S/R Emini Journal

[jrlvnv]

took a long entry at 1272.25 at 8:10pst... got out with a tick of profit and reentered again at 8:18pst... got out with the 2 points in less then a min...

4re you the MAN... nice system

 

[4re]

Quote from Lamont_C:

I wasn't referring to anybody in particular with regard to over-trading. I was emphasizing a key principle behind what you're doing. One man's over-trading is another man's most profitable MO, but over-trading is nonetheless one of the most common causes of failure over time.

Yes, I knew what you were saying. And I am with you.

You seem like the type that also studies the psychology of the markets. Am I right? I am big into this part of the market. I like to know why the market is moving as much as when it is moving.

 

[4re]

Quote from Lamont_C:

I don't want to rain on your parade re the MAs. If they work for you, great. But think about looking to the left when you use them and you may be able to obtain a greater benefit from them.

How is that? I just look in the now I guess. I mainly use them to keep me in a trade and at the angle it is presenting.

 

[4re]

Quote from jrlvnv:

took a long entry at 1272.25 at 8:10pst... got out with a tick of profit and reentered again at 8:18pst... got out with the 2 points in less then a min...

4re you the MAN... nice system

Glad you like it. We are just trying to have fun makin monee and new friends.

Good job, you and Lamont both took the trade I should have taken. But we are all happy since we all made profit.

 

[Lamont_C]

Quote from 4re:

How is that? I just look in the now I guess. I mainly use them to keep me in a trade and at the angle it is presenting.

Well, for example, note how I've marked your chart: the two lateral S/R levels and the two minor consolidations.

As for psychology, yes. Without it, no other means of determining S/R makes any sense, nor does it test out well enough. Which is why using Fib or MAs or TLs or some other form of S/R is only occasionally and generally useful. For example, if the 60d EMA is truly to serve as S/R, then enough traders must be using it in order to move price. If they aren't, then any movement around that MA is most likely purely coincidental.

However, if you look to the left, you'll note that little congestion area just before price plunges toward 1280. This is not to say that any unusual price activity around that area is due to the congestion and not to the MA. However, if one believes that S/R are created by trader behavior, assigning the responsibility to the congestion area makes more sense.

 

[4re]

Quote from Lamont_C:

Well, for example, note how I've marked your chart: the two lateral S/R levels and the two minor consolidations.

As for psychology, yes. Without it, no other means of determining S/R makes any sense, nor does it test out well enough. Which is why using Fib or MAs or TLs or some other form of S/R is only occasionally and generally useful. For example, if the 60d EMA is truly to serve as S/R, then enough traders must be using it in order to move price. If they aren't, then any movement around that MA is most likely purely coincidental.

However, if you look to the left, you'll note that little congestion area just before price plunges toward 1280. This is not to say that any unusual price activity around that area is due to the congestion and not to the MA. However, if one believes that S/R are created by trader behavior, assigning the responsibility to the congestion area makes more sense.

You are right, That is why I hate trading on the fly. I always miss something important.

Proves to me that the cliche I try to trade by "Plan your trade and trade your plan is correct. Especially if you look at today, the 1272.25 trade has worked I think 4 times so far.

 

[Lamont_C]

Quote from 4re:

You are right, That is why I hate trading on the fly. I always miss something important.

Proves to me that the cliche I try to trade by "Plan your trade and trade your plan is correct. Especially if you look at today, the 1272.25 trade has worked I think 4 times so far.

Something else to think about, if you want to, is the average daily range, which provides its own S/R apart from whatever the swing points are. It's not a lock, but I keep it in mind to keep myself from becoming overconfident.

For example, the ADR for the ES is currently around 14. Applied to today's trading, that would give you an upward "limit" of around 85 (which is only a couple of points away from that congestion/your EMA). Knowing what the limit is also helps me to avoid taking trades that are near that limit unless there is some compelling reason to override my better judgment and take the trade anyway (about once a month, there is a substantial range expansion similar to the one on the 11th, and it pays to play it).

On the whole, the ADR has little to do with how you yourself trade your particular system. But if there were some sort of parabolic move that covered the range very quickly, knowing the range might prevent you from taking a further entry in the same direction.

Just a thought. Something to play with.

 

[JimmyJam]

Did ET just do a "brain freeze" or what?
***

I wasn't referring to anybody in particular with regard to over-trading. I was emphasizing a key principle behind what you're doing. One man's over-trading is another man's most profitable MO, but over-trading is nonetheless one of the most common causes of failure over time.

Lamont_C

Overtrading is definitely something that "I" have to look at and be aware of. It's just that I believe the market offers many opportunities to make profitable trades on an intra-day basis (this MAY or MAYNOT be true). If it's a criticism, I think it's a good one and I'll definitely take it to heart (kinda like tell'in a baller, "pick your shots") when he's (or she) is making poor shoot selection.

I don't want to rain on your parade re the MAs. If they work for you, great. But think about looking to the left when you use them and you may be able to obtain a greater benefit from them.

Lamont_C

Yeah, I ditched the MAs when I realized that by looking left I could find previous defined points of Support/Resistance (so far, working like a charm ). But I use Quotetracker, and it only backfills for 10 trading days, which is why yesterday I couldn't find the bottom (oh yeah, and also, there's wasn't one, you had to go back to the previous year!).

BTW, K-Rock around?, I hope he's getting some of this action!

... And you made the point about cherry picking the best trades of the day as well. Which if you feel like you are cherry picking there is no fear of size.

Yes, on losing days I lose more money but I at least try to make it up the next day on one trade.

4re

You appear to be using multi-day probability. (If you have a method that delivers 75 to 80 percent of the time on any given day, and the method doesn't deliver one day, the following day it has a higher probability - 100+ percent - of delivering.)

Is that correct?

What does your records/backtesting show?

If so, this is the first time that I've heard of it, and it sounds like a very powerful concept ...

Best,

Jimmy

 

[4re]

Quote from Lamont_C:

Something else to think about, if you want to, is the average daily range, which provides its own S/R apart from whatever the swing points are. It's not a lock, but I keep it in mind to keep myself from becoming overconfident.

For example, the ADR for the ES is currently around 14. Applied to today's trading, that would give you an upward "limit" of around 85 (which is only a couple of points away from that congestion/your EMA). Knowing what the limit is also helps me to avoid taking trades that are near that limit unless there is some compelling reason to override my better judgment and take the trade anyway (about once a month, there is a substantial range expansion similar to the one on the 11th, and it pays to play it).

On the whole, the ADR has little to do with how you yourself trade your particular system. But if there were some sort of parabolic move that covered the range very quickly, knowing the range might prevent you from taking a further entry in the same direction.

Just a thought. Something to play with.

Yes, I do look at the ADR. I don't usually trade by it but if I am in a trade that is taking too long to work then I start looking to it.

 

[Lamont_C]

Quote from JimmyJam:

But I use Quotetracker, and it only backfills for 10 trading days, which is why yesterday I couldn't find the bottom (oh yeah, and also, there's wasn't one, you had to go back to the previous year!).

For reference: