ES Journal Archive (2006 - 2008)
- Thread starter Buy1Sell2
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The "rule" as I see it helps determine the length of the intraday swings. On the HSI, moves are often 100, 200, or 300 points (not exactly, mind you). In other words, if you are short, and the current move is getting close to 100 points, tighten your stop. At 100 points there will be increased volume and then some stalling. If the move goes lower, look for it to go another 100 points.
Remember, 300, 500, or even 1000 point intraday swings are not uncommon right now.
Obviously, you cannot simply say, "Oh, It's gone 100 points, or 200 points, so I'll starting short now." If it were, trading would be easy. Of course, it's not. But price WILL tend to slow down and congest, ever so briefly, at those levels, so there is time enough to get into position.
I was one of the critics who thought that the rule of 10 was a bunch of hooey. Looking back, I was too hasty. It has some usefulness, but it is not simply a set it and forget it kind of rule. Just because price often bounces at 10 point (ES), or 100 point (HSI) levels, or even at other levels such as R1 and S1, doesn't mean that one can simply place orders to sell and buy at those levels and then go out golfing (sorry, John).
You cannot build an entirely trading philosophy around a rule of thumb.
The tools that intraday traders use to trade the S&P--gap fills, floor trader pivots--tend to work even better on the HSI
71.5
61.5
what more could you ask for ?
61.5
what more could you ask for ?
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