Today's Futures chart of the FTSE 3 trend deals with a possible 4th late on if you felt obliged to close early as a nice extending trend line bounce came into play about 4.15pm.
RSI trend lines displayed in line with rend.
Chow you maybe able to see what I was on about earlier if you compare the 2 although I have reduced this chart further to get the full day.
Bonsai, 3 or 4 deals in a day this appears a much better set-up for me and during the short time I was here was able to avoid a false signal which previously I would have followed and probably lost 5 or so points from. Found I was able to manage it better from the signals and stops. Albeit a paper trade but very comfortable with this addition to my approach. After all its only the mechanics of managing the position that has changed and not the entry signal. From this system not including the late rally from 4.15pm possible 45 points, yet the 4.15pm signal was very clear and I would have taken it or held the position 3 longer as the line chart did not break previous low before trend break.
Kevin
RSI trend lines displayed in line with rend.
Chow you maybe able to see what I was on about earlier if you compare the 2 although I have reduced this chart further to get the full day.
Bonsai, 3 or 4 deals in a day this appears a much better set-up for me and during the short time I was here was able to avoid a false signal which previously I would have followed and probably lost 5 or so points from. Found I was able to manage it better from the signals and stops. Albeit a paper trade but very comfortable with this addition to my approach. After all its only the mechanics of managing the position that has changed and not the entry signal. From this system not including the late rally from 4.15pm possible 45 points, yet the 4.15pm signal was very clear and I would have taken it or held the position 3 longer as the line chart did not break previous low before trend break.
Kevin
Attachments
Reactor
I hope you did'nt follow Bonsai's advice and kick the cat, after all it was'nt the cat's fault was it!!!! LOL.
Bad luck and if it is any consolation I've been there done that and got the t-shirt!
I am assuming here that you are trying to daytrade and would have been at your computer throughout the trades. If not then I apologise and take no notice of what I have said.
I have had a look at your trades from your attachment and I can see something from your deals that I can relate to in my past trading. I maybe on the wrong path and if so please tell me but have posted because I thought it may help and I know how you must be feeling, a completely wasted and costly day in terms of what you were trying to achieve. Especially as your last deal was correct but as you already know you failed to manage it effectively and came away with an unneccessary lost from this deal. As Bonsai said the other day you will have some baggage after a day like this, but YOU ARE NOT ALONE!! I am sure many other traders have had the same sort of results.
First of all I am no EXPERT. From what I saw in your trade details tells me you sold early in the session after a rising market yesterday and at a time when todays session had yet to indicate that rise was over. Thats something you need to consider.
I do not know what your style of trading is or what tools you are applying so this is all taken from your own orders. Clearly from a daytrading perspective your first deal was left to run against you to far, as you already know but I can see from your second losing deal that you kept the loss down, so you employed a much tighter stop in your own mind this time round. This suggests that your first deal was way off and now you were keeping things much tighter. It also shows that you let the price go so much on the first one holding in hope that it would turn your way. By the time it had gone to far you had given up and then decided to BUY.
Please do not think I am having a dig or rubbing salt into the wounds, I have been there! You then bought when at the top and paid for it with the price failing to go anywhere. Maybe because you had already taken a big hit you were now over conscious of it and this came to play later.
Although from my own signals your final deal according to the time was a little late as it turned out the price you got was very good IMHO.
The question you have to ask yourself is why did you not lock in the profit you had from this deal. Why did you sit there and allow the paper profit you had, some 21 points at 3995 to evaporate fro 3pm to 5.15pm. Especially when the last fall failed to stay below 3994, that in itself was a strong signal, like a double bottom that the prise would rise against you.
If you have traded in the manner that I have before then maybe without realising it you had allow anxiety to creep into your dealing with your confidence gone. It looks to me that what you did was not trade the position according to your strategy or chart/price but allowed your feelings to take over. It looks as if you traded this final position according to your overall trading position for the day. You were down some 27 points following your first 2 deals. When the 3rd deal moved correctly for you it gave hope that you would at least reduce your loss to a more acceptable level. As the deal progressed it gave further heart that you could break even or maybe make a profit for the day.
Now the market does not play like this and while you wanted just a few more points when it was in the 3990's unfortunately the market takes no notice of important price levels for you but plays its own game. Thats why YOU MUST manage your position according to whats happening rather than previous deals. In fact it sounds like the baggage of your first deal had already taken hold. The market can be a great teaser and so having come so close to working out alright the price went and turned. It came back to tease you again and then it kicked you in the teeth. As I said I have done this more than once but you have to learn from these mistakes and move on.
