S/R Emini Journal

[sandygray66]

Quote from 5Pillars:

For the S/R weekend crew (darn hard core bunch here)....one other market profile method that I have never talked about here is to draw "horizontal" lines at the high tick and low tick of the first hour of trading (08:30 to 09:30 "initial balance"). I know a successful trader that takes trade signals as price trades at these drawn horizontal lines...........he looks for LONG trades with volume increasing above the upper "initial balance" tick, and SHORT trades below the lowest "initial balance" tick level.

Price has a tendency to leave the "initial balance" area with some momentum......watch for it and you can catch some good moves.

Thanks for sharing this idea, 5P. However, perhaps there's a bit better way to play this idea.

In looking at the TICK charts for the last few days, it appears that entering on the breakout of the 1st hour high/low was putting you into the trade at less than the ideal time (i.e. long at a short term top, which may continue up after a retracement).

Instead, it looks better to wait for the post-10:30 EDT new TICK high/low, and then enter when TICK inevitably retraces near the 0 line (say +100 for longs and -100 for shorts).

Another observation: this TICK breakout method seems to work better when Tick is bouncing back and forth across the 0 line during the first hour without hitting extremes (over +1000, or -1000). If TICK is solidly on one side the whole first hour and hits an extreme (like +1200 on 9/20), a breakdown to a new low of only -100, is probably not indicative of a market reversal, but instead just a retracement prior to trend continuation.

Many thanks for this idea! TICK is my favorite market "internal", and I always watch it to see if it's supporting the direction of my trades (and watch for divergences on it versus ES price to confirm reversal entries). For me, this is a new twist on its use for trade entries.

Who says reading ET on a Saturday morning is a waste of time!

Sandy

 

[5Pillars]

SG66 - The trader I know that uses this method looks for very specific volume plays at these levels (he usually only takes one or two trades a day with large size and he only goes for 1 pt).....when he gets the set-up he is looking for he then takes a shot for 1 pt.

I know he is looking for a breakout move based upon volume readings to catch some momentum out of the initial balance range. I know he rarely has losers so he is on to something.

 

[4re]

Quote from 5Pillars:

SG66 - The trader I know that uses this method looks for very specific volume plays at these levels (he usually only takes one or two trades a day with large size and he only goes for 1 pt).....when he gets the set-up he is looking for he then takes a shot for 1 pt.

I know he is looking for a breakout move based upon volume readings to catch some momentum out of the initial balance range. I know he rarely has losers so he is on to something.

Once again the idea of taking a larger position for fewer points comes up.

It just seems to me that this tends to work very consistantly for the emini. It is also a very low stress technique which is very dificult to find in trading.

 

[LondonUSTrader]

Quote from 4re:

Once again the idea of taking a larger position for fewer points comes up.

It just seems to me that this tends to work very consistantly for the emini. It is also a very low stress technique which is very dificult to find in trading.

One point that springs to mind, is to be successful you don't need to make a lot of points net.

You just need to trade big size and have a consistent equity curve.

Let's take an extreme example. If you made just 10 points net per month on average and traded 200 contracts you would make $1.2m per year.

Something to think about. It's about consistent profits on a monthly basis and building account size up gradually over time, IMHO.

 

[princessa]

Quote from 4re:

One very simple strategy for options if you don't know all the greeks and just want simple but effective.

1. Find a stock that tends to make big moves. Like 4-5 dollar moves at a time.
2. Wait for the bollinger bands to get real tight
3. Do a straddle or strangle on it. Where you buy the puts and calls
4. You are going to need to let it make it move to either side. Usually about 3 - 4 dollar move will just about double your money.

thanks a lot, gary! i may try this sometime. hadn't thought of using bollinger bands to get the timing right...but in this strategy, you are probably buying near term options with close expiration dates, right? and do you buy in the money options? or out of the money options?

 

[princessa]

Quote from billp:

Thanks princessa. It looks like we are among the few people that started with options first and decide to move to stocks or do more stocks. I have to say I feel uncomfortable shorting stocks or holding stocks overnight though as compared to options due to 'much higher potential risk $'.

i have no problem shorting or holding overnight with one large caveat: if i meant for the stock to go down immediately and it doesn't and i'm holding a large position, i cut my losses and run. holding longer and hoping for a fall tends to be futile, leading to even bigger losses.

 

[billp]

Princessa,

Your 'immediate'--is it within the day or 1-2 days later. Thks.

Quote from princessa:

i have no problem shorting or holding overnight with one large caveat: if i meant for the stock to go down immediately and it doesn't and i'm holding a large position, i cut my losses and run. holding longer and hoping for a fall tends to be futile, leading to even bigger losses.

 

[princessa]

Quote from LondonUSTrader:

One point that springs to mind, is to be successful you don't need to make a lot of points net.

You just need to trade big size and have a consistent equity curve.

Let's take an extreme example. If you made just 10 points net per month on average and traded 200 contracts you would make $1.2m per year.

Something to think about. It's about consistent profits on a monthly basis and building account size up gradually over time, IMHO.

good point....

 

[princessa]

Quote from billp:

Princessa,

Your 'immediate'--is it within the day or 1-2 days later. Thks.

no later than the next day. that said, if it is consistently going down, i may hold an extra day, but if it's going against me, i'm out.

 

[4re]

Quote from LondonUSTrader:

One point that springs to mind, is to be successful you don't need to make a lot of points net.

You just need to trade big size and have a consistent equity curve.

Let's take an extreme example. If you made just 10 points net per month on average and traded 200 contracts you would make $1.2m per year.

Something to think about. It's about consistent profits on a monthly basis and building account size up gradually over time, IMHO.

Yes, I wish I was that example. But you are correct