Quote from cnms2:
I wonder what would be the right way of trading a period
like that of Friday, between 12:30 and 15:30, when using only the ES 5 min and the YM 2 min.
During periods of
High Bar Overlap as exemplified by your attached chart, the finer tools play a more important role allowing the trader to 'carve the turns' more accurately. However, using the ES and the YM in tandem - in order to the trader remains on the
right side of the market works the same as it would in periods of
low bar overlap. The trader simply expects less profit during high overlap.
The trader has three choices with respect to how to trade this environment.
- Bring the finer tools into the picture (in this specific example - DOM Walls and Tic Charts)
- Sideline until high bar overlap ends
- Follow the signals given by the Coarse Tool Set and paying special attention to Timely and Appropriate Action
Using
only the ES and the YM requires the trader to head to the YM
immediately when given permission by the ES in order to obtain
a signal for change. Which signal to expect depends on context, and as always, when the context changes, the answer to "what
must come next?" also changes. As such, one must
always know the current context - that means each and every bar.
Of course, having a complete understanding of "what
must come next?" (P and V Sequences) along with following the
exact permissions provided by the ES in order to go and obtain a 'signal' from the YM helps tremendously. In such a fashion, the trader
always stays on the right side of the market.
Staying on the 'right side' of the market is the
goal. Achieve that goal often enough, and you'll have all the profits you'll ever need.
- Spydertrader
