Futures I Trade Show & Brooks Book

[Futures I Trade Show & Brooks Book]

I was a little confused because you are on the Globex chart, and I was looking at the day chart. At any rate, your numbering looks fine to me, but I think your entry may be a little confused. If the bull bar at 8:30 is the signal pullback bar that creates your L2, the entry would be at one tick below it, or 1009.25, not at one tick below the next bar, which is your entry bar.

 

I was getting confused switching between Globex and the day session chart, so I just abandoned Globex except to see where the gap may be. Al suggests imagining the gap as a trend bar, and I actually use my drawing tool to draw one in. He also takes about the charting dilemma somewhere, maybe his website.

 

Sorry, but I thought the requirement for the L2 was a high that is higher than the previous bar. (?) The low of the L2 bar-1 tick is 1008.25

[Futures I Trade Show & Brooks Book]

Using the methods described in the book, the first trade of the day was an L1 short at 1008.25 off the 1st bear trend bar. The next trade I saw was also an L1 short at 1004.50 off the 4th & 5th double bottom bear bars. Any trade around 1010.00 was before the first 5 minute bar of the day closed and thus was not compatible with my understanding of Al's methodology since it was too early to look at a lower time frame for setups, the market not yet having proven itself in a strong trend.

 

Thanks for the reply. I just started reviewing some of the posts and wanted to see if I had a rudimentary understanding. The difficult thing for me is knowing where he resets his count, so I saw the 1008.5 as a L2 and the next as L3. This might become clearer to me later. Thanks for the info.

[Futures I Trade Show & Brooks Book]

Can someone tell me if there was an ES short signal @~1010.00 right near the open at 9;30EST on Fri via this method? I am trying to see if I am understanding it with any accuracy. Thx.

[Trading with Market Statistics VIII. Counter Trend Trades in Symmetric Distributions]

Thank you for the responses Jerry and BlowFish. I can see that I must be careful in the terminology I use because I may be introducing my own mental "bias" by using the wrong wording in my head when reviewing the posts.

 

In ES Thurs, I see where skew and trend match, producing very nice outcomes.

 

The idea of a breakout against the skew is also clearer on review and Jerry's comment above to dbntina - "the distribution function is dynamic. Note the emphasis on the word dynamic. Reversion to the mean, does not necessarily occur."

 

(Lightbulb starting to flicker on....)

[Trading with Market Statistics VIII. Counter Trend Trades in Symmetric Distributions]

Thanks to jperl for his generous insights, and dbntna and BlowFish for their work on theTradeStation code to see what is being discussed on the chart (received a copy from a trader on this board).

 

Sorry for being dense on this, but I am a bit confused on the trade direction when viewing the Price vis-a-vis the VWAP and the PVP.

 

My understanding is that the skew is in the direction of the VWAP (so VWAP > PVP means skew is up).

 

When VWAP > PVP but current price < VWAP, is there a directional bias?

 

Thanks for the threads and any clarification.