This is what happens if you let your heart rule your brain. I would look at why you placed the order at the times you did and clarify what signals you are following.
Please do not take this the wrong way I am just offering up my opinion based on making the same sort of errors. If your not sure about a signal then don't follow it there will be another along later. Dont rush into a trade just because you are losing, as a deal is open you should be asking yourself if I was looking at the chart now would I still feel this is a sell or buy. If your answer is sell when you have a buy then I would suggest you should close. Don't allow previous results in the day to effect how you manage a position.
It is generally more beneficial to trade with the trend but I have lost count how many times I missed a deal so looked for a reversal taking the view it cannot go any further and then lose points because it did. When the price is trending look for deals to support the trend and you may find you will do better. Look at reversals but maybe wait for confirmation from a trend change and then change your deals accordingly. If you look at the chart I posted you will see that today there were 3 main trends, so there was points to be had from either direction. But always keep in mind what the over-ridding trend is for the last few days and during the day especially if it is a strong one because on those days even a trend change against the daily trend may not offer much upside.
Just to recap you did not lose much on your second deal and your 3rd. The 1st was the 1 that crippled you so consider a stop loss. If you cannot pull the plug yourself consider using Tsim (if not already - as it is easier to use than the IB platform IMHO) and place a stop where you are happy to lose. However this depends on your trading strategy, a scalper will set a very tight stop of only a few points and generally will not base it on any price action before. You may want to consider, depending on your style of trading looking at where the price has been, if I am buying where was the last support, from the chart time you are using be it 2 or 5 min whatever. If there is a support line consider that level as your stop that way you are making an assessment of your risk according to the chart rather than picking out of thin air and maybe providing yourself with a better chance of closing a losing deal if this level is broken. Apply the same process when selling and also consider your exits.
I hope I have not gone on to much and I dont want you to think I am teaching you to suck eggs.
Best of luck in the future, chill out over the weekend. Have a look at the charts and remember where you went wrong. Form a clear concise trading plan that works for you those deals where you know you get the point from and stick to them rather than go hunting blind.
Regards Kevin
I hope you did'nt follow Bonsai's advice and kick the cat, after all it was'nt the cat's fault was it!!!! LOL.
Bad luck and if it is any consolation I've been there done that and got the t-shirt!
I am assuming here that you are trying to daytrade and would have been at your computer throughout the trades. If not then I apologise and take no notice of what I have said.
I have had a look at your trades from your attachment and I can see something from your deals that I can relate to in my past trading. I maybe on the wrong path and if so please tell me but have posted because I thought it may help and I know how you must be feeling, a completely wasted and costly day in terms of what you were trying to achieve. Especially as your last deal was correct but as you already know you failed to manage it effectively and came away with an unneccessary lost from this deal. As Bonsai said the other day you will have some baggage after a day like this, but YOU ARE NOT ALONE!! I am sure many other traders have had the same sort of results.
First of all I am no EXPERT. From what I saw in your trade details tells me you sold early in the session after a rising market yesterday and at a time when todays session had yet to indicate that rise was over. Thats something you need to consider.
I do not know what your style of trading is or what tools you are applying so this is all taken from your own orders. Clearly from a daytrading perspective your first deal was left to run against you to far, as you already know but I can see from your second losing deal that you kept the loss down, so you employed a much tighter stop in your own mind this time round. This suggests that your first deal was way off and now you were keeping things much tighter. It also shows that you let the price go so much on the first one holding in hope that it would turn your way. By the time it had gone to far you had given up and then decided to BUY.
Please do not think I am having a dig or rubbing salt into the wounds, I have been there! You then bought when at the top and paid for it with the price failing to go anywhere. Maybe because you had already taken a big hit you were now over conscious of it and this came to play later.
Although from my own signals your final deal according to the time was a little late as it turned out the price you got was very good IMHO.
The question you have to ask yourself is why did you not lock in the profit you had from this deal. Why did you sit there and allow the paper profit you had, some 21 points at 3995 to evaporate fro 3pm to 5.15pm. Especially when the last fall failed to stay below 3994, that in itself was a strong signal, like a double bottom that the prise would rise against you.
