Dogpile

I did a video on a few Taylor type of concepts. the quality didn't come out so good but I think its understandable. The chart is a 15-min Chart of S&P Futures (ES)... comments welcome:

<<Didn't you pay attention to Thursday's VAH ?>> yes but going long there was under the 1530 resistance zone. playing long there would be in expectation of a trap -- not something I generally do. I am a 'go with' the short-term momentum type and my oscillators made momentum lows there. Clearly, not a great spot to short since the oscillators were quite depressed at that point -- but also a difficult long entry -- I just skipped it altogether. This type of price action is consistent with low-ADX environment -- which is not really my sweet spot in terms of trading strengths. I prefer less 'bar overlap' tradign environment (expanding ADX). You are right though in that it would have been good entry from pure price perspective -- just didn't line up with my kind of trading. hope you caught it. I have found those multi-hour type of bull-flag formations like we had pre-lunch today to be a bit difficult. I went long later on when it opened up a bit, getting away from 1530 and showed bullish action after testing VWAP. But even there I did the wrong contract -- making a small amount on long-NQ when I should have been in ES or RUS, which moved a lot. NQ was the only one NOT to trade low to high today -- so that was a bit frustrating to only make a little by choosing the wrong contract. ah well, just one of those days where can't seem to quite nail it. I had a mega-day on Wednesday.

in my pre-open post this morning, I mentioned: 1) the importance of Thursdays 'Higher Low' 2) the potential for a directional move today given 3 closes that were close to each other and low 15-min ADX 3) the importance of the 1530.00 pivot 4) the important buying that had occured in the 1503-1505 zone In retrospect, this analysis was pretty good. You might ask, 'well how much money did you make today Dog?".... Well, I didn't make much. It is really amazing how the market can obey many of the core principles you believe in and still be so complex. The fact is that I was actually up a lot of money today but decided to play for a bigger win by scalping out of partials and trailing stops with breakeven sell-stop orders. The complexity today arose out of the size of the opening gap. It was massive. We built value at 1518.50 on Thursday and opened nearly 20 pts above that. I decided that I wanted to go long on a test of 1530.00 as that would provide support. Well it did and the market bounced up -- and looked like it was set for lift-off. But it wasn't ready yet - for whatever reason. I stopped on my remaining position during the 10:45am EST 15-min bar (for breakeven). Price continued down for another 90 minutes and went BELOW 1530 to flush out any remaining stop-loss orders before rejecting that in a 'bear trap' --- by printing a 'buying tail' that stretched below 1530 -- and then grinding up the rest of the day. The day ended up making its highest bar for the day AFTER the lowest bar was made for what was a 'low to high' day. Thus, I was bullish coming into the day. I was looking for a close far away from the last 3 closes near 1524.00 -- and we closed +18pts vs that level. All of that yet I made what amounted to a few small scalps. Linda Rashke talks about trading in her book like one is fishing. Most of the time, you catch small ones. Occassionally, things line up and you catch a big one. Today was a 'small one' day. I was dead right on the 'structure' but it still managed to be tricky enough to not allow the 'big one' to be caught. Those S&Ps are tricky, man. Time for a drink. Let's get em next week.

hi all, I am not really 'counting' Taylor days so much as watching tests of highs and lows. I have a few oscillators I watch and I keep my trades in line with those keeping mindful of good price zones to execute longs and shorts in terms of support/resistance. Here is how I see it for now: Last Thursday 10/18, we closed with a narrow bar that indicated 'balance' -- you look for a potential strong directional move with this type of set-up. Friday we got that day. But note the location. We gapped down and trended down & away from 1547.00. This indicates strong conviction by 'Big Money'. Lower prices encouraged MORE selling, indicating that the market needed to unload shares as its 'inventory' was 'too long'... The important thing about last Friday now is that a 'high volume zone' occured with the largest volume occuring at 1530.00. Since that time, a lot of volume has built up down at 1503-1505, indicating strong buyers down there. We tested 1530.00 yesterday. As I mentioned, we did this yesterday morning after we had already had 3 consecutive days of 'low to high' trading (where the lowest 'bar' of the day occus BEFORE the highest bar of the day). After 3 in one direction and facing stiff resistance at 1530.00, guess what happened: We went and tested 1530.00 and price stopped at 1529.75 and reversed hard. This formed a 'high to low' trading day (highest bar of day occurs BEFORE lowest bar of day). Thus, the 'expectation' was for yesterdays test of 1530 to fail. And it did. It didn't HAVE to, but that seemed to be the odds-play. Since that test, the market attempted down and this move was rejected as the S&P futures bottomed in the same price zone (1505) that saw buying interest on Mon 10/22 and Wed 10/24. There has been a lot of buying 1503 - 1505. Thus, on Thursday we formed a 'Higher Low'. This is the most important data point of any, I think. Linda Rashke thinks the essence of Taylor is to watch and analyze price action at previous highs and lows. Violations/failures of highs and lows are very important. Higher lows and lower highs are also very important. To me, yesterdays 'Higher Low' vs Wednesday is the very important data point that Rashke would highlight. We built up a lot of volume at 1503 and 1505 earlier in the week (buyers) and then formed a higher low vs that level yesterday. Seperately, note that we have 3 closes very close to each other over the last 3 days: 1525.00 1522.00 1524.50 We do have a fed meeting next week so we might need to get beyond that to breakout but my expectation would be for a close 'away' from 1524.00 today-- implying we could get a good, driectional move. Confirming this is the fact we have low 15-min ADX and a potential catalyst in Countrywide (CFC) earnings due out this morning. Be aware of potential for a directional move today -- but be careful of entering in the high-volume zones if trying to 'go-with' momentum -- as it is easy to get 'chopped up' if you are not careful on your location. Best set-up would be a strong momentum move and a pullback that does NOT require entering right in the heart of a chop-chop zone.

you know, the book is virtually unreadable until you have thought a lot about it and then go back to it the 2nd or 3rd time -- then you get used to how he writes and can decipher his terminology and thus what he is REALLY trying to say. until you start to understand his terminology, which is a very weird way to write, you really don't know what he is talking about. I think he would have been better off not calling a buy day a buy day or a sell day a sell day. Should have been something like 'Day 1', 'Day 2', 'Day 3'. It gets too confusing to talk about shorting on a buy day at objectives and violations -- you get confused about which day he is referencing, the previous day or the current day. I think its a little like all other trading concepts -- you have a general 'roadmap' but then you have 'alternate routes' lined up in your back pocket if the first roadmap doesn't seem to be right. This is not unlike something like Elliott Wave where you have alternating simple and complex corrections and 'alternate wave counts.' Some of the time, you simply won't be able to figure out the pattern in real-time and don't have to trade. Other times, it follows one of the scripts you have laid out and you make good money. Linda Rashke has a 'pattern recognition' type of system that uses swing trading rules and oscillators. Draw any random lines on a page and she can form a 'trading structure' for that path. Every pattern has a failure point, which triggers a new 'read'. The same pattern may be bullish or it may be bearish, the trick is getting the higher timeframe to be bullish and the lower timeframe to just be switching from bearish to bullish. That way, you are getting reward that is based on a higher timeframe (bigger reward) for the lower timeframe risk (pattern failure on the lower timeframe). This is your 'edge' as a nimble trader that can enter and exit with virtually no slippage, 24 hours a day. This is similar to how I am thinking about Taylor. Wait for something recognizable on the higher timeframe and let the lower timeframe flip from bearish to bullish or vice versa.

re tomorrow, today we had a directional breakout set-up: 3-Bar Triangle Low 15-min ADX Tomorrow we do not. Therefore I will look for a morning reversal into a support/resistance price zone -- but as always, be mindful if we get strong range expansion off opening price. We have 3 consecutive 'low to high' trading days. If we violate the high first, I will be looking for a spot to short if the tape confirms such. If we trade down first (off opening price) -- I will look for a long into a support zone. Since we have 3 straight low to highs, the trend is up -- 1 'high to low' day would set up a long for friday (Pinball Buy).

