What may look like a TR on a 5 minute chart my just be a sideways move in a bigger channel on a 1 hour chart. Within channels are trading ranges, triangles, flags, trends, BO’s. etc And within TR’s the same things also exist.
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
I was going to take a break from posting BUT after getting my carcass in gear a little before 9:30 I decided to look at the markets and take a few trades. I took my first on the 9:30 bar (chicago time). I took my last on the 11:00 bar (chicago time) Profit in MES $450.00 and profit in micro naz $76.50. I stopped trading for the day on that 11:00 bar. I have to work outside on the house. I think it was about 10 trades or so, I will just have to count them and see. Most were averaging down trades, of that I am pretty sure. I decided to go ahead and trade this morning and make the screen shots even though I was going to take a few weeks off. The reason is today's PA was an excellent example of what I call compounding so I thought it would be a good opportunity to expound on my view of that whether it be, a right or wrong view. But it is how I think.
Anyway I will post the charts tonight if not too tired. I am done trading for the day. I stopped on the 11:00 bar. Ate breakfast and now going outside to work. Have a good day.
Anyway I will post the charts tonight if not too tired. I am done trading for the day. I stopped on the 11:00 bar. Ate breakfast and now going outside to work. Have a good day.
At first I didn't pay much attention to it but ... I have to admit that it is an exceptional thread. There is a lot of experience behind this thread.
Thank you Volpri, hope you have a good but not too tired day, looking forward to reading your trades.
If I had to stick with a Volpri phrase it would be ... The context is everything, it is much more important than what the price does at the moment.
You don't have to see the tree, must see the forest
Look at the context,
Averaging the input because it is difficult to make the perfect input,
Put stop,
Not be greedy
Brilliant!
So simple and so difficult at the same time.
You don't have to see the tree, must see the forest
Look at the context,
Averaging the input because it is difficult to make the perfect input,
Put stop,
Not be greedy
Brilliant!
So simple and so difficult at the same time.
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I haven’t read Volpri’s thread here for months.
Why ?
Because I’ve been attempting to average down, as Volpri (still ?
) regularly recommends.
Taking that approach, along w/ a few other tweaks, has delivered to me the best results I’ve had. I’ve exited several profitable trades that had drawdowns that would have earlier triggered me to exit w/ a loss. None of my draw-downed/averaged-in trades has been a loser.
The cautionary word: no one should try this until they are confident that they have arrived at a reasonably accurate model of how the market alternates between momentum and cyclicality. Until you’re at that point, you should be trading this approach w/ tidiy winks, if at all. And you likely won’t have that confidence unless you do a LOT of brass-tacks research where you painstakingly attempt to diagnose what the market is doing, likely over N * 1000s of chart investigations.
Volpri's regular repetition of real trading success (and occasional fails) is also very important as an example, that this really can be done.
And, being able to avg in is not the end of difficulties, but it’s key, at least it is for me.
One additional thought is that many people, like me, may have been trading charts that are just too fast to permit trading that matches their analytic models and algos. 5min charts aren't the only game, try H01 or H04 on FX/Futures if you need more time for your neuro-motor to work well. Most of my trend assessments are now are based on charts not faster than DAY. Finally, consider options as an additional way to control risk -- that's another world, so otherwise trade w/ very small risk.
My development is nowhere done, and the difficulty continues to be fully implementing what I know, but I don't any longer see a whole lot of mystery in charts.
Why ?
Because I’ve been attempting to average down, as Volpri (still ?
) regularly recommends.Taking that approach, along w/ a few other tweaks, has delivered to me the best results I’ve had. I’ve exited several profitable trades that had drawdowns that would have earlier triggered me to exit w/ a loss. None of my draw-downed/averaged-in trades has been a loser.
The cautionary word: no one should try this until they are confident that they have arrived at a reasonably accurate model of how the market alternates between momentum and cyclicality. Until you’re at that point, you should be trading this approach w/ tidiy winks, if at all. And you likely won’t have that confidence unless you do a LOT of brass-tacks research where you painstakingly attempt to diagnose what the market is doing, likely over N * 1000s of chart investigations.
