ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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Attached is the yesterday's 15 RTH chart. Here, the continuation RSI bar can be readily seen. This pattern is also visible a couple of days ago on the daily chart. Notice on this chart, that there was no divergence on the RSI with the first short grail, thus making it weaker by definition. We WERE still near the top there however. That's what grails and divergences are--they are showing you places where the current trend is weakening and where a reversal may occur. This is why you will get stopped out less with tis method. 
Attached is the 60 minute continuous ES chart from yesterday showing the bearish divergence. The technicals simply show the area of next least resistance. That is why I believe technicals work. News stories? They generally move the market in the path of the next least resistance. Do we need news stories or care about them? No.
Note: the continuous chart has a much different look to it than the RTH chart. I have come to believe that the RTH chart is more reliable, but both can be traded. For example , we have not had bearish 60 minute divergence on the RTH, but we certainly saw short grails prior to yesterday's closing on the 15. If you were just trading the RTH, you would have stayed short for the night session and if you had a profit target , would have utilized the night session to take profits.
Note: the continuous chart has a much different look to it than the RTH chart. I have come to believe that the RTH chart is more reliable, but both can be traded. For example , we have not had bearish 60 minute divergence on the RTH, but we certainly saw short grails prior to yesterday's closing on the 15. If you were just trading the RTH, you would have stayed short for the night session and if you had a profit target , would have utilized the night session to take profits.
By the way, do you remember a few pages ago where I was long and I had the stop still below the 1368 reaction low? I discussed it being a large stop, but also defined my reasons for having the stop there and that reversal signals would more likley come before the stop was taken out. Did we get stopped out?-- No. This is why I like to keep my stops outside the reaction highs/lows and have them outside the "noise"
At this time, I believe that I have shown all of the parts of a good system to you, the readers. This has of course been with Romik's and other's help. The idea behind the journal was to demonstrate in the beginning, the frantic mind of a daytrader and gradually move the trading to longer frames with less activity and more calm thoughts. All the while, I have been introducing the signals and the stop placement along the way with possible exit strategies that could be used. The final step was to show the continuation RSI pattern that can be used to reinitiate a trade or add to a trade. An emphasis was not placed on volume, news or fundamentals. This was done purposely as they can disregarded in an effort to keep things simpler and have you evaluating more markets. I will still be here posting in this journal, but I feel it important to mention that the tools that I use have all been provided. You have what you need, inside this journal, to be successful. Good trading to all of you and I hope this has helped someone--You are the one that makes your own decisions--you are your own guru--I am my own guru. If the ideas presented here are not for you don't trade with them in mind. If you want to tweak--fine. As with any idea, it is up to you and you only to define your risk and manage your own money so that you don't blow up. I say always be conservative and don't risk more than 2 percent of total liquid net worth on any one trade/idea. If that means you don't trade--then don't trade! Again , good trading to all of you.
The idea behind the journal was to demonstrate in the beginning, the frantic mind of a daytrader and gradually move the trading to longer frames with less activity and more calm thoughts. All the while, I have been introducing the signals and the stop placement along the way with possible exit strategies that could be used. The final step was to show the continuation RSI pattern that can be used to reinitiate a trade or add to a trade. An emphasis was not placed on volume, news or fundamentals. This was done purposely as they can disregarded in an effort to keep things simpler and have you evaluating more markets. I will still be here posting in this journal, but I feel it important to mention that the tools that I use have all been provided. You have what you need, inside this journal, to be successful. Good trading to all of you and I hope this has helped someone--You are the one that makes your own decisions--you are your own guru--I am my own guru. If the ideas presented here are not for you don't trade with them in mind. If you want to tweak--fine. As with any idea, it is up to you and you only to define your risk and manage your own money so that you don't blow up. I say always be conservative and don't risk more than 2 percent of total liquid net worth on any one trade/idea. If that means you don't trade--then don't trade! Again , good trading to all of you. - Status