Great story. I had a Cessna 170 once. Fun plane. My friend and I flew from Dallas to Houston once and the flaps broke. When we landed he got some duck tape and taped them up until we could fix in back in Dallas. Not legal, of course, but effective.
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
Great story. I had a Cessna 170 once. Fun plane. My friend and I flew from Dallas to Houston once and the flaps broke. When we landed he got some duck tape and taped them up until we could fix in back in Dallas. Not legal, of course, but effective.
Since thread temporarily off track I'll throw in my story. Not frightening at the time, but went out with Chief instructor to do some spin training as part of the instructor rating add on. We did some aerobatics also on the way back to the airport, a ton of fun. The next time the plane flew, a Decathlon, a wing came off and the Chief instructor and the student spiraled into a swamp and died. Kind of a holy sh** moment after the fact.
Ok finally got some time to show a chart of trades taken this morning. Got company but they are sitting on the porch eating fresh blueberry muffins and yapping away. These trades will illustrate the rules above in my post #1149.
First, the chart (5 min) ES or MES showing the general context of a sideways movement or range. This was today’s July 8th 2021 price action. Remember, this is all part of the market cycle. Ranging action is one aspect of the market cycle. It requires it’s own rules and tactics to successfully trade it. You cannot trade it like one trades trends or BO’s. Many traders refer to this as noise or chop, and stay away from it. But it is very tradeable if certain guidelines are followed. Lets look at these. Look at post #1149. Rules 1-4 are specifically looked at on this chart below.
1) The range width or height must be at least 3 times the size of a min scalp (min scalp is 1 point)
2) Average bar 3 times the size of a min scalp (visual glance suffices)
3) Must have 20 bars in sideways motion to start employing the tactic (really aggressive traders can start at 12 to 15
4) I start buying in bottom 1/4 and averaging down as it moves against me or shorting in top 1/4 and averaging in with more as it moves against me.
All those rules are true with this chart. I crawled my lazy carcass out of bed after the market had been open over an hour and started trading almost immediately. I could clearly see rule #3 had been true even before RTH’s open. And true for 15 bars or so since the RTH’s open. I arose from my deep sleep and grabbed a cup of 8o’clock brand coffee.
So, that was the context. The market cycle or phase you might say. It was an established range. Time to therefore use range trading tactics. There are more than one range trading tactics but I will deal with a couple in this post and the next post.
The first tactic: Fading the edges of the range.
I like to start shorting the top part of the range once price gets into the top 1/4 of the range. If I am feeling real giddly I will start shorting in the top 1/3. I like to average down by adding as it moves against me on up towards the top. I am building a position in the top 1/3 or 1/4. The same thing for the bottom except I am building a long position by averaging down. Look at the chart. Study it. It met rules 1,2,3 and 4. I will discuss each particular trade in a following post. This tactic is fading the tops and bottoms of the chop AS LONG AS THE CHOP MEETS THE RULES 1-4.
Profit target. I prefer to take profit on any move towards the center of the range. Sometimes, once it starts going in my favor in a very strong way, I will hold till price reaches the top or bottom 1/4 before taking my profit but more often, than not, I will take profit near the center of the range. Doing that often gives me more trading opportunities as the immediate succeeding bars will often give me another entry in the bottom or top 1/3. But if waiting for an entire move to the other side of the range for profit taking I may have to wait for several bars, causing me to miss out on more profit opportunities. Remember, in chop it is up and down then up then down. I want to capitalize on the up and down moves taking slices out of the middle. While it may seem like overtrading it is really just using a technique to extract profits of 1 to 8 points on a range. Over and over. It can be quite profitable if you add size to those trades. And it is generally quick profits not taking long on a 5 min chart to extract several trades.
What is the principle that makes using such a tactic so profitable? It is simple: it is based on the observable fact that aprox 80% of BO ATTEMPTS top or bottom of an ESTABLISHED range (i.e. 20 or so bars of sideways movement) fail and within 3 to 5 bars price will trade back into the range. Until it doesn’t, and we get a successful BO. If that happens I like to use another tactic to recuperate any losses I might have because the fade didn’t work. And get me back in the money on the trade. I will discuss this second tactic in my next post and illustrate the use of it in todays trades. SL’s are generally keep outside the range unless it is a broad range with big bars.
