Mini Dow daytrading

[viclondon]

Hi all,
I have been trading full time for a couple of months, only on the Mini Dow (YM). I also do some swing trades on the Forex, but in this journal I will only discuss the YM.
In the past I have done mostly longer term investments with good success. I worked for many year at a major investment intitution in the City in London, but resigned recently.
My strategy is mostly based on floor traders pivot points, candlesticks around the pivots and moving averages; I also vaguely use the thick and trin and keep an eye on the NASDAQ and the Trix, as I have noticed that quite often the NASDAQ tend to lead the YM and in case of real trends NASDAQ and YM tend to correlate.
In these first two months I have had hit and misses, but I have noticed several consistent patterns:
- I tend to be profitable in the first hour and last hour of the market, while I often loose money the rest of the time
- I have been monitoring two sets of pivot points: the ones computed by TradeStation (based on market hours) and the one given by CBOT (based on 24 hours). Some days one work perfectly, some other is the other one. I get the best results when they are the same (practically when the market stays within the range of market hours)
- When a weekly or monthly pivot falls between daily pivots it is a disaster for me, as I loose my reference: the market may follow either the daily or the weekly or monthly
- When the two sets of pivots overlap and there are no WP or MP in the way I have my best days, as I fade moves to the pivots, or I buy pull backs to the pivots

So now I have decided to be on the market in the first hour and the last half hour, when the real moves are made on the market. For the rest of the session it depends how the pivots are: in the rare situations when they are crystal clear I trade the whole day, otherways I try to do some Forex or go to play glof👍.

The reason of this journal is to try to get in contact with other more experienced traders and discuss the behaviour of the YM and also to give myself a better discipline.

YM traders are very welcome to comment, especially if they use pivot points

 

[HaloTrader]

Sounds interesting ^^
I usually fade the Dow gap in certain market conditions. (aka not today ^^)

 

[viclondon]

Hi halo,
welcome to the thread.
Yes, fading the gap is one of my favourite play. If the gap is less than 80-100 points and the price stay within daily suppport 1 and daily res 1 and bounces off support I go every time. It generally gives a nice big move.
What do you mean by "not today"

 

[viclondon]

I will try to explain my "strategy" in detail, as I find much more intesting when people do that instead of just entring price and target. I have a good capital and can afford to learn for a few months, although of course would prefer to get consistently profitable.
Another of my favourite moves is the "15:30 move" (Eastern time). At this time very often the market makes a big move in one direction and to detect the direction is generally not that difficult. It is as if all the action of the day is a preparation for this move.
IMO the major movement take place in three situations: opening gaps not covered, first hour and last half hour of trading; the rest is often playing around and whipsawing. In certain days when the pivots are well lined up this playing around can be very profitable, as price keep bouncing between two pivots allowing a good nomber of good trades, but often it is better to stay away.
So far I have found out that one of the most important things to learn is when it is worth to stay on the market the whole day and when is better just to stick to the first hour and last half hour

 

[gedward3]

HI Vic,

I tend to look at the Dow quite a bit and find that only going long when price
is above the open and only going short when price is below the open can
catch you some good 20 to 60 point moves once or twice a day. It doesnt
always work but if you build it into your strategy it will work more than
it loses.

Ged 🙂

Hi halo,
welcome to the thread.
Yes, fading the gap is one of my favourite play. If the gap is less than 80-100 points and the price stay within daily suppport 1 and daily res 1 and bounces off support I go every time. It generally gives a nice big move.
What do you mean by "not today"

 

[viclondon]

Interesting, I will keep an eye on that.
IME I gree with you regarding the first hour or first part of the day, but I have noticed that quite often the last half hour is a strong corrective move against the tresn of the morning.
Thanks for your input, keep it coming

 

[viclondon]

Embarassing start to my journal, as my PC froze just at the starting bell and missed the first trade.
Now short at 8209 on an engulfing pattern on the 5m and towards the opening gap.
The pivots are all over the place today, so I prolly will only trade this and the last half hour

 

[gedward3]

Vic,

You just entered before R1 and its now using it as support
for the time being.

