Day Trading the E-mini Futures

[Day Trading the E-mini Futures]

 

you did not wait until the shorts were washed out and the longs began building....

 

 

I have seen several references to this type of thing recently and was wondering if someone could maybe clarify what is meant by this and how do you go about determining that shorts or longs have "washed out"?

[The Close of a Bar is Meaningless]

The math of reality.

 

Your reality or mine? To each our own, I presume.

 

Cheers

[The Close of a Bar is Meaningless]

I'm not saying they can't be high or "too high". I'm saying they can't both be high within the same strat. It is an either or situation.

 

High win/loss ratio with small win amounts or Low win/loss ratio with high win amounts.

That is just how math works whether it is trading or sports or music or .......

 

I don't think that this is true at all. I believe it is very possible to have a high win/loss ratio with high win amounts. In fact, it is the one thing that I continually strive for on an ongoing basis. Have I achieved it yet with total consistency? No. Do I believe that I will get there eventually? Absolutely!

 

I'm curious what math you are using to arrive at this self-limiting conclusion?

[The Close of a Bar is Meaningless]

It is all to do with waiting for momentum to washout before taking a position.

If you are trading ES from say a 5 minute chart you really don't have a chance of seeing it.

 

Hi John,

 

How do you go about "seeing" this washout of momentum?

[ES .. the LOW of the Bar is More Volatile Than the HIGH of the Bar.]

I would suggest that if you wish to discuss CVB relative to apply a momentum speed measure that it could present a fruitful discussion

 

Well I am glad to see that this discussion is gaining some more participants, although it seems to be straying slightly off topic.

 

I agree with you that this is what is at the heart of what johnw was describing in his earlier post, i.e. how to measure/identify changes (delta) in the speed (momentum) of the bars, and therefore spot potential reversals, and that it indeed could present a fruitful discussion. So how about we put the focus back onto the topic and see where this goes?

 

In my mind the question becomes, how do we measure/quantify the change in momentum?

 

Johnw, perhaps if you could clarify what you meant by "imagine the surprise of the guys from the bottom of the bar when they go hurtling past ... unless something is done quickly to remedy this situation, price will enter into a spin much like a car would when it's rear end is traveling faster than it's front end"?

[ES .. the LOW of the Bar is More Volatile Than the HIGH of the Bar.]

I would have thought that this topic would have garnered more interest as it is, well, interesting...at least I think it is. Being able to identify clues to changes in momentum that lead to price reversals would seem to be quite a useful tool. In any case, I look forward to hearing more of the OP's thoughts on the topic.

[ES .. the LOW of the Bar is More Volatile Than the HIGH of the Bar.]

If price is rising it is because it is being pulled-up by new tics, each higher than the last.

This is done by the guys at the price bar high ... so imagine the surprise of the guys from the bottom of the bar when they go hurtling past ... unless something is done quickly to remedy this situation, price will enter into a spin much like a car would when it's rear end is traveling faster than it's front end.

 

In the same manner as the car, the price bar is spun on it's axis and even if it is still traveling upwards or sideways, the momentum has changed.

 

Hi johnw,

 

Interesting analogy. Would you care to expand on this a little bit more, as I'm having trouble visualizing what is being described in the highlighted wording?

 

This is one very effective way you can see the end of a price wave and the formation of a new reversal wave and you can measure the speeds [momentum] and calculate their Delta to assist you

 

What are you using to measure the speeds [momentum]?

[ES .. the LOW of the Bar is More Volatile Than the HIGH of the Bar.]

If I were to say to you that the LOW of the bars in ES are currently more volatile than the HIGH of the bars ....what would you make of this.

 

I would make of it that price is rejecting the downside and is likely to push higher.

[How Are Turning Points Created?]

There is a set of indicators, available to the public, that do an excellet job of spotting session extremes in real time.

 

The strongest extremes are formed when machine placed limit orders are replenished at a rate that exceeds human capability and exceeds the momentum of the market as plainly demonstrated below.

 

In the longer term there is a divergence between balance of trade indicators and price and in the millisecond time frame by spikes in trade velocity so strong that it can only be done by machines.

 

Below are sceenshots of extremes from today and the previous 4 days -the extremes are labeled by date and the times are PST. In almsost every instance, at these extremes, there is the divergence in the higher time frame and velocity spikes in the fastest time frame as shown below.

 

[/center]

 

Bottoms are made by a bid bigger than the market and tops are made by an offering that is bigger than the market and the momentum that got price to the highs.

 

At least one of these signals happens almost every day as you can see happened in each of the previous four days.

 

cheers

 

UB

 

Hi Urma,

 

I'm not sure I know exaclty what I'm looking at with most of these colored squiggly lines (although I must admit they are pretty), but I think I get the concept you described regarding the "trade velocity" and can see the velocity spikes your are referring to on your charts, which leads to my question...

 

On the last chart, there appear to be two distinct velocity spikes, one at 7:17 and one at 7:24. If these spikes are only created by machine placed orders that are larger than the market itself, and are indicative of large traders who want to turn the market, why did the spike at 7:17 fail?

 

And what about the turns that occur in the market without a velocity spike? Who is behind those reversals?

[Managing Fear: the First Step in an Effective Psychological Plan]

Imagine this for a moment ....there are two sincere opportunities on offer.

 

The first is to be Mentored so that we can trade to a level of living comfortably.

The second is to be Mentored to a target of USD100K each and every day

 

What is the difference in mentoring in each case.

And what are People's first REACTION to the two offers.

 

Interesting questions.

 

I don't know what the difference is in the mentoring, but obviously the results being offered are worlds apart. I would question the ability of the first mentor because if their method is sound and can get you to a level of living comfortably, then getting to a level of 100k/day should simply be a matter of scaling up size, assuming of course a sufficiently liquid instrument is being traded. Since that is not being offered then my assumption is that there is some flaw in the method or the mentor is not willing to share everything. After all, we should not be in this game just to be living comfortably.

 

Then again, if the 2nd mentor is offering the opportunity of 100k/day I would question their motive for sharing such a method. While it is not something that I am yet capable of, it is something that I do believe is very possible, but why would someone just give that away?

 

That being said, my first reaction...Sign me up for the 100k/day!!

[How Are Turning Points Created?]

My interest is not so much in why prices turn where they do, as much as it is in how it is achieved. In other words, what are the mechanics of how larger traders create a turn or reversal? And by the nature of having to turn a large number of contracts, are there footprints of it left behind that give clues as to when this is happening?

[How Are Turning Points Created?]

Sell orders dry up at a bottom; buy orders dry up at a top.

 

Pretty simple, heh?

 

 

Phantom

 

Yes, I understand that very basic part of it, I'm looking more for how a large trader or group of large traders makes this happen. What sequence of events must occur at, just prior to, and soon after these reversal points?

[How Are Turning Points Created?]

Each day the ES market creates several reversal points, where price turns as buyers step in and take control from sellers and vice versa. What are the mechanics behind how these reversal points occur? I assume that they are created by large traders who have the deep pockets to change the direction of price, but what, specifically, must happen at these points in order for prices to reverse?