Matcha's Dow E-mini Journal

[Bolimomo]

Quote from PatientOperator:


.....
Thanks Boli for the data:
TRIN:
2.00 - a thick red horizontal line for super bearish, Short trades only
1.50 - a thin red horizontal line for bearish
0.70 - a thin green horizontal line for bullish
0.50 - a thick green horizontal line for super bullish, Long trades only

I try to trade mainly long or short accordingly and if the TRIN is between 0.7 to 1.5, long or short will be considered. I also look at the slope of the TRIN data to see where we are going.

TICK:
1000 - a thick red horizontal line for super bullish, reversal a hi prob.
-800 - a thick green horizontal line for super bearish, reversal a hi prob.
I also inserted 2 white horizontal lines (at 600 and -500). Anything in between is in the neutral zone - no particular attention required except may be the direction it's heading.

PO and Matcha:

It's good to keep monitoring $TRIN and $TICK. But they are not the gospel. I would not advice to trade based on $TRIN/$TICK alone. They are to be viewed in the context of the day's environment.

For example, a while back I had an idea: why don't I just fade the market (e.g. trading SPY) based on $TICK. Short if 1min $TICK > 1000. And long if 1min $TICK <-800. The result was miserable. The reason is because... like all indicators... the difficult part is: the interpretation of these indicators are context dependent. They are to be interpreted differently (exactly opposite) in different context.

e.g. At the beginning of an uptrend, $TICK >1000 maybe caused by an impulse move, which sparks a rally. So is the second wave... $TICK >1000 is just a continuation. It is not until the trend has matured, and is accelerating up... then the $TICK >1000 probably will end a trend. But it may or may not cause a reversal. Strong trends are not followed by immediate reversals. Only by ranges. So shorting based on $TICK, no matter how you look at it... is bad. (Similar for downtrends.)

Price (or index value) is still "the" thing to look at. Everything else is supplemental.

It is this very same reason (dual interpretations of indicators) that many pure, simple mechanical trading systems do not work. Despite being a former computer programmer, I couldn't come up with any mechanical trading strategy in TradeStation that yields consistent profits. I believe that there are 2 factors: 1) I don't have adequate logics in the trading systems. 2) Through TradeStation, I do not have enough access to market data other than just the instrument's price series.

Anyway... again look at $TRIN and $TICK in the context of the market environment and as a guide for a bias and a confirmation of a trade you want to make. They are not to be used alone.

And from time to time $TRIN has weird readings. For example, just a few weeks ago I have seen $TRIN as high as above 7. Very weird.

 

[Bolimomo]

Quote from Matcha:

Boli.
do you also monitor put/call ratio? is it on one of your 21 monitors?

No I don't monitor put/call ratio. I found that it's not that valuable for day trades. They are more pertinent to swing/position trades IMO.

 

[~~~]

Quote from Bolimomo:

You can't go cheap on me now!

I want my abalone, shark fin soup, Australian lobsters, Typhoon Shelter crab, suckling pig and, of course, chowing down with some Remy Martin XO. (Or a Mou Tai will do...)

haha.. sometime i am very generous.. sometime i am very frugal
hmmm.. considering you are smart and charming, and we're both good warroirs and i don't want we killed each other with our 'kung-fu' so may i suggest we toss a coin to decide ...

if "heads" ... i buy you milk tea, dan tart or black forrest cake ...
if "tails" you buy me abalone, shark fin soup, australian lobters, thyhoon shelter crab, suckling pig and some teas will do, thank you no need remy martin xo (see i am so generous again always thinking of saving you $ )

i not only master "the art of the war" i also master "the art of the deal" not by donald trump but by ME lol.

hey warrior.. have you been to Xi'an??

To Matcha & OP .. this is a good example for trading tips, if u lose.. u lose small, if u win... u wanna win Big!

 

[Bolimomo]

Quote from ~~~:


.....
i not only master "the art of the war" i also master "the art of the deal" not by donald trump but by ME lol.

hey warrior.. have you been to Xi'an??

That's very true. PO and Matcha take note... see how Big Sister drives a bargain! That's why she is a pro.

Trading is similar. Buy when nobody wants it. Sell when *everybody* wants it. Buy wholesale, sell retail. Repeat.

RE: Xi'an. No haven't. Beijing, Shanghai, Guilin, HuangShan, Hangzhou, Dalin, Zhenyang, Nanjing, Guongzhou... that's all. Next trip maybe. Most of them over 10 years ago. Maybe things have changed... hard to trade on a laptop in Mainland China via the Internet. (Well... Internet was not that widely accessible until recent years...)

 

[Bolimomo]

Quote from ~~~:


.....
To Matcha & OP .. this is a good example for trading tips, if u lose.. u lose small, if u win... u wanna win Big!

Yeah. In food terms... risk a milk tea for the potential reward of Abalone and Shark Fin soup. Very good trade.