WHY? I would just think about this with an open-mind: What you are doing when you are trading the Taylor Technique is doing something that is a simple but powerful trading concept. You are aligning 2 timeframes. Your 'reward' is framed out on the higher daily 'Taylor timeframe' --- your risk is framed out on the lower timeframe -- however you do this --- you call this 'watching the tape'. What I am saying is that there are other timeframes to align that are powerful as well. Some are scalpers using 1min, 400 tick and 800 tick charts -- I know someone quite good at that actually. I love Taylor because his 'rhythm' lines up nicely with a timeframe near and dear to me --- the major theme of the day but still intraday where you don't have to worry about overnight news and gaps -- at least primarily. Thus, I would remain open to thinking about expanding your trading 'arsenal' because you are clearly good at aligning the timeframes that you have chosen. just my 2 cents. keep up the commentary. I will start a new 'Taylor Thread - Nov 2007' when we get there and hopefully we can continue to discuss this... dog

WHY? I wanted to thank you though for participating here, I do feel like I understand Taylor better even if I don't totally get the labeling of the days. But that is less important to me anyway. The real important thing is the violation of the high or low (the 'test').

I understand that WHY? -- its just that its difficult to interpret what you are saying because its just the software spitting it out. I actually did mostly shorts today and then tried one long that would have worked huge but I chickened out. Nevertheless, this was my best day since August so I am quite happy. This is AWESOME movement by the futures market -- I sure hope this keeps up.

stackm, I have asked WHY? like 10 different times on how he can be sure it is 'X' day (buy/sell/sell short). I am not disagreeing with him. He states it with certainty but doesn't explain the clear-cut reason. So this just leads to confusion. Hence, my previous conclusion that the less important thing is what you label the day --- the more important thing are the violations of highs and lows and reading the tape. Any day that goes above the previous day high is a potential short trade -- like yesterday. Any day that tests the previous days low (violation or higher bottom) is a potential buy, this was the case yesterday -- despite WHY? calling it a sell-short day (again, I am not disagreeing with him). This is how I am treating it until somebody can come on this thread and tell me why today is definitely a _________ (fill in blank) type of day. Otherwise, it is just too frustrating and you may miss good trades because you are thinking its one thing and its not. No matter what Monday was, it traded 'low to high'. No matter what Tuesday was, it traded 'low to high'. Thus, we have 2 low to highs. A violation of Tuesdays high is a clear potential short. Trading down first is much trickier. When its tricky, Taylor can't really help you that much -- its down to your ability to read the pattern and the tape and go with it. that is my current take anyway. btw, I love the fact that you are certain about this stuff WHY? -- it makes me think that you really do have figured Taylor out -- but since you just won't say why for sure today is a sell-short day -- it is kind of like trying to talk to a 'black box' - your software is a mystery.

here is the 15-min chart. can see low ADX on the bottom. Can see there are 2 green bars which indicate 'low to high' (green) or 'high to low' (red) days. note that there was a lot of congestion today in the 1521.00 area so I will not be inititating shorts in that area unless we break below that first with momentum -- then short is ok with a stop somewhere well-above 1521.00.

in my view, we have a potential breakout set-up for tomorrow. The daily chart shows a day with a higher low than the 3-day low and a lower high than the 3-day high. this forms a bit of a triangle. On a 15-minute chart, we have a 'low adx' set-up -- which is generally a precursor to a directional move the next day. I will look for either 'range expansion off opening price' or will look to play the first 'flag' that sets up once a directional move begins with strong momentum. We do have 2 consecutive 'low to high' days so I am also looking for a high to low' day. Monday looks like the buy day, Tuesday the 'buy the higher low day' (consistent with a 'buy day+1' -- which Taylor called a 'sell day'). The breakout set-up is the dominant thing though, in my view.

if todays VWAP > yesterdays VWAP, a big correction is a potential buy. ----- this was theme for day... I made a bunch on short-side... tried long-side but it chopped too much and only made a little there... tried short-side again and lost a little bit and missed the big move up. on to tomorrow.

example of a 'set-up': this is trying to enter for a move down on a 'high made first' day. The market has corrected UP on a 15-min timeframe with A-B-C type of 'structure' see chart

<<OK, I am revealing my trade secret here:>> lol, there are no secrets -- just valid concepts. here is my secret: if todays VWAP > yesterdays VWAP, a big correction is a potential buy. if todays VWAP < yesterdays VWAP, look for hard down - ie, downside range expansion off opening price... also look for 'low made first' thus, VWAP > VWAP[1] is most consistent with a 'sell day' (buy on weakness) VWAP < VWAP[1] might be a 'buy day' if 'low made first' most important: be careful if 'range expansion off opening price' and be very wary of 'high made first' and err on the side of bullishness -- the market most of the time goes up -- or it drops quickly if its not dropping quickly, odds are its going to go up soon.

