Futures Indexes System and Tool Box

[bubba7]

manz, I think Jack has simplify most of concepts that mention above, i.e. he didn't mention "pinwheel of three regression lines" any more.

color=red]Posted by manz66 on 05-14-03 07:34 AM:
I just want to give newbies some more informations, so, they can use it to setup entry and exit.[/color]

Posted by Squarepants on 05-14-03 01:00 PM:
May 14 Wednesday
9:46 waiting to short if 9:40 bar is broken down.

#1 s943.75 at 9:48 rocket failure 5min macd xo - turned into rocket
c937.50 at 10:38 5 1/4

#2 s936.50 at10:56 - continuation of morning trend possibly.
stop at trendline, need to see vol pick up.
c937.50 at 11:08 -1

#3 s939.50 1:48 rocket failure
stop at 1min trendline 1:59
stop moved to break even 2:00
c939.00 2:04 Nearing the 5min uptrend line, with a slight break 1min downtrend line. Will watch for a short rocket after slow 5min uptrend line is broken.
+1/2

#4 s937.00 at 2.12 stop at 1min trendline
thinkin about washing this 2:17, need more vol.
c938.25 at 2:19
-1 1/4

3 1/2 for the day
8 1/4 so far for the week

Posted by Squarepants on 05-15-03 03:40 PM:
May 15 Thursday

Not a very good day for me. Please excuse the free form prose...just me talking to myself.


#1 s942.75 9:48
c944.25 9:53
-1 1/2

When playing rocket failures, you want the 5min Macd to cross first then short the low of the bar. Don't guess.


#2 b947.25 stop at trendline at 9:57
s946.50 stopped out at last 5min low and trendline. Probably only looking for point 3, as the pullback is on light vol.
-3/4

#3 s943.75 10:20 somewhat of a rocket failure play. Waited for 5min Macd to cross down then short on the low of the next bar. Stop at trendline 1min chart.
c944.00 10:30
- 1/4

#4 s941.25 at 10:43 Rocket, stop at 1min trendline
c941.25 at 10:56
0


1:30, missed this rocket
But notice the shakeout when the Phili Fed Index-survey came out, better than expected. then there was the steady climb into the afternoon.



#5 b order in at 946.25 at 2:24 possible continuation of slow trend.
b946.25 executed at 2:25
stop at slow trend line or no follow through soon.
s945.25 at 2:32 out at slow trendline break.
-1

Stopping for the day. not making good decisions.

-3 1/2 for the day


How'd you guys do today? Dawg, Vorzo?


Posted by vorzo on 05-15-03 11:40 PM:
May 14-15
Yesterday - missed the morning short rocket, then did a couple washes in CCC.
Day +0.25

Today

Tough day for me too. The 1m chart did me in - was watching it too often. Was also tired and distracted - sould've stayed out altogether.

#1 long rocket
10:01 long 947.50
10:11 sell 945.00 rocket failure -> MACD x. Very late exit, lousy execution.
-2.50

#2 MACD reversal -> not right away, cost me 0.50
10:12 short 944.50
10:17 cover 945.00 no other reason but vol picking up to the upside on 1m chart. Ugh.
-0.50

#3 short rocket
10:34 short 943.50
10:57 cover 941.00 failure to traverse -> channel BO -> reversal into CCC?
+2.50

#4 reversal
10:57 long 941.00
11:14 sell 941.50 rocket reentry
+0.50

#5 long rocket
11:47 long 943.50
11:57 sell 941.75 rocket failure, down vol picking up
-1.75
Didn't know about report at noon.

At this point called it a day as I was not thinking straight anymore - I passed on the short rocket. Way too many trades.

Day -1.75
Week +7.25

Posted by Banjo on 05-16-03 06:22 AM:
reots
vorzo, if you don't have briefing this is a good free page to check every a.m. for the days reports of significance.
http://biz.yahoo.com/c/e.html

color=red]Posted by Squarepants on 05-16-03 01:47 PM:
May 16 Friday

#1 b948.25 at 9:48 Had buy order in for the pullback.
s947.25 at 9:52 Thought there was a rocket forming, strong vol on up bar. I was wrong.
-1

#2 s943.00 at 10:03 short rocket
c939.75 at 10:39 5min macd trying to crossover.
broke second 1min trendline so got out when the high of 10:25 bar was broken.
+3 1/4

I'm using the 1min trendline as a general gauge of the people contrary to my position. If the 1min is broken on strong vol then I'll get out. If on light vol, I'll give more leeway, then, if it continues in my direction, I'll draw a new 1min trendline. This was broken on light volume both times, so the first time I stayed in. The second time, there were more factors. Still looking for #3 as the light vol suggests that the pullback is not a trend reversal.

Lunch....

No afternoon trades.


+2 1/4 for the day
+7 1/4 for the week[/color]

 

[bubba7]

Posted by vorzo on 05-16-03 03:50 PM:
Fri May 16
Today's trades:

#1 long rocket; pos numbers (I have Briefing thanks Banjo, was trying to trade without news but I got burned a few times and decided to check economic reports)
9:46 long 947.00
9:52 sell 947.50 rocket failure -> down vol rising. Should've known better to take profits quickly or stay out.
+0.50

#2 short rocket
10:02 short 942.75
10:27 cover 938.75 failure to traverse
+4.00

#3 VDU BO -> rocket
11:43 long 942.00
11:46 sell 941.75 BO failure
-0.25

#4 long rocket
12:31 long 942.50
13:15 sell 944.00 channel BO -> MACD x
+1.50
Didn't trade in the afternoon.

Day +5.75
Week/17 trades +13.00
Much better than last week although I don't feel fully confident yet. Market was tougher this week, rangebound and undecided. Lots of change, little continuation.

28 days/75 trades +92.00

Posted by Magna on 05-17-03 10:57 AM:
Re: Fri May 16
Vorzo,

Congrats on a nice day. A question or two:

Quote from vorzo:

#1 long rocket...
9:46 long 947.00
9:52 sell 947.50 rocket failure -> down vol rising. Should've known better to take profits quickly or stay out.
+0.50

As the stoch wasn't anywhere near rocket zone, and the macd never got above .24, why did you play this as a rocket? Or did the indicators trigger on a different timeframe (I'm looking at the 5m). If it is a different timeframe (say, the 1m) are you trading off this or simply using it for anticipation?

