Quote from Champion:
You have provided this definition: "2 pair. This is just a term for DOM activity. You will notice that occasionally the Bbid/Bask jumps from one pair of Bbid/Bask to another and then it jumps back to the original pair. This small repeated excursion is called a 2 pair." You will see that I'm doing my studying.
To read the sequencing of two pairs and a spike while the market is trading, could you explain what a spike is or does in this context? I want to be able to recognise a spike. This would be very very helpful.
Thanks again.
I drew a sketch of the price as it goes through the end of a 5 min bar marking the end of a trade.
this sequence applies to almost all trades that a person may be doing during the day for exiting a profit making hold.
some examples are:
1. the end of a fast paced tape when the price is perched on the right trend line. This is such a priftable trade that most people simple exit when the second five min bar does not exceed to extreme of the prior bar.
2. Failure to traverse from right to left in a medium or slow pace channel. The Failure to traverse going from right to left is what ends all channels. Some people wait for the channel BO on the right trend line of the channel but doing this is not related to making money. You will have a spike on the failure to traverse 5 min bar.
3. left channel line reversals. For slow paced channels, a person slaloms. That is, they make money on each travese of the slow channel. There is a spike at the left channel line. for medium paced channels the first left to right traverse may not make any money for you because it is lateral usually. hold through this lateral traverse or wash on max value when it reappears. The next few left to right traverse will bear fruit if you reverse, more for each successive left to right traverse. You reverse on the spike on the left channel lins at these times.
4. Right channel line reversals. There will be spikes back into the channel trend direction as a trend continues and when a failure the BO occurs. In ET there are a lot of edge traders and hair trigger traders, this situation is where they exhibit most of this strange behavior they have cultivated. Whenever a channel is performing, the right trend line is where you have a resumption of high money velocity profit making. As the price hits the line it spikes into a resumption of making money.
5. Quality entries from the sidelines.
There is a caveat for lessor skilled people here. It they do not know when and how trends end, they often use the right trend line for some sort of decision making. They are facing a mystery period. I cannot flesh out the bunch of screw ups they usually commit for this situation. Others who are focussed on making money do as suggested above.
Spikes. Spikes end 2 pairs and thus are a marker for hvaing taken a profit and usually beginning a new profit making hold. The 2 pair is the end of the bar that ended to trend. in my sketch the 2 pair is the extreme Bbid/ Bask of 1142.0 and 1142.1. Above that is the "1 back" of the 2 pair. 1142.1 and 1142.2. This illustrates a bar pointing down and ending a short trade and beginning a long trade.
The spike is at value 1142.2 and is the Bbid of the third pair back.
for the sketch I am finishing a short trend and I am watching when to to the deed. (Hit T). I am in a stretch on the "fast money" squeese/stretch monitoring and nalysis chart. THe DOM is translating.
At the arrowhead of the translation arrow I note that the price is dwelling on and trading on the "extreme" pair. When it ends by going "1 back" (I say it aloud if i am mentoring and id I'm lucky I hear it said too). It does not "stick". I say "didn't stick". Then price returns to the "extreme" and dwells. this can happen several times but it stops. See "neutral". I know I am in neutral because of the smart money (INDU/YM04M) is in neutral and the "dwell" is equal on each portion of the 2 pair.
at this point I am ready to lock in profits. But I do not want to be a hair trigger. I sit. I watch. I am looking for three subsequent signals. Each in turn comforts me. As they show up I am not too greedy, just a tad greedy, semi greedy and wealthy anyway. If I am mentoring I am a little more alert because I am a "top gun" type weirdo.
when the dwell on the "1 back" is much more significant than on the extreme, I glance at the Stretch /squeese values to see if they are tending to substantiate the DOM dwell imbalance.
As the dwell on the 1 back steadies and the Bask hits 200 or less with volume over 4,500 (not in DU or VDU), I more or less start scaling. boink. boinck. boink.
On friday I noticed I was running ahead of the market a little too much so there was a possibility of not being in the groove and just being "hot". I tried to control myself by backing off 15 seconds per action. This is like dropping grass flakes while golfing. You take into account the MLR of the leaves and move your feet a 1/4 inch or so and adjust your rear elbow somewhat. We are not talking club changes.
The differences in performance here are whether or not you exit on 1142.1 or on the "spike" value of 1142.2 while using market orders.
From the list above,you see this is a nice tool for making money. I had 54 actions for a recent day. If I pick up a tick on these for a bunch of contracts (think 10), then we are looking at 540 ticks. that is a few bucks.
Okay. by this time it gets fairly clear that any price you get during any trade, is occurring over and over. The process of making money is a slow motion situation. The market moves into the trading area. It does stuff. The hold you have gets less and less favorable. You come to the place where you are not making anymore money for the moment. Simply by doing a reversal (scale it, for example to keep at the head of the line), as the market starts to provide opposite profits again, you remain in the same emotional and trading status. You retain your position on the "right" side of the trade.
For me this is just the same as slipping out of 100,000 shares of a 28 dollar stock during it's peaking day. I have to dump in blocks that are like those on the T&S and also not exceed 10
% of the culmulative volume. 30 trades over four hours. Slow Mo Tion. ES is a market that simply gives me spikes to trade. So I use Stretch/squeese and DOM when the ends of making money shows up. What makes each identical is this: timing and watching only what is important at that time.
It is getting fairly clear that some things are beginning to click around ET. Channels can be trusted. Beliefs can be put in place by honing them with qlink. Watching smart money on INDU/YM04M. Wathcing PRV and picking off acceleration (continuation of trend) and deceleration (watch out) seven times in 5 mins. And, very important 2 pairs leading into spikes.
Out side of these timing concerns, there is the LT channel, the IT channels as they traverse the LT. And the top of R and bottom of S. Then you have thex context down cold and know what each day holds (4 trends usually) and that 3 times the daily H/L is a reasonable goal. (see Ari Kiev tape for the efficacy of having a goal), then you will begin to experience having a partnership with the market. It is a place filled with whatever you summon for the moment and no surprises. It is recognizing continually that the deal on the table is wanting "change" and knowing that all change is there to use to make money. If you understand that the imprimatur of the market is just like milk and Nike, you can operate every moment. "Got Change?" and "just hit T" are how it is.
. no macros required.