S/R Emini Journal

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Quote from candeo:

Candeo,
I was not unlike you when I switched to this market from options. One thing I realized early is that this market moves extremely fast when we have a lot of players. That is one reason that picking a target and sticking with it is so important. The more time you spend with it the more you'll understand it.

I also noticed that a lot of people just go for 2 points and reverse. That really can swing the market fast. I tried several different methods that had worked for me in the past to no avail. When I noticed that S/R levels were very important in this market I started to research it. That is when I noticed that unless it is a trendy day 2 points was about all you could safely get.

A couple years back trend trading worked very well in this market but has since been changed by the 2 point guys. Not being a person to fight the market I just developed a method that worked for me.

Not saying you can't go for more, because you can but it can also be dangerous.

4re

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4re,

Thank you for the explanation. I have some questions though:

- Why do you think it is that traders go for the 2 points? And how could it really affect you if entries are different anyway? In all markets there are traders with very short time frames. You just need to decide what you will consider as "noise". Saying "it is moving fast" is very relative, and it is easy to adapt your stop to a multiple of the ATR for example, to take care of volatility.
- This might be really stupid, so please bear with me: the ES is pretty much a reflection of the 500 stocks. So how could it be that much affected by supply/demand and the 2 points traders if anyway it needs to follow the S&P? I am basing this comment on my experience with ETFs that just follow a pool of stocks, but maybe there is something I am missing here, thank you for clarifying.
- As we are talking about this, I have noticed with ETFs that technical analysis in general is not as useful as with individual stocks, because of what I have just been saying. For example, S/R are not as significant because for a resistance to be very strong you need most of the stocks to stop moving when this point is reached on the ETF's chart. Most traders of individual stocks do NOT study S/R of the corresponding ETF. So the comments you posted from Douglas (especially about traders self-fuffiling their own expectations) are not as true for ETFs. I would think it is the same with market Eminis. What do you think?

Thanks again for helping a beginner.
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I'm sure some traders would argue the opposite is true (ETFs move individual stocks). That's why some stock traders use them as leading indicators. However, I personally believe that both are relevant. Sometimes ETFs move stocks, stocks move ETFs, and ETFs and stocks move together.
 
Hey K-Rock -

Thanks for the reference on the ACD breakouts - seems to be another great way of handling breakouts (using intraday data, rather than off the S/R from prior days).

Is the 3 pt. band above the 30 min high and below the 30 min a range expansion number that you've come up with based on experience, or is that standard to the ACD breakout method?

Is this from Mark Fisher's "The Logical Trader"? I've thought about getting that book. Or do you have another web source you can refer me to learn more about the ACD method?

I only take divergence trades when price has pierced the Keltner channel on the 5 minute chart, and then turned back on a opposit colored candle (i.e. a red 5 minute candle closes after the upper KC has been pierced). There was an acceptable divergence set up that met my criteria at lunch time yesterday, but I was away from my desk at the time. The rest of the day, after KC filter criteria was met, price kept on going and didn't create a divergence.

Sandy
 
I'm sure some traders would argue the opposite is true (ETFs move individual stocks). That's why some stock traders use them as leading indicators. However, I personally believe that both are relevant. Sometimes ETFs move stocks, stocks move ETFs, and ETFs and stocks move together

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Very good point and I kind of agree with this. Obviously traders feel more confident to buy stocks when markets are going up of course. But a lot of these ETFs were created very recently. Same with Eminis. I don't believe any traders make their decisions on individual stocks depending on the ES, which is itself clearly moved by the S&P. So, I am still wondering how ES can be trading so differently than S&P, and how the fact that most traders would take 2 points would affect it. Thank you for clarifying it.
Just heard the job numbers. Looking really good for equities. We might have a huge day today!
 
Quote from sandygray66:

Hey K-Rock -

Thanks for the reference on the ACD breakouts - seems to be another great way of handling breakouts (using intraday data, rather than off the S/R from prior days).

Is the 3 pt. band above the 30 min high and below the 30 min a range expansion number that you've come up with based on experience, or is that standard to the ACD breakout method?

Is this from Mark Fisher's "The Logical Trader"? I've thought about getting that book. Or do you have another web source you can refer me to learn more about the ACD method?

I only take divergence trades when price has pierced the Keltner channel on the 5 minute chart, and then turned back on a opposit colored candle (i.e. a red 5 minute candle closes after the upper KC has been pierced). There was an acceptable divergence set up that met my criteria at lunch time yesterday, but I was away from my desk at the time. The rest of the day, after KC filter criteria was met, price kept on going and didn't create a divergence.

Sandy
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The 3 pt. band is something I picked up from someone else trading the ES. Since I have been using it (for about 4-months) as a filter to help determine if the market is range-bound are trending it has been very helpful.

There are a lot of good threads here on ET about the ACD Method.

It seems like the method you are using is similar to a trader here on ET named "no_pm_please". If you haven't already read his threads/journals you should check them out.
 
Well, I screwed up because my price was hit while I was typing. I now have an order set at 1294. I did not get the first order in on time to do it.
 
Quote from 4re:

Well, I screwed up because my price was hit while I was typing. I now have an order set at 1294. I did not get the first order in on time to do it.
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I suspect that will be fine. Seems clear to 99.
 
4re -

Well, your 1289 level did terrific with this morning's labor info. That level was clear from yesterday's high.

However, I'd like to understand how you chose the 1293.5 level as the next breakout level - especially since that level was presciently the exact high so far this morning. :)

Sandy
 
Quote from sandygray66:

4re -

Well, your 1289 level did terrific with this morning's labor info. That level was clear from yesterday's high.

However, I'd like to understand how you chose the 1293.5 level as the next breakout level - especially since that level was presciently the exact high so far this morning. :)

Sandy
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Actually, I just changed it back to my original 93.50. Seems like we are having a little trouble getting through 93 right now so when it wrnt up 93.75 I will consider that noise and 93.50 still in effect.
 
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