Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

horace

How Do You Decide the Next Move Will Be Big or Small

Recommended Posts

Trading the ES I find that I wind up with a lot of small trades and only two or three decent trades most days.

The signals for the decent trades quite often are weak and some of the small trades have strong signals.

 

Do you Guys find the same thing and how do you filter out the potentially small trades

Share this post


Link to post
Share on other sites
Trading the ES I find that I wind up with a lot of small trades and only two or three decent trades most days.

The signals for the decent trades quite often are weak and some of the small trades have strong signals.

 

Hi Horace,

 

There are people here who are far better qualified to answer your question, but here are a few thoughts . . .

 

Rather than trying to decide whether the next move will be big or small (i.e. anticipate the quality of a signal), it might be easier to try and decide whether the current move (when holding a position) will be big or small. In other words, enter with the signals but then begin immediately to assess the probabilities of a favorable continuation of the move. Ask "what is happening now?" rather than "what is going to happen in the future after I enter a position?"

 

What is the nature of the small trades? If you can scratch three or four trades and then make a decent profit from one or two good trades, then that's actually pretty good going in my book.

 

Finally, remember that the ES is a mean-reverting market, so hoping for lots of movement on a typical day is always likely to disappoint.

 

Hope that helps!

 

BlueHorseshoe

Share this post


Link to post
Share on other sites
Trading the ES I find that I wind up with a lot of small trades and only two or three decent trades most days.

The signals for the decent trades quite often are weak and some of the small trades have strong signals.

 

Do you Guys find the same thing and how do you filter out the potentially small trades

 

Horace,

 

I trade the TF... kind of a different animal. The words "small" and "decent" are not very clear. I can assemble a very good day taking 7 to 10 ticks. If I manage to add a 30 tick move... well, I'm one happy clam.

 

Unless you need to have the liquidity that ES provides, give TF a try.

 

As far as filtering for large moves, it seems to me that a market is an ever changing equation. It's not extremely difficult to observe price action to see weakness or strength building. How far that move will evolve is largely a product of the ever changing equation.

 

S/R is of some help to gauge what's possible.

Share this post


Link to post
Share on other sites

If you're looking at the depth of market then you can judge how far the market is likely to move based on how many contracts are trapped on the wrong side of the market. So if the market has been selling off, lets use es as an example, you'll be looking for everyone to get stuck selling the bottom. One you have an area with over 100,000 contracts absorbed then you know that will be a much bigger move.

 

You also want to look at the market relationships and understand how they work. For example if the dollar is up 0.40% on the day, crude down 0.70% on the day and ES is down 0.30% on the day then you know that ES has to be positive at some point during the session , so any longs in es you have you will be looking to hold them

 

Hope that helps

Share this post


Link to post
Share on other sites

Your signal dilemma....from what indicators? What form of analysis do you use?

 

I would look at that, and then wonder why I'm using a tool like that. But then I might say to myself, if every strong signal leads to no move while every weak signal leads to a big move...why don't I simply view the weak signal as my trigger?

 

A CONSISTENTLY bad signal is just as good as a CONSISTENTLY good signal.

 

What is an indicator? It's nothing more than a symbol.

A symbol of what? More than likely, it's symbolic of a trend change.

 

If your indicators are not CONSISTENT, then they're not indicating anything. It because a maybe it will or maybe it won't. I do analysis on all three axis' as well as run three different oscillators(which can change if my some things become blurry)

 

Having a complete form of analysis is extremely important...if what you're doing does not clearly define a point to pull the trigger, what use is it really? Studying the markets can become a very time consuming and exhaustive endeavor, though very beneficial. Knowledge is power in this instance, and that can only be gained one way.

 

I wish you success in finding truth.

 

