Awash's Journal

Perfect trading day for the trend with multiple opportunities to make some money. Today, I did some things right and wrong but more importantly I learned something new. I’ve never considered signals prior to major trading because I felt pre-market activity could skew indicators. Have any of you opened positions based on pre-market activity from indicators?

Trade#1 – [Short 995 10:04 EST & Cover 991 10:16 EST] I didn’t set an entry stop because the market was tight early on and didn’t break out until after 10am. My entry was late as usual but I got filled at a descent price (should have been in by 996.75). I was able to snatch four points and boy was I happy (No reversal signals until price bounced off 990.25). I was so emotionally encouraged that I missed the rebound because I took an early lunch.

Trade#2 – [Short 997.50 14:28 EST & Cover 998.50 15:02 EST] There proved to be some strong resistance around 998, went short with good timing off a good divergence signal. Everything was going good until the price reversed. I didn’t close the position in time and I took a loss. I should have made at least a point on this trade. Another case of me telling myself to wait. A good trade turned out to be a bad trade.

Mistakes for today:
1) 10:01 EST Late entry after new support was broken (should have anticipated price direction because of the early divergence and a poor attempt to break 1000.50 resistance).
2) 10:30 EST Took an early lunch after a 4 point winning trade and I missed the rebound.
3) 14:59 EST Failure to exit my position on reversal signal and I took a loss (Stupid mistake).

Stopped trading at 15:03 EST


Stockfrosty, that's precisely why I avoid pre-market activity but I may want to keep it in mind while I'm analyzing overall market direction.
 

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Quote from Awash:

Have any of you opened positions based on pre-market activity from indicators?
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I’ve had mixed results from using pre-market activity and have since learned to place less credence on them and put more weight on prices from RTH.

Kermit
 
Quote from Kermit:


VisionTrader,

Interesting you should mention the use of tick charts. I think they actually give much clearer, more information-rich price movements/patterns. If I may ask, why would you recommend it “FOR ENTRIES ONLY”?

Kermit
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I tell ya, I am almost sold on them. I have had the suggestion from several here at ET and it makes sense to me. Why not include the thoughts behind the transactions that take place at night or whenever. After all, these folks are telling a price story too.

I have set my charts up with the Fibs. The ES charts look nice.
 
Quote from Kermit:


VisionTrader,

Interesting you should mention the use of tick charts. I think they actually give much clearer, more information-rich price movements/patterns. If I may ask, why would you recommend it “FOR ENTRIES ONLY”?

Kermit
More...

Realized I didn't answer your question.......

My point was that smaller numbers of ticks exhibit the same patterns as say a 5M chart. You can time an entry on a 5M or 3M or whatever by stepping down to a 21, 34 or 55 tick chart.

I don't use these but I do use 377,610, 987 and 1597 tick charts. I am really watching the ES on a 1597 tick chart for reversals, using a fib strectched on it and it helps guide me. Today was a good example.

Have a look at the chart.
 

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Nice trading awash. Once you get your entries down, it will help.

Have you ever considered entering on the first red candle after divergence and the DT? Did you try the tick chart or was it too off base?
 
Awash,

What is the lower indicator on your charts ?
Sorry if you've already mentioned this. I scanned through past posts and didn't see it if it's there.
 
Quote from VisionTrader:

Have you ever considered entering on the first red candle after divergence and the DT? Did you try the tick chart or was it too off base?
More...

The tick chart wasn't helpful for me, and that's only because I'm such a new trader that I don't want to overwhelm myself with data, how it's displayed, nor an aresnal of other indicators. Maybe after another six to eight months I'll figure out how I can work it into my repertoire. For now, time intervals are better for me than tick intervals.

As to the first black (down) candle, I should probably try entering on it after divergence. But most of the indicator divergence stemmed from pre-market activity. Click chart: http://www.elitetrader.com/vb/attachment.php?s=&postid=320433 And, tell me if I'm reading the chart incorrectly but the most of the divergence came before 9:30. I didn't want to miss read the indicator. Tell me what you think.

tradersaavy, the indicator is MACD with signal line.
 
This is back in my hayday as a Futures Broker Systems Analyst. Once for a handfull of my clients I created a system that trades off of the pre-market activity exclusively. Entries and Exits are pre-set. The system has a 85% accuracy rate.

Its soooooooooo easy you will laugh.
I must admit, Its so stupid simple its almost insane!!
But it works.
You can throw away ALL your reading material and you wont have to attend another seminar.
If you will just follow the rules you will see an 85% accuracy rate.

But I must warn you, It's soooooo simple that most people won't be able to do it because it defies logic and reason and it goes against everything you have been told about trading!


If your interested I will share it with you.
 
Quote from T-REX:

This is back in my hayday as a Futures Broker Systems Analyst. Once for a handfull of my clients I created a system that trades off of the pre-market activity exclusively. Entries and Exits are pre-set. The system has a 85% accuracy rate.

Its soooooooooo easy you will laugh.
I must admit, Its so stupid simple its almost insane!!
But it works.
You can throw away ALL your reading material and you wont have to attend another seminar.
If you will just follow the rules you will see an 85% accuracy rate.

But I must warn you, It's soooooo simple that most people won't be able to do it because it defies logic and reason and it goes against everything you have been told about trading!


If your interested I will share it with you.
More...


I assume this is what you trade based on your comments. It's ssooo easy here at ET.

Start a journal. Document what you are doing. Exactly and in writing. Call your trades in real time and teach us. Clear as mud.
 
Quote from Awash:



The tick chart wasn't helpful for me, and that's only because I'm such a new trader that I don't want to overwhelm myself with data, how it's displayed, nor an aresnal of other indicators. Maybe after another six to eight months I'll figure out how I can work it into my repertoire. For now, time intervals are better for me than tick intervals.

As to the first black (down) candle, I should probably try entering on it after divergence. But most of the indicator divergence stemmed from pre-market activity. Click chart: http://www.elitetrader.com/vb/attachment.php?s=&postid=320433 And, tell me if I'm reading the chart incorrectly but the most of the divergence came before 9:30. I didn't want to miss read the indicator. Tell me what you think.

tradersaavy, the indicator is MACD with signal line.
More...

Looking at your chart...I only see one indicator, slow sto I believe. Don't you use another "confirming indiator". MACD, etc.??

There was some massive divergence brewing in your chart. 5 consecutive lower highs followed by a divergence in price before the open. If your MACD was telling you this also, set a reasonable stop above the DT and go with it.

I think your real question is...Do I read pre and post market data. My answer is yes. Put up a longer chart time for guidance. Use prudent money management, but listen to your indicators when they speak pre-market. Just be aware of econ news, etc.

This is my opinion. Many will answer you differently. Experience is all that will really help.
 
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