Trading the Pivots
- Thread starter JimmyJam
- Start date
Ehlers is a genius when it comes to designing Indicators which interpret price action pretty much almost perfectly.
IMHO I believe that having a setup in mind and doing the same consistent methodology over and over again will generate the consistent results that the "average trader" is looking for.
That's why I'm trying to develop this approach to trading the markets by:
1) Determining the Pivot Trend
2) Trading in the Direction of the Pivot Trend
3) Keying off of the Pivot, Support and Resistance
4) Having a consistent set of tools to determine when to enter trade.
And while I personally don't use these tools, here's some more info (from Amazon.com) for folks who are interested in them:
http://www.amazon.com/Cybernetic-An...f=pd_bxgy_b_img_b/102-2056771-2465769?ie=UTF8
If they will help you with #4 above, so much the better.
Best Regards,
Jimmy
It depends on you hit/miss/break even ratio and how a sample of data for trades were distributed away from the mean. If your r/r is 8:1 in this example and your batting average is 50% hit, 25% Break even and 25% loss for arguments sake risking 1% of account per trade might be a little on the conservative side - you could push it a bit more for sure. 2%,5%?? It depends on how much risk you can stomach, account blowout simulations and, most importantly, the distribution of those win/losses. You could start off conservative and if after 100 trades (which would take about six months), you saw that there was a small standard deviation away from the mean batting average then you could risk closer to 5%.
I am assuming that a rising equity curve doesn't in any way affect future results (it most certainly does - usually negatively). Anyways.
Normally this figure is high, however if you are waiting patiently for quality entries only and trading only 2-3 times a week with the aforementioned figures being true, it is not high IMHO. If the w/l/b.e. distribution was all over the place then perhaps 1-2% would be ideal. The only thing that could finish you is 20 catastrophic losses in a row if you did 5%, cause 8:1 is cool
eIgHtoOnE SPeCIALISt
Here's what I was thinking.
5% of the pricipal as your protective stop, looking at R:R ratio of anywhere from 6:1 upwards to 8:1 or even higher.
With a Reward:Risk of 8:1 ... using your approach that's the high-end of the scale, but it's very doable (we've both seen these scenarios played out in the markets countless times), and taking only the most optimal entries you'd probably have a win rate of 50% to 75%.
If you do this once (or max twice) a week, taking only the most optimal scenarios, where all your ducks line-up in a row; the results would be rediculous.
Then, diversy into multiple markets ... and pow!
Best,
JJ
edit: reversed the R:R to match yours. but you see what I'm talking about, this is why I say that if a trader swing'em he/she'll blast-off.
...who needs pivots...
you might want to read maoxian blog. he trades strength - he has lots of chart examples that will help drive home the point - very simple approach and very good dude to post his stuff. once you trade larger shares, taking partials helps solve problem. ive also noticed if i put on too much size, i have a harder time with the wiggles. i hit MIND in 11's a while back, took partials and set target at like 13.59... it did the hoochie-koo, but got there and my profit order took me out. not a large position, but nice gain just the same. tight now i have a small pos in EXC and kinda wiggles too. plus its summer and stuff has been chopping a bit
what you are also describing are A-B-C type price structures. i find that looking at 15-m or 30-min chart helps.. sometimes a 3-min looks like EOW, but 15-m looks okey. i bought the PB on AUY on friday and got out at +2% because i had to work and i ASSumed that pm session would be slow. it went up another 2%!
"Sniper Trading" (Book)
by George Angel or Angell kinda a has a system on buying PB of ABC type strutures.
For Tuesday, 09/05/06
Market Status
Pivot Trend: Bullish
1st Resistance: 1316
Median Pivot: 1311
1st Support: 1308
Current Trend: Up
***
Friday was a nice turnaround.
While weâre sitting up pretty high here, the Pivot Trend remains Bullish, so weâre going to look to be Long today.
While the market could replicate Fridayâs action, ramping up during the Bond opening and continuing that trend, if it does Iâm going to remain FLAT. Remaining FLAT is a position, and can keep you out of trouble when you don't like the setup (there will always be another setup, there will always be another trade).
Tuesday I'll be looking to Buy the Dip, and if it happens Iâll be there to catch it.
See you at the open.
Best Regards,
Jimmy Jam
Market Status
Pivot Trend: Bullish
1st Resistance: 1316
Median Pivot: 1311
1st Support: 1308
Current Trend: Up
***
Friday was a nice turnaround.
While weâre sitting up pretty high here, the Pivot Trend remains Bullish, so weâre going to look to be Long today.
While the market could replicate Fridayâs action, ramping up during the Bond opening and continuing that trend, if it does Iâm going to remain FLAT. Remaining FLAT is a position, and can keep you out of trouble when you don't like the setup (there will always be another setup, there will always be another trade).
Tuesday I'll be looking to Buy the Dip, and if it happens Iâll be there to catch it.
See you at the open.
Best Regards,
Jimmy Jam
To aid in the educational aspect of the thread, I will explain my thinking and reasoning processes to you.
1. The 1 Day Pivot Point is greater than the 3 Day and the 1 Week (5 Day) Pivot Point, so therefore, the Pivot Trend is Bullish, and the market's momentum is still upwards.
2. The Investors Fisher Transform of the RSI (IFT) is currently above the 0 Line, hence bullish ... I'm going to want price action to go lower, so I can re-enter on a bullish re-cross (provided it happens) of the IFT [see chart].
3. The Median Pivot is at 1311 and first Support comes in at 1308, so I'm thinking that price action will at least drop to 1311, and more likely 1308 (or lower) before I can enter on the re-cross of the IFT, going LONG.
Hope that helps.
Best Regards,
JJ
1. The 1 Day Pivot Point is greater than the 3 Day and the 1 Week (5 Day) Pivot Point, so therefore, the Pivot Trend is Bullish, and the market's momentum is still upwards.
2. The Investors Fisher Transform of the RSI (IFT) is currently above the 0 Line, hence bullish ... I'm going to want price action to go lower, so I can re-enter on a bullish re-cross (provided it happens) of the IFT [see chart].
3. The Median Pivot is at 1311 and first Support comes in at 1308, so I'm thinking that price action will at least drop to 1311, and more likely 1308 (or lower) before I can enter on the re-cross of the IFT, going LONG.
Hope that helps.
Best Regards,
JJ
Hey QBall,
Thanks for the info, couldn't agree with your about position sizing, and either going in small or taking contracts off the trade as it moves in your direction.
I did a search under "maoxian" here and I didn't find anything. I'd love to check him out, as, if you think about it, I'm just trading strength here also. Is the blog on ET, or should I goggle it.
I've read the Angel book also, he's got some great ideas, but putting it together takes a little work ... (to say the least), I'll be reviewing his concepts as well, but I see them as being more for the advanced trader who already has a base in place, because he's so "all over the place" in his writings ... but come to think of it, his rules for catching the reversal of the dominant trend could come in very well with this system 'emmmm?, see what I mean folks, it's share and share alike!
Well we've got the open and an early drop, and I didn't have time to go get my coffee
.Guess I'll have to make do.
Best,
JJ