Day-Trading 2.0 for small traders
- Thread starter jjrvat
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I think that's really depends on how fast your chart is. I actually use a combination of an 0.1 range chart with 144 WMA and 1min chart with 240 WMA. This is because range bars tend to last anyway from 3 to 10 minutes therefore a 144 WMA is more suitable with them. I trade the SPY BTW.
If i see price making a new low (LL) and waves failing to make it (HL), I usually don't take the next trade as for this is a good sign of a Double top or Double Bottom which is a very good sign of reversal (espcially in the ES). The example you brought of the NQ is very good as you can see that the price made a Double Bottom and then reversed to the upside.
Jjrvat,
How do you determine what moving average to use along with the 240WMA? I trade the NQ and look at either the 110 Tick or 30 Tick chart. The 6 WMA seems to crowd the bars too much and is extremely sensitive (whipsaws) especially on the 30 Tick chart. Do you have any suggestions on what moving average to use to replace the 6WMA? I don't like the idea of large stops so I'm a little leary about using a 55 WMA. Thanks for your help.
Floyd
How do you determine what moving average to use along with the 240WMA? I trade the NQ and look at either the 110 Tick or 30 Tick chart. The 6 WMA seems to crowd the bars too much and is extremely sensitive (whipsaws) especially on the 30 Tick chart. Do you have any suggestions on what moving average to use to replace the 6WMA? I don't like the idea of large stops so I'm a little leary about using a 55 WMA. Thanks for your help.
Floyd
Quote from jjrvat:
Ironfist NQ example
This is a good example on the implications of price analysis, indicators and perspective in a simple trading system. I will only focus on the factors that are relevant to this threadâ¦
The original system
âThe only indicator I'm using is a 60EMA. Go long when the price goes above it, go short when the price goes below it.â IronFist
A PBP example based on this trigger
Timeframe
1. 500 Volume Bars. The original post was 1 min chart but for obvious reasons, volume charts will reduce a lot of whipsaws when trading a moving average as a trigger.
Direction Indicators (Macro direction):
1. 240 WMA: As a visual aid for macro direction. Price and slope above/ below
2. Daily Pivot Points: To visualize if the market is going to keep moving in one direction or its going to change and also for potential profit/stop targets
Price Analysis Indicators (Wave analysis and current direction):
1. PRICE: For wave analysis. Blue/Brown dots indicates if price made highs or lows in the last 5 bars
Indicators for triggers, exits and failures (Timing)
1. A 55 WMA: Go long when the slope goes up; go short when the slope goes down. I did that to further reduce unnecessary whipsaws. For the sake of the analysis bars are colored according to this condition.
Summary yesterday US MORNING
Blue arrows: 3 perfect entries all winners = Macro direction ok (red 240 WMA slope) and Wave analysis OK (HH/LL)
1st Trade: Max profit range 66 ticks / Drawdown to the max profit range 1 tick / max time in the market +/- 24 mins
2nd Trade: Max profit range 10 ticks / Drawdown to the max profit range 1 tick / time in the market +/- 2 mins 30 secs
3rd Trade: Max profit range 18 ticks / Drawdown to the max profit range 2 ticks / time in the market +/- 27 mins
Orange arrows = 9 valid potential trades but not according to the trigger. All of them had at least 4 ticks max profit range
Red arrows = Reversals but very advanced trades. Observe the first 2 highlighted circles both at pivot points and how the red bars after the reversal green bar failed to break the pivot and make lower lows and compare with the last highlighted circle (also at the pivot) in which this didnât happen (and therefore the downtrend continued).
I leave you with the chart and Iâll post my comments on it later.
jjrvat
Quote from jjrvat:
Ironfist NQ example
This is a good example on the implications of price analysis, indicators and perspective in a simple trading system. I will only focus on the factors that are relevant to this threadâ¦
The original system
âThe only indicator I'm using is a 60EMA. Go long when the price goes above it, go short when the price goes below it.â IronFist
A PBP example based on this trigger
Timeframe
1. 500 Volume Bars. The original post was 1 min chart but for obvious reasons, volume charts will reduce a lot of whipsaws when trading a moving average as a trigger.
Direction Indicators (Macro direction):
1. 240 WMA: As a visual aid for macro direction. Price and slope above/ below
2. Daily Pivot Points: To visualize if the market is going to keep moving in one direction or its going to change and also for potential profit/stop targets
Price Analysis Indicators (Wave analysis and current direction):
1. PRICE: For wave analysis. Blue/Brown dots indicates if price made highs or lows in the last 5 bars
Indicators for triggers, exits and failures (Timing)
1. A 55 WMA: Go long when the slope goes up; go short when the slope goes down. I did that to further reduce unnecessary whipsaws. For the sake of the analysis bars are colored according to this condition.
