Spydertrader's Jack Hershey Futures Trading Journal

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Quote from Tums:

I did a wild experiment today. This was on sim, of course.

I opened the following windows:
1. a YM 2m chart, (no ES chart)
2. a Brackertrader window for ES, with the buttons: BUY, SELL, Close All, Reverse. All the buttons were set to market orders.

I was watching the YM chart, and traded the ES contract!

I wasn't looking at the ES price, I was looking at the YM chart, YM gaussian, drawn the YM channels, and press the ES order keys when a signal came. All the orders were at market; they were either BUY, SELL, CLOSE ALL, or REVERSE.

The results were quite surprising.
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Quote from WGTrader:

Tums, are you going to leave us dangling?!! Tell us how suprising. :p
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before you read any further, please understand this disclaimer: I am not advocating trading ES while only looking at the YM chart.


The experiment had surprising benefit to me. (can't speak for you tho.)

The PnL was positive, that should not come as a surprise.

What surprised me was that I found I could trade without looking at the price, which was something I had problem dealing with all these times.

Without the knowledge of price, I also lost the knowledge of PnL. My total focus was devoted to the signal: I enter, reverse, or exit purely on signals...

Trading ceased to be a win/lose game; a game where the entry/exit price differential must be positive or else I will be a failure.

Trading became an exercise in executing signals -- enter... hold... then reverse. Or, when in doubt (which at my skill level, I still have plenty), I exit and wait for the next clear signal.

My brain is re-wired now... LOL, who cares about the price anymore.
 
Thanks Ezzy.

On a different note a couple of people have posted about doing better when they are not constantly scouring for FTT's.

I guess we should anticipate continuation and look for evidence of this then if it is not forthcoming then perhaps look for evidence of a fault (which is likely still continuation) and finally look for an FTT.

This can lead to entering at the RTL (point 3 or even 5). The RTL has its own consideration BO or FBO. Even if we enter at the FTT we will need to decide BO or FBO as price approaches the RTL.

Having reviewed this thread it seems there is far less discussion about BO/FBO than there is about the FTT.

If are channels are correct we will be approaching the RTL on decreasing volume. We would then anticipate the dominant to resume or the BO to occur.

Sometimes the breakout 'drifts out' on low volume and then increases in the new dominant direction. Sometimes it drifts out and then increases in the old dominant direction requiring a new channel. Sometimes it punches out with new pace and volume. Sometimes it spikes on volume and immediately fails.

Does any one have hints tricks and tips they use to monitor the BO FBO? I can offer one thing I like to see, - a XO and then price running back along a tape on decreasing volume to 'kiss goodbye' the old RTL. This was always a favourite trade before I encountered the JHM.

Cheers.
 
Quote from BlowFish:

...
Does any one have hints tricks and tips they use to monitor the BO FBO? ...

Cheers.
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have you noticed, when BO/FBO happens around 20ma, it takes on a different behavior?
 
My chart for the morning.

The current situation is we had a BO but volume was decreasing all the way so I anticipate a wider downchannel even though price broke thru ma20. I could be completely wrong of course.

However, also the blue upchannel (I forgot to draw LTL when I took the snapshot) seems a little steep for current volume. Had I been long then I would sell. It looks like there's no supporting volume.

Ivo
 

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Quote from Tums:

before you read any further, please understand this disclaimer: I am not advocating trading ES while only looking at the YM chart.


The experiment had surprising benefit to me. (can't speak for you tho.)

The PnL was positive, that should not come as a surprise.

What surprised me was that I found I could trade without looking at the price, which was something I had problem dealing with all these times.

Without the knowledge of price, I also lost the knowledge of PnL. My total focus was devoted to the signal: I enter, reverse, or exit purely on signals...

Trading ceased to be a win/lose game; a game where the entry/exit price differential must be positive or else I will be a failure.

Trading became an exercise in executing signals -- enter... hold... then reverse. Or, when in doubt (which at my skill level, I still have plenty), I exit and wait for the next clear signal.

My brain is re-wired now... LOL, who cares about the price anymore.
More...

Very interesting... very interesting. I was also pondering if at some point of study, one could trade by focusing on volume first and price second as confirmation. Not that it's of any significance, but would demonstrate the "rewiring" of the brain, as you put it.

RT
 
Thanks for your replies, ehorn and ljyoung.

I looked at your link (http://www.elitetrader.com/vb/showthread.php?s=&threadid=83604&perpage=40&pagenumber=21) and found the following:

- "The idea behind the YM leading the ES has less to do with timeframes, and more to do with 'smart money' involvement in the marketplace"

- "What I am saying to you is The YM leads the ES when it matters - at sentiment change. Since our methodology involves recognizing the market as it transitions from continuation to change status, The YM provides an early warning for the ES."

Since earlier means earlier in time, it would be optimal to show the leading effect on a video. I have no videos of ES and YM, thats why i used a 1 second bar chart to identify the exact time where one could start to see the points of change on YM before seeing them on the ES. All i found is that the YM and ES are almost exactly synchronized in time.

If the reason for the leading effect of the YM is the 'smart money' involvement, the effect of the smart money should also be noticed in other than the 5min/2min bar timeframes.

I still think that the comparison of YM and ES should be done on the same bar resolution, especially if trendlines with narrow spaced defining points (tapes) are used.

I will post a few charts with equal ES/YM resolution, maybe cnms2 can show the points of change on my charts, i will use the examples he posted yesterday.

There are many assumptions about one instrument leading the other:
OEX leads SPX (Bryce Gilmore, developer of WaveTrader software)
NQ leads ES (Rickey Cheung, developer of RC Advance, RC Success, RC Swing trading systems)
DAX leads ES (Teresa Lo, if i remember it right)
YM leads ES (Jack Hershey :-)
OIL leads DOW (German news)
VIX leads ES, ES leads DAX, OIL leads NQ, Gold, $, Yen, € ....

I really like to see if it is possible to test the YM leads ES thing.
 
Quote from cnms2:


Look at my last 2 posts how YM formed its tape after FTT and broke down with volume increase, before ES at its point of change (decreasing volume after VE).
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I looked at your 2 posts.
Here is a 1 second chart of the same period to identify the point in time where the change in sentiment could be first noticed.
I added channels, which in my opinion are a very good represtentation of the 50 minute upward movement.
I added the NQ to show the synchronicity in time of the different market indices.
Please add 1 hour to the times on the charts.

Is it possible to see the YM leading on these charts?

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1687615">
 

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Quote from cnms2:

Compare with my entry. YM leads at ES' points of change ...
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To properly compare the YM and ES charts, i have used the same 1 minute resolution for both charts.
I tried to draw the same tapes that you have drawn.
To zoom in the 10 minutes of the last down tape i have used a 1 second bar chart and added the channels. (Please add 1 hour to the times)

Where would be the ES point of change in my charts? (I think volume consideration are possible with 1 minute bars)
How can i see the YM leading at this point?

Thanks

<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1687618">
 

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