<<Are you doing multiple shorting? Shorting intraday rallies ...covering on declines as it moves down?>> well, I only do a few trades a day... I play: 1) the FIRST pullback in what I think is a new move 2) a good 'a-b-c' corrective pattern if the original move appears to have residual momentum 3) I fade moves when my oscillators are extended as we enter a 'high-volume' zone. Those are my basic trades. Across ES, YM, NQ, ER2... a few trades set-up every day. I do miss some and that is frustrating. Basically, I am just trying to do what everyone else is -- synchronize 2 timeframes. For you, it seems to be the Taylor/3-day type of timeframe with a 'micro-timeframe' -- you call it 'the tape' -- but same thing. For me this is: 1) A Daily/Taylor type of timeframe with a very short-term timeframe (like you) or 2) A very short-timeframe with an intermediate timeframe like a 15-min chart or 3) A breakout from an area of known 'balance' - this is when daily and 15-min charts are both indicating the same thing --- both are 'coiled up' and ready for a directional move. Some trades I will just play for a few points. Other trades I will scalp off some of it early and get a free ride for a bigger move. I have opened a second futures account to try to trade some things with 'higher timeframe' hold -- more like trade just small size and look for the next 20-40 pt move on something like RUS.... not there yet though.

no, looking long potentially before 1505 -- just no more shorting if it goes that low.

yah, sweet move off the violation of previous day high. 1505 is high-volume zone so no more shorting for me if/when it goes near there.

just my 2 cents: individual stocks are loaded with 'chaos' in the short-run. I think you are better off sticking to liquid ETFs that don't have futures contracts attached to them. The ones I have been studying are EEM (emerging markets ETF trading 10-20 million shares per day) and XLF (the financial ETF which has been trading 60 million shares per day). The Brazil Index (EWZ) is also very active. XLE, the energy ETF, is very active but I just don't like the way it trades. with ETF's, you will never have to worry too much about some individual stock rumor that will cause the instrument to drop -5 or -10 or -20% out of nowhere. just my opinion.

<<Does this make any sense or have I just confused the issue even more?>> I didn't say anything about going back 3 months so I am not sure what you mean by this last post. I was just asking if you thought today might have been action consistent enough with a 'buy day' to change your thinking for tomorrow. You mentioned today was a sell day and therefore tomorrow would be a 'sell short day' in which longs are not consistent with Taylor. Again, I am just curious on how you interpreted todays action with how it relates for tomorrow. I may very well go long tomorrow -- or I may not -- I am just trying to understand any 'adjustments' made in how you are thinking about it. Today worked out well. We moved below the previous day low and could therefore use the previous day low plus a bit more as a target. This was 1505+ on the S&P futures -- call it 1505-1510. This was a nice target to have (1505+) because I had no other pivot to work with given the trend-down nature of Fridays action. There was no real zone to short into -- therefore I favored the long-side early. I had the Taylor method as a roadmap and we had 'upside range expansion off opening price' (a market profile concept) as confirmation of that bullish roadmap. I did a long-side trade and made some money this morning. Then later did a short-side trade and made a lot on that one. I then stopped trading though I really could have tried another long as my oscillators were extended to downside just as we re-entered that high-volume 1505 congestion zone. In retrospect on the day, I am pleased but feel I did miss a good long on Russell this morning -- but that is ok. For tomorrow, here would be the my guidelines: If today were a buy day -- I would actually look to go long on the day after a buy day if we test down 'first.' An obvious spot would be a test down into the high-volume 1505 area -- looking for a morning reversal and a range expansion type of move up. If we test up first tomorrow and it was a buy day, then I will look to short, should price action favor that (ie, not something like strong upward range expansion off opening price on big volume). I don't really see an obvious high-volume zone right now to short into so this might be tricky. But Taylor could also do a short on a move above todays high tomorrow -- so that is a possibility. If today were a sell day -- tomorrow would be a sell-short day and we would look to short above todays high. No longs on a sell short day so that would not be an option. This is what you (WHY?) called today -- a sell day -- making tomorrow a sell-short day. Will just have to see. If today were a sell-short day, making tomorrow a buy-day -- then we could go long on a viloation of todays low or on a 'higher bottom'. We could also go short on a 'high made first' type of set-up where we violate todays high tomorrow. ------------ Here is the funny thing, even if you don't know how to count Taylor days -- you have a 2 in 3 chance of being consistent with Taylor if you just look to buy on a test lower (lower low or higher bottom). And you have a 3 in 3 chance of being consistent with Taylor if you look to short a test of a previous high -- since shorting is allowed on any of the 3 days. Thus, the only time you will be out of sync with Taylor is the time you are going long right into a sell short-day. Does that make sense? You don't really have to count days -- you just have to be a good short-term trader and follow those basic rules and you 'can' be right 5 out of 6 times... I say this only because I can honestly say I don't understand how Taylor is counting days yet. I can 'try' -- but I just can't get definititive answers about how you KNOW this or that day was what.

