S/R Emini Journal
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Here is why I like to use Bollinger Bands for options. The greeks let you know all about the volitility and the decay of the option contract. While the BB's are really spread out volitility is high and so is the cost of the contract. When the BB's are tight the volitility is low and so is the cost of the contract. Also we know that when the BB's are tight we are getting ready for an explosive move on the underlying stock the problem is BB's don't tell you which way that move is going. So I like to buy ATM puts and calls with a couple of months time on them. A couple of months ago I was doing a CAL trade where I made about 50% each side of the trade. That trade was posted in Romiks divergence journal in greater detail. But you need a stock that makes big moves to get big money.
this appears to work really well with google, for example. this is a stock i know, so i may try your method with it. google is also good for another reason: supports and resistance levels are fairly predictable.
the problem i have had with google in the past is that the premium is so high on it, it's very expensive to buy it a couple of months out, so you're risking quite a bit of capital on the trade. but in combination with bollinger bands, it would probably work out better. also, in all fairness, i must say that when i apply discipline to the google option trade ( don't rush in, etc.), i can and have made pretty good profits on this trade.
okay, i'll stop junking up your thread with all this options talk. thanks for the help.
the problem i have had with google in the past is that the premium is so high on it, it's very expensive to buy it a couple of months out, so you're risking quite a bit of capital on the trade. but in combination with bollinger bands, it would probably work out better. also, in all fairness, i must say that when i apply discipline to the google option trade ( don't rush in, etc.), i can and have made pretty good profits on this trade.
okay, i'll stop junking up your thread with all this options talk. thanks for the help.
buy straddle leaps...fewer options....for same money
Princessa,
The only problem with goog is that the underlying stock is so expensive. I guess maybe I should have been more clear when I said about a 4 dollar move. Let me say about a 10% move instead. This is a technique for big moves that is another reason I usually give it a couple of months minimun. The Q's calls I just bought are for Dec but I am still holding my OCT puts that I bought in late July.
Gary
Quote from sandygray66:
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
I try using a similiar approach, while also keeping an eye on the trin and leading stocks and ETF's. The DAX is another indicator because it often leads the US market and can have trendlines and flags setup right when the US market opens. Also you can see divergences between the indices, with the DAX leading sometimes.
Anyone else notice a connection between 10:15-10:45am reversals (mostly upside reversals) and the rallies at the close of the european markets. The same pattern often happens in the US market 45min before the close. Anyone notice that it is often choppy between 11:00-11:10am EST, perhaps squaring of positions in Europe.
Anyone here trade or watch the DAX?
Here is a comparison chart of what I'm talking about.
(Note: ER2 was already lower relative to ES, acting as another leading indicator)
using any other markets for emini trading is useless. imho..when u are trading eminis, watching or listening anything else is info overload..with giant emphasis on anything else once you eliminate stuff like other markets and if u succeed emini daytrading you will.....don't expect it to be good for a few..years.... .....test your theories realtime, not real money......for 60 consecutive days, no coulda shoulda woulda and then you have your tentative answer, for yourself. something u can depend on...if it continues to work as promised by 2 month test..... something to keep or chunk.....very few things are worth keeping for system.... ...the above is.....
John
I watch the Dax as well. As you pointed out it can give clues to the direction of the market. The way I think about it is that some of the best traders (not only Europes best) prefer the Dax for various reasons, I bet they are all watching the ES as well and therefore the divergence is an indication of what the smart money is doing or positioning for. To me the dax is no different to watching another emini. They can all move in some form or another before the ES shows any signs of movement. But as you know judging divergences in real time is no easy task. Friday we should have brought home the bacon but that unusual selling in the ER just stopped it reacting.
I would like to trade the Dax but I would have to change brokers.
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