First, the chart (5 min) ES or MES showing the general context of a sideways movement or range. This was today’s July 8th 2021 price action. Remember, this is all part of the market cycle. Ranging action is one aspect of the market cycle. It requires it’s own rules and tactics to successfully trade it. You cannot trade it like one trades trends or BO’s. Many traders refer to this as noise or chop, and stay away from it. But it is very tradeable if certain guidelines are followed. Lets look at these. Look at post #1149. Rules 1-4 are specifically looked at on this chart below.
1) The range width or height must be at least 3 times the size of a min scalp (min scalp is 1 point)
2) Average bar 3 times the size of a min scalp (visual glance suffices)
3) Must have 20 bars in sideways motion to start employing the tactic (really aggressive traders can start at 12 to 15
4) I start buying in bottom 1/4 and averaging down as it moves against me or shorting in top 1/4 and averaging in with more as it moves against me.
All those rules are true with this chart. I crawled my lazy carcass out of bed after the market had been open over an hour and started trading almost immediately. I could clearly see rule #3 had been true even before RTH’s open. And true for 15 bars or so since the RTH’s open. I arose from my deep sleep and grabbed a cup of 8o’clock brand coffee.
So, that was the context. The market cycle or phase you might say. It was an established range. Time to therefore use range trading tactics. There are more than one range trading tactics but I will deal with a couple in this post and the next post.
The first tactic: Fading the edges of the range.
I like to start shorting the top part of the range once price gets into the top 1/4 of the range. If I am feeling real giddly I will start shorting in the top 1/3. I like to average down by adding as it moves against me on up towards the top. I am building a position in the top 1/3 or 1/4. The same thing for the bottom except I am building a long position by averaging down. Look at the chart. Study it. It met rules 1,2,3 and 4. I will discuss each particular trade in a following post. This tactic is fading the tops and bottoms of the chop AS LONG AS THE CHOP MEETS THE RULES 1-4.
Profit target. I prefer to take profit on any move towards the center of the range. Sometimes, once it starts going in my favor in a very strong way, I will hold till price reaches the top or bottom 1/4 before taking my profit but more often, than not, I will take profit near the center of the range. Doing that often gives me more trading opportunities as the immediate succeeding bars will often give me another entry in the bottom or top 1/3. But if waiting for an entire move to the other side of the range for profit taking I may have to wait for several bars, causing me to miss out on more profit opportunities. Remember, in chop it is up and down then up then down. I want to capitalize on the up and down moves taking slices out of the middle. While it may seem like overtrading it is really just using a technique to extract profits of 1 to 8 points on a range. Over and over. It can be quite profitable if you add size to those trades. And it is generally quick profits not taking long on a 5 min chart to extract several trades.
What is the principle that makes using such a tactic so profitable? It is simple: it is based on the observable fact that aprox 80% of BO ATTEMPTS top or bottom of an ESTABLISHED range (i.e. 20 or so bars of sideways movement) fail and within 3 to 5 bars price will trade back into the range. Until it doesn’t, and we get a successful BO. If that happens I like to use another tactic to recuperate any losses I might have because the fade didn’t work. And get me back in the money on the trade. I will discuss this second tactic in my next post and illustrate the use of it in todays trades. SL’s are generally keep outside the range unless it is a broad range with big bars.
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Are you able to post a 1 minute chart like you have done in the past with the trades? Thanks!
Sorry but I can’t on this one.
Notice the amount of times that moves to top or bottom of the range fail to BO successfully price goes back to center enough to make a scalpers profit of 1 to 8 points. Actually even more than I circled but I circled enough to give us the idea that 80% BO attempts fail. Any move into top 1/4 or down to bottom 1/4 is a BO attempt.
Here is a look at trades 1 and 2. First was a long entry in bottom 1/4. The exit was a few points later on a move towards the center of the range locking in profits. The second was a short on the same bar. First an initial entry. Then a second entry (averaged down or scale in if you prefer LOL) as it moved against me. Both entries in the top 1/4 of the range. Then the exit of the entire position once it moved in my favor and gave me a profit on both entries. Again several points. All in accordance with rule #4 and guidelines on profit taking in my post #1149 above.
Trade #4
Short. No averaging down. Exit on move towards middle. Several points.
Trade 5 # long trade …exit on move towards middle.
Grab the profit. Don’t get greedy. Again several points in both cases and in accordance with post # 1149. Trade 5 could have been held for more. I think I had preset the profit and went to the restroom.
Short. No averaging down. Exit on move towards middle. Several points.
Trade 5 # long trade …exit on move towards middle.
Grab the profit. Don’t get greedy. Again several points in both cases and in accordance with post # 1149. Trade 5 could have been held for more. I think I had preset the profit and went to the restroom.