#2 short rocket
10:02 short 942.75
10:27 cover 938.75 failure to traverse
+4.00

Very nice trade.

#4 long rocket
12:31 long 942.50
13:15 sell 944.00 channel BO -> MACD x
+1.50

Again, it may be a timeframe thing, but on the entry the macd never got above .30ish, even the large bar at 12:45 didn't reach .40. Nice profitable trade, tho, and that's what counts!

Anyway, good trading, looking forward to you stepping outside the paper-trading zone and doing this with real dollars, even if only 1 contract. Then psychology will step in, and it will interesting to see how that affects your exits.

Posted by cornholetrading on 05-19-03 07:26 PM:
Once again what happened to Jack? It seems like he disappeared again. Last I heard he was revamping the material and moving forward with new info, but it never came. I have seen him post on other threads so I know he still around.. Once he stopped showing up, all his momentum he was building died. I have not seen dawg lately either.

Posted by vorzo on 05-19-03 09:03 PM:
Re: Re: Fri May 16:

Magna,

It was an INTRABAR signal that doesn't show on the historical.


Didn't wait for the MACDhist on this one, BO from lateral channel was good enough for me.

Thanks for the encouragements. I'll switch to one contract live soon. Likely to exit early when I go live - I'll have to work hard on that.


Thanks for your answers. I was watching the trend-day on Monday (5/19) and really wondered how you paper-traded it. In the real world, after you're up 4 or 5 pts (which is a substantial gain in the ES) it'd be awful tough not to take your profits when it starts retracing against you, regardless of the indicators. Whereas with "paper" it's no big deal, there's no serious emotional issue, you can try and squeeze every drop out of it.

A few things Jack said about the subject:

"Paper trading is insidious in many ways. The antidote is real wash trading.... A very bad mistake to make is paper trading first and then assuming you know a lot so you can just plunge in. You cannot learn the emotional three-quarters of trading using paper trading."

Anyway, good trading to you Vorzo. Look forward to your trades and hope you and Dawg continue posting.

 

[bubba7]

Posted by vorzo on 05-21-03 11:02 PM:
This week
Magna, I was on holiday on Mon (Victoria Day in Canada) so I didn't trade. Didn't trade today either.
I agree with what you and Jack said about paper trading - it's nothing like live trading where real emotions come into play.
But it does help achieve one thing - confidence in your trading, and patience - two psychological aspects that are key to success.

Here's Tue:

#1 lateral channel traverse - I attempted this after noticing the lateral channel, on bounce off the bottom side.
10:21 Long 923.25
10:24 Sell 922.75 failure to traverse -> wash
-0.50

#2 short rocket
10:58 Short 921.75
10:37 Cover 921.75 MACD convg -> failure to traverse short channel -> wash
0.00

#3 lateral channel failure to traverse -> short rocket
11:07 short 922.25
11:41 cover 920.75 failure to traverse short channel after pt 3 -> MACD convg
+1.50
Should've taken profits at yest low where it failed (10:38 at 919.50)

Day +1.00

Posted by vorzo on 05-22-03 10:33 PM:
Thu May 22
Nice morning rally.

#1 long rocket
9:54 long 925.75
9:59 reverse 925.25 realized I entered at away side of yest channel -> traverse to the right side. Reversal was completely uncalled for. My self control must've got weaker because I've been trading less lately.
-0.50

#2 reversal on traverse to the right side
9:59 short 925.25
10:03 reverse 926.75 bounce off right side -> traverse left -> hod broken. This reversal was called for, maybe a little late.
-1.50

#3 long rocket
10:03 long 926.75
10:56 sell 932.00 new point 3 -> failure to traverse -> MACD x -> rocket failure. Did this one by the book.
+5.25

One stupid mistake cost me 2 pt. If I stayed in from the beginning I would've scored 6.25 on the trade.

Day +3.25
Week +4.25

Dawg, are you still around? Did you nail the morning rally?

Posted by jack hershey on 05-23-03 03:13 PM:
update
see attached. this may be second try.

Posted by vorzo on 05-25-03 04:09 PM:
Fri May 23
Jack, great update. Thanks for your post.

#1 iceberg -> slow channel pt 3
10:30 long 930.25
10:38 sell 929.75 wash on what looked like failed traverse - didn't notice rocket forming ??
-0.50

#2 long rocket
10:39 long 930.25
11:19 sell 932.25 MACD x -> rocket failing, down vol rising
+2.00

#3 rocket reentry
11:28 long 933.25
11:33 sell 933.25 wash on failure to traverse channel. This should've been the exit for trade #2
0.00

Didn't take any trades for the rest of the day - tight range/low vol heading into the long weekend.

Day =1.50
Week +5.75
A modest week.

Posted by jack hershey on 05-27-03 04:52 PM:
a nice one trade day.
For rockets it was an am trade .

For the iceberger's it lasted all day long.

This is a nice example of a fast trend easing into a steady slower trade.

There must be a steady flow of money coming into he equities markets.

Posted by ElectricSavant on 05-27-03 08:17 PM:
Jack
Yes Jack, plenty of buyers out there.


Posted by Magna on 05-28-03 11:03 AM:
Jack,

On a number of occasions you've mentioned words to this effect when describing the various levels (beginner, intermediate, advanced):

"Add contracts weekly. Advance until you have partial fills."

Assuming you mean entry, you've got me curious, and my question is how would you ever have partial fills on entry? If market orders, no partials. If stop orders (buy-stop, sell-stop), no partials. So the only ways you might end up with partials would be pure limit entry (a "retrace" type entry which seems contrary to your methods), or a stop-limit entry where the limit equals the stop value (or is within a tick, for otherwise the liquidity on the ES would almost always give you a full fill). So by what means do you enter trades that you might end up with partials? Thanks, and looking forward to your "full" return in July.

Posted by jack hershey on 05-28-03 11:49 AM:

Historically, DJ, etc, I have had partial fills with orders (market). The way it seems to work is that they get some contracts first then complete the order with others. It is all very fast.

On the daily email sheet that I get from account in the evening (I open it in the am), I sometimes noticed the partials there.

I do watch the T&S and I see that the # of contracts is small a lot of the time.

With the ES you are correct that the fills are perfect for less than, say, 20 contracts.

For equities, I always note partial fills on market orders. And I do prefer this instead of blocks that would be larger than the sizes going through on the T&S.

There was a time when getting filled in fractions lead to stuff to deal with. Now with the decimals who cares any more. With senility setting in for me I still do notice that I think in fractions for offsetting stops.

As you are able to see profits building, you can add contracts to the extent that you wish. The market entries will work on the ES quite nicely without problems as you say.

For equities I stick with upper limits of total shares I would hold and I always enter and exit with partial fills of my specific total purchase goal. I do this slowly and intentionally by spacing market orders over time and making the order size the T&S block size. Specifically, I say to buy to keep the order filling going along and to not ever let the total shares be more than 10% of daily cummulative total showing on the real time quote sheet. I have a cap at 100,000 shares per equitiy purchased. the buy/sell block ratio is about 20/30 blocks as you would see on the T&S.

The futures markets are slowly changing and partial fills is going out of the picture on the indexes, either mini or regular..

 

[bubba7]

Posted by vorzo on 05-28-03 10:28 PM:
Wed May 28
Didn't trade yest and what a great day I missed ... a 10+ rocket in the morning.
Today:

#1 long rocket, hod bk
9:58 long 955.75
10:03 sell 954.00 MACDx -> rocket fail. Late exit.
-1.75
Good for a MACD reversal but didn't take it - didn't want to go against trend. Ugh.

#2 long rocket
10:30 long 955.25
12:00 sell 958.50
+3.25 11:10 failure to trav but rocket still on -> 2nd pt 3 -> 2nd failure to trav -> rocket fail -> MACD x

Day +1.50

another trade

Posted by vorzo on 05-29-03 10:31 PM:
Thu May 29
One trade today:

#1 long rocket
9:53 long 955.25
10:57 sell 960.00 rocket failure
+4.75

Initial channel was broken at 10:15 but rocket was still on and MACD didn't cross until later when it got entwined. A slower channel formed.

Day +4.75
Week +6.25

Posted by downtickboy on 05-29-03 11:41 PM:
Where did Dawg go? Has he been on vacation?

Posted by version77 on 05-30-03 01:39 AM:
Dawg jumped on one of those rockets and hasn't been seen since...

 

[bubba7]

Posted by vorzo on 06-03-03 11:38 PM:
Trades since Fri
Been real busy lately and didn't have time to post.

Fri
#1 long rocket after 10:00 release
10:06 long 959.75
10:52 sell 962.75 MACD x -> channel BO -> rocket failing
+3.00

Week +9.25 (4 trades)

Mon
#1 long rocket
10:09 long 971.00
10:48 sell 974.75 failure to traverse -> congestion
+3.75

Tue
#1 long rocket
10:00 long 969.50
10:04 sell 967.75 rocket failure -> MACD failed to cross 0
-1.75

Right after I noticed the channel on 1m - I exited as it was bouncing off right side. Duh.

Day -1.75
Week +2.00
Friday am


I posted this during the am as a real time narrative:

09:45est centering @1001 bracket in @ 1002.1

stall, dip, Failure, FBP, Reverse on BO down 1006.2

stop@ 1006.2 trading fractal 5 min, stop is : 4 bars back @ H val + 1 tick.

go to tape on 5 min then 15 min

exit as "continuation"

mkt exit 997.2

enter L 998.1 @ 11:31

wash 999.0

I can see from the comments by others it was not easy to follow.

So the details are:

I trade by entering after sync with a bracket.. The bracket is based on the centering of the sync. Centering value for me was 1001.0

Overnight the market moved and nitro took on a 90's trade. That overnight stuff, was visible and let us know the open would show as a gap for market hours on the ES. I commented that It would be fun to go through the 1000 today before the open.

The long side of my bracket was 1002.1 where I used the centering of 10001.0. nitro spells out the quarters in his post on ES. I do not I just list the number of quarters. .0 is none, .1 is .25 and .2 is .50 .3 is .75.

I suggested elsewhere before the open that the market was in "change" for the open. This means I use a reversal strategy instead of just no linkage between trades as entry/ exit trades.

However my bracket on "change" status takes me in I am going to reverse out and see if I can get to a trend where I trade "continuation". I know this is not for everyone and I do expect the type of stuff I get from TM, sim, okiwon, fruity etc. Usually I do not trade real time on ET but today I thought sim might (I was wrong) and I thought he would post a chart or graph. (he didn't)


Under "change" I log formations from the 1 min. There were two prior to the reversal: a stall (full box) and a dip. They were 5 min plus. This is fast pace market lingo. By seeing this and noting it in my stop log, I am sort of prepared to ace the reversal and ride it into a "continuation" type market operating point.

I posted a chart of this phase un annotated because I was posting in real time. See below

After the dip we get into flaws. I noted that I was in a failure modus.

Thr formation that emerged was a FBP. This is nice because I want to reverse out of a long. If there were no failure ,etc, then I would be a little flakey. Flakey means that the market is sort of loose and noisy. Not a problem but it is a setting where you have to look for clues harder.

FBP lets me know I just have to wait for it to end and at market reverse. Double contracts and just roll.

You will feel good during this interval. Wrapping up profits. Being in the groove. and seeing that you will be nailing a trend in continuation mode. Thr fact is that you see the morning is playing out with two trades and there will be an exit.

So 1006.2 is the deal it turns out. Out with profit and in short.

There is a trend

"continuation dictates an exit.

I am out at 997.2.

As the time passes I do my thing. My picture is that the 1000 value is there out in front of me. While it's midday so to speak and I am cycling through dumping tons of equities for going to cash for 3 weeks I still am looking at taking cash as intraday peaks of a bunch of stuff. I am not perfectly neutrally biased.

At 11:31 I go L price turns out to be 998.1

one VDU
no slalom room.
Exit as a wash price turns out to be 999.0

I didn't go through 1000 as a long. And I had to go to work pronto cause the fade has started on equities which I own and which I am leaving.

Nitro apparently has a chat group for classy people like simtrader etc.

I am sorry we missed sim's trade today but he found a BO and made 4 points with it before 10:15 he says. I hope he does a chart.

I think I got 4 points for 200 bucks/contract.

