The ER2 Trading Journal

[lynx2004]

Quote from trade_4_living:

Again, don't rely on it to trade, just use it as a reference from a different perspective. I use many other indicators to make a trade decision. I have many indicators on five monitors.

MACD/STO/CCI/RSI/DMI/AROON/MA/Support/Resistence, fib, double top, double bottom, candlesticks, chart formations and patterns (cup/handle, head/shoulder, triangles, channels etc), divergences, time of the day, compare to YM/ES/NQ etc...

congrats, good short today....

with all the above mentioned indicators, how do you make a decision? which takes priority and when?

 

[trade_4_living]

I use 1 minute chart to make entry/exit decisions. I use 5 minutes chart to decide if I want to go long more often or short more often.

I use the relative MA movement as a major decision on going short or long. I use ADX to see if a strong trend is exist. If MA is above 80% of the price level, chances are, sellers will kick in, if the MA is below 80% of the price level, buyers will kick in. This is equal to the Market Profile but in dynamic sense.

Let me do some sceen captures today and show you why I did and why I stayed in a trade.

Quote from lynx2004:

congrats, good short today....

with all the above mentioned indicators, how do you make a decision? which takes priority and when?

 

[trade_4_living]

This is the 5 minutes chart when ER2 opened for the day. I look at the MA TA indicator (it is at the bottom of the panel, not on the price chart), MA was right above the 80% level at the open , and it opened at the resistence, top purple line on the price chart.

As minutes passed by, look at Aroon indicator, there are no greens (bulls), all RED (sellers dominiate), stay in the short, don't cover too soon. Pesavento Patterns bottom/top indicator will flash to me on where the critical fib levels and crossing points. You can see them from the chart on the green or red arrows.

When to cover? if the MA line drops below 50% level from 80%, in most cases, it'll touch the 20% line, looking to cover near 20% line.

I know many people are using MA cross overs to find trends and trade stocks, but how can you predict when they would cross back and the prevailing trend would end? This indicator is the answer.

 

[trade_4_living]

On the ADX, the red line (-DI) above the green line (+DI) means bears are in control at the very beginning. +DI is decling and -DI is rising. ADX line - the white line measures the strength or weakness of the trend. If ADX is rising and the red line is above the green line, the bearish trend is rising, stay in the trade. If the red line is dropping and the ADX line go acrosses the red line, watch to cover.

If ER2 is trendless, +DI and -DI will trade around the 20-25 for a period of time. However, if the previous cycle was very downtrend and ADX line moves to the very bottom - below 15, it means the bears are very weak, bulls were about to take over.

 

[trade_4_living]

Always check the Pivot/Support and Resistence. If it breaks S-1, looking for S-2 as the target to cover or buy. Always put a stop several ticks below the support, if it breaks the support, look at the next support line for entry.

 

[trade_4_living]

Always check the fib retracements for possible entry or exit .

 

[trade_4_living]

Another indicator I check very frequently is CCI 50 period. If CCI 50 period line (the orange line on my chart) is declining and below the 0 line, it is bearish, think short trades. If it crosses the 0 line and stays above it, it is bullish, always think long trades.

 

[trade_4_living]

Most often, when the market opens, TA indicators like CCI etc really won't show up well on minute charts. This is when the tick chart really helps at the open. I look at 133 and 233 tick charts:

 

[trade_4_living]

I pay very close attention to the trading channels. If two bars break the trading channel, I would consider to change my position or take a new positon. Would some of you want to share how you trade ER2? What are you looking for TA wise? How do you trade? How often do you trade in a day?

 

[trade_4_living]

This is the 233 tick chart on my laptop. This chart stopped right around 10:30 AM (CT). I have not resfreshed the data. It shows what happened today before 10:30 AM (CT) and not after.

I have MA percentage change (MA derivate) indicator on the chart (bottom panel), notice it was over 80% at the open, moved below 20% around 10:00 AM (CT). I also have the Pesavento Map on the chart (the white dot line).