Question for Grob/Hershey...

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Quote from Dantheman:

i think if you excercised a little patience to wait for your wash price (same entry/exit)
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the question that needs to be answered is 'what's the best way to wash and still have protection against a runaway mkt against you?'
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This is what I've been pondering since Friday.

What exactly is a wash? What are the action steps you take to perform one? When do you know you should wash? When do you know you should *not* wash?

The definition I held of a wash trade was "you realize that you are on the wrong side of the market, and try to hold to get out at break even." I am completely re-evaluating that definition.

Some of my observations:
1. On the trading description examples I have seen, I've noticed that a line states "wash", with the next line "reverse." Many times the wash occurs during the same bar that the position began on. I think I remember seeing some washes where they were held multibar, but not on any of Jack's examples.

2. In the thread here
http://www.elitetrader.com/vb/showthread.php?s=&postid=800525&highlight=washing+only#post800525
He makes a distinction between washing, and exiting the market when you don't know what's going on. He then briefly touches on how the "TERMINATOR may be used for the longer hold drill on washing."

3. Here he has a very good skeleton of how to begin to learn to trade, and touches on washing: http://www.elitetrader.com/vb/showthread.php?s=&postid=786619&highlight=washing+only#post786619

It is so calming to know that you can always wash after an entry where the market has taken you into a trade as a consequence of price movement caused by smart traders. There is nothing wrong with entering the market a little later than the smart money.
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Break this sentence apart. I've read this over 50 times, and on this last time alone I saw something new. Look at the preconditions he describes here. Look at the postconditions that will occur if they are met.

I need to dwell on this and some other posts some more, but I think that if you are in a position where you don't know if you can wash without a big move against you - you need to exit right then and there.

Anthony
 
I don´t understand why some of you continues to try to catch the rockets? To me it´s almost the same thing as chasing the market. I mean there are a whole lot of pros just waiting for amateurs to enter the rockets so they can fade them. When I see a rocket forming I take a break and put on some coffee cause they´re way to difficult to handle for me :)
I´m practising a lot on washes just like you, wich I think is the main reason why I´m now slightly profitable (in the simulator) when I have a bad day, where I used to loose 2-3 points.

good luck tomorrow to you all,
Stalker
 
Because Jack recommended them as a good starting point for beginners :)

You start with them and iteratively refine until you get to SCT.

Rockets are easy to enter - easy to identify and slip in.

My first challenge with them is getting out in time, before it crashes back on the launching pad. I believe the wash trade here is the key to that. My second challenge is recognizing when they are out of fuel. I believe volume is the key to this. I haven't reached an "aha" state with these though.

10-19-05 in the PM was a good example of a rocket, IMHO.
 
Quote from Grob109:
The am worked for you with these tick ranges on particular bars. Think while you debrief what was it that correlated with that successful movement. Being as you were short, you may feel more aspects of newness. In the pm try to drebrief and see what was not correlating that was there in the am. What you are finding out is where a change in monitoring occurred durin the three "hold" periods. What you become aware of is the place where learning is now continuing for you. Here is the picture: this am the sufficiency of conditions was less complex and you handled this well. In the pm, additional facets were at play that required synthesizing into the picture. One or more of these facets became the dominating feature of why making money eluded you. Look around especially as bars reach limits of their size (and which end) and when in the time of the bar formation this occurs. You will see, concurrently, other parts of your sweeps telling you when change is coming up.
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Jack, thank you for your posts last week -- you gave me some pointed areas to look at in my debriefing that have been helpful. I've been looking closer at how the 5m ES breaks down into 1m bars and I believe I've found what you are referring to above. I've attached a 1m ES chart from Thursday afternoon with the bars grouped in to 5m chunks. What struck me is that most 5m bars seem to set their high/low on the first/last minute of the bar, meaning there are few changes of direction inside the bar.

Also, I've identified several factors that affected my am vs. pm... starting the day just under the IT, wider range bars am, smoother transition between bars (tape). But as best as I can tell, the dominating feature that you refer to was volume. My best trade in the am was a short tape with five consecutive bars of min 14k. When I got shredded in the PM we had two hours without a bar above 14k. This was also the case on Friday and Monday.
 

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This was a thread about channel trading for a long while, now it´s´all this talk about rockets beacause there are documents several years old that says it´s a beginners trade. Well market conditions change.
 
Hypotamus, didn´t you have a job that took a lot of time so you couldn´t follow the markets so often? You seem to have a awfull lot of spare time :)
 
The 80/20 levels on the stochastic can mean different things depending on market conditions. If you define the rocket as going short when you cross the 20 or long when you cross the 80 when the market has no particular direction you will get creamed but this should be obvious as the popular use of them is just the opposite. Have you tried testing rockets with different volume levels as a filter? Would be curious to see how that would work out.
 
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