If you have traded in the manner that I have before then maybe without realising it you had allow anxiety to creep into your dealing with your confidence gone. It looks to me that what you did was not trade the position according to your strategy or chart/price but allowed your feelings to take over. It looks as if you traded this final position according to your overall trading position for the day. You were down some 27 points following your first 2 deals. When the 3rd deal moved correctly for you it gave hope that you would at least reduce your loss to a more acceptable level. As the deal progressed it gave further heart that you could break even or maybe make a profit for the day.
Now the market does not play like this and while you wanted just a few more points when it was in the 3990's unfortunately the market takes no notice of important price levels for you but plays its own game. Thats why YOU MUST manage your position according to whats happening rather than previous deals. In fact it sounds like the baggage of your first deal had already taken hold. The market can be a great teaser and so having come so close to working out alright the price went and turned. It came back to tease you again and then it kicked you in the teeth. As I said I have done this more than once but you have to learn from these mistakes and move on.
This is what happens if you let your heart rule your brain. I would look at why you placed the order at the times you did and clarify what signals you are following.
Please do not take this the wrong way I am just offering up my opinion based on making the same sort of errors. If your not sure about a signal then don't follow it there will be another along later. Dont rush into a trade just because you are losing, as a deal is open you should be asking yourself if I was looking at the chart now would I still feel this is a sell or buy. If your answer is sell when you have a buy then I would suggest you should close. Don't allow previous results in the day to effect how you manage a position.
It is generally more beneficial to trade with the trend but I have lost count how many times I missed a deal so looked for a reversal taking the view it cannot go any further and then lose points because it did. When the price is trending look for deals to support the trend and you may find you will do better. Look at reversals but maybe wait for confirmation from a trend change and then change your deals accordingly. If you look at the chart I posted you will see that today there were 3 main trends, so there was points to be had from either direction. But always keep in mind what the over-ridding trend is for the last few days and during the day especially if it is a strong one because on those days even a trend change against the daily trend may not offer much upside.
Just to recap you did not lose much on your second deal and your 3rd. The 1st was the 1 that crippled you so consider a stop loss. If you cannot pull the plug yourself consider using Tsim (if not already - as it is easier to use than the IB platform IMHO) and place a stop where you are happy to lose. However this depends on your trading strategy, a scalper will set a very tight stop of only a few points and generally will not base it on any price action before. You may want to consider, depending on your style of trading looking at where the price has been, if I am buying where was the last support, from the chart time you are using be it 2 or 5 min whatever. If there is a support line consider that level as your stop that way you are making an assessment of your risk according to the chart rather than picking out of thin air and maybe providing yourself with a better chance of closing a losing deal if this level is broken. Apply the same process when selling and also consider your exits.
I hope I have not gone on to much and I dont want you to think I am teaching you to suck eggs.
Best of luck in the future, chill out over the weekend. Have a look at the charts and remember where you went wrong. Form a clear concise trading plan that works for you those deals where you know you get the point from and stick to them rather than go hunting blind.
Regards Kevin
reactor
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kevin,
thanks for your reply! it has reassured and helped me. the first trade i did was purely based on gut instinct. the previous night i had convinced myself that it was right to go short as soon as the market was open. it was a bad mistake.
the second trade was also a hopeful trade. it was only then i started using my strategy and realised that there was a resistance level at 4020 from my L2 screen and at the same time i saw the support at 4000 and 3995. so was more than happy to switch trades from being long to short.
my demons came back when my third trade hit 3995. i knew i had to exit there and then, but i didn't want to be down for the day. as a result i let a winner become a loser.
i've learnt that i have to trade to my strategy and not my emotions. i'm even more eager to take on the markets again this monday and determined to trade my strategy.
reactor
thanks for your reply! it has reassured and helped me. the first trade i did was purely based on gut instinct. the previous night i had convinced myself that it was right to go short as soon as the market was open. it was a bad mistake.
the second trade was also a hopeful trade. it was only then i started using my strategy and realised that there was a resistance level at 4020 from my L2 screen and at the same time i saw the support at 4000 and 3995. so was more than happy to switch trades from being long to short.
my demons came back when my third trade hit 3995. i knew i had to exit there and then, but i didn't want to be down for the day. as a result i let a winner become a loser.
i've learnt that i have to trade to my strategy and not my emotions. i'm even more eager to take on the markets again this monday and determined to trade my strategy.
reactor
Bonsai,
Thank you for clarification, I will need to confirm if the new Douglas book does not overlap the one you mention as I have already obtained a copy of his 'Trading in the Zone', which deals principally with your mindset. I imagine a similar thread to that of Piper but in more detail.
As for Elder, I thought he was known for his 'Trading for a Living'.
You have given me a productive week, I am much happier with a new approach to my stop and it makes me concentrate more on previous action before making an entry and during an open position as I move it according to the price action that develops.
This all helps to keep focused when trading and leaves me feeling far more relaxed. When trading for a few points at a time my stop was just a few points selected for minimum risk rather than some basis or structure. It also helps in 'reading' the market near term helping me to keep a position running closer to the end of a trend.
I suppose I have moved a little closer to becoming a day swing trader LOL. However I suspect I will not have the ability to hold as long as you might and will trade some of the trend changes during the day, so I expect I will still make a few more trades in a day than you might. But 3 - 6 is a vast improvement, me thinks.
From what I have read of Piper's book I doubt it will change my existing entry signals now that I have taking up a day trends approach, although it may add a few. I just think it will 'put it all together', if you know what I mean as a complete plan in a more structured defined format.
Thank you for your time and effort.
Kevin
ps Thought you would get away without a question LOL
Your use of the AD line (winners & losers) are you applying this in the same manner as Piper's MD approach.
Thank you for clarification, I will need to confirm if the new Douglas book does not overlap the one you mention as I have already obtained a copy of his 'Trading in the Zone', which deals principally with your mindset. I imagine a similar thread to that of Piper but in more detail.
As for Elder, I thought he was known for his 'Trading for a Living'.
You have given me a productive week, I am much happier with a new approach to my stop and it makes me concentrate more on previous action before making an entry and during an open position as I move it according to the price action that develops.
This all helps to keep focused when trading and leaves me feeling far more relaxed. When trading for a few points at a time my stop was just a few points selected for minimum risk rather than some basis or structure. It also helps in 'reading' the market near term helping me to keep a position running closer to the end of a trend.
I suppose I have moved a little closer to becoming a day swing trader LOL. However I suspect I will not have the ability to hold as long as you might and will trade some of the trend changes during the day, so I expect I will still make a few more trades in a day than you might. But 3 - 6 is a vast improvement, me thinks.
From what I have read of Piper's book I doubt it will change my existing entry signals now that I have taking up a day trends approach, although it may add a few. I just think it will 'put it all together', if you know what I mean as a complete plan in a more structured defined format.
Thank you for your time and effort.
Kevin
ps Thought you would get away without a question LOL
Your use of the AD line (winners & losers) are you applying this in the same manner as Piper's MD approach.
Reactor
No problem, I had every sympathy with you last night. Always draw the good points of your trading from a bad day.
You stopped your second deal with a minimum loss. An important part of being successful is the realisation that however good you may become you will have to accept losses. Your 3rd deal was spot on and as you know now had you restricted your loss on the 1st as you did with your second your 3rd would have put you in profit for the day and I suspect you would have taken it. Probably you might even have had another bite on the last rise and come away with a good profit.
One thing I did not mention last night, when you hold on unnecessarily by the time you give in and close for a bigger loss you have undoubtedly missed another trade and become reluctant to join late because you feel as soon as you do it will turn against you. By working from your strategy and a stop or exit strategy you have more chance of being out of the market when the clearer signal to enter again presents itself and therefore you are able to benefit from it rather than go through the suffering of holding onto a loser.
One final warning you have done this once, your feelings can take control again, while you may say to yourself that you will not allow this to happen again you may let this happen again if you do not take some action to prevent it. It may not be enough just to see where you went wrong and tell yourself I wont let that happen again. We are all different and able to deal with our problems in our own way but it is evident that many of us suffer from letting our emotions get the better of us regardless of how much time we spend preparing our strategies. When the feelings take control our strategy shoots out the window unless with have dealt with them effectively.
At least another good point is that you have seen it as a problem and accepted it as such going blindly on will only end in more suffering. If this has already happened before then I would take up more steps to prevent it again. If you have not already done so write down your entry signals, your management of an open position and your stop and or exit signals. Having a clearly defined system to follow maybe the answer that helps you push the emotions away while you concentrate your thoughts on ensuring the price action is meeting your criteria for buying/ selling, holding or closing.
