Day-Trading 2.0 for small traders

[amitman]

Here's another example from today trading RIMM
7 trades 7 winners 25-35 cent each.
Notice that if u see a trade i didn't enter it's because two possible reasons:
1) the HMA25 wasn't aligned with the slow wma (no LH, LL)
2) the price didn't get 2 cents lower then the trigger bar (look at my previous post to underastand).

there you go,

 

[StillStanding]

why don't you just use the buy zone instead of all these indicators?

Quote from TheRumpledOne:

In this system, all I do is what jjrvat taught:

1) identify the bias ( long or short )

2) identify the waves ( higher or lower )

3) when price crosses and closes the fast ma line, enter the trade ( pull the trigger) if the wave is with you.

4) collect profit ( exit the trade ).

 

[TheRumpledOne]

Quote from StillStanding:

why don't you just use the buy zone instead of all these indicators?

LOL.. I do use the Buy Zone. I use it everyday.

But I like to learn other systems because they give me ideas.

And, you are using the indicators in jjrvat's methods as VISUAL AIDS, they are NOT triggers themselves.

Once you can see the "TREND" and the "WAVES" you don't need the indicators.

Remember, there are only TWO indicators: a slow MA and a fast MA. I don't know if you're kidding or not when you say "all those indicators".

If you were talking about my TRO DIGITAL COMPASS, that's just displaying those indicators on multiple time frames so I don't have to look at 8 charts.

I know someone who said he didn't use indicators. That intrigued me. Took me a few years to figure it out, but I don't need any indicators at all to trade.

I use indicators to tell me when NOT to trade or to make sure I am trading with the flow and not against it.

When I figure out how to code it, I'll make a "jjrvat" indicator.

 

[TheRumpledOne]

Quote from SuperVolatility:

How do you determine the market bias?
Based on what indicators/trends?

The bias is determined by using the wma(240) according to a couple of jjrvat's earlier posts on page 1 of this thread.

If price is below the wma(240) only enter short.

If price is above the wma(240) only enter long.

Simple, yet profitable.

If you break this simple rule, do NOT blame this system for your loss.

 

[maninjapan]

Interesting to see how different people are approaching this. I have been using a 3 bar approach myself.
I have also been following another thread, AHG, which I also reccomend you read guys. Its a slightly longer term approach, but with suprisingly similar rules.


TRO, once you get a candle crossing the MA, how far below/above do you set your limit? and do you need the candle to close or do you consider it crossed even while its still active?

 

[jjrvat]

The importance of Macro Direction

I am posting again some comments on Macro Direction with a today real trade mistake ***(thanks pkchilly for the very good idea to improve the content of this thread)

1. The importance of establishing the current time direction is not because you are going to trade its signals but because you want to know in which side you will have the best probabilities for a good trade. Therefore, it doesn’t override price analysis. It’s a very important complement that helps to limit the playing field.

2. Therefore a scalper shouldn’t need to overanalyze it, or perfectly understand every single S/R and potential entry or exit in the “macro”. Common sense is the key.

3. If you have experience you should be able to see the general direction at a glance of the price in a naked chart. Otherwise, simply use visual aids:

a. You just need a 240 WMA (changing color according to the slope is even better). It doesn’t mean that you only must look for shorts if the slope is going down, it means that in the CURRENT TIME you will have better probabilities if you go short.

b. Plot Pivot Points (I really like PP). Again you are not going to trade PP and you don’t need to know PP by heart you are just looking for factors that help you with your probability analysis. Two simple and easy guides.

i. Look if the price is above or below its PP. If it’s above/below, only means that you would have better probabilities of going long/shorts.

ii. Once you have done that look where the current price is in relation with this next Support pivot (S1, S2, S3) or Resistance pivot (R1,R2,R3). For example if the price crossed above PP and it hasn’t touch next R1, means that you will have A LOT of probabilities if you look for longs (as long as it hasn’t touched or breached).

iii. A scalper is not interested in taking the whole move to the next pivot point, neither is trying to forecast when its going to happen. A scalper is only looking for the “macro” direction in the current time for increasing his probabilities of making a good round of scalps.

c. Of course, the best case scenario (in terms of probabilities) is when the 240 WMA slope is up, price is above PP and it hasn’t touch the next pivot resistance level.

4. The macro intraday direction usually changes because of news, open or close of markets (Japan, London, US, etc), important externalities or when price reach a point where can’t go any further without a fundamental reason and big investors and traders are not willing to take the opposite side until further confirmation.

5. Among these reasons, the only one which is difficult to establish when it’s going to occur is when price reach short term exhaustion areas. That’s why I use Pivot Points as visual aids to determine macro direction.

jjrvat

 

[mktman]

is the 240WMA used on a daily chart timeframe?
Thanks for sharing this simple system

 

[jjrvat]

Mistake #1

The purpose of this post is not to overanalyze mistakes or bad trades. While mistakes can be reduced a lot with experience (not all because we are human beings, no matter what we do we will always have some “stupid” trades), bad trades will always be part of the cost of doing business. WE CAN’T TAME the market however we can always aim to reduce risk.

Today Yen Futures (6JH8)

1. Yen opened above Pivot and keep going up during Tokyo giving 2 clear longs of more than 20 ticks.

2. +/- 8:46:22 (GMT+1) price make a new low that was higher than the previous

3. +/- 8:54:38 price make a new higher high.
4. Macro direction is perfect. Price above 240 WMA and slope going up and price above R1.

5. +/- 9:06:32 makes again a higher low and 9:14:18 a Higher High

6. I decide to go long in the next wave

7. With everything aligned +/ - 9:19. I pull the trigger at 9429. A Close above Hull plus a close above R1 … a theoretical perfect entry…

Is this a mistake or a bad trade (market didn’t respect price analysis) ?

I’ll continue in the next post

jjrvat

PS: mktman, 240 WMA in a daily chart will be far away from the action. For volatile stocks try max a 50 WMA

 

[jjrvat]

I can find many excuses for why this trade failed:

1. Price hit next Pivot R1.5 twice plus and it couldn’t break it and already retrace to R1
2. By mistake I used a chart template without middle pivots (I use this when pivot are very close together)
3. Big guys running stops at the pivot
4. Bad luck,
5. Etc, etc, etc, I can continue forever but its worthless

This is not bad trade but a mistake not because of the previous reasons but because I was overconfident and I didn’t respect 2 basic principles:

1. The previous low (+/- 9:06:32) was at 4927. The last 3 bars before I pulled the trigger ALREADY broke this point (4925, 4925 and 4922) but because the R1 was there I decided to “oversee” this fact and instead of trading price I traded pivot points !!!.

2. I neither respected macro direction analysis where direction may change: London opening coinciding with price reaching pivot point…

3. It was so clearly wrong, that my natural stop (the previous low) was above the current price!!! (nevertheless I stubbornly place the trade) … At least I minimized the error closing the trade when price closed below Hull again at 9424 with a loss of 5 pips in 2 contracts ….

Sometimes is better to miss the train because of few pips than getting run by it.

jjrvat

 

[TheRumpledOne]

Quote from maninjapan:

Interesting to see how different people are approaching this. I have been using a 3 bar approach myself.
I have also been following another thread, AHG, which I also reccomend you read guys. Its a slightly longer term approach, but with suprisingly similar rules.


TRO, once you get a candle crossing the MA, how far below/above do you set your limit? and do you need the candle to close or do you consider it crossed even while its still active?

Since I am a scalper, as soon as the price crosses the MA, I am in. I am out as soon as the price stalls... I leave a lot on the table, in fact I just took 3 pips and left 8.