Indicators are liars! Support and Resistance Trading for the S&P emini

ProfLogic · Sep 30, 2008

Quote from fearless9:

ES
Your horizontal lines are only giving you a part of the story.
Some of them work when they work .. no more no less.

It is vital to read the story and the story lately has included friday setups where the day closes up on the poorest bid-ask spread of the week, thus leading into a sell-off in the early part of the following week.

It is a story, and we trade the story.
We don't write it, we simply trade it.

Regards
f9
(my PMs are switched off by the way)

So simple . . . so accurate . . . so logical . . . so difficult to trust and believe.

fearless9 · Sep 30, 2008

Just to follow on ....

You would expect yesterday's sell-off given the circumstances, to trigger an equivalent run at the bid.

Big as it was, it was not even the biggest run-off in the last five days at the bid.

All adds up to a story that is not even paralleling the news.

regards
f9

vertigo3 · Sep 30, 2008

there is lower bid and ask. Can't this be attributed to the lack of full hedging as financials not shortable.

fearless9 · Sep 30, 2008

Quote from vertigo3:

there is lower bid and ask. Can't this be attributed to the lack of full hedging as financials not shortable.

Sorry V3 I cannot help you with that one as it does'nt come up on my radar.

All I am interested in are comparative ratios.
Absolute figures are apt to create false comparisons in my world.

regards
f9

stoneface · Sep 30, 2008

Quote from fearless9:

Sadly, like all good things, there is nothing clever involved.

It is the volume at the ask compared to volume at the bid.

Either you subtract the bid vol from the ask ............
or you can create a ratio with the ask volume over the total volume.

regards
f9

To clarify, you are saying that the runup on late Friday had very poor liquidity and that the bull run into the close had very little substance behind it.

I happened to be long TY bonds on Friday afternoon and was dissapointed to see them sell off into the close... I was then shocked to see the skyrocketing of bonds on Monday.

Thanks for sharing your insights on the b/a.

fearless9 · Sep 30, 2008

Quote from vertigo3:

thanks for explanation.

what charting package can capture these numbers?

Sorry V3 I have just seen this post.

I think that there are several offering volume at bid and ask .....NT, TS multi, ensign and few more, the names elude me in this moment.

Once you have the two numbers you can play around with them to suit.

regards
f9

fearless9 · Sep 30, 2008

Quote from stoneface:

To clarify, you are saying that the runup on late Friday had very poor liquidity and that the bull run into the close had very little substance behind it.

I happened to be long TY bonds on Friday afternoon and was dissapointed to see them sell off into the close... I was then shocked to see the skyrocketing of bonds on Monday.

Thanks for sharing your insights on the b/a.

My only intraday interest is ES and I don't worry too much about liquidity as it is more than I need.

I can only cope with so much info at my age and so it goes into two buckets.

... what I need
... what holds an interest to me.

I work hard at keeping them separate.

regards
f9

ESResistance · Sep 30, 2008

Hi f9

I am in the process of testing a bid ask tool. Looks promising, just need more practice in being able to read it, looks like it could be a nice little extra tweak for my method.

If any of you guys that are knowledgable in the use of this data want to post thoughts, opinions and links to information on this feel free.

fearless9 · Sep 30, 2008

Quote from ESResistance:

Hi f9

I am in the process of testing a bid ask tool. Looks promising, just need more practice in being able to read it, looks like it could be a nice little extra tweak for my method.

If any of you guys that are knowledgable in the use of this data want to post thoughts, opinions and links to information on this feel free.

I don't think that there is very much in the way of technicals to offer.
Bid-ask is only one part of the story and like lots of things works best in bigger frames.

It is important to have order flow running in the back of your mind and to know just what is reasonable.

ie can 2,000 contracts lift price through say 8 tics and hold it there or is it a short setup.

It all becomes habit after a while like a second language

regards
f9

SicilianTM · Sep 30, 2008

Quote from fearless9:

(my PMs are switched off by the way)

Hello f9,

I was curious about something and I was thinking of PM'ing, but I guess here is a good place to ask. I've read many of your posts and sought them out since you seem like someone who is very successful in a style of trading I would like to master myself.

Anyway I was wondering what you set for yourself as a daily tick goal. I know this may seem like a superficial question, but I've read posts about how long you trade each morning, about your stop size, and about your expected risk:reward per trade, but I've never seen you mention your tick goal, and this relates to how many trading opportunities you expect to see in your trading sessions. If this is something you prefer not to reveal, I understand.

Thank you for your posts here and in other threads, and good luck in your trading.