There are some good books that help to deal with this although I have not read through them completely I was recommended Mark Douglas 'Trading in the Zone' which deal specifically with your mindset and Bonsai put me in the direction of John Piper ' Way to Trade' which also deals with this point and a complete process to your trading. Unfortunately this book is no longer in print so you can only get a second hand copy, an e-book format or try at the library. All I would add if you have not yet sorted out your complete strategy then this is a really good book for that purpose among other things.
I firmly believe that if you develop specific signals and practices for your trading then you can eradicate your emotions by giving yourself something to think about and follow so that the emotions do not get a chance to develop as your mind is already working on your strategy.
Kevin
No problem, I had every sympathy with you last night. Always draw the good points of your trading from a bad day.
You stopped your second deal with a minimum loss. An important part of being successful is the realisation that however good you may become you will have to accept losses. Your 3rd deal was spot on and as you know now had you restricted your loss on the 1st as you did with your second your 3rd would have put you in profit for the day and I suspect you would have taken it. Probably you might even have had another bite on the last rise and come away with a good profit.
One thing I did not mention last night, when you hold on unnecessarily by the time you give in and close for a bigger loss you have undoubtedly missed another trade and become reluctant to join late because you feel as soon as you do it will turn against you. By working from your strategy and a stop or exit strategy you have more chance of being out of the market when the clearer signal to enter again presents itself and therefore you are able to benefit from it rather than go through the suffering of holding onto a loser.
One final warning you have done this once, your feelings can take control again, while you may say to yourself that you will not allow this to happen again you may let this happen again if you do not take some action to prevent it. It may not be enough just to see where you went wrong and tell yourself I wont let that happen again. We are all different and able to deal with our problems in our own way but it is evident that many of us suffer from letting our emotions get the better of us regardless of how much time we spend preparing our strategies. When the feelings take control our strategy shoots out the window unless with have dealt with them effectively.
At least another good point is that you have seen it as a problem and accepted it as such going blindly on will only end in more suffering. If this has already happened before then I would take up more steps to prevent it again. If you have not already done so write down your entry signals, your management of an open position and your stop and or exit signals. Having a clearly defined system to follow maybe the answer that helps you push the emotions away while you concentrate your thoughts on ensuring the price action is meeting your criteria for buying/ selling, holding or closing.
There are some good books that help to deal with this although I have not read through them completely I was recommended Mark Douglas 'Trading in the Zone' which deal specifically with your mindset and Bonsai put me in the direction of John Piper ' Way to Trade' which also deals with this point and a complete process to your trading. Unfortunately this book is no longer in print so you can only get a second hand copy, an e-book format or try at the library. All I would add if you have not yet sorted out your complete strategy then this is a really good book for that purpose among other things.
I firmly believe that if you develop specific signals and practices for your trading then you can eradicate your emotions by giving yourself something to think about and follow so that the emotions do not get a chance to develop as your mind is already working on your strategy.
Kevin
Bonsai
Just been having a quick look at the 60 min and daily chart on the FTSE cash. Would you say from the fall above 4200 has already produced 5 waves. This action came following a lengthy rise from the lows of the 3000's so was this a corrective group of waves before the rise continues or are we now witnessing the abc pull back formation before another 5 wave down.
Kevin
Just been having a quick look at the 60 min and daily chart on the FTSE cash. Would you say from the fall above 4200 has already produced 5 waves. This action came following a lengthy rise from the lows of the 3000's so was this a corrective group of waves before the rise continues or are we now witnessing the abc pull back formation before another 5 wave down.
Kevin
Any of you that are looking for The Way to Trade, check out Borders. Saw a copy sitting in there the other day, £25. For a high street chain they have an amazing selection of trading books.
Reactor, I've made every mistake in the book, but I won't lose that much on a trade because for futures I've got to have a stop in the market as soon as I place the trade. And I never move it back against myelf, however tempting. I only move it up to relevant chart points when in profit. You'd be suprised how this frees you up. And have a target. FTSE futures on Liffe will take away paper profits very quickly. I think you have to seriously look at taking 20-30 points as a matter of course, unless there is a clear trend or momentum. Also, (after many problems), I never let a winner turn into a loser. If I realise they're bringing it back at me I tighten up the stop and try to get out with a few points. OK, mistakes get made, but I believe it outweighs the corroding effects of taking small losses from what were winners.
