reversals

nwbprop:
seems you are using a breakout approach. ES is too choppy to use breakout apporach. You need to enter early to keep being stopped out.
 
Quote from Trend Fader:

Simple answer.. trend trading the ES intraday is a losers game. You are basing an entire method on an instrument that is one of the most choppiest trading vehicles in the world. If you want to trend trade intraday go with currencies or bonds..




--MIKE
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Bonds can chop you to pieces as well. The biggest difference between bonds and ES is that when a directional move occurs bonds just like to take off and not look back, while the Es keeps backing and filling. This can also be used to your advantage, you just have to adapt to it. In fact the Es gives you much more opportunities to enter during a trend than the bonds.:) Personally i find NQ/ES easier to trade than bonds.
 
nwbprop:
There have been some good points made here by others. Seems to me you're trying to trend trade a contract (ES) in a time frame it's not known for trending in to start with, in other words you may want to consider a longer time frame. Another possibility might be to only take trades during the first and last 60 - 90 mins of the day. Or another possibility might be to use the second longer time frame you mentioned as a "trend filter", taking trades in the shorter time frame only in the direction of the trend in the longer time frame.
 
Quote from nwbprop:

I currently trade the ES mini and have a problem i am trying to solve that seems easy but is killing my PnL. I would like to hear other peoples opinions on the way I trade or ANYTHING else as I may be going about trading wrong(back to the drawing board)=(

I am a trend trader. Essentially i look for a trend to be initiated using 5 min bars with lower lows and lower highs. For reversals i look for breaks of 5 min bars that lead to breaks of 15 min bars to confirm the reversal. The current problem i have is that reversals on the 5 min bars often fail too continue and often lead back into the original trend direction. This can be seen as a 5 min bar pullback but does not break the prior 15 min bar confirming the reversal. Instead it resumes the 15 minute trend and does not turn into a reversal.

I know an easy way to get around this problem is to just use the 15 min bars high and low as reversal points instead of the 5 minute. I think though that the 5 min bars can offer a higher yield if traded correctly but it shows in my bank account that it churns more and gets me out of some nice slow moves(15 min trends) which happen much more frequently than the fast pace 5 min trends. If I cant figure this out successfully, I will use the 15 min bars for reversal points instead.

What I currently use for a possible reversal is 3 bar monitoring. For example, I will use a short trend. What signals a reversal long will be a break of the high of the prior 5 min bars high and a close above it. This signals to me a possible reversal. I will call this bar 1. What I want to happen is to see the next 5 min bar close higher than the last 5 min bar(bar 1). Essentially a confirmation of the reversal. If this was the case, then i would hold until it broke below the prior 15 min bars low or 1 tick below where i got in; whichever first.

There are many many combinations. With 3 bar monitoring, I have 3 options of my own. I can hold, sideline, or reverse. What I am doing now is not currently working for me.

A.I hold if i get bar 2 confirming my reversal and will exit if it breaks through my price after that. This in my opinion has a high probablility of being a reversal.

B.I hold if bar 2 is a inside bar(inside bar 1) or a bar that does not break below the price i entered. If this happens, i look for bar 3 to confirm my reversal. If that doesn't happen, I sideline.

C.I sideline if it breaks one tick below I entered. This means that the resistance that it broke through should act as support and it didn't because it broke through that level.

Right now B is holding me back cause it seems that half the time it continues as a reversal and half the time it continues the 15 minute trend. I don't want to be sidelined but I also do not want too take a loss for guessing on the way it will go.

This is probably not in enough context and I left out some combinations as it is still brainstorming and a work in progress. If you guys have other suggestions on reversals in ES, I am all ears. The examples above is usually in the context AFTER I get 2 15 min bars confirming the trend meaning 2 bars with a higher high and higher low. If anything in my post was confusing, please ask. Any replies would be appreciated. I have given this my all and more for the past year and will call it quits soon. Another one might bite the dust BUT it sure was a lot of fun and challenging.

Sincerely,

JC
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this may be off-topic.. but imagine if you sold short one ES or NQ a couple months ago, and held until yesterday... maybe adding on along the way?! Think of how low commissions would be and how much profit you could now book! But I'm used to holding overnights, and can't see how many can successfully day-trade futures for a longer period of time without being ground up. I do some futures from time to time, and my observation is that holding O/N would work best in many cases.

bonne chance....

Ic E
:cool:
 
Quote from NihabaAshi:

Hi nwbprop,

How come your not posting any charts to show exactly what your talking about ???

Charts of when it didn't work and when it did work.

NihabaAshi
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Thanks for all the replies. You are absolutely right that I should post some charts.

In the attached chart, i reversed and sidelined at the red circle after bar 2 did not close above bar 1. Bar 1 was the first bar to close above the previous 5 min bar. This is a perfect example of missing the biggest move of the day cause the trend resumed back down.

I did reshort at the pullback where I circled the green part and where it touched the left side of the TL.

JC
 

Attachments

Here is another chart where in the red circle I didnt get bar 2 closing above bar 1 so it was a sidleine and the trend resumed down.

The green circle shows a successful one that I took where we did get bar2 closing above bar 1 and confirming the reversal.
 

Attachments

Quote from nwbprop:

Thanks for all the replies. You are absolutely right that I should post some charts.

In the attached chart, i reversed and sidelined at the red circle after bar 2 did not close above bar 1. Bar 1 was the first bar to close above the previous 5 min bar. This is a perfect example of missing the biggest move of the day cause the trend resumed back down.

I did reshort at the pullback where I circled the green part and where it touched the left side of the TL.

JC
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I don't know what you mean by bar 1 and bar 2, but why would you reverse anything? The trend never resumed because the trend was never reversed in the first place. Each swing point is lower than the previous swing point.

I'm going to assume that you have all this written down and that you tested it before putting down real money. Your definitions of "trend" and "reversal" aren't profiting you.
 
In your very first chart the area you circled in red had a very good short signal based on two things. First you had a very nice reversal candlestick from the four previous up candlesticks, and secondly you had an INCREASE in volume on that down candlestick from the volume on the four previous up candlesticks. You have to learn about volume and study it to trade the es with any success IMO. Volume trends and sudden changes will give you some of the best complimentary trade signals while trading the es. :)
 
...I recently backtested on NQ in 5 min bars the classical definition of a trend which you use. It was marginally profitable with my transaction costs, but not good enough to trade IMO. Since my testing has shown that NQ is a better vehicle than ES, I would doubt that it is profitable in ES. Also I think it's way too obvious a system to rely on. IMO money is made on subtle systems which take a free ride on market manipulations.
 
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