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IE I am saying a degree of flexibility is warranted rather than pure precision. |
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yes good point.
I meant it to be taken as a concept rather than an everlasting rule. I posted it simply because I wish someone had shared this with me a few years ago. Would have saved me a lot of money not getting chopped up.
The concept is just that you should almost EXPECT the market to play a chop-chop game after some good morning movement (with some exceptions). This choppy action is what is needed to eventually set the market up for an afternoon directional move. 40,000 was just a number I have pointed out as a starting point.
take today as an example (Wednesday):
the market played a sideways chop game for much of the day. 40k contracts did not form at a single price until 3:40pm. Thus, the play was to either fade moves away from 'value' or just wait. Not getting caught up in that chop (or playing fade-trades only before 40k) was a nice guideline to have. The market ended up printing ~55k at 1489.50 today and then had a nice directional move down for -20 pts. Waiting until at LEAST 40k saved you any chance of getting caught in the chop today. Waiting for 55k was golden on this day. Tell me when a market is ready to trend and I can just bracket it and use a stop and clean-up.
Over the last 8 weeks, the median daily
PVP is 54,986 contracts. The lowest one that occured is 39,917. As market dynamics change and volume goes up over time in the futures market, 40k will prove too low and I will adjust it upward. But I am just thinking of 40k as a MINIMUM type of number anyway.