The other day on the mini dow someone in the US sold 10,000 contracts instead of 100 and the market spiked down and then up 300 or so points in seconds. A lot of spread bet traders were understandably panicked out, and ended up arguing the toss with the SB companies. If this happened on FTSE futures, you'd probably have to take the loss, which could be thousands.
My brokers have assured me that if you have a stop in the Liffe market it will be hit with a few points slippage even in the event of a crash. There are some big spikes sometimes in electronic markets. When going short you should have somewhere in the subconscious the thought that they could find Bin Laden in the next minute. Would you like to have no stop in that situation?
Not trying to be harsh. I'm a novice, and making no claims to be any good at this game, but without a stop I can't do it at all, simple as that. It's just too frightening, and the FTSE on liffe is just too quick to not use stops at entry.
Of course, getting the stops right is another problem.
Good luck,
Sean.
Reactor, I've made every mistake in the book, but I won't lose that much on a trade because for futures I've got to have a stop in the market as soon as I place the trade. And I never move it back against myelf, however tempting. I only move it up to relevant chart points when in profit. You'd be suprised how this frees you up. And have a target. FTSE futures on Liffe will take away paper profits very quickly. I think you have to seriously look at taking 20-30 points as a matter of course, unless there is a clear trend or momentum. Also, (after many problems), I never let a winner turn into a loser. If I realise they're bringing it back at me I tighten up the stop and try to get out with a few points. OK, mistakes get made, but I believe it outweighs the corroding effects of taking small losses from what were winners.
The other day on the mini dow someone in the US sold 10,000 contracts instead of 100 and the market spiked down and then up 300 or so points in seconds. A lot of spread bet traders were understandably panicked out, and ended up arguing the toss with the SB companies. If this happened on FTSE futures, you'd probably have to take the loss, which could be thousands.
My brokers have assured me that if you have a stop in the Liffe market it will be hit with a few points slippage even in the event of a crash. There are some big spikes sometimes in electronic markets. When going short you should have somewhere in the subconscious the thought that they could find Bin Laden in the next minute. Would you like to have no stop in that situation?
Not trying to be harsh. I'm a novice, and making no claims to be any good at this game, but without a stop I can't do it at all, simple as that. It's just too frightening, and the FTSE on liffe is just too quick to not use stops at entry.
Of course, getting the stops right is another problem.
Good luck,
Sean.
kevin
Elliott is mainly a sentiment indicator ?
If you have read Prechter, you will know that any (every) wave
can extend. That is the main problem - you can never be certain
sure of what will come next.
To me, the sequence above 4200 seemed like a top that was a
low risk entry for a number of reasons and I can go into that if you want.
The sequence since the top has been acting very much like
a reaction to the final wedge which started at 3900.
So we could easily retest that if sentiment is poor.
What may prove significant is that it broke the bottom channel line
(see my journal) and has not yet managed to recover its ground.
So the prognosis is more weakness until (if) it does.
The bottom channel goes back to April.
On the other hand, the 'collapse' in the U.S bond market poses
some interesting questions about where that money will be
invested next ? If it goes into stocks then WATCH OUT.
But if it was (say) Japanese money going home then WATCH OUT.
Caveat emptor ?
LOL
One other thing. If we have seen 5 waves then the correction
is not yet over. No such thing as a five wave correction !
Every correction must be an ABC. so at best we would only have
a B wave rally before the C wave rolls in.
Elliott is mainly a sentiment indicator ?
If you have read Prechter, you will know that any (every) wave
can extend. That is the main problem - you can never be certain
sure of what will come next.
To me, the sequence above 4200 seemed like a top that was a
low risk entry for a number of reasons and I can go into that if you want.
The sequence since the top has been acting very much like
a reaction to the final wedge which started at 3900.
So we could easily retest that if sentiment is poor.
What may prove significant is that it broke the bottom channel line
(see my journal) and has not yet managed to recover its ground.
So the prognosis is more weakness until (if) it does.
The bottom channel goes back to April.
On the other hand, the 'collapse' in the U.S bond market poses
some interesting questions about where that money will be
invested next ? If it goes into stocks then WATCH OUT.
But if it was (say) Japanese money going home then WATCH OUT.
Caveat emptor ?
LOL
One other thing. If we have seen 5 waves then the correction
is not yet over. No such thing as a five wave correction !
Every correction must be an ABC. so at best we would only have
a B wave rally before the C wave rolls in.
