Inventory Grab Alert 4/30/09!

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Quote from veggen:

A short scalp I took off daily PP and globex low, after a pretty big divergence in CD and price.

White line on price chart is cumulative delta, as well as indicator on bottom:

http://www.sierrachart.com/userimages/upload_2/1241716460_17_UploadImage.png



PS: SIM, not real
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Your chart shows an obvious down trend. The point you decided to short at is a small pull back and a price break to the down side again. A good point to short. Delta or no Delta. The important part is that you can have a stop just above the top of the pull back and if your reasoning is good for a profit target that is far enough to justify the risk based on the anticipated win% rate you have a good trade. Divergence shmavergance.
 
Quote from ivanbaj:

Your chart shows an obvious down trend. The point you decided to short at is a small pull back and a price break to the down side again. A good point to short. Delta or no Delta. The important part is that you can have a stop just above the top of the pull back and if your reasoning is good for a profit target that is far enough to justify the risk based on the anticipated win% rate you have a good trade. Divergence shmavergance.
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I of course could not agree with you more ivanbaj! The reason I like this method, and trying to build a strategy around it, is that it makes it more easy for me to make "hard" rules to follow.

As you say, this trade would have made just as much sense with, or without CD-divergence..
 
Quote from veggen:

I of course could not agree with you more ivanbaj! The reason I like this method, and trying to build a strategy around it, is that it makes it more easy for me to make "hard" rules to follow.

As you say, this trade would have made just as much sense with, or without CD-divergence..
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The important part is the risk reward win% rate. If you spend to much time on the divergence you will loose track of the above.

What if the risk is 2 points. What if you need 10 points based on your win%. Will you take the trade and HOPE that the 10 points target gets hit? How the Delta divergence helps you with that decision? If it does not, then what are you doing? Are you satisfied that some BS thing has given you a reason to enter?

Here is what you should do in your SIM. Enter at random. Then put your brain in 100% CPU utilization to figure out your exit. Just keep doing it till you make money. At that point you will be a star. I promise you.
 
Quote from ivanbaj:

The important part is the risk reward win% rate. If you spend to much time on the divergence you will loose track of the above.

What if the risk is 2 points. What if you need 10 points based on your win%. Will you take the trade and HOPE that the 10 points target gets hit? How the Delta divergence helps you with that decision? If it does not, then what are you doing? Are you satisfied that some BS thing has given you a reason to enter?

Here is what you should do in your SIM. Enter at random. Then put your brain in 100% CPU utilization to figure out your exit. Just keep doing it till you make money. At that point you will be a star. I promise you.
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The setup I just took, is only one of the setups I am working on.
Not all of them evolve around CD-divergence.

If you wonder, the trade I just took had a target set at 2* my stop - stop 2 points, target 4.

Believe me, I have spend a LONG time trying to find the "perfect" strategy/setups to beat the market. Not that long time ago however, I came to realize that the "strategy/setups" is not the most important part. I have to admit that I have heard traders mention this MANY MANY times, but I never really believed them. I allways thought this was the way "profitable" traders liked to speak in order not having to reveal their setups.

Of course you need an edge in the market from your strategy, but more important is money management, and the ability to ONLY follow your strategy.

With this setup that I just took, I am hoping that a target 2* my stop will make me end up positive in the end. This far it looks promising.
 
Quote from veggen:

The setup I just took, is only one of the setups I am working on.
Not all of them evolve around CD-divergence.

If you wonder, the trade I just took had a target set at 2* my stop - stop 2 points, target 4.

Believe me, I have spend a LONG time trying to find the "perfect" strategy/setups to beat the market. Not that long time ago hovewer, I came to realize that the "strategy/setups" is not the most important part. I have to admit that I have heard traders mention this MANY MANY times, but I never really believed them. I allways thought this was the way "profitable" traders liked to speak in order not having to reveal their setups.

Of course you need an edge in the market from your strategy, but more important is money management, and the ability to ONLY follow your strategy.

With this setup that I just took, I am hoping that a target 2* my stop will make me end up positive in the end. This far it looks good.
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Few dangers:

1. If your stop/reward sizes are too small you will be trading noise. Meaning you will be gambling.
2. If your stop/reward sizes are too big you will be hopping.
3. The sizes (volatility) changes. So you are back where you started.

I would always ask myself. How is XYZ thingy help me with the above problems.
 
Quote from ivanbaj:

Few dangers:

1. If your stop/reward sizes are too small you will be trading noise. Meaning you will be gambling.
2. If your stop/reward sizes are too big you will be hopping.
3. The sizes (volatility) changes. So you are back where you started.

I would always ask myself. How is XYZ thingy help me with the above problems.
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Thanks for the advices!

I have thought a great deal about the use of small stops and the pros/cons with this.

In order to make that work, I understand that I can only enter the market in "key" areas. This is what a big part of my strategy is build around. This allso affects, a great deal, the number of setups I have during a normal trading day.

Sorry to ask, but what does "XYZ" mean?
 
Quote from veggen:

Thanks for the advices!

I have thought a great deal about the use of small stops and the pros/cons with this.

In order to make that work, I understand that I can only enter the market in "key" areas. This is what a big part of my strategy is build around. This allso affects, a great deal, the number of setups I have during a normal trading day.

Sorry to ask, but what does "XYZ" mean?
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XYZ. I meant if "some" like ABC or XYZ indicator. How is the information from that (XYZ) indicator going to help you with the "real" problem of trading.

"key" areas. We are all looking for them.

I do not want to steal this tread. I will admit I am bias against using volume on the time scale. Every time I have used volume like that I have lost money. I do use some volume information on the price scale for S/R but every time I find S/R and just use 30min or 60min or 4 hour bars the same S/R appears. It seems that the S/R are at the same place no matter what you use. This make sense doesn't it. BTW P&F is pretty good too.
 
Quote from ivanbaj:

but every time I find S/R and just use 30min or 60min or 4 hour bars the same S/R appears. It seems that the S/R are at the same place no matter what you use. This make sense doesn't it.
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That pretty well wraps it up ...

regards
f9
 
Quote from riskfreetrading:

Now trading at 925. Was trading earlier at 928.5. I expected it to fall to 918 in closing gap with cash session of yesterday.
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Hey delta resting inventory rotation grab crap etc:

She is at 902! How is it going now? A long day for you! Did I not tell you yesterday afternoon and today morning to pay attention to your long assets ? :p

Markets side with minority, and not majority. Few men silenced the biggest of all crowds.

Assets= ass.. :eek:
 
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