<<Dogpile is it possible you are trying to use intraday volume info to help you determine if it is a B,S, or SS day?>> I am not relating my volume analysis to a taylor day -- I am not a pure-taylor guy --- I am a hybrid -- I find things that 'speak' to me and use them. I use short-term set-ups that I feel have underlying 'concepts' -- like Taylors -- behind them. Thus, I think of Taylor for his concepts -- I think of Market Profile for its concepts etc.... I am just trading when the concepts I believe in align with my short-term set-ups. I am here simply because I would like to learn Taylor better -- but I am a profitable trader without Taylor --- I would just like to understand True Taylor. What I find is really sweet is when I learn something new and then sometimes that lines up with something else I know to be a profitable concept -- then you have more confidence to take that trade. That is what learning Taylor better could REALLY do for me.

WHY?, if I use the 'look back at the last 10 days and the lowest low was the buy day' rule --- then today looks like the buy day. is this the kind of day you software adjusts for or are you sticking with idea that tomorrow you will only do a short since today was a sell day and therefore tomorrow would be a 'sell short' day? dog

<<What do you think dogpile have we bottomed on the S&P? Today is a taylor sell day.>> lol. happily, I don't have to make that judgment --- I just take the set-ups as they come. <<May I ask you where you would start and why?>> well I was wrong on my count but I will tell you why I thought 10/11 was a day to look to short. Because we had built a ton of volume at 1570 on 10/5. We tested up away from that on 10/9. 10/10 we build a lot more volume at 1570. 1570 had become a 'heavy' point and this price was high in the range. The gap up on 10/11 surprised me somewhat but given the volume profile and the fact that 4 of last 5 days traded 'low first, high last' -- I felt that it could be a bear trap. It was. Taylor-wise, there were 2 low to high days and a violation of the 2nd high -- that is a short set-up in its own right. This was my thinking at the time. I was right on the bear trap and made decent money that day -- though only 5 or so points. This past Friday was a MUCH better day for me. The key to me is to just make money every day and occassionally you make that big win. 10/11 was not my big-win day, 10/19 was... just the way it goes.

I don't think there is that much slippage on either. Some, yes -- but not a lot. This probably depends on the timeframe you trade on though... I don't make that many trades per day so this is less a factor than if you make a lot of trades per day. One other thing I think is relevant that I didn't mention is actually pretty important. With ES, due to the 'back & fill' --- you can often enter at say 1501 and offer out 1/4 or 1/2 of your position for 6-7 ticks above that entry and get filled if your initial entry was pretty good. Even if you are wrong about the ultimate move, you get that partial position off at a profit and have low risk on the balance. This is much of the reason you can use bigger size on ES, IMO. I don't think you can do this with the other contracts. For the other contracts, primarily NQ and YM, I usually use 'stop-orders' to ENTER. I am trying to 'join-in' on a dogpile type of move -- often due to program trading. You can still take partials off if the initial program pushes you to a profit right away -- but your 'stop' entry-order on YM will often be just fine in terms of short-term location -- whereas you cannot do this with ES -- I don't think you can ENTER on stop-orders on ES profitably -- you give up too much.

WHY, if you were to just look at the S&Ps from scratch right now, pretending you haven't looked at them in last month -- can you tell me where you would start and why? and then correlate this back to why 10/11 was a 'buy day' ? or why 10/10 was a sell short day? doing something like this might help me get something that right now, looks pretty much indecipherable.