Axiom

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date: 8th May 2024. Market News – Stocks mixed; Yen support still on; Eyes on NFP & Apple tonight   Economic Indicators & Central Banks:   As the Fed maintained a “high-for-longer” stance, stocks gave up their gains with attention turning back to earnings. Chair Powell and the Fed were not as hawkish as feared and the markets reacted immediately and in textbook fashion to the still dovish policy stance. The Fed flagged that recent disappointing inflation readings could make rate cuts a while in coming, but Fed chief Jerome Powell characterized the risk of more hikes as “unlikely,” giving some solace to markets. Stocks traded mixed across Asia, while in Europe, DAX and FTSE futures are finding buyers and US futures are also in demand, after the Fed’s message. Yen: Another suspected intervention by authorities, this time in late New York trading, ran into resistance from traders keen to keep selling the currency. Swiss CPI lifted to 1.4% y/y in April from 1.0% y/y in the previous month. Headline numbers are still at low levels and base effects play a role, with the different timing of Easter this year also likely to distort the picture. That said, the numbers may not question the SNB’s decision to cut rates, but they do not support another rate cut in June. Financial Markets Performance:   The USDIndex has corrected to 105.58, but USDJPY is already inching higher again, after a sharp drop to a low of 153.04 on Tuesday that sparked fresh intervention speculation. The pair is currently trading at 155.38. Treasury yields plunged and were down over double digits before profit taking set in. USOIL finished with a -3.6% loss to $79.00, the lowest since March 12. Currently it is as $79.53. Gold was up 1.4% to $2319.55 per ounce, reclaiming the $2300 level. Market Trends:   Wall Street climbed initially with gains of 1.4% on the NASDAQ, 1.2% on the Dow, and 0.96% on the S&P500. The NASDAQ and S&P500 closed with losses of -0.3%, while the Dow was 0.23% firmer. The Hang Seng rallied more than 2%, and the ASX also posting slight gains, while CSI 300 and Nikkei declined. Apple’s earnings report is due after the US market closes today, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 7th May 2024. Dow Jones Close To 1-Month High, Eyes on Disney Earnings. The stock market trades at a 3-week high after significant support from the latest earning reports and US employment data. Economists continue to expect a rate cut no earlier than September 2024 despite the US unemployment rate rising to 3.9%. The US Dollar Index trades higher on Tuesday and fully corrects the decline from NFP Friday. Dow Jones investors wait for Disney to release their latest quarterly earnings data. The stock holds a weight of 1.93%. USDJPY – The US Dollar Regains Lost Ground The USDJPY is an interesting pair on Tuesday as the US Dollar is the best performing currency within the market while the Yen is witnessing the strongest decline. Investors will continue to monitor as we enter the European Cash Open to ensure no significant changes. The exchange rate has been declining since the 29th of April when the Japanese Government is believed to have intervened and strengthened the Yen. However, the US Dollar has been gaining over the past 24 hours. During this morning’s Asian Session, the exchange rate trades 0.44% higher. Currently the only concern for the US Dollar is the latest employment data which illustrates a potential slowing employment sector. However, investors are quick to point out that this cannot be known simply from 1 weak month. This is the first time the NFP data read lower since November 2023. No major data is in the calendar for the next two days which can influence the US Dollar. Despite the weaker employment data and lower wage growth, investors continue to predict a rate cut no earlier than September 2024. This is something which can also be seen on the CME FedWatch Tool, which shows a 34.3% chance of rates remaining unchanged in September. In regard to the Japanese Yen, most analysts expect the next rate increase in the second half of this year depending on a stable movement of inflation. In addition, investors are monitoring the actions of financial authorities, expecting new currency interventions from them against a weakening Yen. This is the main concern for investors speculating against the Yen. However, economists continue to advise the Yen will struggle to gain even with a small rate hike, unless the rest of the financial world starts cutting rates. USA30 – Investors Turn To Disney Earnings Data! The Dow Jones is close to trading at a 1-month high and is also trading slightly higher this morning. The index recently has been supported by the latest employment data which indicates a higher possibility of rate cuts by the Fed. Today investors focus on the quarterly earnings report for Disney. Disney stocks are trading 0.37% higher during this morning’s pre-trading hours indicating investors believe the report will be positive. So far this year the stock is trading 28.40% higher and is one of the better performing stocks. Yesterday, the stock rose by 2.47% but remains significantly lower than its all-time high of $197. Currently analysts believe the earnings data will either be similar to the previous quarter or slightly lower. If earnings and revenue read higher, the stock is likely to continue rising. The stock is the 22nd most influential stock for the Dow Jones and will only influence the USA30 and USA500, not the USA100. Currently, technical analysis continues to indicate a strong price sentiment. The price trades above the 75-bar EMA and above the VWAP. In addition to this, the RSI is trading at 68.11 which also signals buyers are controlling the market. The only concern for traders is retracements. A weaker retracement could decline to $38,703, whereas a stronger retracement can fall back to $38,571. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HFM Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Michalis Efthymiou Market Analyst HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • ECL Ecolab stock breakout, from Stocks To Watch, https://stockconsultant.com/?ECL
    • COST Costco stock nice breakout follow through, https://stockconsultant.com/?COST
    • $DG Dollar General stock possible downtrend reversal, attempting to move higher off the 136.7 triple+ support area, https://stockconsultant.com/?DG
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.