ES Gap Fill Daily Journal July 2010
- Thread starter vieiradan
- Start date
Had a massive computer crash today, ended up making the trade from my iphone using iTWS's version of book trader.
It was a very small gap, data was supportive and the market moved into the size I can trade right at the open. Stop was 6 points, 2 contracts.
A few notes on iTWS, you can't see when the market is opening (no bell) so I went off my cellphone time. I knew this would be inaccurate so I waited for the time to change to 9:30 on my cell and the bid/ask size to increase.
Book trader is pretty solid for a DOM function on a phone. However, there is one drawback, you can't scroll up and down in the market (you get about 5 points total). I quickly set my target, and then was unable to set my stop. In order to set my stop I would have to wait for the market to move within that range that it showed on the price ladder. If that makes sense.
RE: the crash. I noticed about 7am, my old video card had caused a device conflict (ATI Radeon 4850 dual head, the new card is the FirePro MV2450 quad head). Screen was totally locked up. I shut down, pulled the old card (not in use). Restarted and then ran check disk file integrity, low level and bad sector scan. I always do this after a crash.
I am looking at getting another PC soon. Will probably use this solely for order entry and DOM's
It was a very small gap, data was supportive and the market moved into the size I can trade right at the open. Stop was 6 points, 2 contracts.
A few notes on iTWS, you can't see when the market is opening (no bell) so I went off my cellphone time. I knew this would be inaccurate so I waited for the time to change to 9:30 on my cell and the bid/ask size to increase.
Book trader is pretty solid for a DOM function on a phone. However, there is one drawback, you can't scroll up and down in the market (you get about 5 points total). I quickly set my target, and then was unable to set my stop. In order to set my stop I would have to wait for the market to move within that range that it showed on the price ladder. If that makes sense.
RE: the crash. I noticed about 7am, my old video card had caused a device conflict (ATI Radeon 4850 dual head, the new card is the FirePro MV2450 quad head). Screen was totally locked up. I shut down, pulled the old card (not in use). Restarted and then ran check disk file integrity, low level and bad sector scan. I always do this after a crash.
I am looking at getting another PC soon. Will probably use this solely for order entry and DOM's
Data qualifies for today and is supportive of a gap fill (trade is 1086.25). No more news, should open around this area. I will take this with 2 contracts and a 5.5 pt stop. I would prefer a larger stop and may straddle this trade if it goes against. (move stop on half to 4.5 pts and 6.5 on other half).
Two anecdotal downsides. Above R2 and this gap is greater then 50% of 5 day ATR.
Two anecdotal downsides. Above R2 and this gap is greater then 50% of 5 day ATR.
TY. I used to trade a gap fill system that traded overnight gaps that I developed over time. It was profitable, though it required constant overnight attention to get best fill and multiple scaling overnight.
In short, it was too time intensive and I was unable to stay awake for the NY session after 12 hours glued to globex. Badly messed up my sleep pattern also as I found I was napping around 11:30EST to 1:30EST. Then after the NY close sleeping from 5PM to 9PM. Rough schedule, did it for a quarter and said to hell with that.
Beautiful up gap overnight, eroded. Market is light, and what passes for "too obvious" during heavily traded months, is working as a setup. In terms of "simple" technicals, we are very technically sound. Past month or so ES intraday Fibonacci's have been very tradeable. So have MA's, pivots and other confluence areas. By this I mean getting a bounce off 5m/233tk setups enough to get a first target hit of 1pt or so. Traders 101. Same stuff ya see from post Thanksgiving to the New Year, imho.
Traded this down gap today with 4 contracts and a 5.25 pt stop. Traded my tgt 3 times, never went the extra tick to fill me.
10am reversal gave it a good bounce, I would like to have retained part of the position for the NYSE close, however was not my original plan.
That's another indicator of a light market. The 3:45 reversal has been on space shuttle time. The 10am has been good. 8 mins prior to any news event has seen an obvious slowdown or slow drift.
The summer is here, just a bit late.
In short, it was too time intensive and I was unable to stay awake for the NY session after 12 hours glued to globex. Badly messed up my sleep pattern also as I found I was napping around 11:30EST to 1:30EST. Then after the NY close sleeping from 5PM to 9PM. Rough schedule, did it for a quarter and said to hell with that.