Bonsai,
I have yet to read Pretcher, something I will endeavour to do in the fullness of time. For now my reference to this study if from the Murphy book.
After having a quick look at it I now realise my error concerning the correction that you have highlighted and as you have said if 5 waves have been seen then there are another to follow after the abc. I have been looking at the different charts and it can be difficult to follow because what my appear a clear wave indication on one time frame it is not on another. I saw the 5 waves from the 60 min chart which appeared to be followed by a congested period from thur/fri. A congested period often appears to form a triangle pattern where my SMA produces a lower high followed by a higher low and that appears to be the case from the 60 min chart. If this were the case then a fail currently somewhere around 4020 (from memory) on the cash chart could signal a move down IMHO.
Yes if you are willing to share your reasons for the sell I would be interested to learn a different approach. I can see it is a fail of the channel and it has been a long run so as you have said it was low risk and did produce around 30% retracement thus far. However while I think the fall may not be over I also do not at this stage consider the rise to be either. It just may have a larger retracement to make from the move between 3300 and 4200. However I would have to bow to your experience with EW and if one set of 5 wave down has been seen; my understanding is that there will be more of these 5 waves. If this was the case what is the sequence we could expect, how many groups of 5 have to be seen before we can consider the bigger wave complete.
As for your entry point which can be seen was a good one; from my own set-up it was both a trend line breach with an RSI failure swing.
With reference to Kauffman is that all to do with the Adaptive moving average. Been playing with that today with Sierra. They have the setting at 11 : 5 : 5. I found this was rather good on the 2 min chart for friday but on the 5 min chart such a setting was behind the 13 SMA. I found this improved on the 5min chart with a setting of 9 or 7 to 3 : 3.
As for my strategy I have broken my entry signals down to 6 trendline/SMA for now, with RSI trendline extremes with or without its own trendline breach as additional. This forms the nuts & bolts of the entry signals now. There will be other signals to follow but they will be based on other factors such as failed retest's from longer time frames.
Kevin
I have yet to read Pretcher, something I will endeavour to do in the fullness of time. For now my reference to this study if from the Murphy book.
After having a quick look at it I now realise my error concerning the correction that you have highlighted and as you have said if 5 waves have been seen then there are another to follow after the abc. I have been looking at the different charts and it can be difficult to follow because what my appear a clear wave indication on one time frame it is not on another. I saw the 5 waves from the 60 min chart which appeared to be followed by a congested period from thur/fri. A congested period often appears to form a triangle pattern where my SMA produces a lower high followed by a higher low and that appears to be the case from the 60 min chart. If this were the case then a fail currently somewhere around 4020 (from memory) on the cash chart could signal a move down IMHO.
Yes if you are willing to share your reasons for the sell I would be interested to learn a different approach. I can see it is a fail of the channel and it has been a long run so as you have said it was low risk and did produce around 30% retracement thus far. However while I think the fall may not be over I also do not at this stage consider the rise to be either. It just may have a larger retracement to make from the move between 3300 and 4200. However I would have to bow to your experience with EW and if one set of 5 wave down has been seen; my understanding is that there will be more of these 5 waves. If this was the case what is the sequence we could expect, how many groups of 5 have to be seen before we can consider the bigger wave complete.
As for your entry point which can be seen was a good one; from my own set-up it was both a trend line breach with an RSI failure swing.
With reference to Kauffman is that all to do with the Adaptive moving average. Been playing with that today with Sierra. They have the setting at 11 : 5 : 5. I found this was rather good on the 2 min chart for friday but on the 5 min chart such a setting was behind the 13 SMA. I found this improved on the 5min chart with a setting of 9 or 7 to 3 : 3.
As for my strategy I have broken my entry signals down to 6 trendline/SMA for now, with RSI trendline extremes with or without its own trendline breach as additional. This forms the nuts & bolts of the entry signals now. There will be other signals to follow but they will be based on other factors such as failed retest's from longer time frames.
Kevin
Sean77
I hold the same intraday view of 20 - 30 points. I tend to take the profit because I find that if I am in such a position often the FTSE will start to take it back around these levels. If it is to continue it tends to provide another signal before doing so allowing you to enter for a second time.
Kevin
I hold the same intraday view of 20 - 30 points. I tend to take the profit because I find that if I am in such a position often the FTSE will start to take it back around these levels. If it is to continue it tends to provide another signal before doing so allowing you to enter for a second time.
