Iterative Refinement

[Spydertrader]

Quote from cnms2:

This sounds nice ...

It's nothing you haven't known for over a year. YM leads the ES. Doesn't it? What is more, I posted nothing new this evening. Everything discussed tonight I had already posted in the previous Journal. You all know this stuff. You just haven't put it all together - yet.

- Spydertrader

 

[cnms2]

This reminds me the time when I started playing contract bridge. I learned the rules, conventions, techniques, but the challenge was to recall and apply each one of them at the right time. Post tournament, listening to the better players' recollection of individual plays everything looked so logical and beautiful. I couldn't wait for the next tournament, full of trust in my skills ...

Thanks again Spydertrader! This evening was (another) eye opener.

Quote from Spydertrader:

It's nothing you haven't known for over a year. YM leads the ES. Doesn't it? What is more, I posted nothing new this evening. Everything discussed tonight I had already posted in the previous Journal. You all know this stuff. You just haven't put it all together - yet.

- Spydertrader

 

[PointOne]

Quote from Spydertrader:

Trading Breakouts on decreasing Volume doesn't place oneself on the right side of the market very often. However, if PRV indicated increasing Volume (at the time of BO), then one must go with PRV in order to correctly anticipate a breakout. However, if at some point within the bar, one knows Volume cannot make it to increasing actual Volume, then a reverse (not exit) is in order.

Good stuff. A couple of things I want to comment on:

Reverse not exit: How many times does one have to be sent the wrong way (by PRV) and then exit for a wash or small loss only to see price race the other away before one learns this? "WWT?" is so important - of course you have to have a feeling for the time by which certain things should have occurred - knowing when you know in other words. (We know people can get very stuck on this one.)

Reliance on YM: Very often an area of difficulty for me in trading the NK or DAX would not arise in the ES (ideally) because of the correct use of the YM. I appreciate the focus here is on the ES (rightly so) but I have a gnawing/nagging feeling whenever you resort to the YM as providing the answer. I'm sure you know what I mean and I admit it does seem churlish of me to complain when the ES/YM inter-relationship has been explained so well. If you dropped all YM monitoring and analysis, how would you do?

Thanks once again, you are an inspiration.

 

[ehorn]

How are you folks setting up your displays these days? I am hoping to stimulate some discussion as to the whats and whys for a particular display setup and how it is working for folks and their visual sweeps.

I have a 1 monitor setup. Real high-tech

It is a (20" widescreen) consisting of 2 charts side-by-side (YM 2M on the left and ES 5M on the right) using Ensign. This takes up about 95% of the screen - with 50% of that for YM and 50% ES. I currently have only price and volume on the charts, price is 90% of the height and volume is 10%.

Then on the far right I have ES T&S (Ninja Trader) in upper right filtering sales >= 20 (BTW I like the default color scheme for this as it goes off like a brightly lit christmas tree when the blocks start firing off ). In the lower right is the static DOM (Ninja Trader) fixed at 8 points in lower right.

What do you have your charts settings at? I have YM price fixed at about 200 PTs and ES fixed at 25 PTS.

How much time are you viewing in one chart at any given point (i.e. given your setup how much of the day, for each chart, can you see on the screen?

If this topic would be more appropriate in SW, let me know and I will ask mod to move it.

Thanks!

 

[Spydertrader]

Quote from PointOne:

If you dropped all YM monitoring and analysis, how would you do?

Think of the YM, not as providing an 'answer' (so to speak), but as a way, by which, a trader can 'carve the turn' a little more - compared to using the ES alone. Similarly to how using the 'finer tools' (DOM, T&S, Tic Charts and Str-Squ) allow the trader to 'carve the turn' even more, so too, does the YM perform in the same way for the ES - just not as fine a job as the 'fine tools' do. As a result, one simply needs to understand the sequences of events which occur - like dominos falling in a row - in the particular market in question. By determining which set of 'tools' best suits the needs of the market, and more importantly, to allow the trader to maximize the data input required to make an informed decision, all that remains is to understand not to try and grab every Tic - but to extract only as much as the particular market provides.

As I have often said, everything anyone ever needs resides in Price and Volume. Determining the best way to display this information is probably all you really need.

- Spydertrader

 

[R/R]

Jeez, looks like you guys had more fun last night than I did at the party I went to. Just getting caught up on all of the great posts.

Quote from bi9foot:

The ES has exited the lateral formation, we cannot look at the YM (at the moment of the snap shot)....

Bi9: I would like to debate this point.
The 12:30 ES bar remained ON THE LINE (lower lateral horizontal trend line) therefore I disagree with your statement. So let's try to clear this up so we all have the same understanding.
Please take a look here, however the context was VE and LTL. Isn't a Lateral described by horizonal trend lines?
http://www.elitetrader.com/vb/showthread.php?s=&postid=1801255#post1801255

 

[cnms2]

I guess you can use a 2 min chart of your trading vehicle...

Quote from PointOne:

... the ES/YM inter-relationship has been explained so well. If you dropped all YM monitoring and analysis, how would you do?
...

 

[Breakeven]

Quote from Spydertrader:

Anybody want to be short in the face of increasing black Volume?

