Daytrading Breakouts in the ES

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Quote from dbphoenix:



I agree. Even though I trade by price, you've come up with some very clever tweaks. Readers should do well with this if they can get past missing those cataclysmic events for which Bollinger Bands are often not much help.

You also made a point which I hope will not be missed, that if one is trying for more profits, he should trade more contracts, not look to make more trades. It's the looking for more trades that usually trips us up.
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Exactly right! By learning to check your ego at the door when trading, you can start to make decent money. My method means that you will NEVER catch the huge move because you've already exited. If you have a psychological problem with leaving $800 on the table when you only took $200 then go and take a cold shower. Forget about it - ignore it. The guy that caught all $1000 probably lost $2000 amongst the shit the prior week while you were taking your boring little $200 winners. Once you start getting the knack of consistent small(ish) winners, go to 2 contracts, then 3. But whatever you do, don't start trying to be a hero catching the big moves, & trading all day long etc. - it ain't worth it! It's a cliche I know but you must exercise great patience and discipline. This is a simple trading method but to make it work you have to have these qualities. BTW there will come a time when these markets change and pullback trading will become necessary ...but that's another thread :)
 
Quote from luxor:

Excellent work Rotten johnny. But can someone explain what exactly is a reaction high/low or pivot high/low and how it looks on a chart?

thanks,
lux
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Page one second post! Then scroll through the next pages looking at my screenshot attachments.
 
Quote from version77:



Johnny, do you ever use the high of the breakout bar as a stop?...
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You're talking about a short trade I assume. When I see the place where I need to sell short, I will enter that price (a sell stop-limit order 1 tick under the pivot low ..see page 1 second post). I have my NinjaTrader program set up to automatically fire off a bracket order the second I am filled. The target price is 4 points lower than the entry price and the initial stop is 4 points above it.

Having done that, I will nearly immediately look to lower the stop-loss order (using "Tighten Stop" in NinjaTrader). I will NOT put the stop-loss above the breakout bar until that bar has closed. Instead, I will move my stop-loss either behind the most recent trend bar down, a little pivot, or just a fixed $$ amount away (keeping it at $200 or maybe down to $150). I want to see if the breakout bar is a trend-bar down before I decide what to do (see page one rules). If the breakout bar does CLOSE as a trend bar down, then I will immediately tighten my stop-loss to one tick above it.

Anybody who wants to see my settings in NinjaTrader - I can send you some screenshots. Go and get that program and play around with it this weekend.

In sum, I don't know until the bar closes! Does that answer your Q?
 
JR,

You state in your rules that the breakout cannot be coming off an interday High or Low.

As this is more likely to occur in the first time period from 9:40 to 11:30est, can you add any conditions to this rule? For example yesterday 6/12 in the ES, the interday low was made around 10:20est then went straight up to b/o at 11:25est.

My question is do you have to ignore all breakouts that reverse off an interday high or low, or are there conditions that would allow you to take the reverse b/o?

Also I know you quit for the day after a winner, do you also quit if your first trade is a loser?

Thanks.

PS: It's nice to have 5 mins. to set up your trade. Used to trade off a 1min chart, made things hectic to say the least.
 
Quote from Johnny Rotten:


Anybody who wants to see my settings in NinjaTrader - I can send you some screenshots.
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I would greatly appreciate that. Especially am I interested in your settings of "the ratio trigger."
 
Quote from Johnny Rotten:

My method means that you will NEVER catch the huge move because you've already exited.
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I wouldn't go that far, unless one takes an automatic exit. Simply moving the stop behind the last reaction level on a trend day will catch much or most of the move. There will be times, however, when the band is broken and price just takes off without any retracement bar. Tough luck, unless one makes a cowboy trade.

All that aside, you've offered something that works (because it's based on market principles rather than fantasies) and that is understandable even to beginners. That puts you well ahead of the mass of pretenders here who jealously guard their "secret" strategies (pitiful). Hats off to you.
 
Quote from bdeanfl:

JR,

You state in your rules that the breakout cannot be coming off an interday High or Low.

As this is more likely to occur in the first time period from 9:40 to 11:30est, can you add any conditions to this rule? For example yesterday 6/12 in the ES, the interday low was made around 10:20est then went straight up to b/o at 11:25est.

My question is do you have to ignore all breakouts that reverse off an interday high or low, or are there conditions that would allow you to take the reverse b/o?

Also I know you quit for the day after a winner, do you also quit if your first trade is a loser?

Thanks.

PS: It's nice to have 5 mins. to set up your trade. Used to trade off a 1min chart, made things hectic to say the least.
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See attached. You are talking about buying above the horizontal line I assume? I would not have taken this trade for the reasons outlined in my post on Page 17. But my reasons have nothing to do with coming off Intraday lows (I think you meant to say Intraday since "Interday" refers to the daily chart). But I see what you'e getting at, and a point of clarification is required for this rule:

CLARIFICATION ABOUT NOT BUYING WHEN COMING OFF INTRADAY LOW (See page one):

When the pivot high is the Intraday high, and the susequent pullback goes to new intraday lows: do NOT buy above the pivot high. But if we get another new pivot high AFTER new lowe were made, it is fine to trade it.

CLARIFICATION ABOUT NOT SELLING WHEN COMING OFF INTRADAY HIGH:

Don't sell under a pivot low if the subsequent pullback goes to new intraday highs. Otherwise it's fine to sell any pivot low!
 
How many of you today (June 13) at about 09:40 EST had orders to buy above the pivot high made on the first bar in the ES?

If you did, then you ain't been paying attention! We had a situation where the market was coming off of an intraday low AND an outside bar was mixed into the equation. Re-read my last 2-4 posts for more detail if you don't know what I'm talking about. You can't "ignore" the rules, just because I sometimes do :p

Oh, and to top it off, at about 09:40 the ESTX50 Moving Average line took a down turn. Anyway still not tracking the two Eurex symbols needs to get themselves sorted!
 
Quote from dbphoenix:



I wouldn't go that far, unless one takes an automatic exit. Simply moving the stop behind the last reaction level on a trend day will catch much or most of the move. There will be times, however, when the band is broken and price just takes off without any retracement bar. Tough luck, unless one makes a cowboy trade.
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I actually think that you can aim for more than $200 profit but ONLY if you trade multiple contracts. I think that a single lot trader should be very happy with $200! But if you've traded a 2-lot, then you could cash one in at $200 like normal, pull your stop to BE on the second and let it run. There are endless money management possibilities once you get into multiple contracts. Using the AutoScale feature in Ninfjatrader is a great tool for managing multiple contracts.

But for the sake of simplicity and to not get ahead of oneself - it's best to focus on just the entry/exit method for now. The people who figure this stuff out on a 1-lot consistently will likely have no difficulty 'scaling up'. Well, so long as they don't start thinking they are God, and remember what made them successful as a 1-lot trader! :)
 
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