Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
- Start date
Hello volpri,
Thank you thank you thank you thank you. You are amazing sir. I really appreciate your time and effort and helping us price action trading. It is greatly appreciated.
Hello volpri,
You are a good man.
What are you thoughts on this when it comes to practice and repetition in sim:
"PRACTICE is the key to doing repetitions rather winning or losing and the PnL in sim is -$X,XXX"
I have a bad habit of stopping sim trading when my account balance is going into drawdown. Staying consistent when losing or winning I think is important too when practicing. the losses will come.
Yes, I agree MACD. He is helpful.
Can you give a breakdown on what your comms vs profits are? Win/loss rates
The market cycle is, again:
Starts with a BO that moves into a Channel and on into a Trading Range. This progression happens 75% of the time. The other 25% of the time it will be different.
The BO and Channel portions of the cycle together comprise what can be called “the trend”.
For instance, a bull channel that does not lead to a range but instead has a successful BO out of the top of the channel and the bull trend continues. In such a case, the cycle is starting over. It starts with the BO of the previous bull channel ….then the new channel …..then a range. This sort of PA usually renders a MM (measured move) as the unexpected is happening. When unexpected events happen I look for bigger moves.
It is important to first locate where price is in the market channel. That can usually be done quickly with a visual glance. I may have to draw a few lines to better see it but that usually only takes a few seconds. When a RTH’s session opens there aren’t enough bars to determine the phase of the cycle that price is in, because no cycle has yet been made for the session. So, what I do is look at the overnight session, especially, paying attention to price action from around 1:30 a.m. to the open of the next RTH’s. Usually that is enough that will give me some sense of what phase of the cycle price is in at the open of RTH’s.
Once there are enough bars in the RTH’s session (usually 20 or more) then I will begin determining the cycle from the open of the RTH’s (regular trading hours). And will generally play the market based upon the cycle found within the RTH’s. Occasionally I might still glance at the overnight cycle and correlate that with the RTH’s cycle if things are unclear. However, the more bars we get in the RTH’s as time moves along, my tendency is to rely more on what I see in the RTH’s as opposed to what I see in the overnight.
Remember the larger context is that market cycle. It is important. Why? First to see the pressure operating in the market from a larger perspective. The market is “made” by institutions doing their buying and selling and they cannot hide the pressures they are creating in the market. They are the ones drawing the chart, so to speak. We, as retail traders, are just trying to “get into” picture that they are drawing, positioning ourselves in the drawing to extract a profit. The second reason for locating what phase the cycle is in, is that, whatever the present cycle is, well that will determine the tactics or techniques I will employ, and the setups I will use. See, BO’s (breakouts) are traded differently that channels. While ranges and channel are similar (a channel is a tilted range) and traded with similar techniques there are also difference between them that will lead to the use of different techniques.
Starts with a BO that moves into a Channel and on into a Trading Range. This progression happens 75% of the time. The other 25% of the time it will be different.
The BO and Channel portions of the cycle together comprise what can be called “the trend”.
For instance, a bull channel that does not lead to a range but instead has a successful BO out of the top of the channel and the bull trend continues. In such a case, the cycle is starting over. It starts with the BO of the previous bull channel ….then the new channel …..then a range. This sort of PA usually renders a MM (measured move) as the unexpected is happening. When unexpected events happen I look for bigger moves.
It is important to first locate where price is in the market channel. That can usually be done quickly with a visual glance. I may have to draw a few lines to better see it but that usually only takes a few seconds. When a RTH’s session opens there aren’t enough bars to determine the phase of the cycle that price is in, because no cycle has yet been made for the session. So, what I do is look at the overnight session, especially, paying attention to price action from around 1:30 a.m. to the open of the next RTH’s. Usually that is enough that will give me some sense of what phase of the cycle price is in at the open of RTH’s.
Once there are enough bars in the RTH’s session (usually 20 or more) then I will begin determining the cycle from the open of the RTH’s (regular trading hours). And will generally play the market based upon the cycle found within the RTH’s. Occasionally I might still glance at the overnight cycle and correlate that with the RTH’s cycle if things are unclear. However, the more bars we get in the RTH’s as time moves along, my tendency is to rely more on what I see in the RTH’s as opposed to what I see in the overnight.
Remember the larger context is that market cycle. It is important. Why? First to see the pressure operating in the market from a larger perspective. The market is “made” by institutions doing their buying and selling and they cannot hide the pressures they are creating in the market. They are the ones drawing the chart, so to speak. We, as retail traders, are just trying to “get into” picture that they are drawing, positioning ourselves in the drawing to extract a profit. The second reason for locating what phase the cycle is in, is that, whatever the present cycle is, well that will determine the tactics or techniques I will employ, and the setups I will use. See, BO’s (breakouts) are traded differently that channels. While ranges and channel are similar (a channel is a tilted range) and traded with similar techniques there are also difference between them that will lead to the use of different techniques.
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Don’t get offended if I clarify abbreviations such as RTH’s (regular trading hours) or PB’s (pull backs). I am not talking down to anyone nor assuming most traders don’t know what these stand for. I am simply doing this for new traders or perhaps other traders that simply aren't familiar with the terms.
I want to show the cycle I have been talking about with it's phases. Remember there are techniques for trading each phase of the cycle.
Then I will show some trades I took this morning introducing a technique I don't think I have discussed before in this journal or if I did, it was a very casual mention. I want to look at this technique with a little more detail. I used it this morning. So I will post some trades this morning. I will post the charts enlarged and marked up and give an explanation of them later today. I am done trading for the day.
But in the meantime I will post the larger context chart showing the market cycle occurring over and over. This is a 24 hour chart so that I can go back enough to mark up the cycles. It is VERY IMPORTANT to understand this concept of cycles. These are the larger contexts that I speak of and these determine my tactics and setups I will use in trading. Each phase of the cycle has it's own techniques.
At the last range on the right you will see my trades made today. Later today I will posts a couple of more chart describing these trades and the technique I want to introduce to this journal.
First, how the cycle works:
SO.....RANGE ..THEN BO....THEN MOVES TO CHANNEL....THEN INTO RANGE AGAIN. (IN A NUTSHELL ...BO ....CHANNEL...RANGE) The process repeats about 75% of the time in this order. There will be about 25% of the time it may DO EITHER OF THE FOLLOWING BELOW.
1) From RANGE to BO to RANGE SKIPPING CHANNEL WITH ONE RANGE ON TOP OF THE OTHER. STAIR STEPPING. THESE SCENARIO PROVIDES MANY RANGE TRADING OPPORTUNITIES.
2) RANGE TO CHANNEL THAT HAS A BO OF THE CHANNEL DIRECTLY INTO ANOTHER CHANNEL SKIPPING THE RANGE AFTER THE FIRST CHANNEL. THESE ARE MANY TIMES GOOD FOR A MEASURED MOVE UP. AND FOR PRESSING A TRADE.
3) BO TO RANGE SKIPPNG THE CHANNEL BETWEEN THEM.
4) RANGE TO MULTI-LEG BO SKIPPING THE CHANNEL AND EVENTUALLY JUST MORPHING INTO A RANGE. THESE ARE GOOD FOR PRESSING A TRADE. THAT IS, ADDING TO A WINNING POSITION. IN A WAY THESE ARE JUST VERY TIGHT CHANNELS. YOU CAN CALLED THEM MULTI-LEG BO'S OR TIGHT CHANNELS. IT DOESN'T MATTER WHAT YOU CALL THEM. WHAT MATTERS IS THE PA (PRICE ACTION)
P.S. I forgot to write it in the chart above but between that last bear channel and that last range area (where my trades took place) there WAS a BO between the channel and the beginning of the range. It was a successful BO south of that last channel. The charts later today should have that BO annotated.
I got other things to do but will try sometime today to post the other charts and give explanations.
Then I will show some trades I took this morning introducing a technique I don't think I have discussed before in this journal or if I did, it was a very casual mention. I want to look at this technique with a little more detail. I used it this morning. So I will post some trades this morning. I will post the charts enlarged and marked up and give an explanation of them later today. I am done trading for the day.
But in the meantime I will post the larger context chart showing the market cycle occurring over and over. This is a 24 hour chart so that I can go back enough to mark up the cycles. It is VERY IMPORTANT to understand this concept of cycles. These are the larger contexts that I speak of and these determine my tactics and setups I will use in trading. Each phase of the cycle has it's own techniques.
At the last range on the right you will see my trades made today. Later today I will posts a couple of more chart describing these trades and the technique I want to introduce to this journal.
First, how the cycle works:
SO.....RANGE ..THEN BO....THEN MOVES TO CHANNEL....THEN INTO RANGE AGAIN. (IN A NUTSHELL ...BO ....CHANNEL...RANGE) The process repeats about 75% of the time in this order. There will be about 25% of the time it may DO EITHER OF THE FOLLOWING BELOW.
1) From RANGE to BO to RANGE SKIPPING CHANNEL WITH ONE RANGE ON TOP OF THE OTHER. STAIR STEPPING. THESE SCENARIO PROVIDES MANY RANGE TRADING OPPORTUNITIES.
2) RANGE TO CHANNEL THAT HAS A BO OF THE CHANNEL DIRECTLY INTO ANOTHER CHANNEL SKIPPING THE RANGE AFTER THE FIRST CHANNEL. THESE ARE MANY TIMES GOOD FOR A MEASURED MOVE UP. AND FOR PRESSING A TRADE.
3) BO TO RANGE SKIPPNG THE CHANNEL BETWEEN THEM.
4) RANGE TO MULTI-LEG BO SKIPPING THE CHANNEL AND EVENTUALLY JUST MORPHING INTO A RANGE. THESE ARE GOOD FOR PRESSING A TRADE. THAT IS, ADDING TO A WINNING POSITION. IN A WAY THESE ARE JUST VERY TIGHT CHANNELS. YOU CAN CALLED THEM MULTI-LEG BO'S OR TIGHT CHANNELS. IT DOESN'T MATTER WHAT YOU CALL THEM. WHAT MATTERS IS THE PA (PRICE ACTION)
P.S. I forgot to write it in the chart above but between that last bear channel and that last range area (where my trades took place) there WAS a BO between the channel and the beginning of the range. It was a successful BO south of that last channel. The charts later today should have that BO annotated.
I got other things to do but will try sometime today to post the other charts and give explanations.
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The technique I want set forth is trading BO out points. These can be previous highs or lows. They can take place anywhere but when the larger context support it then the odds are more favorable. I took several of these in MES this morning and the entries and exits are in the chart above in my post #1229. I will post a more detailed chart later today of these MES trades. Since there were several trades of this sort in MES, and wishing to not complicate showing the process, I decided to make one trade in the ES, to first show the concept. I think it will make it easier to see the idea and then later I will post the chart that is annotated and has the MES trades on it.
Basically the idea is this: When there is a BO of anything...for instance, a previous high or low and then the BO fails and goes the opposite way there is a tendency for the market within a few bars to close the gap and go back to test the BO point. This is especially true in Ranges but also in channels that are not too steep.
Now the first thing to do is look at the larger context. In this case price had traded back up in the channel and was now near the top. That favors price going down. It broke above the previous swing high (see magenta line or BO point) then traded down towards the middle of the channel. It is a bear channel so it could trade on down to the bottom before it heads back up.
I am willing to average down BETTING that it will trade back up to the BO point at least enough for a decent scalp before it would trade to the bottom of the channel. I am betting it will close the gap between my first entry long and the swing high magenta BO point. Price is now, at the time of my entries, around the middle of the channel.
But I am willing to average down all the way to the bottom of the channel, if need be. Why? because most BO's of a channel (75% maybe 70% in a bear channel BO out of the bottom) will fail and price will trade back up into the channel enough to get out of my averaged down position with a profitable scalp.