Volpri's regular repetition of real trading success (and occasional fails) is also very important as an example, that this really can be done.
And, being able to avg in is not the end of difficulties, but it’s key, at least it is for me.
One additional thought is that many people, like me, may have been trading charts that are just too fast to permit trading that matches their analytic models and algos. 5min charts aren't the only game, try H01 or H04 on FX/Futures if you need more time for your neuro-motor to work well. Most of my trend assessments are now are based on charts not faster than DAY. Finally, consider options as an additional way to control risk -- that's another world, so otherwise trade w/ very small risk.
My development is nowhere done, and the difficulty continues to be fully implementing what I know, but I don't any longer see a whole lot of mystery in charts.
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I want to show some charts from monday june 15. I traded monday till 11:00 a.m then had to go work outside and took no more trades for the day. I want to zero in on a few things on this first chart. A later chart will show my trades. So, we get the opening bar at 8:30 price trades down an immediately on the next bar goes up. Price also opens above the 20 ema And the 50 sma. This is bullish off the bat. Then we get the first Pb. Notice the low of that pb stays above the 20 ema. This is bullish. The first attempt by bears to push price south was on that opening 8:30 bar. The second attempt by the bears to reverse the opening moves fails. That second attempt shows as the first PB (red). But notice from the opening and thru the first PB the bears could not push price through the 20 ema.These gaps are important pieces of info as they indicate who is winning. They indicate the pressures. Look at the broad green gap line. Bullish.
The first bar to go above the previous bar’s high in a PB is called an H1 entry (high1 because it is the first time). I missed that entry cause my body was still in bed, probably snoring. So, we get leg1, then PB, then a good H1 entry, then leg 2. Next we come to the second PB. Now this is where the strenght of the bears will be tested again. They attempt to push prices below the 20 ema but cannot. It almost reach it On bar 9:40 then then bulls push back and stop the bears. Then we get an H1 that fails then an H2 (second time in a pb that the high of a bar goes above the high of a previous bar). This creates a second entry. NOTE, in deeper PB’s it is usually best to take a second entry especial when price is around the 20 ema.
So then we get a third leg up and price starts flattening out as 3 pushes up and we have a wedge top. But because of all the strong Bullish behavior prior to the 3 pushes up we will likely see this sideways motion to be a bear flag and trend up will continue. Why do I say this? Because GAPS..GAPS..GAPS between the lows of bars and the 20 ema. Bears are failing on every attempt to push back and create a reversal.
Just remember gaps between low of bars and the 20 Ema in bull moves mean a lot of bullish strength. In a bear trend same thing bearish strength but gaps will of course be between the high of bars and the 20 ema.
In our bullish case here you generally do not want to be shorting. And it provides an environment conducive to AVERAGING DOWN on entries. That is, odds favor the trend will continue so RISK IS LOWER for averaging down than in other contexts. Again CONTEXT CONTEXT CONTEXT!
One other thing. I look at at bull bars as bull trends. The bulls win that 9:40 bar. Dial down to a smaller TF and see that the 5 min bar was a bull trend on say a 1 min chart. All bears bars are bars won by the bears and a smaller TF will show the trend. Dojis are sideways moves or ranges on smaller TF’s. So on that 2 PB (red) when you see big bear bar followed by another bear with a tail on top you can expect to see a little more selling before the pb ends. So it goes on down on the next bar but on that bar the bulls win it closing the bar near it’s high (so bull trend on smaller TF). Then the bears push back a second time trying to get a reversal. So they win that bar. On the next bar pulls push back hard (bar closes on it’s high AND has a tail on the bottom..tail means buying pressure) that tail is as far down as the bears could push price but the bulls push back on the tail and close high. The bulls come back in strong on that bar with the tail closing it on it’s high. It is now highly likely this PB is over. Now here is another IMPORTANT concept. When the market tries to do something twice and fails then it will make an attempt in the other direction (most of the time). Bears tried twice in the 2nd Pb to get a reversal and both times the bulls stopped them and that bull bar 9:40 was the signal bar for a long entry. With that strong close even if the bulls fail to push it very far odds are high it will, at least go north far enough for a scalp.
Remember right at the open the bull tried twice to get a reversal and failed (opening bar and 1st pb).
