bakrob99

Market action since Jan 1 has been tough for traders looking for pullbacks. Once a move is underway, it keeps going having skipped past the traders who would be getting in on pullbacks, and using the fuel of the stops of the responsive traders to keep going. IMO, you have to figure out a methid for getting in the trends that is different than "normal" market behaviour because, in this mareket, by the time a pullback happens the move is over.

To me it was longs closing out their trades somewhat disappointed that it didn't hold up for more move to the upside. Nothing weird about it at all. If it's EASY UP ... then it can be EASY DOWN too. Very easy for daytraders to hold longs and they have to exit before the close. So around noon EST the High Tick extreme signalled the end of the party.

I spent quite a few years entering at high volume (places) and found out it wasn't conducive to my financial well being. Much too choppy for me. After all, if the market likes the area it will trade there for a while. Rangebound - you can do well buying the low or selling the high if you get the breakout direction right. I tracked CHVN's and CLVN's but decided a while ago to get rid of the high volume node lines on my chart to make it cleaner/clearer. I think I can easily see where the market has spent some time before using overlapping bars... and where it may again if it gets back to it. Thanks for your reply.

Rather than concentrate on HiVol levels, I have found it more helpful to watch Low Volume nodes only. And the 30min bar's VPOC

How to identify ? Volume. And time and sales tempo and pace increasing. And then the first slight pullback, maybe a down 5 minute bar is bought aggressively (opp for shorts). Go with this flow. Longer time frames intraday (30 minute) have consistently higher lows in uptrends. As price gets back or even near a prior bar's low it rallies and never takes it out. This is an OTF reentry or add-on entry point. Stay in or get long. EXIT is at close of day.

You're implication was clear. You should be prepared to stand by your comments. It's not up to me to support your statements.

Tams - that is just BS. Please substantiate your post by showing the link to you quote. If you know anything about The Grail system you'll know that it is a very good system for walking your automated strategies forward and providing insight as to their likelihood of maintaining robuistness in the future market. It is not an automate stratgey - nor wa sit ever intneded to be. The developer is a software developer and not a trader. bakrob99

Although it's always in, do you still hav a drop dead stoploss in case it gets wacked?

TS's new walk forward system was based on their acquisition of The Grail - a product that had been purchased by a hedge fund several years ago and then the new owners stopped releasing it for new retail customers. It may prove to be a great advantage to system designers now that it is back in the public domain. From my experience, the only automated (day trading only) strategies that I have written (and I have well over 1000 of them) are based on longer time frame charts like 15 min or 30m. Anything shorter time frame including advanced bar type have not stood up over time. The lack of automated success over th epast 3 years suggests that either I have no idea what I am doing (probable) or it's not that easy to develop a robust strategy (even more probable), or both. I just find it easier to be profitable on a discretionary basis than relying on my automated strategies. There are many pitfalls besides curve fitting. I would like to know 1. what timeframe the original poster is having success with and 2. whether his original premise is market price action based or indicator based. Good luck with your trading.

In my experience, you need to wait for a green candle of strong sign of buying which crosses your ema then place (quickly) a buy stop 1 tick in front of it. If the candle is too big (too much risk) then wait for a pullback and buy it around the mid candle point. Also, I see from your chart that you are entering after the ema has flattened out which is not the best choice in my experience. You want the EMA sloping in your direction.

You needed to enter at 10:15 after the market showed strength on the UpBar You're a buyer at 1231 and you got 38.50 out of it. What do you consider a failure?

I use a shorter SMA10 and a longer SMA30 to determine an area where I may want to make an entry but only if price action confirms it. So if looking for a long setup wait until you get a strong bullish bar and buy 1 tick over the high of it if it is small enough to place a low risk stop below. If it's big but strong, put a fib on it and buy aat the mid point. In either event, I use a min 6 tick stop and a 12 tick target which for me, has ben achieved over 60% of the time prior to my stop being hit. These type of setups work well when the market is trending. It's up to you to determine when that is. You can use market internals, or look at higher highs and higher lows being made or whatever works for you. I also watch the 15min chart to make sure it is not in disagreement with the 5, and sometimes get an excellent similar setup on the 15min which goes farther than 12 ticks .

I find my willingness to take trades and follow my rules is enhanced if I backtest and forward test my edge/strategy and really find out what the expected returns are. For example: I know that in my setup trading the ES if I use a 6 tick stop, it will get hit 37% of the time but the 63% reaches 12 ticks. So for me, it is easy to set my stop to 6 and target 12 which is a 2:1 RR ratio. Knowing that I can still be a winner if I only get 40% of my trades winning helps take the trade and stay in it. If I use a bigger stop and smaller target I will have a much higher win rate but then I must have a higher win rate just ti break eve\n. That makes me more "nervous" and I end up hesitating on entry or taking short profit both of which are account killers. So - for me - the psychology of knowing my winners when they come will be bigger than my losers helps.

Great post Larry. I have a trading journal in Excel that gives me statistics - but I write my thoughts and comments on paper then after the trading day, transcribe them to the spreadsheet. This way I don't miss a setup trying to complete a spreadsheet note. I wonder how it's done in the pit?

Absolutely the #1 reason why I don't make money when I am on a winning streak is if I do as you suggest, namely trying to predict what may happen rather than letting the edge of my trading plan work out. If it is a valid signal - take the trade. If you have trouble doing it - commit to taking the next 20 (as per Trading in the Zone) and then look at the result. Trading in blocks of trades (signals) helped me become profitable.