Summary yesterday US MORNING
Blue arrows: 3 perfect entries all winners = Macro direction ok (red 240 WMA slope) and Wave analysis OK (HH/LL)
1st Trade: Max profit range 66 ticks / Drawdown to the max profit range 1 tick / max time in the market +/- 24 mins
2nd Trade: Max profit range 10 ticks / Drawdown to the max profit range 1 tick / time in the market +/- 2 mins 30 secs
3rd Trade: Max profit range 18 ticks / Drawdown to the max profit range 2 ticks / time in the market +/- 27 mins
Orange arrows = 9 valid potential trades but not according to the trigger. All of them had at least 4 ticks max profit range
Red arrows = Reversals but very advanced trades. Observe the first 2 highlighted circles both at pivot points and how the red bars after the reversal green bar failed to break the pivot and make lower lows and compare with the last highlighted circle (also at the pivot) in which this didnât happen (and therefore the downtrend continued).
I leave you with the chart and Iâll post my comments on it later.
jjrvat
This is one of the best, if not the best, post on trading I have seen.
The way jjrvat laid out the system is simple yet elegant. It contains all one needs and nothing more.
My hat off to you, jjrvat!!
The NQ chart is priceless.
Price action is key. How many
people stress that? Very few. It is indicator this,
indicator that, but very limited info on price action.
There is so much garbage out there, it is no surprise
that over 90% of traders fail.
I used to subscribe to TTM newsletter. There was one
person who posted a chart showing only price action in
the discussion forum. I thought there would be a lot of feedback. To my surprise, there was hardly any.
Indicators can certainly help, but in my opinion, only after a lot
of screen time and understanding price action first.
Anek's thread and this thread is absolutely the best.
Price action is key. How many
people stress that? Very few. It is indicator this,
indicator that, but very limited info on price action.
There is so much garbage out there, it is no surprise
that over 90% of traders fail.
I used to subscribe to TTM newsletter. There was one
person who posted a chart showing only price action in
the discussion forum. I thought there would be a lot of feedback. To my surprise, there was hardly any.
Indicators can certainly help, but in my opinion, only after a lot
of screen time and understanding price action first.
Anek's thread and this thread is absolutely the best.
jjrvat,
How do you calculate your Pivots? I calculated the PP for the NQ on May 2 as follows:
(H 1985.75 + L 1921.50 + C 1983.25) / 3 = PP 1963.50
In your chart it appears that you arrived at your PP of 1980.50 by using 1971.50 as the previous dayâs low, or are you using another calculation for Pivot Points?
Thanks for the great thread.
Evolution
How do you calculate your Pivots? I calculated the PP for the NQ on May 2 as follows:
(H 1985.75 + L 1921.50 + C 1983.25) / 3 = PP 1963.50
In your chart it appears that you arrived at your PP of 1980.50 by using 1971.50 as the previous dayâs low, or are you using another calculation for Pivot Points?
Thanks for the great thread.
Evolution
Quote from jjrvat:
Ironfist NQ example
This is a good example on the implications of price analysis, indicators and perspective in a simple trading system. I will only focus on the factors that are relevant to this threadâ¦
The original system
âThe only indicator I'm using is a 60EMA. Go long when the price goes above it, go short when the price goes below it.â IronFist
A PBP example based on this trigger
Timeframe
1. 500 Volume Bars. The original post was 1 min chart but for obvious reasons, volume charts will reduce a lot of whipsaws when trading a moving average as a trigger.
Direction Indicators (Macro direction):
1. 240 WMA: As a visual aid for macro direction. Price and slope above/ below
2. Daily Pivot Points: To visualize if the market is going to keep moving in one direction or its going to change and also for potential profit/stop targets
Price Analysis Indicators (Wave analysis and current direction):
1. PRICE: For wave analysis. Blue/Brown dots indicates if price made highs or lows in the last 5 bars
Indicators for triggers, exits and failures (Timing)
1. A 55 WMA: Go long when the slope goes up; go short when the slope goes down. I did that to further reduce unnecessary whipsaws. For the sake of the analysis bars are colored according to this condition.
Summary yesterday US MORNING
Blue arrows: 3 perfect entries all winners = Macro direction ok (red 240 WMA slope) and Wave analysis OK (HH/LL)
1st Trade: Max profit range 66 ticks / Drawdown to the max profit range 1 tick / max time in the market +/- 24 mins
2nd Trade: Max profit range 10 ticks / Drawdown to the max profit range 1 tick / time in the market +/- 2 mins 30 secs
3rd Trade: Max profit range 18 ticks / Drawdown to the max profit range 2 ticks / time in the market +/- 27 mins
Orange arrows = 9 valid potential trades but not according to the trigger. All of them had at least 4 ticks max profit range
Red arrows = Reversals but very advanced trades. Observe the first 2 highlighted circles both at pivot points and how the red bars after the reversal green bar failed to break the pivot and make lower lows and compare with the last highlighted circle (also at the pivot) in which this didnât happen (and therefore the downtrend continued).
I leave you with the chart and Iâll post my comments on it later.
jjrvat
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