ES Trend Following

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Quote from Bombardier:

I don't have a particular goal with regards to trading but to make right decisions. Even if I lose, it is only worth it if it was executed based on the right decisions. The rest will take care of itself. I don't feel the urgent need to trade full-time, because most who dream about it here don't make it in the end. I dreamed the dream once, like many here, but came to my senses early enough as this has lead me nowhere. Only resulted in emotional trading. Therefore, I have no expectations with regards to this. I have been mentored for a full year and I don't find a full-time trader's job that desirable (no insult to any traders out there, just my viewpoint). What I do enjoy with great passion is to talk and write about the markets and share my insights. The social networking tools out there nowadays make it a really fun thing to do.

You can trade shorter time frames, though I am of the impression that the shorter the time frame, the more randomness and ranges will emerge. So I rather stick to my mantra of objectiveness and trade those trends that are really there to stay and not fade within a few minutes time. I wouldn't be able to manage that, I would get severely frustrated, I would perhaps abandon trading altogether if the only way was to day trade. Thankfully, I found what fits me for the time being. Perhaps I am missing out on the large move down now, I may have been able to simply short somewhere during the range, but I will wait for a real opportunity to come.
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I also went through a period from late October to late November finding few opportunities. Took a few small gains and losses and was actually a bit underwater for the month and then "bam!" a huge trade on the last day of the month made my entire month positive. A textbook example of sticking to a plan. Was it a bit frustrating? Yes, but it beats the alternative of trading willy-nilly or looking for set-ups whose dynamics I don't understand as thoroughly as the set-up I trade.
 
You must have participated in the 50-60pt rally on that day, logic_man. There was only one buying opportunity that I might have taken last week. It was very early in the morning when the ES broke above former support at 1180, so I did not recognize it on time (see chart attached). Very unfortunate how major moves happen mostly overnight nowadays. Currently, bulls are still having the upper hand obviously, but there is one area around 1235 that I am watching more closely. It is the 61.8% retracement from the past downmove (lower 4H chart). Assuming that 1263 was really a top, the levels I drew in the upper 1H chart would confirm the area.

If the market can form some sort of basis there and go higher, it should continue in this upmove. A break, on the other hand, can present a shorting opportunity which I might want to take. Now, I'm entering treacherous waters, as I attempt some degree of forecasting and start to use a tool that I have not used frequently in the past. But I witnessed the accuracy of Fibonacci levels time and again when used correctly. We'll have to see if they can be of good assistance.
 

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I really like this thread and the method presented.

The performance report looks great.

I have an automated system on the SPY hourly and it's been all over the place this past month. There have been a few minor tails to harvest but the chop has been taking some of it back.

I wouldn't change your method just because the market is not giving opportunities. I think many of us are seeing that. Nice thing about your method is it doesn't get violated by false signals to the same degree as a simpler trend system which does not recognize the s/r levels.

PS, I'm long, at the moment.

:D
 
bombardier,

based on the chart you provided and entry suggestion on 28th, wouldn't you agree there were couple other pullbacks to the breakout area later on that day 28th and the very beginning on 30th?

also, does your 1H chart cover 18 hours? did i count it correctly? are you covering all 24hrs? please explain. (i am still very new to the futures :) )

thanks,
tihfa
 
tihfa, I don't trade pullbacks. Too much of a gamble if you ask me. I strictly trade what I see, instead of anticipating that some support area would hold. Hence, the retracements you are speaking of are not really an entry opportunity according to my strategy. Unless you meant to trade the strong bounces at support with a stop near the newly created lows. That would be a different entry tactic and should work out well enough, as far as I am concerned. I strictly stick to trading breakouts and breakdowns because those are what I have backtested my strategy with. The charts cover all trading hours, but I haven't really counted the number of bars. To actually spot those support & resistance areas I trade, you have to set the chart to show the entire session (best is 24h around the clock). Futures charts are the best ones to observe, not necessarily the best ones to trade :) I've elaborated on the pitfalls of their excessive leverage in a previous post.
 
Short @ 1240.50, Stop @ 1247.50

Boy, that was long absence from the market. I believe I spotted an obvious support area at 1245 and shorted it as soon as it broke today. Initial stop was at the high of 1273, but adjusted lower as former support acted as resistance in the last hour. Good that the failed move happened, a 30pt stop would have been ridiculous otherwise. It also nicely broke the Fibonacci retracement I was looking at (annotated in a previous post).
 

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Just checked the markets, only to see that my short was closed out for a $350 loss. Too bad this market shakes everyone out left and right. No fun. Have to be quick taking profits.

Total profit since beginning: $11,937.50
 
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