A plug for the 1M Chart - Divergence

V

VisionTrader

I have gotten a lot of positive comments on my style here, but I have also been "poked fun" at for trading from the 1M chart. I have to say that some of the comments from some of the senior traders here made me re-think myself.


Today was a good day for us 1 minuters. I made 7 trades from my system today and only one did not work out. I did not make a fortune, but it was slow and steady with one good one. If my trade management was better, I would have been able to pick up a few more. Oh well.

For those of you who followed my journal, I had promised to post some more trades. If you remember, I went back to trading my old style and as before it worked. Since today was good, I felt like posting. There have been bad ones don't get me wrong, mostly it was my trade management and over trading that killed the profit. I promise to post the next bad day too.:p

Today I was in 7 trades.
Six successful.

I really think the one minute chart is a good "launching pad" for the ES. It takes some patience and I have to relate it to the 3M and the 5M. Hopefully, my skills will keep improving.

I am going to attach charts for each of the trades if anybody cares to see them. I have my own rules for entry/exit and I usually only look for 2 points per trade unless there is confirmation from the longer time frames.

I had to attach 4 separate charts for all the trades. Sorry. Need multiple file attaching capabilites. You'd think we would have this with all the money we pay to be a member here. Take care
:D
 

Attachments

Trade 3 was my only loser. Lost 2 points. Also did a poor job of entry.

Trade 4 was a classic. The double top, divergence appeared simultaneously across the 1, 3 and 5M chart and indeed there was a decent move.
 

Attachments

Trade 5 is a classic read for a small reversal on the 1M. This is when you take the second against the trend. This set-up has three consecutive divergent peaks on the Sto and MACD. I will always take this trade. It produced today.

Trade 6 is what I referred to in my journal as the "Holy Grail" trade. This is when an extended DB occurs on the 1M and on the 3 or 5M you get a little mini-DB as the sto is turning up, the key is there can be no turn down in the sto on the 3 or 5M chart. This is a great trade and surprisingly occurs fairly oftern.

I got out of this a little early. Can't remember why. Should have exited on the 1M sell a little above it.
 

Attachments

Again, I will always trust this signal. Extend DT on the 1M finally confirmed by the identical signal on the 3 minute.


I would add that I did notice today the power of the 20 period SMA on the 5M chart. It was tough for my lazy old, often ridiculed, laugh at me when I say "hook down", stochastics to bust thru this resistance/support line today. I did notice that it always bounces here. I am probably going to start getting a little wiser when it comes to taking signals when they are right on it.


Take care.
 

Attachments

Quote from Mr. Bollinger:

Excellent stuff there vision, what parameters do you use for your indicators on the 1min ? Thanks.
More...

I would encourage you to read thru my journal. I stopped it a while back. Got kind of big 100+ pages, but there is some good info in here including my plan and indicator settings.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=18677

I have tinkered with things a little, but the concept is still identical. I am always trying to improve the way I trade the 1M chart. It takes a lot of "noise filtering".

If you are interested after reading this, send me your email and I will send you my trading plan doc. with all my stuff.

Hope this helps
 
Hell why didn't I just answer your question


Stochastic 5,5,2 Plot only slow %D

MACD .80, .30, .50 Only the signal line is plotted

On longer time frame charts I also overlay an 8-3-3 stochastic on the 5-5-2. I have found one to lead the other and has helped me with my timing on the turns. When they both align.....give her hell.

Sorry. I don't expect you to cruise thru 100 pages of journal. You will find that my setting in the journal were

Sto 6,5,2
MACD 3,14,1

Again, not the exact indicators that are important. It's the divergence concept coupled witht the DT and DB in price.
 
Here's the conversion formula for the MACD if you need it for your charting platform


Here is the formula:

2/(N + 1) = alpha

Example: 12 days 2/(12 + 1) = .15

Going the other way, use this:

N = (2/Alpha)-1

Example: .15 (2/.15)-1 = 12 days (rounded)
 
YES !

It was a good day for us 1m divergence traders.

I got out of my two best (long) trades early though because the 5m looked so weak. I'm still struggling with the larger-timeframe-effecting-the-shorter-timeframe concept.

I'm considering looking at the larger timeframes for major support and resistance, noting the price levels down on a piece of paper, and not looking at the charts again so that I just let the 1m do its thing.

Any ideas ?
 
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