Today and last Firday's ES action

PuffyGums · Jul 29, 2003

Describe how the edge and setup traders operate and how that differs from the continuous trader?

What is the diff between the edge and setup trader?

dbphoenix · Jul 29, 2003

Quote from daydreaming:

still daydreaming

You should probably change your handle.

Scientist · Jul 29, 2003

Quote from NihabaAshi:
P.S. Trading the Open (the first hour especially when there's a key economic report in the first hour) is not recommended for beginners...

often called amatuer hour...a time when veteran traders takes money from newbie traders.[/B]

"Amateur Hour" = Love it!

The morning (particularly on the ES) has the single most statistically predictable time pivots, thus is the most predictable time of the day altogether, if you know what's supposed to happen when.

If you know the time pivots, you only need to know where the market is altogether in relation to its S/R levels, moving averages etc as well as relative to the other indexes. When you have that overall relative market position, you can estimate which way the pivots are going to go - But most of the time, they just go opposite the preceding short-term trend.

In order to look at this the best, I trade between 9:30-10:10 on 15S-charts. I haven't heard other people of using it yet, everybody talks of tick charts. S-charts can draw a map for you if you want to trade the amateur hour.

With a little patience and observation, scalping the amateur hour can by far be the most profitable trading endeavour in the day. What I mean is that during the first 1 hour, you can make quite a few more points than you could trading all the hours thereafter, even following large swings / trends!

It really is amazing. I suppose that's one of the reasons why the pro's do it and move the market so much during that hour. Most of them have made their day long before they go to lunch

Sincerely,
~The Scientist

rickty · Jul 29, 2003

Quote from dbphoenix:

I don't know what your particular strategy is, but it should not have been too difficult to catch the bulk of the move down.

dbphoenix,
I'm still trying to figure out my strategy. It's certainly not clear to me which side to have been on before the report, which as far as I can see, is what was needed "to catch the bulk of the move down". Looking at a 1 min chart I see that the bulk of the move was in one 7 point candle starting at 10:00 EST.

I'd be interested to know how one could have been positioned to get in on this move. (I do hate to miss them.)

Richard

dbphoenix · Jul 29, 2003

Quote from rickty:

dbphoenix,
I'm still trying to figure out my strategy. It's certainly not clear to me which side to have been on before the report, which as far as I can see, is what was needed "to catch the bulk of the move down". Looking at a 1 min chart I see that the bulk of the move was in one 7 point candle starting at 10:00 EST.

I'd be interested to know how one could have been positioned to get in on this move. (I do hate to miss them.)

Richard

It wasn't necessary to be on any side before the report. Let the market tell you what it's going to do, then act accordingly.

Using the 5m chart, for example, you'll see that there were retracements in all three indexes at the 0950 bar. An entry stop below this bar would have caught the downdraft that resulted when the CC number was announced. Exit at what you've determined to be the target. Playing the NQ, this would amount to approximately 15pts on this leg.

If there were no downdraft, of course, there would be no downside entry.

Scientist · Jul 29, 2003

Quote from dbphoenix:

It wasn't necessary to be on any side before the report. Let the market tell you what it's going to do, then act accordingly.

Using the 5m chart, for example, you'll see that there were retracements in all three indexes at the 0950 bar. An entry stop below this bar would have caught the downdraft that resulted when the CC number was announced. Exit at what you've determined to be the target. Playing the NQ, this would amount to approximately 15pts on this leg.

If there were no downdraft, of course, there would be no downside entry.

-Good post.

rickty · Jul 29, 2003

Quote from dbphoenix:

Using the 5m chart, for example, you'll see that there were retracements in all three indexes at the 0950 bar. An entry stop below this bar would have caught the downdraft

dbphoenix,
Thanks for your input but I still have a problem with this. However if we can go into further detail I think I can resolve it.

I see the low and high of the 950 bar (where I assume, the time of the bar is in reference to its starting time as in QCharts) were 992.75 and 994.75 on the ES. So I assume you would be placing stops at around 991.75 and 995.75 (OCA). (Is that where you would have placed them?) So in this case one could have gotten in on the downdraft. However. I wonder what the slippage would have been? I can imagine by the size of the 1000AM one min. bar that it could have been 3 or 4 points. Is this being too pessimistic?

On the other hand, I have seen on other report days that the initial price action is counter to the final resulting move. In this case one could have been stopped in long only to be put on the wrong side of the resulting move. I hope you see my trepidation in trying to trade the reports.

Scientist,
Let me say a hearty "Gedday" from one Aussie to other. However, I no longer live there (originally from the 'Gong and Sydney but now in the US). I like your idea of the trading book.
It's going to be lots of work. Good luck.

Richard

bubba7 · Jul 29, 2003

Quote from PuffyGums:

Describe how the edge and setup traders operate and how that differs from the continuous trader?

The former folk look for stuff. They find it. And they do a turn by betting on what they think they found. we were told by Scientist that am setups for him yield more in an hour than all day for guys like continuous traders; so he makes more each day than I posted below for Monday and Tuesday. If you trade at some point, you will probably recognize this as the way to operate.

Continuous traders do not do those things. As a day begins, they have a prescriptive entry *and they continue through the day by being on the right side of the market if there is one; if not, they sideline and wait for the market to take them back in again when it begins to move. Seven trades Monday for 26 points; tuesday was 28 points in 3 trades.

* Usually wait for sync and getting taken in after that.

What is the diff between the edge and setup trader?

lol... Probably backtesting skills. set up guys usually have a collection of market situations that they like and ID. They sideline otherwise. Edge folk are primarily mechanics. Often they are totally mechanical.

I would guess most frequent posters here classify others and themselves. You come off as a set up person, but rarely. It's hard to know much about your skills and experience. today you are just asking funny questions.

You may be able to guess where I am in the spectrum.

daydreaming · Jul 30, 2003

Did the ES completed a bottom Head and Shoulder at around 11:30 am? The market took off and in about 25 minutes made a 10 points move. Not bad.

dbphoenix · Jul 30, 2003

Quote from rickty:

dbphoenix,
Thanks for your input but I still have a problem with this. However if we can go into further detail I think I can resolve it.

I see the low and high of the 950 bar (where I assume, the time of the bar is in reference to its starting time as in QCharts) were 992.75 and 994.75 on the ES. So I assume you would be placing stops at around 991.75 and 995.75 (OCA). (Is that where you would have placed them?) So in this case one could have gotten in on the downdraft. However. I wonder what the slippage would have been? I can imagine by the size of the 1000AM one min. bar that it could have been 3 or 4 points. Is this being too pessimistic?

On the other hand, I have seen on other report days that the initial price action is counter to the final resulting move. In this case one could have been stopped in long only to be put on the wrong side of the resulting move. I hope you see my trepidation in trying to trade the reports.

I generally trade the NQ, but it really doesn't matter. If I had been trading the ES, I would have placed a stop-limit order to short at 992.5 with a relatively tight stop. Therefore, no slippage.

As to countermoves, this sometimes occurs. However, if you wait for the market to tell you what to do, as with the last CC report, the probability of your being on the correct side is that much greater.

You are, of course, not required to trade the price reaction to a report. However, the potential reward is so much greater than the potential risk, unless you have a very wide stop, that there's really no reason not to take the trade. Just consider your initial loss limit to already be gone. That way, there's nothing to fret about.