S&P 500 & other indexes - intraday. Plus chat

[The Leopard]

Can you smell a sell-off today?

I can see one - thus far, at least.

 

[robster970]

I can see one - thus far, at least.

Lot of absorption around 98.75 - wonder if this the return trip to 1405/1406 before it sells off again for another leg down.

Incidentally, I'm spending way less time on here these days - I'll PM you my email address.

 

[The Leopard]

Lot of absorption around 98.75 - wonder if this the return trip to 1405/1406 before it sells off again for another leg down.

Incidentally, I'm spending way less time on here these days - I'll PM you my email address.

Got to expect a few wild swings whilst Teh Bernank is flapping his gums.

 

[The Leopard]

Lot of absorption around 98.75 - wonder if this the return trip to 1405/1406 before it sells off again for another leg down.

Incidentally, I'm spending way less time on here these days - I'll PM you my email address.

Hitting 1406 right now - dare you to short.

 

[robster970]

Short - filled at 6

 

[robster970]

Stopped out at 7.50

 

[robster970]

Now it sells off!!! LOL

 

[robster970]

Now it stops!

 

[The Leopard]

Short - filled at 6

Stopped out at 7.50

You got balls, I'll give you that.

What are you doing here with this approach (I've seen you mention a few trades of this nature I think)? Just trading off a level with a tight stop, knowing you'll get smacked a lot of times, but when you hit you'll make out like a bandit? Or am I reading it wrongly?

 

[robster970]

You got balls, I'll give you that.

What are you doing here with this approach (I've seen you mention a few trades of this nature I think)? Just trading off a level with a tight stop, knowing you'll get smacked a lot of times, but when you hit you'll make out like a bandit? Or am I reading it wrongly?

Tight stops, big wins - it is fledgling for me right now and one of the reasons I'm not on here much these days - I'm trying to up my reward levels for lower risk by adding in more layers into how I trade.

 

[The Leopard]

Tight stops, big wins - it is fledgling for me right now and one of the reasons I'm not on here much these days - I'm trying to up my reward levels for lower risk by adding in more layers into how I trade.

This has some appeal, and I actually think this would work better on ES than on the other indices. I think you'll need a high pain threshold and serious discipline because I imagine your hit rate will be low. Then again, if you're taking trades at these kind of areas with a 6 tick stop your return when you hit can easily be 6R, 8R 10R, whatever.

I guess another nice thing is there must be a lot of opportunities for this kind of approach.

But you do need the stones.

 

[robster970]

This has some appeal, and I actually think this would work better on ES than on the other indices. I think you'll need a high pain threshold and serious discipline because I imagine your hit rate will be low. Then again, if you're taking trades at these kind of areas with a 6 tick stop your return when you hit can easily be 6R, 8R 10R, whatever.

I guess another nice thing is there must be a lot of opportunities for this kind of approach.

But you do need the stones.

Yes - my best so far was on 24th July for 12R but I can tell you I worked very, very hard for that and I felt mentally exhausted at the end of the process.

When I say fledgling, it is my mind/psych that is the trouble-maker, not the theory and trade selection that underpins it.

Anyway, I thought you kind of traded like this Leonard - levels of note, good PA, in and then manage the trade...

 

[The Leopard]

Yes - my best so far was on 24th July for 12R but I can tell you I worked very, very hard for that and I felt mentally exhausted at the end of the process.

When I say fledgling, it is my mind/psych that is the trouble-maker, not the theory and trade selection that underpins it.

Anyway, I thought you kind of traded like this Leonard - levels of note, good PA, in and then manage the trade...

Sort of used to be, but I have evolved. I think I started on what you might call Forum PA - I guess the epitome of that is a bar signal at S/R. Although I've never been comfortable with very tight stops.

I've developed to using what I would regard as real price action. I'll still note certain levels, but I wouldn't use any individual bar signals, and I'm more concerned with the way price is moving. It's difficult to explain but essentially I try to interpret what price is doing rather than looking for signals to enter. I think my notion of significant levels is a bit more sophisticated now than it used to be.

I'm sure I read somewhere about a firm that essentially does what you're talking about. The win rate was horrible, 20% or something, but the winners were sometimes vast. I think they were doing it across a lot of things as well.

 

[robster970]

I know exactly what you mean - see inline:

Sort of used to be, but I have evolved. I think I started on what you might call Forum PA - I guess the epitome of that is a bar signal at S/R. Although I've never been comfortable with very tight stops.

