Futures I Trade Show & Brooks Book

mbfromla · #**221** 07-01-2009, 03:17 AM

Here's a chart from 6/23 I'll get better at explaining the charts, but this is so far what I see as potential trades.

mbfromla · #**222** 07-01-2009, 03:36 AM

This chart is for today 06.30.09 Perhaps I'm missing some points, but overall was a very difficult day to trade except the large down at the open.

BlowFish · #**223** 07-01-2009, 05:43 AM

Originally Posted by mbfromla

..... if a trade doesn't immediately work out, most likely it will go against you. ......

This is a function of taking a BO of the previous bars high/low. You are always entering with the immediate trend (in respect to the last 5 minute bar) and so would expect momentum to propel the BO.

6 ticks has always been a popular point based stop on the S&P though as you observe the current volatility is whats key.

ACS · #**224** 07-01-2009, 08:47 AM

Originally Posted by mbfromla

I've been trading for a while, and from what I understand, 80% of so of a time, if a trade doesn't immediately work out, most likely it will go against you. Therefore 90% of a time if a trade is over 4 ticks against you, most likely stop will be hit. So im thinking to have a 6 tick stop in a regular volatility day.

You save 2 ticks on your losers but every trade that would have been good with a wider stop is a swing of 10 ticks in the P&L. You really need a large data base of trades to make the right decision. Al mentions smaller stops in some of his articles but the presentations and book all stress 8 ticks for normal markets. I defer to his experience.

djohnsonhot · #**225** 07-01-2009, 09:16 AM

The best traders I know of enter with 3 tick stops. Period. They get out fast. I am not that good.

The subject, and debate about how many ticks of heat should we (lesser experienced) take SHOULD be based upon how you assess your entry at the time of your trade entry. Sounds easy, huh?

Let me tell you that when you do find that magic entry, and your profit is immediate and obvious, I would say that you can see it with your own eyes, and your entry is clearly a winner. Most of the time, when I have nailed a topping point (let's say for a roll-over to a short trend from a day high, and volume confirms it, and momentum is clearly on your side) then I loosen my stops and let a runner run. I use the PULLBACK strategy that Brooks KIND OF describes: an attempt to go higher on short that fails.

I'll actually SCALE IN on those entries. I'll start with 2 to 5 contracts and then re-enter on the next break level until I hit my max contract size for any entry.

How many times a day doe this happen? Twice, maybe. ALWAYS on the second leg..always...after a major reversal. Those are those magic runs that you say, "wow, I missed that one." And thus: I tend to lose on the entries where I was late to the game (did not recognize the trend in fact did change or rolled) and did not clearly see that wave three was well on its way ....in Elliott terms (or, as Brooks says it, the second "leg" from a bottom that he mentions at about 45 minutes into his Static Slide show).....

If we have a choppy day, as we have seen lately after a single run-up or whatever, then I move my stops to 3 ticks...remember chop is essentially just that: limited in range.

For example, If your average daily range for the last 5 trading days has already declined to low point for the past 30 days, and then you enter a chop zone of 2 points, then your entries at the bottom and tops of these zones are already limited in potential, so your entries SHOULD be limited anyway (there is very little profit potential in chop). You can chew up profits or put yourself in a losing net for the session and walk away disappointed for the day.

When you see chop forming, walk away! Put a shade box around it. Don't trade those zones. In my opinion, you are better off writing checks to the homeless.

One is far better to enter during pull-backs in a nice swinging trend upward or downward and as I mentioned earlier, if you find that turning point, then your initial stop SHOULD be loose, and you should move your trailing stop more slowly to take advantage of waves within waves. What I do is wait for each positive price action bar in your favor to complete, and then move my stop to one tick ABOVE that bar for a short trend and below that bar in a long trend. Then wait for the next bar to close and take that stop to a tick above or below the open again.

On 5 minute charts, there is a way to determine that you are in a good swing and thus SHOULD be looser in your trailing ATM: stacking candles or candles that open at the same price as the closing price, pull back no more than a tick or two and CONTINUE in your favor....just keep SLOWLY moving your trailing stop candle to candle.

I am not a teacher, and thus I am struggling with the language here. I hope this made sense.

The best traders I know of enter with 3 tick stops. They manage their entries better than newbies or the lesser experienced.

forrestang · #**226** 07-01-2009, 09:57 AM

In an attempt to get more aggressive in the morning, took the early morning gap/breakout bar entry. May have prematurely ejaculated the exit? BUt that's the hard part.

My software is giving me 1 tick late entries though so disregard that part.

ACS · #**227** 07-01-2009, 10:24 AM

Originally Posted by djohnsonhot

The best traders I know of enter with 3 tick stops.

I don't have a lot of experience watching the ES but isn't 3 ticks within the range of noise in that contract?

djohnsonhot · #**228** 07-01-2009, 12:20 PM

The best traders that I know enter their trades with 3 ticks of stop and a minimum of 10 contracts..and scalp out pretty quickly. They are pure price action traders, use Elliotts, breakouts and Support and resistance levels. All on clean charts with very little in the way of indicators, MA lines, oscilllators or that sort of thing.

They trade on signals from 3000 volume charts and enter their trades on 233 tick charts. I've watched them trade and they are profitable on the majority and close out quickly on bad entries.

mbfromla · #**229** 07-01-2009, 05:13 PM

ok guys, here is today's chart. Please be advised that this is what i see on the charts,, im sure im missing other setups and not yet perfect in reading price action. Any input will be apreciated my email is job858@yahoo.com

rcossey73 · #**230** 07-01-2009, 05:24 PM

Originally Posted by djohnsonhot

The best traders that I know enter their trades with 3 ticks of stop and a minimum of 10 contracts..and scalp out pretty quickly. They are pure price action traders, use Elliotts, breakouts and Support and resistance levels. All on clean charts with very little in the way of indicators, MA lines, oscilllators or that sort of thing.

They trade on signals from 3000 volume charts and enter their trades on 233 tick charts. I've watched them trade and they are profitable on the majority and close out quickly on bad entries.

The best traders I know don't use an actual stop at all. When they get a signal that it isn't working out like they thought then they exit. They base that signal completely on the current PA.

I use a 7 tick stop and I will adjust it if the current market conditions are more/less volatile than average. However it is always in the 5-9 tick range.