Andre (Oct 30, 2003 4:32:14 PM)
Today we're pleased to welcome Andy Bushak to the Elite Trader Chat Room.
Andre (Oct 30, 2003 4:32:30 PM)
Andy is a full time trader with eSignal with quiet a varied background: a graduate from the United States Naval Academy he spent five years in Surface Warfare and then got himself back into football shape for a shot at a pro career.
Andre (Oct 30, 2003 4:32:38 PM)
After his playing days he went into the private sector with Hewlett-Packard, and began trading with a hand held Quotrek and doing charts by hand. His method was simple: Elliott and Fibonacci.
Andre (Oct 30, 2003 4:32:54 PM)
All through college, Navy, the NFL and HP, he traded. But in joining Trading Techniques, he mentored with Tom Joseph, trader and developer of Advanced GET. Now, with 15 years of full time trading experience, Andy shares some of his expertise.
Andre (Oct 30, 2003 4:33:08 PM)
In today's chat, he'll show us how you can go long or short with the existing trend in any market. Current markets will be covered on multiple timeframes. And he'll touch on entry, exit and stop strategies, as they relate to sound money management.
Andre (Oct 30, 2003 4:33:25 PM)
Andy, welcome. Thanks for joining us today.
Andy Bushak (Oct 30, 2003 4:33:50 PM)
WElcome everybody! It's good to be here. Thanks for joining me.
Andy Bushak (Oct 30, 2003 4:34:08 PM)
I have several slides and they are all here:
http://www.esignal.com/advancedget/charts/.
Just keep that open and you can conveniently view the charts, or
you can click on the separate urls for each chart as I go through them.
Andy Bushak (Oct 30, 2003 4:34:40 PM)
Please view this image: http://www.esignal.com/advancedget/charts/chart1.asp
Andy Bushak (Oct 30, 2003 4:35:04 PM)
Which direction is this market moving from left to right? If it’s moving UP, you should be Long!...
I know this is simplistic, but it is true!
Andy Bushak (Oct 30, 2003 4:35:31 PM)
Please view the next image: http://www.esignal.com/advancedget/charts/chart2.asp
Andy Bushak (Oct 30, 2003 4:35:56 PM)
If the market is moving Down from left to right on your screen, you should be short!...
Andy Bushak (Oct 30, 2003 4:36:19 PM)
This is a Daily WMT chart exhibiting the properties of a Down Trend, where we see lower lows and lower highs.
In order to anticipate where the down trend should resume after any correction (retracement),
we will use the Fibonacci Retracement Tool available within eSignal...
Andy Bushak (Oct 30, 2003 4:36:45 PM)
In this case, a 38% retracement off the low provides a good resistance level.
Andre (Oct 30, 2003 4:36:55 PM)
Folks, if you can't get the first chart, retype it manually in a new browser window.
Andy Bushak (Oct 30, 2003 4:37:40 PM)
Please view the next image: http://www.esignal.com/advancedget/charts/chart3.asp
Andy Bushak (Oct 30, 2003 4:38:19 PM)
Many traders view the 50 period moving average as a trend indicator: When the market is above it, it is stronger.
When it is below it, it is weaker...
Andy Bushak (Oct 30, 2003 4:38:44 PM)
Here's the rule: In an UP Trend, When a market is correcting (retracing) the previous move UP, and if
the market is to remain above the 50ma, it should retrace less than 50% ...
Andy Bushak (Oct 30, 2003 4:39:10 PM)
If it breaks the 50ma, expect a retracement 50% or greater...
Andy Bushak (Oct 30, 2003 4:39:23 PM)
In a Down Trend, it is just the opposite...
Andy Bushak (Oct 30, 2003 4:39:34 PM)
In the 15 min. bar chart of MSFT, I have posted the retracement levels
and the 50ma is green.
Andy Bushak (Oct 30, 2003 4:39:54 PM)
Please view the next image: http://www.esignal.com/advancedget/charts/chart4.asp
Andy Bushak (Oct 30, 2003 4:40:20 PM)
This is LLY, 15 min. and it is in a Down Trend...
Andy Bushak (Oct 30, 2003 4:40:36 PM)
Retracements above the 50ma are greater than 50%, and retracements below the 50ma are less than 50%.
Andy Bushak (Oct 30, 2003 4:40:57 PM)
How do we enter this type of set-up, once we have recognized it?...
Andy Bushak (Oct 30, 2003 4:41:14 PM)
Please view the next image: http://www.esignal.com/advancedget/charts/chart5.asp
Andy Bushak (Oct 30, 2003 4:41:48 PM)
This is LLL on a 45 min. Notice that this will work on any timeframe...
Andy Bushak (Oct 30, 2003 4:42:09 PM)
LLL has retraced 38% as it remains below the 50ma: This is what we want to see...
Andy Bushak (Oct 30, 2003 4:42:26 PM)
Now, that this condition is met, we will look for a short entry...
Andy Bushak (Oct 30, 2003 4:42:47 PM)
By using a Regression Trend Channel, which is available as part of the eSignal Line Tools, we can make
the entry mechanical...
Andy Bushak (Oct 30, 2003 4:43:06 PM)
Regression is a statistical formula that you can probably find in your old high school or college text books...
Andy Bushak (Oct 30, 2003 4:43:20 PM)
The middle line of the trend channel is the regression line which is pretty much the mean of the move...
Andy Bushak (Oct 30, 2003 4:43:32 PM)
The channels are 2 standard deviations of the regression line, one above and the other below...
Andy Bushak (Oct 30, 2003 4:43:45 PM)
In statistics, once you go more than 2 standard deviations past the regression, then something is changing...