As it happened I entered long then averaged down some more then price started right back up closing that gap (red box). I exited with a several point scalp. I could have held for even more but I wanted to make sure it worked well so I could explain it to you all. ROFLMAO. So I grabbed the profit. But as you can see it went on up to the BO point.
See this is a technique to use at practically any point, in a range or channel, that is not too steep. It is basically fading BO's of higher highs and lower lows. If you look to the left of the labeled BO point you will see another swing high that could have been utilized as a BO point after the BO failed and price went down some (5 bars). Then it went sideways a few bars then headed back up to the next swing high (which is the magenta swing high I drew in as a BO point for the next trade). See the gap was filled here too. This process capitalizes on the institutions that are constantly probing price for fair value. This goes on all session long. That is one reason why I say money can be made on most any bar of the 81 bars (5 min bars) in the RTH's session.
The technique doesn't work as well in steep channels or narrow ranges. But it works over and over in broad ranges (broad enough for a 1 to 8 point scalp).
In lower lows I would fade the BO point (the lower low) and sell higher expecting the gap between the lower low and my higher short entry to close. Just remember, look first at the larger context the market cycle. I want to use this technique in broad, not tight or steep channels, and in broad enough ranges to render a scalp.
Now just look at the chart. See if you can pick out any swing lows it would worked on, for me. Remember in such a case entries will be up above the swing low …averaging down and maybe adding to it, even more, should it move against me then waiting to exit a few bars later as it tests the BO point.
Basically the idea is this: When there is a BO of anything...for instance, a previous high or low and then the BO fails and goes the opposite way there is a tendency for the market within a few bars to close the gap and go back to test the BO point. This is especially true in Ranges but also in channels that are not too steep.
Now the first thing to do is look at the larger context. In this case price had traded back up in the channel and was now near the top. That favors price going down. It broke above the previous swing high (see magenta line or BO point) then traded down towards the middle of the channel. It is a bear channel so it could trade on down to the bottom before it heads back up.
I am willing to average down BETTING that it will trade back up to the BO point at least enough for a decent scalp before it would trade to the bottom of the channel. I am betting it will close the gap between my first entry long and the swing high magenta BO point. Price is now, at the time of my entries, around the middle of the channel.
But I am willing to average down all the way to the bottom of the channel, if need be. Why? because most BO's of a channel (75% maybe 70% in a bear channel BO out of the bottom) will fail and price will trade back up into the channel enough to get out of my averaged down position with a profitable scalp.
As it happened I entered long then averaged down some more then price started right back up closing that gap (red box). I exited with a several point scalp. I could have held for even more but I wanted to make sure it worked well so I could explain it to you all. ROFLMAO. So I grabbed the profit. But as you can see it went on up to the BO point.
See this is a technique to use at practically any point, in a range or channel, that is not too steep. It is basically fading BO's of higher highs and lower lows. If you look to the left of the labeled BO point you will see another swing high that could have been utilized as a BO point after the BO failed and price went down some (5 bars). Then it went sideways a few bars then headed back up to the next swing high (which is the magenta swing high I drew in as a BO point for the next trade). See the gap was filled here too. This process capitalizes on the institutions that are constantly probing price for fair value. This goes on all session long. That is one reason why I say money can be made on most any bar of the 81 bars (5 min bars) in the RTH's session.
The technique doesn't work as well in steep channels or narrow ranges. But it works over and over in broad ranges (broad enough for a 1 to 8 point scalp).
In lower lows I would fade the BO point (the lower low) and sell higher expecting the gap between the lower low and my higher short entry to close. Just remember, look first at the larger context the market cycle. I want to use this technique in broad, not tight or steep channels, and in broad enough ranges to render a scalp.
Now just look at the chart. See if you can pick out any swing lows it would worked on, for me. Remember in such a case entries will be up above the swing low …averaging down and maybe adding to it, even more, should it move against me then waiting to exit a few bars later as it tests the BO point.
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