You can say this isn't what I told beginners Ice bergers or occasional slalom’ers. But some of you that I am in touch with should find this as familiar.

There is no reason while most people can't move into this operating mode easily. The reason we spend all the prep time to get there is because you need to get to an even keel mentally and emotionally before you groove as an expert. Making easy money gets you there.

Any beginner can do better than simtrader. The simple reason is that you are not overwrought and emotionally shot. You are just using one chart, A couple of indicator signals and not comparing apples and oranges from several continents.

Several have said that beginners are right on the brink of doing reversals into new trends forming. They let a big cat out of the bag. To get there I had to make very very sure I have put the cure in for early exits or they wind up very frightened by everything going on.
What happens with reversals is that you more than double your daily performance. If you are not emotionally up beat and collected, you are screwed.

Some people here are going through having to quit and drop out because they cannot afford either not making support money or they are broke. This absurd self induced pressure is a mess to deal with. Read the bravado closely to see the level of confidence that is lacking. Empathy doesn't cut it.

Once we move through two or three doubling of improvement in money velocity, then we will pick up the pace by going to a KISS level operation.

We are going to be really ploughing furrows after labor day. Please get the myths out of your operations.

 

[bubba7]

Posted by nwbprop on 06-07-03 11:53 AM:
Just looking forward to AFTER labor day. On friday morning, i entered on the 1 min as the rocket appeared, and once it was not a wash, sat back on the 5 min until the fast line touched the 80. As this happened i went back to the 1 min to watch what was going on. i exited as the 1 min consolidation broke down at 10:24. I did not reverse because i feel like their wasn't enough volume dry up on the 1 min to warrant a reversal(change). Also, the 5 min volume was steadily declining as price was decreasing which led me to wait to see what will happen when dry up occurs. Jack, would you have reversed at this point or waited for volume dry up to see if it would be uptrend continuation or down trend continuation.

10:47 seemed to me to be the vdu on the 5 and 1 min concurrently. I bracketed that entry and got long but after the failure in volume i got out for a wash. another volume dry up occurred at 10:58 (usually when i notice a bunch of dry ups very close to another, i lose money trying to play the bo). I decided to give it another try and bracketed and ended up short at 11:02. this ended up not forming a bo failure. I then figured that my entry was the point 3. Therefore, i created channels using points 1,2,3 that came from the corresponding times of 10:19, 10:40, 10:55. I then exited on the other side of the channel at 11:10 looking for a slalom trade and also got long at the same time. Jack, is this what you would have done our would you have waited to see if it turned into a rocket?


This is where things got fuzzy and i somehow took a 10 cent loss trying to slalom long. the market broke the trend channels and turned into a rocket so i decided to get short on the next 1 min volume dry up. this occurred at 11:28. i got short and it broke up on me for another 25 cent loss. Looking in retrospect, i should have bracketed that entry. what really hurt was that when it did break, i held onto it because it looked like congestion so i thought i could get out when the price came back down(i know i should not think like this). eventually my pain tolerance was too much and i exited for the 25 cent loss. After these two losses, i was mad because i was flat for the day on a day in which a lot of money was out there. For the rest of the day i did not trade jacks strategy cause i was neg for the day so i went back to scalping nasdaq stocks(my bread and butter). jack, what would you have done during this congestion? did you play the break out back down into downward trend continuation?

Ultimatey, in retrospect, instead of trying to slalom, i should have stayed short unitil 1:35 when price broke up out of the trend channel on increasing volume after a vdu and reversed long at the same time. if i would have gotton long here though i would have been very cautious cause the volume on the 5 min was neither increasing or decreasing. it was more of a steady volume(stall). I think this indicates a weak trend.

To me, midday trends f me up every time. i am usually in the groove from 9:45 to 11:15 until the market throws me a curve ball which usually happens on non sustaining volume. I end up seeing most of the formations jack is talking about during this time and don't know quite what too do(stay short, stay long, get out). this is when losses seem to add up. damn, i wish i was at an expert level already When the midday is bad i am also less inclined to take afternoon rockets due to the fact that i have to make up losses from the midday. although a lot of great rockets occur in the afternoon. i did notice though that the end of afternoon long uptrend ended on volume dry up at 2:25.

anyway, i hope jack can add comments to where i am and lead me to where i want to be. I feel like jack has a very funny sense of humor because he realizes that he can only show the way. he puts the next level right under our noses but yet puts it far enough away that we have to reach recognition ourselves. thnx in advance. sorry that my post is soo fragmented. I was not an english major and one thought just led to another.


Posted by vorzo on 06-07-03 11:03 PM:
Update
Thu

Two washes in the morning.
Day 0.00

Fri

#1 long rocket after synch
9:50 long 1002.50
9:54 sell 1000.50 3rd lower high on 1m chart. 1 min too early it turned out; rocket signal still on.
-2.00

#2 reentry
9:56 long 1002.50
10:15 sell 1008.00 away side of channel -> MACD x. Reverse.
+5.50

#3 MACD reversal -> short rocket
10:15 short 1008.00
10:31 cover 1004.00 stall at 1st half hour congestion
+4.00

#4 rocket reentry
11:01 short 1003.00
11:31 cover 998.00 MACD x -> rocket failure -> channel BO
+5.00

A kick-ass day.

Day +12.50
Week +14.50

Posted by vorzo on 06-07-03 11:12 PM:
Re: Friday am

Quote from jack hershey:

at 11:31 I go L price turns out to be 998.1

one VDU
no slalom room.
exit as a wash price turns out to be 999.0



Jack, what do you mean by VDU -> no slalom room?
Did you exit on the following 1m bar after if failed to break 1000.00?

What I meant was that the congestion range was very narrow. There was no room to make any money slaloming.


Posted by hwaxen on 06-08-03 09:15 AM:
Indicators take you away
Indicators lag and respond to the market. If you use an indicator to trade you are waiting for a signal and then lagging the market on your entry and your exit. A trader will have more success if he watches the market, anticipates, enters the trade and controls any errors with stop losses.

This is the orientation that I am trying to leave behind us. I leave it in the thread as a quick reminder of where we do not want to be mentally.