Kevin
Top at 4219
Anything over 4200 was a sell long before we got there.
If you go back to Sept 21,2001 you will find we spike bottomed
at 4224 !
There were then subsequent failures at around that level in 2002
on the way down from 4465 on Aug 22nd the last being at 4230.
So we already had resistance in place which had not been
broken.
The action in the channel from 3900 showed strong up move until
it started to break down. The process of breakdown involved
3 peaks during June. And 3 peaks and 2 valleys count as
1/2/3/4/5 !
The final peak you will remember showed a nice divergence !
There are no sure things in the market, but fewer trades come
easier than that. And the natural 'market stop' was at 4230!
Classic John Piper !
Low risk entry and because it came at a top the downside looked
unlimited. Certainly better than 1:3 risk/reward.
Its called a snake.
Anything over 4200 was a sell long before we got there.
If you go back to Sept 21,2001 you will find we spike bottomed
at 4224 !
There were then subsequent failures at around that level in 2002
on the way down from 4465 on Aug 22nd the last being at 4230.
So we already had resistance in place which had not been
broken.
The action in the channel from 3900 showed strong up move until
it started to break down. The process of breakdown involved
3 peaks during June. And 3 peaks and 2 valleys count as
1/2/3/4/5 !
The final peak you will remember showed a nice divergence !
There are no sure things in the market, but fewer trades come
easier than that. And the natural 'market stop' was at 4230!
Classic John Piper !
Low risk entry and because it came at a top the downside looked
unlimited. Certainly better than 1:3 risk/reward.
Its called a snake.
Bonsai,
Cheers for the explanation a v.nice set-up and maybe more to come. I am working my way through the book finding it very interesting.
On a completely different issue and as you a are full time trader do you; or have you considered a daily set-up where you take just 10 points per day from a single deal be it a buy or sell in addition to your normal dealing.
The concept being that such a set-up will appear within the first few hours of trading and quite often before 9am. The aim of the system being to identify the market direction and in doing so to take a small percentage of that move making it an easy target that can obtained from the early morning activity and be reproduced every day providing the parameters are met.
The single trade system to ensure that over trading is avoided and that a worthwhile gain is secured over a relatively short time span. Which then free's up the day for other activities or is a bolt on to other styles of trading to ensure one system comes up trumps.
Would be interested in your views. 10 points used based on being well within FTSE daily movements. I should add I do not know of such a system but aware that some claim to trade in this fashion and place deals with SB for about £100 - £200 a point from the morning trend.
I wondered if this was a pivot type system. However just employing your own trend selecting tools and managing your early deal accordingly would I suppose meet the requirements of this system.
Kevin
Cheers for the explanation a v.nice set-up and maybe more to come. I am working my way through the book finding it very interesting.
On a completely different issue and as you a are full time trader do you; or have you considered a daily set-up where you take just 10 points per day from a single deal be it a buy or sell in addition to your normal dealing.
The concept being that such a set-up will appear within the first few hours of trading and quite often before 9am. The aim of the system being to identify the market direction and in doing so to take a small percentage of that move making it an easy target that can obtained from the early morning activity and be reproduced every day providing the parameters are met.
The single trade system to ensure that over trading is avoided and that a worthwhile gain is secured over a relatively short time span. Which then free's up the day for other activities or is a bolt on to other styles of trading to ensure one system comes up trumps.
Would be interested in your views. 10 points used based on being well within FTSE daily movements. I should add I do not know of such a system but aware that some claim to trade in this fashion and place deals with SB for about £100 - £200 a point from the morning trend.
I wondered if this was a pivot type system. However just employing your own trend selecting tools and managing your early deal accordingly would I suppose meet the requirements of this system.
Kevin
no, not for me.
but Tomorton has such a system but he hasnt posted here for ages.
basically, I think, he looks for an 'N' shape to the early pattern
and then trades.
anyway a 10 pt move is not enough to overcome any bias
and early on, there usually is quite a bit.
the bias only becomes neutral on 20+ pt moves,imo
but Tomorton has such a system but he hasnt posted here for ages.
basically, I think, he looks for an 'N' shape to the early pattern
and then trades.
anyway a 10 pt move is not enough to overcome any bias
and early on, there usually is quite a bit.
the bias only becomes neutral on 20+ pt moves,imo