Beautiful up gap overnight, eroded. Market is light, and what passes for "too obvious" during heavily traded months, is working as a setup. In terms of "simple" technicals, we are very technically sound. Past month or so ES intraday Fibonacci's have been very tradeable. So have MA's, pivots and other confluence areas. By this I mean getting a bounce off 5m/233tk setups enough to get a first target hit of 1pt or so. Traders 101. Same stuff ya see from post Thanksgiving to the New Year, imho.
Traded this down gap today with 4 contracts and a 5.25 pt stop. Traded my tgt 3 times, never went the extra tick to fill me.
10am reversal gave it a good bounce, I would like to have retained part of the position for the NYSE close, however was not my original plan.
That's another indicator of a light market. The 3:45 reversal has been on space shuttle time. The 10am has been good. 8 mins prior to any news event has seen an obvious slowdown or slow drift.
The summer is here, just a bit late.
You don't have to be up all night, that is the beauty of it. I am not sure what timezone you are in, but the huge upgap was already present at 9 pm Eastern, so all you had to do is go short with a target limit order close to the gap. Everything else was automatic, while you were sleeping. 
Another way to get ready for a possible 2nd gap is that you just put a limit order somewhere where you think the market might trade up overnight. The close was around 1091, so a short limit order around let's say 1096 would have been good expecting an at least 5 pts upgap. Now it isn't guaranteed that your limit order gets filled (there might be no upgap or it is only 4 points) but the whole point is that you don't have to sit there and wait it out, you just go to sleep and see what you have fished by the next morning.
A 3rd way is that you go immediately short at the close. If there is an upgap, you are pretty much guaranteed that eventually there will be no loss, because the market will return to this price. So you can average into the position if it goes up. But if it goes down overnight, you are already short from the close, thus profit....
Another way to get ready for a possible 2nd gap is that you just put a limit order somewhere where you think the market might trade up overnight. The close was around 1091, so a short limit order around let's say 1096 would have been good expecting an at least 5 pts upgap. Now it isn't guaranteed that your limit order gets filled (there might be no upgap or it is only 4 points) but the whole point is that you don't have to sit there and wait it out, you just go to sleep and see what you have fished by the next morning.
A 3rd way is that you go immediately short at the close. If there is an upgap, you are pretty much guaranteed that eventually there will be no loss, because the market will return to this price. So you can average into the position if it goes up. But if it goes down overnight, you are already short from the close, thus profit....
Thanks for the the trades setups. I'll have to think more about them and may have some questions for you in the future. I am (admittedly) not a good ES trader, though I have done better during the overnight session. I find the many headfakes and full retracements in the ES have taken me out of positions. I have been short several times on setups from 1207 and down, with intentions of building a short position, that have held for a session or two only to be taken out and then continue in my suspected direction.
Took a short yesterday, small but wanted to hold half of it for a swing. See if this was the top of the range. However took top tick of the day on my stop. Sweeet!. Also had a limit out on the EUR to sell 2780, no fill, missed me by a two ticks. No worries on EUR though, will be attacking it tonight.
We have a 50/200 cross on the ES, which is bearish to me. The 200sma has been a great indicator of which side of the market to be one, and adding that 50 cross below it is an even more solid confirmation. We are still in a rangebound market until proven otherwise though, imho.
The Chinese GDP number set us up for a nice fat gap fill, but like the night before and many others it got wiped out in a few hours. The data on down gaps below 88 or so is not so hot.
Will post my trade tomorrow if I take one.
Took a short yesterday, small but wanted to hold half of it for a swing. See if this was the top of the range. However took top tick of the day on my stop. Sweeet!. Also had a limit out on the EUR to sell 2780, no fill, missed me by a two ticks. No worries on EUR though, will be attacking it tonight.
We have a 50/200 cross on the ES, which is bearish to me. The 200sma has been a great indicator of which side of the market to be one, and adding that 50 cross below it is an even more solid confirmation. We are still in a rangebound market until proven otherwise though, imho.
The Chinese GDP number set us up for a nice fat gap fill, but like the night before and many others it got wiped out in a few hours. The data on down gaps below 88 or so is not so hot.
Will post my trade tomorrow if I take one.
With the Chinese GDP upgap, we had a repeat of the night before, Upgap of 7 pts then gapfill by the early morning. The 2nd gap rule is good for at least 3 days from the original 1st gap, with a note that more days are between the 2 gaps, the less probability of the gapfill, although still above 50%...