Posted by nwbprop on 06-08-03 10:06 AM:
Re: Friday am

Jack, i am confused about the difference between a stall and hitch, and what is the difference in the sequence following a stall and hitch. From what i understand, a stall is a bunch of volume bars with the same length place next to eachother with the next following volume greater than the stall length. I think a hitch the same thing as a stall but what follows the equal volume bars is a decreasing bar in volume (dip?) after the stall. The dip might refer to the price instead of volume. I am not sure of which one though.

I use the expreesions "stall and dip to describe two brief formations that occur on the fast paced moves. A stall appears first as a slow spot in a series for fast rising (falling) bars in a fast pace trend. The stall is a "box" of bars the same height and moving laterally. The rising (falling) fast paced trend continues after a stall.

A series of stalls may occur. Dips appear after stalls do not form anymore. The fast paced trend encounters a dip which appears as a short term reversal that then ends with a resumjption of the fast paced trend. "dip is a great descriptor. The price dips for about 3 to 5 bars.


You say: "Other approaches. If you are an expert you look for the VDU; see the carrots (V's). When they occur you jump on the BO from the VDU bar. The entry is market and is usually close to the BO on prior bar. It you get into a failure to BO, as an intermediate or expert you simply wash out. If you are able to slalom, and it is a failure to BO, then you slalom by immediate reversal (tack into the trend) and take it from there."

I somewhat understand BO and BO failures but I am not sure when you say "take it from there". Am i suppost to hold for a wash to see if creates a new points 1,2,3 and slalom or wait to see if it turns into a rocket. At some point the price action gets to a place that if it continued it would turn into a rocket, but if it bounces off of the support or resistance, it will turn into a slalom. on friday my short that i took at 11:00 hit the other side of the trend channel at 11:10, and i exited and tried to slalom toward the other side of the channel. It ended up turning into rocket.

"take it from there" just meant continue to trade. You posted several alternatives that were possible. You are at a point where you monitor with expertise; we now turn that into money by taking actions as the opportunities continue to come up.

 

[bubba7]

Posted by ram on 06-09-03 07:15 AM:
update
vorzo.

Can you explain what you mean by "away side of channel"?

the "away" side is opposite the right trend line. It is "away' from the trend failure caused by BO through the right side of the channel.

Fri

#1 long rocket after synch
9:50 long 1002.50
9:54 sell 1000.50 3rd lower high on 1m chart. 1 min too early it turned out; rocket signal still on.
-2.00

#2 reentry
9:56 long 1002.50
10:15 sell 1008.00 away side of channel -> MACD x. Reverse.
+5.50


One trade today:
#1 short rocket -> lod bk
10:17 short 979.75
10:51 cover 976.75 MACD x -> channel BO. Rocket was still on but up volume was picking up.

Day +3.00

Posted by Traduk on 06-12-03 06:28 PM:

quote: hwaxen:

"Indicators take you away
Indicators lag and respond to the market. If you use an indicator to trade you are waiting for a signal and then lagging the market on your entry and your exit. A trader will have more success if he watches the market, anticipates, enters the trade and controls any errors with stop losses"

I started trading 11 years ago with a rudimentary real time feed, a pen and graph paper. If you are claiming that a trader would have more success by getting the feel of the market by observing and using some form of bar\candle relationship then you may be right but you would need abilities way outside my or anyone I know's capabilities.

I have used bar relationships with Crabels "short term price relationships" and a multitude of candle formations based HLC, mid price, high price, low price and just about any relationship imaginable. I use three different time frames on each market and trade three simultaneously and although I am loath to admit it, I could not function without indicator helpers.

I have read every page of this thread and although I do not use Jack's principles as he has stated them (variations on his theme) they are of enormous value and a bit of a masterclass in trading techniques, all for free. I guess we all owe him a big thank you.

The stochastic is known as the near co-incident indicator. It cannot lead where price has not been but it will signal on the close of the bar that flashes the signal for all but the contrarian anticipators. If it is set to update on every tick it will flag on a tick (during bar creation) when a signal is possible and in essence it is just as good as using any part of the bar\candle under creation. The MACD is often a bar+ later than the initiating signal but there are many other qualities of the MACD which come into play as secondary confirmation. Both the Stochastic and the Macd show the underlying wave formation and throughout the formation of a trend they hold a gap as confirmers and display cross-overs that are below\above trend and by crossing through 50 (Stochastic) and 0 (Macd) show trend changes. Lateral congestion can be seen by the slow line in the MACD without need to look at the charts. There is so much than can be gleaned from these two indicator combos that when added to channel use makes the non use of indicators archaic.

Although much of Jack's usage is not exactly want I want or needed. Trading the Stochastic "POP" is the cream on my milk not the actual drink, I can see that he has set the indicators and methodology to use a useful and safish part of a run for profit. I never bothered with volume before and found intense irritation when a very fast run rapidly screamed back on me but not any more. I was always getting chopped up in those violent fast large swings at the open but now find that the indicators can keep me correctly positioned.

For people who are curious and willing to work through this thread diligently and do loads of lateral thinking, the rewards are potentially beyond belief. I have used more methods than I care to think about but, with personal modifications, this has been of immense value.



Posted by hit_n_run on 06-13-03 12:55 AM:
Traduk,

very good posting.

I have read every page of this thread and although I do not use Jack's principles as he has stated them (variations on his theme) they are of enormous value and a bit of a masterclass in trading techniques, all for free.

Trading the Stochastic "POP" is the cream on my milk not the actual drink,


interesting that you are mentioning the -Stochastic POP-
because, years ago, Jake Bernstein wrote in his book -The Compleat Day Trader- about the -Stochastic POP-
did you learn the -Stochastic POP from Jake Bernstein's book?
Jack's adding of the MACD, Volume and channel is a very big improvement for the Stochastic POP setup. IMO.

thanks again for your posting and thanks to Jack for his postings, and I hope Jack will soon post again on ET.


Posted by Traduk on 06-13-03 03:22 AM:
hit n run,

Yes it was in Jake Bernstein's book that I learnt about the "Pop". Jake actually used it to catch the 5th Elliot Wave which after a powerful third wave gave less comparative momentum.

Jack appears to have suggested a very much shortened timeframe Stochastic which will spend most of a powerful trend above 80 or below 20. The logic is good inasmuch as it shows a band 20\80 that is rapidly traversed and the holding above or below 50 and the clustering above or below 80\20 shows the dynamics of the trend very well.

