Spydertrader's Jack Hershey Futures Trading Journal

Status
Not open for further replies.
Nikkei Gaussians

Another example of Gaussians telling you what is going on. Note the Swiss ball that formed underneath to support the price action.*

The first FTT circled on the long in the steep channel was inevitable and you learn to be patient - the prior bars all showed characteristics of strong continuation, then we saw peak volume, continuation on decreasing volume, then the FTT on increased volume. This is all in the steep channel.

So now you are looking for R2R which comes on cue at BO of the steep channel.

BUT you have still not had the FTT of the shallower Long channel - you can therefore anticipate a second top as this is tested again - forming the second FTT shown (the bar was green until the FTT then change occurred intrabar).

Then there is R2R and free fall, peak volume occurs again as the shallow long TL is broken (which confirms your channels did have great significance to a lot of traders).

It's funny how it works out this way even in Japan.

Have a great w/e all and relax, it's all coming together and there is no rush.

(*The Swiss Ball is just a little joke.)
 

Attachments

Quote from Spydertrader:

While I do plan to go more in depth on this subject after we have discussed all the fine resolution tools, let's do a 'quick and dirty' estimation of costs.

ES tic = $12.50
ES point = $50.00

Tree Level ~ 8 - 12 RT (16-24 'in and out') Trades per day. I purposefully inflated the number of trades a 'Tree Level Resolution' Trader would make here.

At $5.00 USD Round Trip (per contract), we have $60.00 dollars (12 RT trades x $5.00 USD per RT) per contract per day in commissions. One contract traded in and out 12 times (twelve round trip trades) racks up 60 bucks in commissions at our $5.00 per RT level. A gross profit of 1.75 points per day on one contract more than covers these costs. As to slippage and Bid / Ask Spread, These 'so called' costs are covered by the gross profit. In other words, If price moved 2 points from your entry and one exits on the bid, the net profit is 1.75 points. The spread is almost always one tic (I say almost because in rare occasions the spread does widen to 2 tics). To cover this 'spread cost' a trader still only needs to profit 1.75 points per day in order to cover commissions and the one tic spread - and still have a net profit. As to slippage, well, we don't place 'target' entry and exit points. The trade provides a profit or it doesn't. If a trader thought they were exiting from there long position at 1400, and instead, found themselves filled at 1399.00, then the 'slippage' would either subtract from the profit or add to the loss on the individual trade. Since a trader only needs to end up the day with a gross profit of 1.75 points to walk away with a small net profit, 'slippage' doesn't effect 'costs' of trading. It may effect one's profitability, but not 'costs.'

As you can see, if one does the math (even when adding in higher than average transaction costs, and higher than average trades per day), a trader needs to end up the entire day barely profitable in order to cover the daily costs.


$60.00 = Commissions and Fees
$12.50 = Bid / Ask Spread
---------
$72.50 = Total cost per contract per day

$75.00 = Total profit on 1.5 ES points / per contract

Remember, the minimum points per day one needs to profit in order to cover all costs and commissions is 1.5 ES points per contract. Anything above 1.5 points per day (per contract) you keep (with a promise to pay Uncle Sam's IRS a few bucks along the way).

I hope the above provides some clarity.

- Spydertrader
More...

thank you for breaking this down Spyder...

I should have used the word <b>transaction costs</b> plus commission costs where the transaction cost would = the B/A Spread... instead of the word 'slippage'...

If a trader can find ways (Lease a Seat), etc... to cut his commission costs down his Channel Trading will have a higher profit per trade outcome with no extra effort on his part...

and when trading other contracts besides the ES using the Channel method he should take care to watch the BA spread on those contracts as that is one of his important base costs and therefore will effect his equity curve...

thanks...

cj...
 
Here's mine for the day. Usually I do well with the Gaussians, but here I had a lot of trouble with them, which means I had trouble with the overall context. I felt comfortable with some of the pt 3 to pt 3 moves, though. It's a more relaxed way of entering than going for the FTTs.

It looks like I'm identifying FBOs too soon, since a couple turned into BOs. But if you wait, you're often too late, so I'm not sure how to improve my practice here.
 

Attachments

Candles tell me way more than bar charts. In fact, in most cases reversal candles appear at FTT and give me better indications as to what kind of volume we have. I have been using candles for a long time and they tell me quite a bit at a glance.

I wil not recommend them to others as that point has already been made, but for me the candle tells me more how the bar is forming as the color and body change over the 5-minute period.

Since I see them naturally they do not distract me or take away from the chart.

Remember it depends on the individual and their comfort level. Candles just give me more visual info than bars do.

:D

Quote from optionpro007:

Good going coach.

As a personal note, and something that might affect trading this system in the future. By using bars instead of candles I think it is easier to follow precisely how the bar forms during the 5 min period.

I am not sure it is so easy to do with candles.

Just a thought.
More...
 
Quote from optioncoach:

In fact, in most cases reversal candles appear at FTT and give me better indications as to what kind of volume we have.
:D
More...


The saying 'You can't teach an old dog new tricks' comes to mind everytime I bug you about something you are doing 'not in order' to the Jack/Spyder "prescribed" SCT doctrine is concerned :D

In his book, The creative process in the individual, Howard Troward writes "order is heaven's first law'. Meaning that getting things into it's proper order is the great secret to everything, including the unbelievable or unimaginable yet.

I now Jack and Spyder understand this very well as I am sure there is a good reason for bars for this fractal, but as you point out, success at the individual level is what matters either way.

Let's keep rolling !
 
Status
Not open for further replies.
Back
Top