Keeping It Simple
- Thread starter dbphoenix
- Start date
DB could you clarify this, I am still reading the thread and will try to find these answers to my questions...but please understand this is a long thread.
For the NQ, enter a trade using a stop (or stop-limit) 2 points
HOW ABOUT THE ES? DO I ASSUME 1 POINT OR 0.75 ?
outside the opening range.
OPENING RANGE? THIS IS RATHER SUBJECTIVE....IS THIS THE HIGH AND LOW CHANNEL OF THE FIRST FEW BARS? HOW MANY BARS? COULD YOU EXPLAIN MORE.
When filled, place your initial loss-limit stop.
IF YOU USE A 4 POINTS STOP IN THE NQ THEN IS A 2 POINTS STOP GOOD FOR THE ES?
When this trendline is broken, place your cover stop below the last reaction
WHAT IS LAST REACTION?
low if long or above the last reaction high if short (3m chart).
If and when the limit of the 10d average range is reached,
WHAT IS THIS AVERAGE RANGE...WE DO NOT USE A TRUR RANG INDICATOR OR ANY INDICATOR. HOW DO YOU QUICKLY CALCULATE THE 10 DAY RANGE? OR IS THIS A 10 PERIOD RANGE?
DB thank you for the post on 12/21/02. Your use of this method seems to pull together the rules in a single post. Just these few hanging questions which have probably been asked and answered in this thread, somewhere.
Michael B.
For the NQ, enter a trade using a stop (or stop-limit) 2 points
HOW ABOUT THE ES? DO I ASSUME 1 POINT OR 0.75 ?
outside the opening range.
OPENING RANGE? THIS IS RATHER SUBJECTIVE....IS THIS THE HIGH AND LOW CHANNEL OF THE FIRST FEW BARS? HOW MANY BARS? COULD YOU EXPLAIN MORE.
When filled, place your initial loss-limit stop.
IF YOU USE A 4 POINTS STOP IN THE NQ THEN IS A 2 POINTS STOP GOOD FOR THE ES?
When this trendline is broken, place your cover stop below the last reaction
WHAT IS LAST REACTION?
low if long or above the last reaction high if short (3m chart).
If and when the limit of the 10d average range is reached,
WHAT IS THIS AVERAGE RANGE...WE DO NOT USE A TRUR RANG INDICATOR OR ANY INDICATOR. HOW DO YOU QUICKLY CALCULATE THE 10 DAY RANGE? OR IS THIS A 10 PERIOD RANGE?
DB thank you for the post on 12/21/02. Your use of this method seems to pull together the rules in a single post. Just these few hanging questions which have probably been asked and answered in this thread, somewhere.
Michael B.
HOW ABOUT THE ES? DO I ASSUME 1 POINT OR 0.75 ?
1pt.
OPENING RANGE? THIS IS RATHER SUBJECTIVE....IS THIS THE HIGH AND LOW CHANNEL OF THE FIRST FEW BARS? HOW MANY BARS? COULD YOU EXPLAIN MORE.
Originally, Mike set 1000 as the cutoff for the opening range, but I've found that the high or low is often set at least a few minutes and as much as ten minutes before 1000. If you want to establish a time as a cutoff for determining the opening range, you may. Or you can let price find its own range in its own time.
Much of this depends on the gap, if any, and the degree of the gap. If the gap is relatively small and likely to fill, then a good part of the first half hour will be taken up by filling that gap, then returning to somewhere near the opening price. If there's no gap, then much of the first half hour will be spent with buyers and sellers probing each other for strengths and weaknesses. That's what makes the breakout, when it comes, fairly reliable.
There is also the issue of reports. Sometimes these are issued at 0945, sometimes at 1000. Entering a trade one minute before the issuance of a report is not real smart. Therefore, it's best to wait at least a couple of minutes to see what the reaction is.
For all these reasons, it's difficult to give a certain number of bars as a "rule".
IF YOU USE A 4 POINTS STOP IN THE NQ THEN IS A 2 POINTS STOP GOOD FOR THE ES?
3pts are suggested for the ES, and I use 5 for the NQ.
WHAT IS LAST REACTION?
A reaction is a retracement or a pullback or any sort of counter-trend movement. See the Determining Trend thread for a chart.
WHAT IS THIS AVERAGE RANGE...WE DO NOT USE A TRUR RANG INDICATOR OR ANY INDICATOR. HOW DO YOU QUICKLY CALCULATE THE 10 DAY RANGE? OR IS THIS A 10 PERIOD RANGE?
I don't know how you define "quickly". The first time you do it, you'll have to write down 10 numbers, add them up, and divide by ten. Each time thereafter, you'll add the current day's range, drop the range ten days ago, and calculate a new average. This takes less than a minute.
However, these numbers do not change rapidly or dramatically. The NQ has been around 28-30 for quite some time, and the ES around 16-18. You could just re-calculate them once a week or every two weeks.
You can, of course, change any of these numbers to suit. This is a structure and will most likely have to be adapted as markets change. But it always puts you on the correct side of the trade and it keeps you out of chop.
--Db
1pt.
OPENING RANGE? THIS IS RATHER SUBJECTIVE....IS THIS THE HIGH AND LOW CHANNEL OF THE FIRST FEW BARS? HOW MANY BARS? COULD YOU EXPLAIN MORE.
Originally, Mike set 1000 as the cutoff for the opening range, but I've found that the high or low is often set at least a few minutes and as much as ten minutes before 1000. If you want to establish a time as a cutoff for determining the opening range, you may. Or you can let price find its own range in its own time.
Much of this depends on the gap, if any, and the degree of the gap. If the gap is relatively small and likely to fill, then a good part of the first half hour will be taken up by filling that gap, then returning to somewhere near the opening price. If there's no gap, then much of the first half hour will be spent with buyers and sellers probing each other for strengths and weaknesses. That's what makes the breakout, when it comes, fairly reliable.
There is also the issue of reports. Sometimes these are issued at 0945, sometimes at 1000. Entering a trade one minute before the issuance of a report is not real smart. Therefore, it's best to wait at least a couple of minutes to see what the reaction is.
For all these reasons, it's difficult to give a certain number of bars as a "rule".
IF YOU USE A 4 POINTS STOP IN THE NQ THEN IS A 2 POINTS STOP GOOD FOR THE ES?
3pts are suggested for the ES, and I use 5 for the NQ.
WHAT IS LAST REACTION?
A reaction is a retracement or a pullback or any sort of counter-trend movement. See the Determining Trend thread for a chart.
WHAT IS THIS AVERAGE RANGE...WE DO NOT USE A TRUR RANG INDICATOR OR ANY INDICATOR. HOW DO YOU QUICKLY CALCULATE THE 10 DAY RANGE? OR IS THIS A 10 PERIOD RANGE?
I don't know how you define "quickly". The first time you do it, you'll have to write down 10 numbers, add them up, and divide by ten. Each time thereafter, you'll add the current day's range, drop the range ten days ago, and calculate a new average. This takes less than a minute.
However, these numbers do not change rapidly or dramatically. The NQ has been around 28-30 for quite some time, and the ES around 16-18. You could just re-calculate them once a week or every two weeks.
You can, of course, change any of these numbers to suit. This is a structure and will most likely have to be adapted as markets change. But it always puts you on the correct side of the trade and it keeps you out of chop.
--Db
Given the extraordinary length of this thread, I've decided to start over with Keeping It Simple II, same forum. I've posted there the rules with the slight modifications I've made since December. Let's move the discussion there and spare newcomers the torture of having to slog through all these posts.
--Db
--Db