Hi HG/Howard,
thanks for the great thread. I just finished dorsey's book and read through the first 1/3 of this thread and want to summarize for my own benefit and also to confirm my understanding and some questions.
If any of the below is wrong, please make the correction.
Patterns
I know many patterns are discussed, but i just want to focus on the basic ones as to keep it simple.
Best probability
False Double/Triple bottoms & tops
1) False double bottom (triple is same except add 2 more columns (xo pair) before the fakeout).
<table border=1><tr><td>o</td><td></td><td></td><td>x</td><td><--LONG SIGNAL</td><td></td><td></td></tr><tr><td>o</td><td>x</td><td></td><td>x</td><td></td><td></td><td></td></tr><tr><td>o</td><td>x</td><td>o</td><td>x</td><td></td><td></td><td></td></tr><tr><td>o</td><td>x</td><td>o</td><td>x</td><td></td><td></td><td></td></tr><tr><td>o</td><td></td><td>o</td><td>x</td><td></td><td></td><td></td></tr><tr><td></td><td></td><td>o</td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td><--STOPLOSS</td><td></td><td></td></tr></table>
2)False double top
<table border=1><tbody><tr><td></td><td></td><td></td><td></td><td><--STOP LOSS</td><td></td><td></td></tr><tr><td></td><td></td><td>x</td><td></td><td></td><td></td><td></td></tr><tr><td>x</td><td></td><td>x</td><td>o</td><td></td><td></td><td></td></tr><tr><td>x</td><td>o</td><td>x</td><td>o</td><td></td><td></td><td></td></tr><tr><td>x</td><td>o</td><td>x</td><td>o</td><td></td><td></td><td></td></tr><tr><td>x</td><td>o</td><td></td><td>o</td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td>o</td><td><--SHORT SIGNAL</td><td></td><td></td></tr></tbody></table>
Good probability
Triple tops/bottoms
1) Triple bottoms
<table border=1><tbody><tr><td></td><td></td><td></td><td></td><td></td><td><--STOP LOSS</td><td></td></tr><tr><td></td><td></td><td></td><td>x</td><td></td><td></td><td></td></tr><tr><td>o</td><td>x</td><td></td><td>x</td><td>o</td><td></td><td></td></tr><tr><td>o</td><td>x</td><td>o</td><td>x</td><td>o</td><td></td><td></td></tr><tr><td>o</td><td>x</td><td>o</td><td>x</td><td>o</td><td></td><td></td></tr><tr><td>o</td><td></td><td>o</td><td></td><td>o</td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td>o</td><td><--SHORT SIGNAL</td><td></td></tr></tbody></table>
2) Triple tops
<table border=1><tbody><tr><td></td><td></td><td></td><td></td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td>x</td><td><--LONG SIGNAL</td><td></td></tr><tr><td>x</td><td></td><td>x</td><td></td><td>x</td><td></td><td></td></tr><tr><td>x</td><td>o</td><td>x</td><td>o</td><td>x</td><td></td><td></td></tr><tr><td>x</td><td>o</td><td>x</td><td>o</td><td>x</td><td></td><td></td></tr><tr><td>x</td><td>o</td><td></td><td>o</td><td></td><td></td><td></td></tr><tr><td></td><td></td><td></td><td></td><td></td><td><--STOP LOSS</td><td></td></tr></tbody></table>
Money Management (ES intraday)
I find howard's management to make a lot of sense and very close to how i am trading the es, even though i am using time series charts with ma and price levels right now.
1) Trade 3x contracts
2) Take 33% profit at 1pt, another 33% profit at 2pt, and change the stop loss for the last 33% to trailing
3) Do not take trade if the initial stop loss(below/above the last o/x) is too wide >3 pt
4) Do not take trade if the risk/reward ratio is >1
Questions
1) How you finding investor RT now after 2 months for DAYTRADING ES, is it reliable? what datafeed are you using? If IB, did you sign up for DTN Market Access Historical Data for extra 15bucks a month?
2)
Quote from HolyGrail:
We need three points for a reversal so a reversal will occur at 25.00. To get a double top buy signal it will need to get to 26.
So even though it has not reversed as yet we place an order to go long at 26.00.
our stop will be at 21.00 if the stock does have a reversal.
http://www.elitetrader.com/vb/attachment.php?s=&postid=1850249
If your entry is 26, and stop loss is 21. Are you expecting a 5pt gain to satisfy the 1:1 ratio? Looking at the chart, it has first resistence at 29. I am just curious what is your risk/reward plan and logic for this entry
3) I know this was discussed, but for intraday ES trading are you using CLOSE or HIGH/LOW? I did some testing and they produce vastly different charts depends on the price action. Just curious.
4) Why are the below 2 chart different, 1 is from your attachment, the other is from stockcharts.com For the life of me i cannot figure out why. (It's not high/low vs close, i tried both, box size etc are also the same).
LEH: I put the difference in the red box
Your chart:
http://spoki.com/showphoto.php?photo_id=29
Stockcharts.com:
http://spoki.com/showphoto.php?photo_id=30
thank you once again!