There are many other forms of jargon that Jack could have used eg. centering, which is actually the oscillation to find a central pivot within congestion. In Market Profile jargon it is the creation of a mini bell curve after a run which may be accumulation or distribution. His ideas could be presented in a totally incomprehensible manner but he has kept it simple, even though I have to spend ages trying to work out what he means at times.

I started reading this thread 2 weeks ago (read it all) and during that time I have completely changed my approach from a mainly non indicator based methodology to TA components that vaguely resemble Jacks and my profitability has sky-rocketed. There have been some critics pop in and state that indicators are not the best way to go. In some ways they are correct as it is better to fully understand bar relationships and larger wave structures before using any indicators as support or reference. I have daytraded, fulltime for 11 years and was not profitable for nearly 5 of them. Anything that fast tracks a trader from being a loser to a winner in weeks\months not years has got to be good even if it requires a strong element of faith without strong knowledge of the underlying structure. If Jack's methods are followed exactly the only risk left is the fortunately rare massive price spike and the variations on themes that have seen countless traders that I knew crash out and leave markets should be avoided.

He stated that he was going to be away for three weeks so I guess normal progress will resume on his return.

 

[bubba7]

Traduk

what is your opinion about using the 80/20 bands or using the 75/25 bands for the stochastic pop?

I do not know what timing you use or on which market.

I am afraid that my answer is a non committal, use what works best. Using Jack's defaults are best to start with and progression will come from careful observation of what works and then determining why. For example, I do not use his defaults but use period timings that represent, slightly less than, the most common number of bars in a run\reversal for each time frame and market.

I trade Eurex, Liffe and the Cme and switch between equity futures and bond futures. They are all different animals and one size does not fit all, for my needs. The objective of a setting is to be within the most frequent turn interval and definitely not to be longer. Jack's default will be within virtually everything and needs to be treated as something that will quickly hit upper and lower levels. How much wiggle room is given after it goes through 80\20 or 75\25 is up to the individual and I do not wish to interfere in any way with Jack's approach. When a market moves dynamically it will stay above or below the bigger numbers but when lacks the dynamic lustre it will more lazily bounce off of 75\25. If I have got it right, he would prefer people to stay only in the dynamic area where profits are easier. It becomes individual judgement as to wether one wishes to explore less dynamic areas.

The use of channels with failures to traverse leading to possible congestion zones or possible reversals is IMO the glue that sticks the method into a workable plan.

there are many people who use a differing signal series withthe STOC than we do. This post is from one of them

Posted by lindq on 06-14-03 06:56 PM:
A counter trend challenge.
Jack proposes buying the move above a high stochastic level. But I don't trade trends, I trade counter to trends.

So I am curious if anyone following this thread would like to take a challenge and have a little fun.

If you have Jack's indicators and the appropriate data already loaded, (I don't use TS) I would be curious to see what the results would be of backtesting on SELLING at a high level of stochastic and BUYING at a low level, with the same MACD settings in place. This would be directly the opposite of his strategy.

Using the same indicator settings for stoch and MACD, try going short at a stochastic level of 80, and going long at 20. Don't wait for a reversal bar to confirm a change in direction. Just go long or short at the close of the bar that hits those levels.

As to profit targets or stop, use your own discretion with settings. Play with it, and I'd be curious as to what you come up with.

Posted by hit_n_run on 06-15-03 01:39 PM:
Traduk

I trade ES 5 min chart.

thanks for your input and your last sentence, a very important point.

"The use of channels with failures to traverse leading to possible congestion zones or possible reversals is IMO the glue that sticks the method into a workable plan."

Posted by vorzo on 06-15-03 11:33 PM:

Week wrapup
Didn't have time to trade much this week.

Tue I was watching the mkt but didn't take any trades.

Fri
One trade:
Short rocket after 10am report
10:07 Short 992.25 rocket -> down vol picked up again
11:31 Cover 986.50 MACD x -> rocket failure -> channel BO
+5.75

Week +8.75 (2 trades)

Posted by bundlemaker on 06-16-03 03:59 PM:
help!
I just found this thread. It seems like there is some incredible info here, but..... I"ve tried starting from page 1 over and over again and it seems like it's not really the beginning of the thread.

Any enligntenment appreciated.

Posted by hit_n_run on 06-17-03 12:54 AM:
bundlemaker

take a look here:

http://www.elitetrader.com/vb/showt...?threadid=14312

http://www.elitetrader.com/vb/showt...&threadid=16502

hope it helps

Posted by bundlemaker on 06-17-03 09:30 AM:
thanks hit n run,

those help a lot. One recurring question is do you enter on closes or during the bar once the trigger points are hit. Even though these questions are answered, I"m just not picking up on the nuances of the answers.

In particular, if you enter when the slow stochastic just hits 80 (or 20) and you use that as the signal, that fast line is almost guaranteed to at least momentarily bounce back out of the over 80/under 20 area.

Am I just totally missing the obvious? I tried a couple of these trades yesterday, got stopped out for small loses, but went back to look at the charts, and the trades should have worked. It's the intrabar values that cause the problems. At least it seems that way.


Posted by dawg on 06-17-03 10:43 AM:

in and out of 80
when to enter or exit ?

when i was just starting to trade rockets this is how i went about it:

to enter: when both fast and slow on a closing basis were above 75 stoch i would enter a long above the high of that 5m bar.

to exit: when the fast closed below 75. i would exit below the low of that 5m bar.

not saying this is the best, but it helped eliminate some emotional decision making and avoiding some whipsaws.

i only look at the stoch on a closing basis...otherwise you get whipped too much.


Posted by hit_n_run on 06-17-03 02:38 PM:
Bundlemaker

Dawq explained his way, and he did quite good. dawq is using 25/75 . I still dont know what is better, 25/75 or 80/20.

hershey takes the trade immediately when both stoch lines are above/under 80/20, and MACD is =/- .40
dont forget the volume and no trades in the deadzone.


Posted by bundlemaker on 06-17-03 02:59 PM:
Thanks guys, this is helping a lot.

I understand that Jack takes them immediately. Is it your understnading then, that if the fast line even momentarily dips below 80, above 20 that you exit? My experience with doing that is you get whipped out every time.