It is useful after every bar closes just ask yourself; what just happened? Who won that bar? Is this the first bar they have won in a while? Were they able to create bars in sequence? See in trading your job is to gauge the pressures at place in the market and determine who has the upper hand and you want to scalp in the direction.
Just look at the series of bull bars in sequence on this chart. Only twice were bears able to get two bear bars in a row. That means bulls are stronger. Look at Bars 9:20 and 9:25, bars 10:25 and 10:30.
The first bar to go above the previous bar’s high in a PB is called an H1 entry (high1 because it is the first time). I missed that entry cause my body was still in bed, probably snoring. So, we get leg1, then PB, then a good H1 entry, then leg 2. Next we come to the second PB. Now this is where the strenght of the bears will be tested again. They attempt to push prices below the 20 ema but cannot. It almost reach it On bar 9:40 then then bulls push back and stop the bears. Then we get an H1 that fails then an H2 (second time in a pb that the high of a bar goes above the high of a previous bar). This creates a second entry. NOTE, in deeper PB’s it is usually best to take a second entry especial when price is around the 20 ema.
So then we get a third leg up and price starts flattening out as 3 pushes up and we have a wedge top. But because of all the strong Bullish behavior prior to the 3 pushes up we will likely see this sideways motion to be a bear flag and trend up will continue. Why do I say this? Because GAPS..GAPS..GAPS between the lows of bars and the 20 ema. Bears are failing on every attempt to push back and create a reversal.
Just remember gaps between low of bars and the 20 Ema in bull moves mean a lot of bullish strength. In a bear trend same thing bearish strength but gaps will of course be between the high of bars and the 20 ema.
In our bullish case here you generally do not want to be shorting. And it provides an environment conducive to AVERAGING DOWN on entries. That is, odds favor the trend will continue so RISK IS LOWER for averaging down than in other contexts. Again CONTEXT CONTEXT CONTEXT!
One other thing. I look at at bull bars as bull trends. The bulls win that 9:40 bar. Dial down to a smaller TF and see that the 5 min bar was a bull trend on say a 1 min chart. All bears bars are bars won by the bears and a smaller TF will show the trend. Dojis are sideways moves or ranges on smaller TF’s. So on that 2 PB (red) when you see big bear bar followed by another bear with a tail on top you can expect to see a little more selling before the pb ends. So it goes on down on the next bar but on that bar the bulls win it closing the bar near it’s high (so bull trend on smaller TF). Then the bears push back a second time trying to get a reversal. So they win that bar. On the next bar pulls push back hard (bar closes on it’s high AND has a tail on the bottom..tail means buying pressure) that tail is as far down as the bears could push price but the bulls push back on the tail and close high. The bulls come back in strong on that bar with the tail closing it on it’s high. It is now highly likely this PB is over. Now here is another IMPORTANT concept. When the market tries to do something twice and fails then it will make an attempt in the other direction (most of the time). Bears tried twice in the 2nd Pb to get a reversal and both times the bulls stopped them and that bull bar 9:40 was the signal bar for a long entry. With that strong close even if the bulls fail to push it very far odds are high it will, at least go north far enough for a scalp.
Remember right at the open the bull tried twice to get a reversal and failed (opening bar and 1st pb).
It is useful after every bar closes just ask yourself; what just happened? Who won that bar? Is this the first bar they have won in a while? Were they able to create bars in sequence? See in trading your job is to gauge the pressures at place in the market and determine who has the upper hand and you want to scalp in the direction.
Just look at the series of bull bars in sequence on this chart. Only twice were bears able to get two bear bars in a row. That means bulls are stronger. Look at Bars 9:20 and 9:25, bars 10:25 and 10:30.
On this next chart you will see some of my trades for the day but instead of focusing on those trades I only want to focus on two conceptS on this chart: 50% pb concept and “a give up point” on an averaged down trade. In post #675 trading_jean wanted to know where to put a “give up” point on an averaged down trade. There are more than one way but here is a way using the 50% pb.
I don’t trade using fibs as too many lines and every rally and decline can render one multiple lines. However, mathematically and psychologically there is a rationale for considering the 50% pb which, by the way, is not a fib number.