 

[~~~]

Quote from Bolimomo:

That's very true. PO and Matcha take note... see how Big Sister drives a bargain! That's why she is a pro.

Trading is similar. Buy when nobody wants it. Sell when *everybody* wants it. Buy wholesale, sell retail. Repeat.

RE: Xi'an. No haven't. Beijing, Shanghai, Guilin, HuangShan, Hangzhou, Dalin, Zhenyang, Nanjing, Guongzhou... that's all. Next trip maybe. Most of them over 10 years ago. Maybe things have changed... hard to trade on a laptop in Mainland China via the Internet. (Well... Internet was not that widely accessible until recent years...)

Thank you for your kind words, Sir!
wow... 10 years ago, now many changes in China. I love Yangshuo~the small town in Guilin .. very peaceful and beautiful.

 

[Matcha]

Wow, a bearish trending day. TRIN and TICK help me get out of troubles. No long positions to day saved me lots of money and energy.

Market open gapped down then sell-off like unstop. I have a rule that not trade the first half an hour. So I missed the entire move. It was painful to see it came down without taking any actions.

Trin has been staying about 2.6 most of the time. So only shorts today.

Trade A. Price break the bull flag. Short.
25 points. Took profits quickly, at previous LOD. Plus Tick reached -1000

Trade B: Breakout pull back. Had to take profit quickly too before 9:00.
10 Pts

No trade during 9:00-11:00. Probably in such a strong trending day, I should started to hold position during that 2 hours.

When I came back to my desk: 10:30pst. Price is channeling down. The move looks very extensive. I waited. 11:25-12:00, price formed an asymmetrical pattern. Look for breakout trade. 10065 zone is the 38% retrace of the entire 6 day rally. If this level is not holding, continue to short. Trade C is the break out trade

Trade C: short. 24Pts

Today’s PnL: +293, 5 trades, 80% winrate
Today $TRIN closed at 4.96. If next Monday or Tuesday, price does not rally. I will look to continue short. Especially if the 38% retracement zone 10065 does not hold. I will look for next level, 50%Fib zone-9980. If we rally back next week, it could be a bullish sign. Prepare to take long side of the trades. Let’s see.

Weekly recap:

PnL: $128
Avg# trade per day: 6
Winrate 61%
Mistakes :7
Cost of Mistakes:-402
Comments: Continue to look at multiple time frame, continue to monitor TRIN and TICK. Learn when to use them when to dump them.

Got to go study now. “Inception” is playing, everyone!!!! Have a great weekend!

 

[Went Fishing]

Good Shoot'n

<*)))><

 

[NoDoji]

Quote from Matcha:

Market open gapped down then sell-off like unstop. I have a rule that not trade the first half an hour. So I missed the entire move. It was painful to see it came down without taking any actions.

Nice trading, Matcha!

It makes sense not to trade the first 30 minutes with stocks due to the emotional baggage of overnight gaps having to be shed, but I don't understand the value of having a rule not to trade the first 30 minutes when you trade futures, since the price action continuous. A lot of excellent moves occur during pre-market and into the open, as well as right off the open.

Have a great weekend!

 

[PatientOperator]

Quote from Bolimomo:

PO and Matcha:

It's good to keep monitoring $TRIN and $TICK. But they are not the gospel. I would not advice to trade based on $TRIN/$TICK alone. They are to be viewed in the context of the day's environment.

For example, a while back I had an idea: why don't I just fade the market (e.g. trading SPY) based on $TICK. Short if 1min $TICK > 1000. And long if 1min $TICK <-800. The result was miserable. The reason is because... like all indicators... the difficult part is: the interpretation of these indicators are context dependent. They are to be interpreted differently (exactly opposite) in different context.

e.g. At the beginning of an uptrend, $TICK >1000 maybe caused by an impulse move, which sparks a rally. So is the second wave... $TICK >1000 is just a continuation. It is not until the trend has matured, and is accelerating up... then the $TICK >1000 probably will end a trend. But it may or may not cause a reversal. Strong trends are not followed by immediate reversals. Only by ranges. So shorting based on $TICK, no matter how you look at it... is bad. (Similar for downtrends.)

Price (or index value) is still "the" thing to look at. Everything else is supplemental.

It is this very same reason (dual interpretations of indicators) that many pure, simple mechanical trading systems do not work. Despite being a former computer programmer, I couldn't come up with any mechanical trading strategy in TradeStation that yields consistent profits. I believe that there are 2 factors: 1) I don't have adequate logics in the trading systems. 2) Through TradeStation, I do not have enough access to market data other than just the instrument's price series.

Anyway... again look at $TRIN and $TICK in the context of the market environment and as a guide for a bias and a confirmation of a trade you want to make. They are not to be used alone.

And from time to time $TRIN has weird readings. For example, just a few weeks ago I have seen $TRIN as high as above 7. Very weird.

Thank you Boli for the clarification on the usage of t and t.

I will keep that in mind - Price (or index value) is still "the" thing to look at. Everything else is supplemental.

--po