Also, can you summarize the volume rules and "dead zone". It's tough sorting through 100 plus pages, I'd really appreciate it.

Here are 2 trades from yesterday (6/160 that I took. Tear them apart....I'd rather look dumb than be poor.

short ES 12:45 @ 1002.50
exit 12:45 @ 1003

short ES 12:47 @ 1002.25
exit 12:48 @ 1003.25


Posted by hit_n_run on 06-18-03 05:18 AM:
bundlemaker

there is more than one possibility for exit. I would say, read first all hershey postings, and then start to trade.
and like Jack said -learning by doing- and a lot of washing

deadzone for me is 11:30 am to 02:00 pm and thats the time when volume starts to go down

 

[bubba7]

Posted by bundlemaker on 06-18-03 09:36 AM:
first trade today:

long ES at 11:05:07, 1010.75
xxx at 11:14:59 1009

then it took off, how much room do I need to give these trades?

Posted by JohnnyK on 06-18-03 01:57 PM:

Coat-tailing
Hi Vorzo,

I've been following this thread since the beginning.

I would like to commend you on the steady detailed contributions you are making here.

I have a small request: Could you post, along with your daily and weekly stats, a running log of total number of points gained over total number of trades?

I have a large request: I will soon be in a position to trade at least one contract. Would you be interested in instant messaging your trades as you make them for a percentage of any profits? If so, what % would make it worth while for you?

For you, this could be an opportunity to learn more. For me, it could be an opportunity to not lose any money, while learning more. I would like to get into the market using a curb on the emotional aspects until I get relaxed.

It could also be a way for you to raise your stake. It's an intermediate step.

I currently have the money and almost the time. I just need to get wired and get the appropriate software and services.

Posted by Sanjuro on 06-18-03 04:42 PM:
bundlemaker,

From your entry, I think you're still trading ES03M.
You should be trading ES03U since last Thursday was rollover.

I've seen it work with different levels of stops, anywhere from
2 to 4 points initial stop and move up to breakeven. You just
have to be consistent and follow every signal you get and
know that overall, you should have more points gained.

You can practice by going over previous days of this year.
Also go over the days the vorzo and dawg have posted for
and see if you get similar trades.

Posted by 1contract on 06-19-03 06:13 AM:
I've been following this thread for a while and plan to try out some of the ideas. I will journal my progress here.

http://www.elitetrader.com/vb/showt...5866#post275866

All constructive comments are very welcome.

[color=greenPosted by vorzo on 06-19-03 10:53 PM:[/color]

Quote from bundlemaker:

first trade today:

long ES at 11:05:07, 1010.75
xxx at 11:14:59 1009

then it took off, how much room do I need to give these trades?

Bundle,

For rockets, I will generally exit a trade when there is a flaw in the normal sequence of things.

Example of normal sequence:
rocket signal -> traverse to away side of channel on rising volume -> traverse to right side on fading volume -> traverse to away side etc

If a flaw occurs (failure to traverse, MACD x, stoch leaves zone, channel is broken) I will get into exit mode.

Sometimes a trend will start strong and then correct to a slower trend by forming a 2nd pt 3 (Jack's aircraft takeoff analogy). Something like rocket failure -> channel BO -> MACD x.
This is the case with your trade.

Mind you, I didn't trade that day so these are after-the-battle comments, so they're not worth much.

The trend started as an iceberg, then at 11:00 rocket signal -> entry.
Entry was at the away side of channel, I'd wait until the channel is broken to the upside and then enter. If it's not, I'll wait for the traverse to the right side.
11:05 traverse to right side -> 11:10 channel broken, rocket failed and MACD about to x -> exit

To figure out whether to stay in when this occurs I look for clues on the 1m chart, 5m NQ/YM, 3m TICK/TRIN. If the channel is broken on rising volume on the 1m chart, I'd probably exit quickly. If I'm in doubt, I check the others. The idea is to get a feel for the prevailing market direction at that time.

Since the trade went south right after entry, I probably would've done the same thing. It's hard enough to wait for the 2nd point 3 when you're in the money.

I am cautious when a MACD cross occurs before the other flaws, it usually signals a reversal and I get out quickly.

Below there is a discussion requesting real time information for coattail trading. the response is a very good one. It is along the lines of: "Iwould rather not give you fish; it is better that you learn to fish"


Re: Coat-tailing

Quote from JohnnyK:


I have a small request: Could you post, along with your daily and weekly stats, a running log of total number of points gained over total number of trades?

I have a large request: I will soon be in a position to trade at least one contract. Would you be interested in instant messaging your trades as you make them for a percentage of any profits? If so, what % would make it worth while for you?

JK,

I've been real busy at work lately and too tired to get up in the morning to trade - this week I didn't trade at all. I will trade tomorrow and post at the end of the day, including the running total.

As to your other request, I think you should know that the trades I've posted so far are simulated, so they do not reflect my live trading. In fact, I expect to make about half of the simulated results when I go live. I was about to switch a few weeks back but then I was busy at work so I put it off until I have more time - this should happen in a few weeks. It sucks but I think it'd be foolish to go live now when I'm in the market only a few hours a week.
I know Dawg was trading live and had success with the method but he didn't trade lately either.

I could send you my trades in real time if you think that would help. Of course I would do it for free - I have learned this method courtesy of Jack who generously shared it with us. Wouldn't that be something -

But I think that what's more important for you is to learn the method and learn how to deal with the stress. Simulate it for a month or two until you get consistent and comfortable, then go live. Post your trades - that helps to stay focused and disciplined.

If you take the time to understand the method you will get a better understanding of how the market works, when to trade and when to stay out.
The concept of washing is priceless too. It's the opposite of what most systems and books preach - instead of waiting for a fixed stop to be triggered, you get out as soon as there is a flaw (the reason for your entry is no longer there).


A trade

Posted by vorzo on 06-20-03 07:12 PM:
update
Fri Jun 20

#1 long rocket (hist<0.4)
11:12 long 1001.00
11:34 sell 999.00 rocket failure -> no new pt 3 -> up vol picking up -> reverse iceberg
-2.00

Entry was late and hist <0.4; volume dropped on prior bar. Guess I was itching to take a trade.