Ged

Embarassing start to my journal, as my PC froze just at the starting bell and missed the first trade.
Now short at 8209 on an engulfing pattern on the 5m and towards the opening gap.
The pivots are all over the place today, so I prolly will only trade this and the last half hour

 

[viclondon]

Gedword,
R1 for me are at 8216 (from tradestation) and 8239 (from CBOT).
Where do you get your pivot from? Maybe yours are more accurate than mine which would explain a lot of things. I have been experimenting with different waysto compute DP and might be still wrong

 

[viclondon]

BTW, loads of problems with connection today which is unusual, not ideal conditions for trading. The market seems to be going sideways ATM

 

[viclondon]

HI Vic,

I tend to look at the Dow quite a bit and find that only going long when price
is above the open and only going short when price is below the open can
catch you some good 20 to 60 point moves once or twice a day. It doesnt
always work but if you build it into your strategy it will work more than
it loses.

Ged 🙂

I reread this post more carefully and I understand better what you mean now

 

[N Rothschild]

wouldnt worry about pivots to much on the dow, they are more powerfull in forex than equities, good for a scalp tho

 

[gedward3]

Gedword,
R1 for me are at 8216 (from tradestation) and 8239 (from CBOT).
Where do you get your pivot from? Maybe yours are more accurate than mine which would explain a lot of things. I have been experimenting with different waysto compute DP and might be still wrong

Vic,

Im using Ninja Trader and they are a built in indicator. Are you Spreadbetting
or trading futures. You can get a Demo from Amp Futures and use NT free
to practise on before you go live.

R1 is at 8219 on my chart

 

[gedward3]

wouldnt worry about pivots to much on the dow, they are more powerfull in forex than equities, good for a scalp tho

Genics,

I thought floor trader pivots work just as well on the Dow. Ive watched the
Forex and it does really move in time with the pivots.

Ged

 

[gedward3]

BTW, loads of problems with connection today which is unusual, not ideal conditions for trading. The market seems to be going sideways ATM

Vic,

If you look on a 60min chart yopu will see the Dow is using an ascending trendline
thats formed from 1pm on the 28th April and todays R1 as support looks like thats
why there a bit of ranging at the moment.

Not sure what news is out later so it could be an anouncement thay are
waiting for as well.

 

[viclondon]

Vic,

Im using Ninja Trader and they are a built in indicator. Are you Spreadbetting
or trading futures. You can get a Demo from Amp Futures and use NT free
to practise on before you go live.

R1 is at 8219 on my chart

No spread betting. I am trading on my account on Tadestation.
The PP are also built in, but the thing that confuses me is that there are too many different PP around, so some day they work some they don't (at least for me).
As I mentioned earlier I am using two different sets of PP, the other one from CBOT based on 24 hours of data. My experiences is that some days the ones from TS work better and other days the ones from CBOT. I get my best results when the two of them are equal, therefore when the 24h price stays within the range established during market hours.
To make things more confusing when weekly or monthly points get on the way it is a real mess.
So in my opinion I should only use PP when all of them are lined up properly, which does not happen very often, otherwise I drop them and just trade the first and the last move. Today I was fooled as I was especting a move towards yesterday's closing price, since the gap was relatively small and the price stayed within R1 and S1

 

[N Rothschild]

you better off looking at market profile, VAH VAL etc

 

[viclondon]

Vic,

If you look on a 60min chart yopu will see the Dow is using an ascending trendline
thats formed from 1pm on the 28th April and todays R1 as support looks like thats
why there a bit of ranging at the moment.

Not sure what news is out later so it could be an anouncement thay are
waiting for as well.

Yes it looks like the market is waiting for new releases, but I don't think there is anything important planned for today

 

[viclondon]

you better off looking at market profile, VAH VAL etc

Interesting, although market profile looks very complex to me and I should start documenting from scratch.
I have no idea what VAH VAL is. would you care to develop?

 

[gedward3]

Theres a perfecting buyin or selling op now because the price is on the trendline
depending which way you look at it. I just put a buy in with a 25 point
stop.

Have a look at this site for Different types pivots

mini-sized Dow ($5) Futures June 2009

Ged

No spread betting. I am trading on my account on Tadestation.
The PP are also built in, but the thing that confuses me is that there are too many different PP around, so some day they work some they don't (at least for me).
As I mentioned earlier I am using two different sets of PP, the other one from CBOT based on 24 hours of data. My experiences is that some days the ones from TS work better and other days the ones from CBOT. I get my best results when the two of them are equal, therefore when the 24h price stays within the range established during market hours.
To make things more confusing when weekly or monthly points get on the way it is a real mess.
So in my opinion I should only use PP when all of them are lined up properly, which does not happen very often, otherwise I drop them and just trade the first and the last move. Today I was fooled as I was especting a move towards yesterday's closing price, since the gap was relatively small and the price stayed within R1 and S1