My stops have become tighter in conjunction with what you describe below wrt PA. Say for example, if a sell-off is running out of steam and I see buying pressure starting to overwhelm selling, then buyers start to jump in at higher prices, I'll join the bid. If sellers then re-assert themselves and push below the low of where buyers first turned it around, it tells me:

a) Sellers have more strength than I expected to see or
b) Buyers are weaker than I was expecting

either conclusion violates my reason for getting in and therefore being taken out just below the low that I used as my point of reference is fine by me

I've developed to using what I would regard as real price action. I'll still note certain levels, but I wouldn't use any individual bar signals, and I'm more concerned with the way price is moving. It's difficult to explain but essentially I try to interpret what price is doing rather than looking for signals to enter. I think my notion of significant levels is a bit more sophisticated now than it used to be.

I do this too. Ironically I was going to write a big piece on this thread regarding how to read the continuum of the auction process rather than the discrete nature of bars/candles but I decided against for the other reasons discussed in the Foyer over policy/content/etc

In any event, I do know what you are talking about and I suspect if we were in a room together watching the auction in flight, we would probably be talking about the same thing.

I'm sure I read somewhere about a firm that essentially does what you're talking about. The win rate was horrible, 20% or something, but the winners were sometimes vast. I think they were doing it across a lot of things as well.

Current win rate is about 55% but it has real variable outcomes with an interesting distribution ranging from -R all the way to +12R with an average for just shy of 1pt and a SD of 3.61pts.

Mail me dude.

 

[robster970]

One more thing. Levels are not absolute. They are tempered by the available liquidity in that area and the power of the orderflow as it hits it. Under and overshooting should be compensated for wrt to volume and level of trade facilitation/liquidity.

Take the low at 97 today, look at 1min chart and scroll through minute by minute with VAP on screen. Was the absorption of that orderflow in the 3-4mins it was around this level enough to tell you that somebody serious wanted to trade at this price and this represented value?

23k contacts traded at 98.75. The NVPOC was at 98 and the low was at 97. Is it realistic to expect 98 to take all that activity without a little bit of push and shove?

The question is rhetorical btw. I already know Leonard and Pedro understand this stuff.

 

[VielGeld]

Interesting you should mention high R:R trades, Rob. I've been naturally gravitating to that style myself recently, main reason being that high win rate systems are more stressful in the long run and have less margin for error than high R:R.

Of course, the best trades are high win rate & high R:R, but I think I'd settle for high R:R on its own.

 

[Shakone]

I do this too. Ironically I was going to write a big piece on this thread regarding how to read the continuum of the auction process rather than the discrete nature of bars/candles but I decided against for the other reasons discussed in the Foyer over policy/content/etc

That would be interesting to read. If you do write it, and don't post it, please PM it to me.

 

[Splitlink]

This has some appeal, and I actually think this would work better on ES than on the other indices. I think you'll need a high pain threshold and serious discipline because I imagine your hit rate will be low. Then again, if you're taking trades at these kind of areas with a 6 tick stop your return when you hit can easily be 6R, 8R 10R, whatever.

I guess another nice thing is there must be a lot of opportunities for this kind of approach.

But you do need the stones.

May I make an observation. Perhaps someone could help me with this approach.

I have been trying this and do find that my losses are fairly manageable when I take profits before they turn into losses. I do this in the belief that sooner or later I will get a big winner. The problem that I find with this method is that it is essential to trade every time an entry occurs, at least, with the same instrument, otherwise the winner occurs in one's absence. That is where the snag for me lies and, I suspect, for many others. We cannot be there all the time and, even when we are there, we miss some, sometimes.

Nevertheless, I have not given up, yet, because I find that I manage my account better with tight stops but, and it is a big but, if one can't trade them all the method has a serious fault.

 

[The Leopard]

May I make an observation. Perhaps someone could help me with this approach.

I have been trying this and do find that my losses are fairly manageable when I take profits before they turn into losses. I do this in the belief that sooner or later I will get a big winner. The problem that I find with this method is that it is essential to trade every time an entry occurs, at least, with the same instrument, otherwise the winner occurs in one's absence. That is where the snag for me lies and, I suspect, for many others. We cannot be there all the time and, even when we are there, we miss some, sometimes.

Nevertheless, I have not given up, yet, because I find that I manage my account better with tight stops but, and it is a big but, if one can't trade them all the method has a serious fault.

I think there may well be something in this. The other thing is cherry picking. Often the best opportunities might not look good (by whatever criteria you apply). So you disregard them, and cry and curse as they leave for the moon without you. Meanwhile, you never fail to scoop up the losers (loosers).

The approach has considerable merit but it is one that I imagine is very difficult to implement. I think it's something that requires considerable experience and fortitude to use successfully.

 

[robster970]

In my opinion and I am no expert on this:

1) You are looking for very good set-ups and to do this you need to be trading very, very rationally

2) You need to be in front of the screen for pretty much most of the session as these set-ups can come up at any time during the day

3) The in-trade mgmt is hard and once again has to be very rational simply because you are trying to let it run for a long while.

Exposure and practice seem to be the key to improvement and I have no doubt that this will take me a some time to master to become competent in a basic way.