Winning in the EMinis
- Thread starter MaxMin
- Start date
How do you distinguish between "truth" and head fakes? "Truth" vs. noise? "Truth" of a pullback within trend vs. start of new trend?
Maybe we should all become monks!
To MaxMin,
I like your stuff about confidence and the journal itself...applicable in other areas of life besides just trading.
To bbmat,
So far...I think this journal is about many trading aspects...
Pivot points is just one of several.
The other...reason why I'm interested in this journal is that Max is going into areas of trading that I consider to be much more important than Pivot Points...
Such as psychology of trading and price action itself.
Also, what you find useless (TA and Pivots) may be a gem to someone else....
Simply, there are many roads to profits...
something you already know via saying your open to ideas about Pivot Points.
In addition, there are so many ways to use Pivots...its crazy.
You probably haven't found a particular way of using Pivots that integrates well with your trade methodology and may be the reason why its useless to you...
while others have found a way to integrate it nicely into their trade methodology.
Here's one way to use pivots...as profit targets (exit signals) and not as entry signals nor confirmation to entry signals.
I've been using the above for many many years...successfully.
By the way, I didn't even know pivot point analysis could be backtested ???
Last of all, I've attached your chart to show value in watching pivot points.
Therefore, pivot point analysis are very useful to me...its a gem.
P.S. The P+S1/2 is a pivot midpoint not based on your numbers but my numbers...the other info is based on your numbers.
Also, the designated profit targets (pivot points) work well for me because I trade size and have an easy road map of where I need to scale out of my position at.
NihabaAshi
I like your stuff about confidence and the journal itself...applicable in other areas of life besides just trading.
To bbmat,
So far...I think this journal is about many trading aspects...
Pivot points is just one of several.
The other...reason why I'm interested in this journal is that Max is going into areas of trading that I consider to be much more important than Pivot Points...
Such as psychology of trading and price action itself.
Also, what you find useless (TA and Pivots) may be a gem to someone else....
Simply, there are many roads to profits...
something you already know via saying your open to ideas about Pivot Points.
In addition, there are so many ways to use Pivots...its crazy.
You probably haven't found a particular way of using Pivots that integrates well with your trade methodology and may be the reason why its useless to you...
while others have found a way to integrate it nicely into their trade methodology.
Here's one way to use pivots...as profit targets (exit signals) and not as entry signals nor confirmation to entry signals.
I've been using the above for many many years...successfully.
By the way, I didn't even know pivot point analysis could be backtested ???
Last of all, I've attached your chart to show value in watching pivot points.
Therefore, pivot point analysis are very useful to me...its a gem.
P.S. The P+S1/2 is a pivot midpoint not based on your numbers but my numbers...the other info is based on your numbers.
Also, the designated profit targets (pivot points) work well for me because I trade size and have an easy road map of where I need to scale out of my position at.
NihabaAshi
If you take a long hard look at how the stock indexes "work" you will come to the unmistakable conclusion that their natural tendency is to retrace. Everyone who has studied the stock indexes knows this, so this is not a unique or even particularly insightful observation.
But let's get empirical for a minute and take a look at some of the numbers. Let's look at the movement of ES in terms of moves of a minimum range. Let's use 2 points (arbitrarily chosen) as that minimum range. You could use 20 pts for YM or 5 pts for NQ for a sort of equivalent move if either of those markets is your speciality. Moves smaller than 2 points will not be considered.
For the past 3 days there were 58 moves during RTH (regular trading hours) of 2 points or more according to my charting program and data. What is interesting is that of this data, 53% of the moves are 3 points or less, and 77% of the moves are 4 points or less. If over half the moves retrace or even reverse after a 3 point move, then it makes sense to bank profits at these levels when a pullback seems imminent.
Here's a little nugget for system traders who have managed to read this far. If the previous percentages hold, it also doesn't take too great an imagination to figure how a 2:1 profit / loss ratio 53% win system could be achieved by using a 2 point move as a type of entry signal, along with a 1 point stop for money management. A 1:1 ratio system could be likewise created with 77% accuracy by using a 2 point stop. While these might not be the most profitable systems, they probably would have a profitable edge.
But let's get empirical for a minute and take a look at some of the numbers. Let's look at the movement of ES in terms of moves of a minimum range. Let's use 2 points (arbitrarily chosen) as that minimum range. You could use 20 pts for YM or 5 pts for NQ for a sort of equivalent move if either of those markets is your speciality. Moves smaller than 2 points will not be considered.
