I have traded ER2, migrated to CL (see my thread "Some Observations on Scalping Crude")and I am doing more ER2 again as the tension is creating more treadable patterns.
I am basically scalping using visual aid and my sense of momentum. It's been hard but I am adapting by trading with volume confirmation only and for wider targets.
I don't use stops just get out when the swing goes against me. In the last few days I also stopped scaling against moves.
I have posted the following yesterday at an other board:
"If one looked at a15 second or 89 tick or 89 volume bar chart of ER2 one could see that the patterns have not changed, intensity and range has.
Chart patterns are clearer to read because there is intense two sided market at every turn. One of the most reliable patterns the flag or pendant formation on the 1, 3 and 5 minute chart is appearing several times a day in its perfect form, meaning after a move with robust volume - which we now have on impulse moves- the market pulls back a bit on much much less volume. This ebb and flow is not readable well in aquiet market, only in an active market. Most of these patterns in the last week met their measured targets, again textbook. Yesterday afternoon the high volume bottom at 2:30 ESTwas followed by three waves up on less and less volume and the "surprise"drop.Textbook.
On the other hand if one is a swing trader, because momentum leads to somewhat bigger overswings it is easier to catch a turn or at lest when one does catch one targets are met quickly(rubberband effect), one can act with more confidence if the breadth reading are lopsided in the direction of one's trade. Four days ago downside volume was 20x the up volume. Needless to say even the simplest oscillator can pick intraday tops in those conditions.
As far as blackbox trading I have my own theory, when the market is intense it is a free for all and noone can control the market. If you are a BB operator and stand in front of the freight train it will run you over even if you are GS or MS. The only blackbox person I personally know chips away at moves at their extremities so they are actually containing market moves rather then exagerating them. I do the same as a scalper.
One aspect of market movement I don't see discussed much is what cycle in the market is dominant.
I don't mean cycle in the regular sense but more like on what time scale the ebb and flow of intensity is at the moment. Skilled traders try to figure out thisd ebb and flow and if they are tuned to it it's like magic. You and the market are one.
In individual stocks (unless it's a MOMO stock), the dominant intensity may be daily as the stock is dragged up and down by the ebb and flow of the market, with an occasional jolt from a news item or right after a breakout/breakdown.
In futures the dominant action (where there are clearly formed tradeable patterns)are both intra day and inter-day because of leverage more attention is paid to every little move.
It takes a lot of learned skill and stamina to figure out,track this and consistently be good at it.
When the market is in a crisis mode or after important releases the dominant intensity becomes microscopic. In the last few days the 1 and 3 and 15 minutes charts of ES, EQ, YM had as many good formations as one would have on hourlies in months and dailies in two years.
When people don't understand a sudden move it could be because dynamics of a different wavelength are in play then the ones the trader is used to. It is the best to stay clear of these situations - one should chose one battles carefully and stay clear of slower or faster markets then what one is used to."
Regards,
GC
I am basically scalping using visual aid and my sense of momentum. It's been hard but I am adapting by trading with volume confirmation only and for wider targets.
I don't use stops just get out when the swing goes against me. In the last few days I also stopped scaling against moves.
I have posted the following yesterday at an other board:
"If one looked at a15 second or 89 tick or 89 volume bar chart of ER2 one could see that the patterns have not changed, intensity and range has.
Chart patterns are clearer to read because there is intense two sided market at every turn. One of the most reliable patterns the flag or pendant formation on the 1, 3 and 5 minute chart is appearing several times a day in its perfect form, meaning after a move with robust volume - which we now have on impulse moves- the market pulls back a bit on much much less volume. This ebb and flow is not readable well in aquiet market, only in an active market. Most of these patterns in the last week met their measured targets, again textbook. Yesterday afternoon the high volume bottom at 2:30 ESTwas followed by three waves up on less and less volume and the "surprise"drop.Textbook.
On the other hand if one is a swing trader, because momentum leads to somewhat bigger overswings it is easier to catch a turn or at lest when one does catch one targets are met quickly(rubberband effect), one can act with more confidence if the breadth reading are lopsided in the direction of one's trade. Four days ago downside volume was 20x the up volume. Needless to say even the simplest oscillator can pick intraday tops in those conditions.
As far as blackbox trading I have my own theory, when the market is intense it is a free for all and noone can control the market. If you are a BB operator and stand in front of the freight train it will run you over even if you are GS or MS. The only blackbox person I personally know chips away at moves at their extremities so they are actually containing market moves rather then exagerating them. I do the same as a scalper.
One aspect of market movement I don't see discussed much is what cycle in the market is dominant.
I don't mean cycle in the regular sense but more like on what time scale the ebb and flow of intensity is at the moment. Skilled traders try to figure out thisd ebb and flow and if they are tuned to it it's like magic. You and the market are one.
In individual stocks (unless it's a MOMO stock), the dominant intensity may be daily as the stock is dragged up and down by the ebb and flow of the market, with an occasional jolt from a news item or right after a breakout/breakdown.
In futures the dominant action (where there are clearly formed tradeable patterns)are both intra day and inter-day because of leverage more attention is paid to every little move.
It takes a lot of learned skill and stamina to figure out,track this and consistently be good at it.
When the market is in a crisis mode or after important releases the dominant intensity becomes microscopic. In the last few days the 1 and 3 and 15 minutes charts of ES, EQ, YM had as many good formations as one would have on hourlies in months and dailies in two years.
When people don't understand a sudden move it could be because dynamics of a different wavelength are in play then the ones the trader is used to. It is the best to stay clear of these situations - one should chose one battles carefully and stay clear of slower or faster markets then what one is used to."
Regards,
GC