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Day-Trading 2.0 for small traders
- Thread starter jjrvat
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Thanks for the input.
can you please email or post some more detail.
what kind of profit and stop you use for 1000volume bar on NQ mini or 5000 volume bars on ES.
this looks promising thread.
In one post you said its not a 90% win rate..give us a more practical win rate which you have come accross.
great help if you can post different instruments which you trade with different setting which you found helpfull.
thanks again
can you please email or post some more detail.
what kind of profit and stop you use for 1000volume bar on NQ mini or 5000 volume bars on ES.
this looks promising thread.
In one post you said its not a 90% win rate..give us a more practical win rate which you have come accross.
great help if you can post different instruments which you trade with different setting which you found helpfull.
thanks again
bump...
any body will like to take a shot on this one
any body will like to take a shot on this one
Hi jjrvat,
just found the ET thread and would like to say thanks again and ask the same question again.
Do you think that time & sales could be helpful to spot momentum - or even the change of direction?
Or is this in regards to very fast tick charts not necessary or even disturbing in your opinion?
Could you go over your entry methods again. How do you determine the length of the MA periods you use as an entry/exit trigger and what about price setups.
For me using usual 3-Bar-Reversals are an option to get into a new wave.
But as you said, there are 1001 different methods...
just found the ET thread and would like to say thanks again and ask the same question again.
Do you think that time & sales could be helpful to spot momentum - or even the change of direction?
Or is this in regards to very fast tick charts not necessary or even disturbing in your opinion?
Could you go over your entry methods again. How do you determine the length of the MA periods you use as an entry/exit trigger and what about price setups.
For me using usual 3-Bar-Reversals are an option to get into a new wave.
But as you said, there are 1001 different methods...
Just applied this to my first chart today and just want to make sure Im on the right track. It is a FTSE 100 chart using 100 volume. I plan on scaling down once i get used to reading it on a slightly slower chart first. If I am on the right track then the signals here are long, 240wma up, HH's and HL's. but would want to show some caution as it is getting up to R1. It did actually die out at R1. Need to wait for new HHs and HLs and a break above R1 before looking for new longs.
Any comments appreciated.
Any comments appreciated.
billdobson1972, timokrates,
Youâre welcome
Entries, Exists and consistency
There is a strong interrelation between entries, exits and consistency and once again the order of analysis will be decisive for a good or bad trade. If you are not consistent with price analysis, you can have a perfect automatic algorithm as an entry and exit and you still will lose money sooner rather than later. Moreover, and probably more important, if you entries and exists are not consistent with your trading plan (i.e instrument, timeframe, time, risk and capital) you are doom in the long run.
What are the implications (in terms of entries and exists) of trading 1000 volume NQ chart or a 8 tick ER2? What is the difference between a 90% win rate in a BP 10 constant range bar and a 60% win rate in a daily JNJ (Johnson & Johnson) chart? ⦠Is a 3 Bar reversal entry consistent with a 12500 ZN volume chart or is a valid exist for a daily QM chart when the entry was made based on the weekly charts, and therefore you believe is consistent with your trading plan? ... If you donât know the answer for these questions (for the instruments you are trading of course) I would suggest that you seriously consider having a break from your trading platform and think about the implication of your trading plan.
My point is that if a small trader has a consistent trading plan based on price analysis, timing for entries and exits will follow naturally. I am not implying that pulling the trigger is easy, of course it requires a lot of effort and screen time but in order for a small trader to be successful he/she should find their own strategy for entries and exits.
In any case, Iâll try to organize some ideas that helped me to develop my entries and exits; maybe you can find them useful and helpful to develop your own strategy⦠Iâll post them later.
billdobson1972, Iâll try to address you questions in the next posts.
Timokrates, Iâll try to address your other questions in the next posts
Do you think that time & sales could be helpful to spot momentum - or even the change of direction? Or is this in regards to very fast tick charts not necessary or even disturbing in your opinion?
NO. I donât use time & sales so I cant give you any constructive comments. When scalping I find that price analysis is enough for spotting momentum and change of direction.
jjrvat
Youâre welcome
Entries, Exists and consistency
There is a strong interrelation between entries, exits and consistency and once again the order of analysis will be decisive for a good or bad trade. If you are not consistent with price analysis, you can have a perfect automatic algorithm as an entry and exit and you still will lose money sooner rather than later. Moreover, and probably more important, if you entries and exists are not consistent with your trading plan (i.e instrument, timeframe, time, risk and capital) you are doom in the long run.