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1804542>

Spyder,

I have a question on the FBO of the YM lateral 12:28 bar. At the time this bar opens the ES is still giving permission to check the YM and the YM breaks out on inc PRV showing change. At this point the ES is moving up on dec vol (still in the dip/lateral) showing continuation.

I reversed long on the 12:28 YM bar, then back short by the end of the same bar. I did get back on the right side but got chopped a bit.

I guess what I am asking is, when told to look at the YM should I take whatever it tells me, or should I filter that through what I "know" is happening on the ES? How should I have known at that point that the YM was not leading the way out of the lateral?

Or put another way, what did I miss on the 12:28 YM bar? What was the YM telling me that would have kept me short on this bar?

Thanks for any insight!

 

[cunparis]

I'm towards the beginning of the second journal and I'd like to start testing out the method on equities. Last week I was just observing, a few of the stocks on the watch list went up 7% thursday & friday. So now I'd like to try with a small amount of money (that I can afford to lose).

I did the scans and made the watchlist. Which reminds me, is anyone using the java program that was in one of the journal threads (I forget if it was journal 1 or 2)? Tonight while using it I found a problem (probably due to changes in the clearstation website) and I fixed it (I'm a Java developer). I can post the fix if anyone is interested. If the original author is ok with it, I wouldn't mind enhancing it a bit.

Which reminds me of another question I have: It seems most of you are doing futures now. I'm curious why you changed from equities to futures. Well the reason must be obvious, you're making more money on futures right? But why? I'm on page 50 of the 2nd journal so I haven't see anything about futures yet but I'm very eager to see what the method is for futures. I was in the middle of learning futures wanting to move from equities to YM when I found this method.

Anyway, I did a stocktables scan 90 RS & 80 Earnings (thinking RS was the more important of the two). Then I did the scans and combined my final universe with the final universe posted by spydertrader last week.

I ended up with the following watch list for Monday:

Today's Alerts

*Date* *Symbol* *Alert Type* *Shares* *Order Type* *Order Price* *Signal*
2/22/2008 ANW Buy 157 Market N/A In Dry Up
2/22/2008 ATV Buy 538 Market N/A In Dry Up
2/22/2008 AZZ Buy 148 Market N/A In Dry Up
2/22/2008 BHS Buy 346 Market N/A In Dry Up
2/22/2008 BKI Buy 415 Market N/A In Dry Up
2/22/2008 BONT Buy 758 Market N/A In Dry Up
2/22/2008 DSL Buy 168 Market N/A In Dry Up
2/22/2008 DSX Buy 163 Market N/A In Dry Up
2/22/2008 EMKR Buy 440 Market N/A In Dry Up
2/22/2008 EXM Buy 136 Market N/A In Dry Up
2/22/2008 FMCN Buy 99 Market N/A In Dry Up
2/22/2008 GIGM Buy 254 Market N/A In Dry Up
2/22/2008 GKK Buy 235 Market N/A In Dry Up
2/22/2008 GMKT Buy 217 Market N/A In Dry Up
2/22/2008 GSOL Buy 386 Market N/A In Dry Up
2/22/2008 IMMR Buy 576 Market N/A In Dry Up
2/22/2008 JADE Buy 1,567 Market N/A In Dry Up
2/22/2008 JCG Buy 119 Market N/A In Dry Up
2/22/2008 LQDT Buy 483 Market N/A In Dry Up
2/22/2008 LXU Buy 210 Market N/A In Dry Up
2/22/2008 MALL Buy 555 Market N/A In Dry Up
2/22/2008 MTH Buy 331 Market N/A In Dry Up
2/22/2008 POZN Buy 406 Market N/A In Dry Up
2/22/2008 RATE Buy 113 Market N/A In Dry Up
2/22/2008 SFLY Buy 317 Market N/A In Dry Up
2/22/2008 SNHY Buy 232 Market N/A In Dry Up
2/22/2008 SXE Buy 188 Market N/A In Dry Up
2/22/2008 TGIC Buy 793 Market N/A In Dry Up
2/22/2008 VSR Buy 862 Market N/A In Dry Up
2/22/2008 WCG Buy 98 Market N/A In Dry Up
2/22/2008 XING Buy 730 Market N/A In Dry Up

It seems big. Most of those are score 0, there is one 7, and a few of the rest. Please let me know if you see anything suspicious. I created volume alerts in quotetracker and I hope to be at my desk tomorrow during the opening. I work 2-3 days/week which only leaves 2-3 for trading.

Finally, only one person PM'd me from my post last week asking if anyone else was a beginner to this method like I am. I doubt we're the only ones. Is it ok if we post about equities trades here?

Good luck to everyone for the week ahead.

 

[Tums]

Quote from cunparis:

...Which reminds me of another question I have: It seems most of you are doing futures now. I'm curious why you changed from equities to futures. ...

People didn't changed to futures.
There has always been 2 distinct groups of traders, a few people straddles both groups.

It seems the equities group has more people with day jobs, while the futures group with more full time traders.

The equities group tend to pick up and go.
The futures group... heheh... need more handholding, thus more back and forth discussion.

I am glad the threads is combined; I get to know what is going on with the equities group.