For the past 3 days there were 58 moves during RTH (regular trading hours) of 2 points or more according to my charting program and data. What is interesting is that of this data, 53% of the moves are 3 points or less, and 77% of the moves are 4 points or less. If over half the moves retrace or even reverse after a 3 point move, then it makes sense to bank profits at these levels when a pullback seems imminent.
Here's a little nugget for system traders who have managed to read this far. If the previous percentages hold, it also doesn't take too great an imagination to figure how a 2:1 profit / loss ratio 53% win system could be achieved by using a 2 point move as a type of entry signal, along with a 1 point stop for money management. A 1:1 ratio system could be likewise created with 77% accuracy by using a 2 point stop. While these might not be the most profitable systems, they probably would have a profitable edge.
Quote from MaxMin:
Recognizing the truth is not the same thing as being true to the truth. Being true to the truth requires action to align your position to the truth of the market. The time between recognition and action is the level of your flexibility. }
There is an ancient Chinese expression that translates closely to : a thought once spoken is a lie. What it means is that anything we percieve is in fact percieved through our perception, duh. We all have a" perceptual warp" that is unique to each of us formed by our life experiences up to the moment. These experiences determine what things must be or have to be in order to reinforce our reality, what we know the world to be, we think it's the world's reality but it's really our interpretation of the world. Without some sort of resolution of events into this reality framework we would sink into the quicksand of the unknown, FEAR. The human ego appears to be rather unique in it's horror of the different or unknown and is as a result very determined to rigidly enforce a comfortable known structure at the very moment it should be relaxing and letting go into expansion, NONFEAR. An irony considering that very probably no creature is born better equiped. I digress.
"Recognizing the truth is not the same thing as being true to the truth"
Humans possess a duality of perceptual modes, an emotional instrument and an intellectual instrument, this is projected onto all human endeavour. An actor playing Hamlet on a stage in front of 2k people has to be totally engaged in the role , giving himself over to it ( emotional instrument) and at the same time fully aware of the fact that he is on a stage with an audience of 2k people ( intellectual instrument). He is engaging both of these awarenesses simultaniously. Successful market players know the mkt is an emotional characteristic and must be dealt with via an intellectual characteristic. This is not an easy point to arrive at, if you are there you understand it if not you are on the road. This is responsible for the warm fuzzy feeling quants strive for, they attempt to preclude that which the mkt really is, emotional behavior, doesn't mean they don't get it right looking for returns to a mean. They are however generally on the short side of Paretos rule, putting up huge capital to gain small % returns, whereas the cognicenti employ the opposite strategy.
Disclaimer: I'm a shade over the top with a nice dinner and some port that's older than I am or I probably wouldn't even be writing this, do hope it make sense to somebody though.
Recognizing the truth is not the same thing as being true to the truth. Being true to the truth requires action to align your position to the truth of the market. The time between recognition and action is the level of your flexibility. }
There is an ancient Chinese expression that translates closely to : a thought once spoken is a lie. What it means is that anything we percieve is in fact percieved through our perception, duh. We all have a" perceptual warp" that is unique to each of us formed by our life experiences up to the moment. These experiences determine what things must be or have to be in order to reinforce our reality, what we know the world to be, we think it's the world's reality but it's really our interpretation of the world. Without some sort of resolution of events into this reality framework we would sink into the quicksand of the unknown, FEAR. The human ego appears to be rather unique in it's horror of the different or unknown and is as a result very determined to rigidly enforce a comfortable known structure at the very moment it should be relaxing and letting go into expansion, NONFEAR. An irony considering that very probably no creature is born better equiped. I digress.
"Recognizing the truth is not the same thing as being true to the truth"
Humans possess a duality of perceptual modes, an emotional instrument and an intellectual instrument, this is projected onto all human endeavour. An actor playing Hamlet on a stage in front of 2k people has to be totally engaged in the role , giving himself over to it ( emotional instrument) and at the same time fully aware of the fact that he is on a stage with an audience of 2k people ( intellectual instrument). He is engaging both of these awarenesses simultaniously. Successful market players know the mkt is an emotional characteristic and must be dealt with via an intellectual characteristic. This is not an easy point to arrive at, if you are there you understand it if not you are on the road. This is responsible for the warm fuzzy feeling quants strive for, they attempt to preclude that which the mkt really is, emotional behavior, doesn't mean they don't get it right looking for returns to a mean. They are however generally on the short side of Paretos rule, putting up huge capital to gain small % returns, whereas the cognicenti employ the opposite strategy.
Disclaimer: I'm a shade over the top with a nice dinner and some port that's older than I am or I probably wouldn't even be writing this, do hope it make sense to somebody though.
