

not trying to change....... just improve

and trying to be humble enough (difficult for a big headed kunt like me at the best of times)
to acknowledge that it's not perfect.
as i said above, the inner targets, between the RS and RL are pretty easy to define.
The flaw is still how to sensibly target a breakout when price is taking off, apparently into the ether, but we know that at some point it's going to pause/stop/reverse

 

[golfer_401]

Why change something that is clearly working and very well for you ?


Paul

Hi Legendary,

While Garry's overall success with this method has been well documented throughout this thread, I would venture that there might be a way to refine (though I have nothing to offer by way of a suggestion yet...still trying to grasp the main concept). For example, the methodology calls for a short to be taken when the BDS line is penetrated (for CAM, corresponds to S4). However, the S4 line can and probably is viewed by many traders to be a level of support. Therefore, a test of the line with a break anywhere from a couple of ticks to a couple of points could still be price testing support for an ultimate rebound. I am speculating that an additional source or sources of information might be used to increase the probabilistic likelihood that the break will result in a continuation in the desired direction. Furthermore, it might also help in maximizing profit taking on the third unit and potentially show other trades that may not have been otherwise playable.

Your impressions are appreciated

Regards,

Ivor

 

[rathcoole_exile]

However, the S4 line can and probably is viewed by many traders to be a level of support.

but I work on the assumption that 95% of traders don't know their @rse from their elbow

 

[golfer_401]

but I work on the assumption that 95% of traders don't know their @rse from their elbow

lol...I thought it was 94.7%...but who's counting? however, the good traders shouldn't knock them about too much as they often contribute to the good setups (i've been doing a bit of that lately).

ES just busted through the CAM BDS like nobody's business...ugly open in store

 

[pedro01]

Rath - which Pit Audio service do you subscribe to ?

Traders Audio have a trial - but I am not sure whether to trial the commentary or non-commentary version.

What do you use ?

Cheers

Pete

 

[golfer_401]

Attached is today's reg session action on the ES with the CAM pivots. Note from the chart that there was only 1 play today off the CAMs and it was a nice one. Price gapped through all levels at the open but came back to test the daily BS line on 2 5min candles...what ensued was a nice 15 point drop. Though not on this chart, I would also note that the daily CAM BS line was 1 tick below the weekly CAM BS line and 2 ticks below the FTP BS line, making for what I assume would be an even more reassuring play at that price point...perhaps when a weekly and daily line up very close, it increases the probability of the trade working out idea: ?)

In the event that the trade was missed, one could have gotten in on the short off the daily DeMark BS line at 889.75 / the weekly FTP BS line at 890.75 (I note that a double top formed at 890-890.5).

 

[golfer_401]

perhaps when a weekly and daily line up very close, it increases the probability of the trade working out idea: ?)
5).

Just realized that you mentioned that in an earlier post...worked well today!