Yes, I'd be willing to place the stop at exactly the hod. Once in a while I even have to place it a tick below the hod because of slippage between the SP and ES markets. This is rule of thumb stuff. Exact precision isn't necessary to figure out entries. It's the idea of limiting risk to some amount of current expected volatilty that's important. You could use a fixed 3 point stop and say I'll only take trades that are within 3 points of the high. Your reward would change but your risk would stay the same every trade. Who knows? Maybe a better method for figuring stop loss amounts will come up tomorrow. ES is only used for entry/exit placement. Nothing else.
Emini divergence journal
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Yes, I'd be willing to place the stop at exactly the hod. Once in a while I even have to place it a tick below the hod because of slippage between the SP and ES markets. This is rule of thumb stuff. Exact precision isn't necessary to figure out entries. It's the idea of limiting risk to some amount of current expected volatilty that's important. You could use a fixed 3 point stop and say I'll only take trades that are within 3 points of the high. Your reward would change but your risk would stay the same every trade. Who knows? Maybe a better method for figuring stop loss amounts will come up tomorrow. ES is only used for entry/exit placement. Nothing else.
Revised sheet based on rules clarifications covered by no pm this morning. Now with new rounding magic 
I'll pretty it up to improve the flow after taking it for a spin, but wanted any feedback or suggestions before going off "half cocked".
Feel free to PM me with any comments, so as not to clutter the thread.
I can also add risk management/trade sizing quite easily.
Mark
I'll pretty it up to improve the flow after taking it for a spin, but wanted any feedback or suggestions before going off "half cocked".
Feel free to PM me with any comments, so as not to clutter the thread.
I can also add risk management/trade sizing quite easily.
Mark
1. It's not void. It's just paused because the risk is too high relative to the expected reward. You could use a limit order to get in if the market comes back within the stop loss area. In this case a buy limit order at 984.00. If the trade doesn't make it back, and the SP touches the opposite keltner band, then the trade would be void.
2. It's the amount of the stop for each setup added to the low or subtracted from the high, not a fixed number.
The idea of placing stops outside the HOD or LOD is more than a bit dated since everyone is aware of it. If you're trading an instrument that is vulnerable to stop-gunning, then the stop is going to have to be placed well out of reach, and that may be well beyond your comfort level.
Which is one reason why I believe that entries are more important than many other people do. If the entry is good, the stop loss is practically immaterial since the trade will generally move fairly quickly (granted there hasn't been much of that lately, but it's August).
But loss limits are required, and one way of determining the "best" number is to look at how much price will retreat from the entry on successful trades and failed trades within the context of what one is willing to accept before emotional responses are triggered. That might very well turn out to be three points, but it could be something slightly more or slightly less. You'd have to look at a large enough sample of trades in order to find a number that would represent the best compromise.
I have ADX crossing above 30 now. I also show divergence between price and the oscillator. All I need is a new high above 989.50 to start the wait for the trigger.
A new high with divergence indicates momentum is left in the trend.The ADX above 30 tells me the trend is getting old. The divergence tells me the big money players are done supporting the trend. The new high is used to reduce the risk at time of entry. I've tried doing entries with divergence and ADX only and got stopped out by momentum left in a trend. This is my attempt to make sure the last bit of momentum is out of the trend before entering. If the divergence were wiped out with a new high then yes the trade would be voided. When the market trends more in say Sep., you'll see the value of this setup requirement.
Ok, now we've got ADX above 30, a new high bar, and divergence. I show divergence starting at 1025. If the divergence holds then after the next down bar I'll be going short.
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