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
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