#2 reversal iceberg
11:34 short 999.000
11:59 wash 999.00 up vol picked up
0.00

#3 short rocket
13:03 short 997.50
13:58 cover 993.25
channel BO -> stoch and MACD entwined -> new pt 3 -> failure to trav/dbl bottom on 1m
+4.25

Week +2.25 / 1 day / 3 trades
37 days/93 trades/+118.00

 

[bubba7]

Posted by jack hershey on 06-21-03 01:35 PM:
Hi there!!
We arrived home in the early hours of the morning.

As you may know I went to cash (equities) on 06JUN03. As an OT update, the trip was terrific.

I have read the thread as way to get uptodate and, below, is a rough out of what i have planned for the near term.

Half of year's profits come after Labor day. So I will ease back into the market accordingly and journal it for the benefit of those who need to see the detail of getting into a rotation with several money streams. My younger Brother is managing my deceased brother's accounts consevatively and I will use examples from that which you may find helpful. It is running at 40% YTD. My MAY was about the same including up to the 6Th (40% for that month plus interval only.)

On the ES front. The comments from the 6th to the present are very good and important; my thanks to all who commented. I don't think of this thread as "mine"; someone started it to get my comments out of an important thread that I intruded upon.

I have started getting the entire thread into a form that will be extremely informative. I am copying what I did not copy before and will flesh out a lot of stuff. All ASAP.

Some very significant and important observations have been made. some oneclearly tated that to get really sharp you must go through the experience of getting there. I am focussed on the transference of skills. It is getting clearer that skills may be acquired and the route involves "knowing" what is going on. fortunately, very fortunately there are people who post who allow us and me, in particular, to "see" into their environment. I needed all of this to make my points. Now it is here.

Now, without dispariaging anyone and in the spirit of progressing in excellence, we can all profit from the foundation found here.

The "pop" comments and the let's have a contrarian (fade) challenge to the stuff here are really the grist we need to play out in great depth the way the game is played.

When you are all millionaires in a couple of years, you will see that we actually do both the trend and the fade simultaneously; it has just not become part of the consciousness as yet. The clue presented to you is the "continuation" and "change" mode stuff. We use two strategies that are triggered by conditions. As some have determined (not guessed), it is true we will use overlaps of these seemingly independent aspects. Those who stated here recently that they see the failure to traverse the channel as the key "flaw" to behold for optimizing profits are, in fact, demonstrating that they perceive that profits may be acquired continually as a foundation principle in making money.

What makes me feel great is reading that people using well built approaches can gain from what we all contribute here.

This all leads us out of debates that are not pertinent to making money. All indicators can be adjusted as leading indicators by using maths. We leave prediction way behind at some point as unecessary. To be minimalists and operate in a KISS mode and continually make money is the result we will all have soon. We seek a way to connect to the market that is bona fide and that has overcome all the myths that have been created historically.

Our vacation was a delight; I notice that it cost 1 1/4 points of one transaction (equities) I made to go to cash on the 6th. lol.. We operate in a mode where what we do cannot be upgraded by those we connect with.

As we achieve our goals here, we can all have a blast too.

[color=greenPosted by nwbprop on 06-21-03 03:16 PM:
Welcome back Jack,

I am glad you had a great trip. I am looking so forward to what lies ahead. Right now, learning from the hard way, i have also realized that reversing on failed rockets(divergence with no entwining) is a great way to take more money out of the market. I have only conciouslly been able to make 2 types of successful trades. Rockets and thier corresponding reversel when failure to traverse the channel, and the failed rocket reverse. the failed rocket occurs is when their is divergence and no entwining. the failed rocket reverse exit that i see can be one of three things; rocket resuming wash( I hate this becasue i have then taken 2 trades, rocket and reversal rocket without a profit), rocket to the other side, or rocket failure on the other side.
lately, i have been really taking it in the arse with BO trades. I can never get the timing quite right and usually can not get out of a falied BO with a wash. usually a loss.

In terms of failed rocket reverse. i sometimes use a BO trade of 1 min consolidation or sometimes i wait for a vdu and BO trade out of that. Sometimes their is a failed rocket reverse without a vdu. jsut some thoughts. i cant wait until we get to patterns. i feels as if this is the next plateau.

Posted by nwbprop on 06-22-03 11:48 AM:

[color=blue]Quote from bundlemaker:

vorzo,

In your example of a normal sequence above, I'm assuming it's a long scenario. If so, then the "away" side of a channel would be the top of the channel and the "right" side would be the bottom of the channel. Am I getting this right.

From your analysis of my trade ("entry was at the away side of channel") can I take it that if a rocket triggers but then pulls back to the low part of the existing channel, then that's a valid re-entry, or perhaps an ice berg entry. I'm not clear on how specifically to use Jack's channels, and I can't find the page on this thread where he describes what to do.

Finally, I've fought indicators so much for so long, I have to admit, I don't really know what a macd cross over is: is it the 2 moving average lines crossing, is it the 2 lines moving across the neutral (or 50%) line, or is it the histogram going from positive to negative.

btw- for those interested in such things: starting tomorrow I'm going to take every beginner setup that occurs with real money. I trade full time, but will be out a couple of mornings this week. I'll post all my trades. I only wish I would have seen this thread much earlier on.[/color]

I know these questions were geared towards vorzo, but i thought i could maybe help. You take the rocket signal and enter your trade, it can either turn into a wash or rocket. if it is a rocket, the stoch will entwine inside the 80 , 20 tape. if the fast stoch touches the 80 or 20 line on the 5 min, perk up and pay attention to the price action. the trend can either come to an end and diverge out of the 80, 20 or resume back into the trend. if it resumes back into the trend, you have your point 3. I assume this is what you are talking about when you say valid re-entry point. I do sometimes add to my position after i have a valid point 3 which creates the right side of a long channel.

Now, you should have your channel based on points 1,2 and 3. If the price then fails to make it to the other side of the channel that you have just drawn, get out becasue it is the end of the trend. Eventually, you will want to reverse at this point.

MACD xover means when the macd histogram goes from pos to neg or neg to pos.

Part of a continuing discussion

Posted by vorzo on 06-22-03 04:05 PM:
It seems that Magna is betting against me

You make a valid point though, my results may be disastruos (much like my previous attempts with NQ) when I go live. Which will happen as soon as I have more time.
Until then, paper only folks. I'm here to learn, not to build credibility.