Of course not. This is possible only in simulation mode.

Depends on where you get your data ... some will still offer free or small charges for RT. Tradestation requires signing up for the full ICE package which is $65 per month $780 per year. Frankly - I get more bang and diversification buck from the EC futures on CME which I already have for the stock index futures. I cancelled my subscription for the TF and will monitor liquidity to see how it affects the volatility and reliability of trending moves which is what I care about.

Really... is that the best strategic thinking you have to offer? Any point you're trying to make is lost in the lack of thought you show.

If you are going to trade more than 50 RT per day you definitely need to LEASE a seat on the exchange and eliminate your exchange fees. Then you can reduce your commission rate by about another .60c for a total RT a little under $3. Ask your broker how to do this... or email the exchange (CME).

In order to be able to capture intraday profits AND still stay in the move I developed a Re-entry tecnique where I would add back my scaled out position with a tighter stop than the original entry. As an example using the ES, if I exited/scaled at a bar's high tick extreme or some target - but momentum was still in my direction, I will add back the scale out on a pullback of approx 6 ticks usually near an 8EMA average. Very often this marks the end of a (small pullback) and allows me to get into the next push back up with a full position on. My logic was based on my observation that I hated seeing the loss in profit that was available while the pullback occurred which usually was this 6 ticks. So why not get out at the high (in a long trade) and get back in with a tight stop? By having a really effective "re" entry technique, you can take you profits and let them run.

Rather than use your funds on buying a bunch of books ... why not use the library. I have found it an excellent resource. I would imagine that for everyone who has learned trading from the newbie stage through to consistent profitability, you need to answer some basic questions. Unfortunately, you are most probably not in a position to know the answers yet - so your first challenge will be to learn enough so that you can answer these questions. What timeframe or timeframes are you most comfortable trading? Are you a scalper or are you planning to take a few trades to catch the 2 or 3 trends of the day? Will you hold positions overnight? What Market(s) will you trade? Why? What type of trader are you? Trend or Counter trend? Momentum or Fade the momentum? How much risk are you willing to accept in order to gain a reward which is sufficient to justify taking the risk? What ratio works for you in terms of Risk:Reward? How many hours or minutes are you willing to put into learning trading? Are you maintaining a job full time and trading on the side? If so -this might suggest some longer timeframe trading might be appropriate where you make adjustments on a daily basis rather than minute by minute? My best advice might be this: Forget about trying to learn an Entry Technique which will result in great gains and few losses. There are no such setups. Each trading style has losses and gains associated with them. The way to win is to know yourself, and your entry setup and trade accordingly while taking profits when the market permits and suggests it's appropriate to do so. Don't waste too long on discovering different entry setups. The real secrets are on exits and managing your trades and taking them according to your plan. Spend more time developing your plan and psychology, less on getting into trades. Trading for a living is a great feeling of accomplishment once achieved but took me far longer than I expected.

Your Poll Questions seem to be tailored rather specifically to get a specific result. I liked the story of it, and the techniques that he employed to gain an edge and keep from being influenced by others. There are many excellent parallels for trading today. One example of this is the length to which he maintained his independence from Wall Street noise. Consider the parallel with respect to the "media" and ignoring the influence of "experts". The fate of Livermore lies more in his mental instability than his profession. But like any trend follower... and he held on to positions like a trend follower... the strategy has large swings. He would get locked into huge positions without enough liquidity to exit. Cotton for example where he controlled the market. That is quite a bit different than any trader these days. No one is bigger than the market. The one question in your poll that seems missing is: " Have You Learned anything from Reminisences which helps your trading today." and I can say without hesitation that his notion of "Making more by sitting (in a position) than by trading" is what I think about when the thoughts of taking early profits flow through my head.

No problem. I have done quite a bit of automated strategy development and trading on Tradestation and I have yet to find a system which enters or exits as well as a discretionary trader following a set of proven rules. Of course - automation allows more markets to be traded and risk spread out ... just need to be able to handle the drawdowns. I can't.

I used to think this too... but no longer do. I have kept statistics on my actual entries for years and reviewing them shows/reveals that the winning trades which I take go for quite a distance and easily provide 12 ticks Best Exit for the ES while having a stop requirement of 6 or even fewer ticks. Do the math and you'll discover that the money is in Staying in the trade when its a winner and getting out when it's not. Forget about RR mumbo jumbo ... it's common sense.

As you described the system I do not think it makes sense. 1. Even IF (and it's a big IF) you have a 90% win rate, you can still get 2, 3 or more Stops in a row. IF you trade 5 contracts (ES) with a 6 tick stop then you're going to lose (for each losing trade) $375 +$25 commission plus slippage which could be 1 (or more) tick or $62.50. That is a $462 hit for just 1 stop loss or ALMOST 10% of your account. Get 2 losers in a row and you will be mentally challenged to take the next trade. Your position sizing is WAY off for any kind of reasonable risk. Take your setup and get hit with a LOSING NEWS SPIKE and watch your account go down the drain. I have scalped the ES for years and slowly I am changing my tactics to take fewer trades and let them run much longer. Add to a winner when another setup occurs while it's moving for you. Start SMALL... let them build That's my opinion anyway.