Any time we see a substantial move and a pb starts it can be useful to draw a 50% pb on the chart. If, I have average down during a pb I watch closely what price does at that point. I want to see it resume the original move at that point or the odds are increasingly saying we may get a reversal from the original trend. One good “give up” point on an averaged in trade is when a pb retraces 75% of the previous move. It is likely reversing and I will look at exiting my averaged down position with a loss and then doubling up and reversing directions from my averaged down trade to quickly get my losses back.
It 50% can also serve as SL in straight scalps.
The gray lines show the 50% point. If you have a position on watch closely what price does around that 50% pb line. It too can make for good entries in the previous direction.
Later on I will post some more charts of Monday’s trades as I want to show what I call compounding my profits. Right now it is 2:21 a.m. and I am tired.
I don’t trade using fibs as too many lines and every rally and decline can render one multiple lines. However, mathematically and psychologically there is a rationale for considering the 50% pb which, by the way, is not a fib number.
Any time we see a substantial move and a pb starts it can be useful to draw a 50% pb on the chart. If, I have average down during a pb I watch closely what price does at that point. I want to see it resume the original move at that point or the odds are increasingly saying we may get a reversal from the original trend. One good “give up” point on an averaged in trade is when a pb retraces 75% of the previous move. It is likely reversing and I will look at exiting my averaged down position with a loss and then doubling up and reversing directions from my averaged down trade to quickly get my losses back.
It 50% can also serve as SL in straight scalps.
The gray lines show the 50% point. If you have a position on watch closely what price does around that 50% pb line. It too can make for good entries in the previous direction.
Later on I will post some more charts of Monday’s trades as I want to show what I call compounding my profits. Right now it is 2:21 a.m. and I am tired.
Thanks for the clarification Volpri, both posts above are very helpful indeed in understanding what you are doing. I am going through the Brooks course myself (not even half way through though) and it is clear your style is very very close to his methods.
One thing I noticed: you seem to calculate the 50% pp starting from the first break above a previous bar (purple on picture below) rather than using the low, is this correct? I haven't tested this on a large sample, but it looks like using the low gives a more reliable 50% line in most cases. Any specific reason you don't use the low?
One thing I noticed: you seem to calculate the 50% pp starting from the first break above a previous bar (purple on picture below) rather than using the low, is this correct? I haven't tested this on a large sample, but it looks like using the low gives a more reliable 50% line in most cases. Any specific reason you don't use the low?
You can do it from that low of that 9:40 Bar. In this case i just did it from the pb bo point where the H2 entry is after that second PB. The 9:40 bar was the bulls trying to end the pb and resume the trend but by the close of that bar we don’t yet know if they will succeed as the high of that bar didn’t end the pb. Even though the odds are high that the bull will succeed in resuming, high close on 9:40 and tail on bottom indicating buying. But once we get that H2 9:45 we see they are pushing back strong and the trend is likely resuming. That is, at least for me, that is the point where I see the trend SUCCESSFULLY resuming, so I prefer measuring from that point. However, if you want to be inclusive of the entire move there is nothing wrong with that. And we also see that the 9:45 bar not only was a H2 but it also broke above the high of the entire PB. Bulls are back stronger than the bears.
And of course 50% line would not have been drawn until about bar 10:15 or so. By that time plenty of time to determine where you would draw it from.
Hey glad to hear you are studying Brooks. Take 2 or 3 years to really go through his stuff and practice alot on a SIM. He will teach you alot more than I ever could. IMHO there is no better PA trader. Others are of a different opinion of Brooks. I suspect they just didn’t take the time to “listen well” and practice. They probably didn’t finish his course much less his trilogy of books before they pronounced judgement.
I don’t recall if Brooks establishes a separate (From SL ) “give up point” for an average down trade or not. I just think it wise to protect oneself from oneself and in the case of a blasted algo blowing throw the SL and even triggering the loss if you have a resting “give up point” it will likely get triggered too getting you heading in the correct direction anyway. Just my way of thinking. However, if my SL gets hit i would probably cancel the “Give up” resting order If I have time to and then enter again on a doubled up trade in the correct direction.