AllenZ's Journal

Originally posted by AllenZ


For my use, a pivot refers to a short term change of direction following a multi-bar move in one direction.

For example, if you get a 5 bar move down with a series of lower highs and lower lows when a prior bar high is finally broken, price pivots or changes direction. Sometimes, this is followed by a strong move and sometimes not, the key is to find when it is likely to produce a reversal or when it is likely to move just enough to allow an entry in the direction of the prior trend.

I use these pivots on every time frame in conjunction with various chart formations to produce trade signals.

I also use the traditional pivot calculations but they are different from these types of pivots. Really wish I had a better word.

These pivot moves were originally shown to me by another trader and then reinforced by yet a different trader. All this to say that no mater how much you think you know, you should always leave yourself open to learn and absorb new ideas.

AllenZ
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Allen. I too am reading your thread. Don't take a lack of posts as a lack of interest.
On the basis of "no matter how much you think you know, you should always leave yourself open to learn and absorb new ideas", I am trying to understand these pivots you use.
Looking at a chart of, for example, the big S&P contract from Oct 2, you would have had a series of pivots at 835, 838.3, 844.5 on the way up, and then when the latest one (844.5) was broken you would have had another series to the downside at 852.2, 850.5. 847.8, 843 etc etc etc?
Am I reading you right?
Maybe you could post an old chart by way of example.

Thanks
H
 
Hi Allen, you looked over my post, giving it a second try here :)

>trading commissions
Hi Allen!
Nice journal. I think it would be usefull to regard commission costs too.
They are an important part of the after all profits.

Even with using the low IB commissions of 0.25 points NQ per RT and your really nice winning series of +27 NQ points in 11 trades (11*0.25=2.75) they take away around 10% of the net gain.

In the macro view they are defintaly an important part IMHO.

go on posting and good trading!
 
Originally posted by e-mini_wannabe
Hi Allen, you looked over my post, giving it a second try here :)

>trading commissions
Hi Allen!
Nice journal. I think it would be useful to regard commission costs too.
They are an important part of the after all profits.

Even with using the low IB commissions of 0.25 points NQ per RT and your really nice winning series of +27 NQ points in 11 trades (11*0.25=2.75) they take away around 10% of the net gain.

In the macro view they are definitely an important part IMHO.

go on posting and good trading!
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I did not overlook your post just not sure what you are asking. I agree commission costs are a big deal and this is one of the reasons I attempt to not overtrade. My goal is to have my profit to commission ratio at about 5 to 1. When i am higher than that I consider my trading efficient and when lower I am either overtrading or struggling a bit with gains.

My general thinking on the subject is if you trade 10 times a day you need to make 12 points a week just to breakeven on a per contract basis. So, it is my contention that this fact alone makes scalping for 2-3 points a more difficult way to make profits as you are requiring much more out of your trading by putting yourself in a hole to begin with.

For example, just something to provoke thought on scalping the futures, those of you trading more than 8-10 times a day and scalping for 2-3 point gains here is a question.

Do you find yourself being profitable in the start of the month but for some reason by the end of the month, even thought you feel you traded well, your profits are small. This is commission cost catching up with you. As your trades increase, your output of points needs to increase to keep up. I am sure there are many scalpers who are profitable but I think to be a profitable scalper in the futures, you need more disciplined, have more skill, and even more luck than trading for larger gains.

Just one mans opinion.

Again I DO feel that scalping is viable, I just like to see traders understand what they are up against in trading different styles.

AllenZ
 
Today was a light day for me. I hate trading oversold markets as the old " damned if you do,damned if you dont scenario" is in full effect. Being a Friday also, and a profitable week, I purposely traded lightly to end the week on a positive note. Although I had the reversal nailed it got away from me but you cant win em all.

Trades

Trade 1 - 10:21 Long 829.50 Exit 837.50 +8
Trade 2 - 14:03 Long 819 Exit 816.00 -3

Day Net +5
Month Net +32

Trade 1 - went long on first pivot following the break of the days low. Exited into the 50% retracement zone. Standard trade.

Trade 2 - went long on a combination of signals, 1-2-3 reversal ( not the standard 1-2-3 but my own version ), and a multi bar pivot reversal. Nice to have confluent entries offer exactly the same signal, placed my stop at 811.50 and was aiming for a target of 830-832. Ran to 824 and I raised my stop to 816 and got hit near retracement low prior to the big run. This is the one that got away as it hit the target about 20 minutes after I stopped out. I toyed with re entering or shorting the exit ( I will do that sometimes if I feel that my exit also presents a reversal entry ) but in the end I was upset for raising the stop pre- maturely and decided to call it a day.

-----------------------------------------------------------------------------------

Weekly Statistics

Week Net +32 ( starting on Tuesday )
Weeks Trades 13
Stopped Flat 3
Wins 7
Losses 3
Win Rate = 70%
Ave Gain = 6.4
Ave Loss = 4.3

Very good start to the month, no scalping and being very selective is my approach for now.

AllenZ
 
Originally posted by garbo
Allen,

Thanks for the very interesting thread.

One (newbie) question: How do you define "to fade"?

garbo
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One of my most consistent trading methods is fading weak breakout/breakdowns.

For example a weak breakout is a break that occurs into a resistance zone after a consolidation period or slow consistent move higher. These are the breakouts that I found have the highest rate of failure.

Have you ever bought what looked like a breakout only to watch it fail? These are the breakouts I look to get short into or " fade ".
Some of the fastest moves occur following failed breakouts so I looked for a method to get me into the failures, only, on the right side.

So,"to fade", is to play against a breakout/breakdown in order to take advantage of the failure that is likely to occur. For example, going short when price breaks out of consolidation to the upside but occurs into a moving average.

AllenZ
 
Originally posted by AllenZ
Being a Friday also, and a profitable week, I purposely traded lightly to end the week on a positive note.
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I am very glad to read this because I've got what I call the "friday syndrom".
I play a very defensive game on fridays by fear of losing a part of my weekly profits.
As a fact, for me fridays are not as good as they should be.

I consider this as a newbie weakness that I must cure. I know I can because I had some very good fridays.
But i'm divided between trading consistently (independently of the weekday) and ending the week positively wich is important from a psychological point of view.

Did you play lighlty specificly on this last friday or do you feel that you do it each time you had a good week and the end of the week is coming ?

Thank you for your journal.
 
Originally posted by x-or

I am very glad to read this because I've got what I call the "friday syndrome".
I play a very defensive game on fridays by fear of losing a part of my weekly profits.
As a fact, for me fridays are not as good as they should be.

I consider this as a newbie weakness that I must cure. I know I can because I had some very good fridays.
But i'm divided between trading consistently (independently of the weekday) and ending the week positively which is important from a psychological point of view.

Did you play lightly specifically on this last friday or do you feel that you do it each time you had a good week and the end of the week is coming ?

Thank you for your journal.
More...


For one, I generally play lightly in oversold markets because it seems that patterns are harder to follow. Longs and shorts struggle as reversals seem immanent but never timely.

My approach for most Fridays is the same as the rest of the week but in certain situations I look to step lightly. Here are a few:

1. Deeply oversold markets
2. Highly overbought markets
3. The day after an Expansion day
4. Triple Witching days
5. Last trading day of the month/quarter
6. Day before a holiday

Now, this is not to say that I don't trade or udertrade on these days. All I mean is that I have found these days to be my least profitable days on average, therefor, I am much more selective and less likely to take chances.

AllenZ
 
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