What are the implications (in terms of entries and exists) of trading 1000 volume NQ chart or a 8 tick ER2? What is the difference between a 90% win rate in a BP 10 constant range bar and a 60% win rate in a daily JNJ (Johnson & Johnson) chart? ⦠Is a 3 Bar reversal entry consistent with a 12500 ZN volume chart or is a valid exist for a daily QM chart when the entry was made based on the weekly charts, and therefore you believe is consistent with your trading plan? ... If you donât know the answer for these questions (for the instruments you are trading of course) I would suggest that you seriously consider having a break from your trading platform and think about the implication of your trading plan.
My point is that if a small trader has a consistent trading plan based on price analysis, timing for entries and exits will follow naturally. I am not implying that pulling the trigger is easy, of course it requires a lot of effort and screen time but in order for a small trader to be successful he/she should find their own strategy for entries and exits.
In any case, Iâll try to organize some ideas that helped me to develop my entries and exits; maybe you can find them useful and helpful to develop your own strategy⦠Iâll post them later.
billdobson1972, Iâll try to address you questions in the next posts.
Timokrates, Iâll try to address your other questions in the next posts
Do you think that time & sales could be helpful to spot momentum - or even the change of direction? Or is this in regards to very fast tick charts not necessary or even disturbing in your opinion?
NO. I donât use time & sales so I cant give you any constructive comments. When scalping I find that price analysis is enough for spotting momentum and change of direction.
jjrvat
Maninjapan,
Excellent and very nice chart!!! And also is a great tip for small traders starting with price analysis: USE slower chart first and in calm waters, not only they are clearer but they develop discipline and patience. Your chart is a textbook example of consistent price analysis.
Your fast MA track waves almost perfectly, however you may have some troubles with timing (if you are trading change of slope in the fast MA) when the height between waves is shorter (it may happen often with 100 volume charts in FTSE 100) or during fast times. Tip: Use H lines that are consistent with your targets and stops and observe them in relation with candles, you can develop an incredible timing edge if you use them properly.
jjrvat
Excellent and very nice chart!!! And also is a great tip for small traders starting with price analysis: USE slower chart first and in calm waters, not only they are clearer but they develop discipline and patience. Your chart is a textbook example of consistent price analysis.
Your fast MA track waves almost perfectly, however you may have some troubles with timing (if you are trading change of slope in the fast MA) when the height between waves is shorter (it may happen often with 100 volume charts in FTSE 100) or during fast times. Tip: Use H lines that are consistent with your targets and stops and observe them in relation with candles, you can develop an incredible timing edge if you use them properly.
jjrvat
thanks for the comments on the chart. I just took that asth efirst half hour of FTSE today, not particularly because it looked to be a perfect example. Just to check that we are talking about the same thing here. Higher volatility results in bigger wave length is what you mean ,yes? Ive been watching FTSE for the past couple of months (I live in Japan) and while it often moves in one direction quite nicely, wave size is often quite small.
200 volume FTSE Chart. This one came from towards the end of yesterday, another good example of long signals I think. 3 or 4 waves there before it topped out with a lower low followed by a lower high. the waves may again be a bit shallow though.
jjrvat, what are H lines that you
jjrvat, what are H lines that you
Entries, Exists and consistency #2
The idea of having a price based approach is not to maximize profits but to minimize risk and reduce the probabilities of bad trades. Therefore not only price analysis has to be consistent with these goals (in fact by default it is) but also entries and exits (including stops) should aim to achieving these same objectives.
Lets assume that price analysis is clear (macro direction and wave analysis HH,HL,LL,LH). Now in order to establish consistent entries and exits a small trader should build upon some logic and general parameters that already given by price:
1. The natural stop and the limit for entries
The first two clear conditions are given before even you place a trade. In the chart, point A (+/-19:00) and B show Higher Highs (+/-19:25), point 1 (+/-19:10) is the last low (btw is also higher low but for the sake of the explanationâ¦)
As soon as point B is plot (you can clearly see this point seconds after when the fast MA change slope to RED, you already know that you are going to go long in the next wave up. The only condition not to go long in the next wave is if price break last low (horizontal blue line at 1705.25 on the chart). Thus, this point becomes the limit for entries that at least allow us to set the maximum condition for placing a trade.
Nonetheless, this point (1705.25) is also the natural stop. The next few minutes after the last high point B (+/-19:25) until the next wave is formed (the one you are going to trade) is the zone where you are going to pull the trigger. Despite of the trigger you use (a cross above 100 CCI, a stoch, MACD cross, candlestick analysis, etc, etc) you natural stop HAS TO BE at least placed at 1705.00 (one tick below the last low), because evidently if your stop is hit at that level you know that you are going against price analysis.
2. The obvious entry, the common sense exit and the first warning stop
You already know too that your fast MA is tracking almost flawlessly price (i.e. waves), therefore and in order to be consistent with what you are using in your chart you can build upon this information. Thus, the obvious entry signal will be of course a close above the Fast MA (+/- 19:32 at 1718.75). This is a good valid entry and itâs consistent with price analysis, plus it reduces drawdowns. Of course this is just the first step developing your own entry strategy.
Using common sense you can use the reason for your entry as reason for your exit (btw ⦠this is not necessarily valid when scalping!!! but this chart is a 1000 volume) so at +/- 19:38 at 1722.75 you have a close below the MA and you take your 4 full points profitâ¦
Moreover if only a couple of bars after your entry you have a close below the MA you can either take it as a warning signal or close the trade BE or with a small loss, if it just a whipsaw you are only one commission away to pull the trigger again, if not you have save a potential big lost⦠Thus, minimizing risk and reducing the probabilities of a bad trade. You can follow the rest of the chart, the next entries "scarily" validate this analysis.
These are only the foundation for consistent entries and exits; Iâll try to round it up in the next posts introducing the other variables (timeframe, time and risk)
jjrvat
PS: I am not trading this afternoon⦠it appears to be one of this random, wild low volume US mornings before the interest rate statement.
The idea of having a price based approach is not to maximize profits but to minimize risk and reduce the probabilities of bad trades. Therefore not only price analysis has to be consistent with these goals (in fact by default it is) but also entries and exits (including stops) should aim to achieving these same objectives.
Lets assume that price analysis is clear (macro direction and wave analysis HH,HL,LL,LH). Now in order to establish consistent entries and exits a small trader should build upon some logic and general parameters that already given by price:
1. The natural stop and the limit for entries
The first two clear conditions are given before even you place a trade. In the chart, point A (+/-19:00) and B show Higher Highs (+/-19:25), point 1 (+/-19:10) is the last low (btw is also higher low but for the sake of the explanationâ¦)
As soon as point B is plot (you can clearly see this point seconds after when the fast MA change slope to RED, you already know that you are going to go long in the next wave up. The only condition not to go long in the next wave is if price break last low (horizontal blue line at 1705.25 on the chart). Thus, this point becomes the limit for entries that at least allow us to set the maximum condition for placing a trade.
Nonetheless, this point (1705.25) is also the natural stop. The next few minutes after the last high point B (+/-19:25) until the next wave is formed (the one you are going to trade) is the zone where you are going to pull the trigger. Despite of the trigger you use (a cross above 100 CCI, a stoch, MACD cross, candlestick analysis, etc, etc) you natural stop HAS TO BE at least placed at 1705.00 (one tick below the last low), because evidently if your stop is hit at that level you know that you are going against price analysis.
2. The obvious entry, the common sense exit and the first warning stop
You already know too that your fast MA is tracking almost flawlessly price (i.e. waves), therefore and in order to be consistent with what you are using in your chart you can build upon this information. Thus, the obvious entry signal will be of course a close above the Fast MA (+/- 19:32 at 1718.75). This is a good valid entry and itâs consistent with price analysis, plus it reduces drawdowns. Of course this is just the first step developing your own entry strategy.
Using common sense you can use the reason for your entry as reason for your exit (btw ⦠this is not necessarily valid when scalping!!! but this chart is a 1000 volume) so at +/- 19:38 at 1722.75 you have a close below the MA and you take your 4 full points profitâ¦
Moreover if only a couple of bars after your entry you have a close below the MA you can either take it as a warning signal or close the trade BE or with a small loss, if it just a whipsaw you are only one commission away to pull the trigger again, if not you have save a potential big lost⦠Thus, minimizing risk and reducing the probabilities of a bad trade. You can follow the rest of the chart, the next entries "scarily" validate this analysis.
These are only the foundation for consistent entries and exits; Iâll try to round it up in the next posts introducing the other variables (timeframe, time and risk)
jjrvat
PS: I am not trading this afternoon⦠it appears to be one of this random, wild low volume US mornings before the interest rate statement.
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