Andy Bushak (Oct 30, 2003 4:43:59 PM)
Here's the rule: The trend is down, and after the market corrects, look for a break of the lower channel.
Use the low of that bar to go short. If that low is taken out, you are short, and your stop is placed
above the most recent pivot high...
Andy Bushak (Oct 30, 2003 4:44:29 PM)
If that low is not taken out, and the market continues higher, there is no trade, and the regression trend
channel is re-drawn to look for the next signal.
Andre (Oct 30, 2003 4:44:40 PM)
Hang on a sec, Andy.
Andre (Oct 30, 2003 4:44:56 PM)
I'm not sure how many people are having troubles with images....
Andy Bushak (Oct 30, 2003 4:45:09 PM)
I'm hanging.
Andre (Oct 30, 2003 4:45:24 PM)
The first one didn't live link... there was an extra slash getting in the way.
Andy Bushak (Oct 30, 2003 4:45:50 PM)
The others should be fine. Yes?
Andre (Oct 30, 2003 4:46:04 PM)
There is a bug with some settings on some browsers that turns off the automatic opening of a new browser window.
Andre (Oct 30, 2003 4:46:35 PM)
If you can't get the images... open a second browser window manually, and type it in manually.
Andre (Oct 30, 2003 4:47:12 PM)
Ok, Andy... back to you.
Andy Bushak (Oct 30, 2003 4:47:28 PM)
Should I go back to any chart?
Andre (Oct 30, 2003 4:47:58 PM)
I don't think so, pick up where you left off.
Andy Bushak (Oct 30, 2003 4:48:20 PM)
I want to show you an indicator that can make this set-up easier to spot and trade...
Andre (Oct 30, 2003 4:48:22 PM)
We'll have a log posted later, folks... complete with links.
Andy Bushak (Oct 30, 2003 4:48:54 PM)
Please view the image: http://www.esignal.com/advancedget/charts/chart6.asp
Andy Bushak (Oct 30, 2003 4:49:20 PM)
Yes, it's the Stochastic! This is a great indicator that works well in a trading range: It helps determine
when a market is overbought or oversold within a range...
Andy Bushak (Oct 30, 2003 4:49:42 PM)
The problem is that when the market goes into a trend, the stochastic can get stuck in the overbought or
oversold end...
Andy Bushak (Oct 30, 2003 4:49:59 PM)
This is where the False Bar Stochastic comes in. The False Bar was developed by Tom Joseph and is part
of Advanced GET and the GET Studies in eSignal. This is the Black Line above the Stochastic in the
JNJ image: When it appears, it is a warning that the overbought condition is False! In other words, we
may have a trend!
Andy Bushak (Oct 30, 2003 4:51:31 PM)
Please view the next image:http://www.esignal.com/advancedget/charts/chart7.asp
Andy Bushak (Oct 30, 2003 4:52:00 PM)
Here's what you see: The market is in an UP Trend, and notice the False Bar Stochastic...
Andy Bushak (Oct 30, 2003 4:52:22 PM)
This is where the best trading opportunity comes in: After an overbought False Bar, look for the market to go
oversold with no False Bar. Apply the Regression Trend Channel to trigger the Long. Place a Stop below
the low...
Andre (Oct 30, 2003 4:52:37 PM)
http://www.esignal.com/advancedget/charts/chart7.asp
Andy Bushak (Oct 30, 2003 4:53:26 PM)
Thanks, Andre. My fingers are a little thick.
Andy Bushak (Oct 30, 2003 4:53:47 PM)
eSignal has a Replay Mode (training mode) that you can actually practice to find these types of trades...
Andy Bushak (Oct 30, 2003 4:54:01 PM)
Check this image of a Montly AMGN: http://www.esignal.com/advancedget/charts/chart8.asp
dkm (Oct 30, 2003 4:54:15 PM)
what stochastic parameters are you using?
Andy Bushak (Oct 30, 2003 4:54:33 PM)
14,3,3
Andy Bushak (Oct 30, 2003 4:54:58 PM)
A strong Up Trend with a False Bar. Market corrects below the 50ma and we expect a retracement greater
than 50%. The Stochastic goes oversold with no False Bar. The trading opportunity is here!...
Andy Bushak (Oct 30, 2003 4:55:25 PM)
That little blue circle is an Ellipse which provides the right price and time for a correction to end,
if the previous UP Trend is to resume. This may be a chat for the future.
Andy Bushak (Oct 30, 2003 4:55:50 PM)
This works on the emini SP, as you can see in this image: http://www.esignal.com/advancedget/charts/chart9.asp
Andy Bushak (Oct 30, 2003 4:56:20 PM)
By the way, the colored bars are the XTL.
Andy Bushak (Oct 30, 2003 4:56:41 PM)
This is my last image: http://www.esignal.com/advancedget/charts/chart10.asp
Andy Bushak (Oct 30, 2003 4:57:13 PM)
This is an actual trade on the 1 min. emini SP. The trade set-up is what we presented here...
Andy Bushak (Oct 30, 2003 4:57:39 PM)
What I show here, is a way to manage the trade: Cover some at 1 to 1 Reward/Risk, then adjust the stop
to breakeven on the remainder. This puts you risk free on the trade. Subsequently cover some at 2 to 1,
and the remainder at 3 to 1. This is a simple money management technique that plans the exits and adjusts the
stop to risk free...
Andy Bushak (Oct 30, 2003 4:58:15 PM)
My initial risk was $125 and this strategy combined with the money management produced a reward of $212.50.
This is 1.7 to 1 Reward/Risk, which is acceptable.
Andy Bushak (Oct 30, 2003 4:59:19 PM)
That's the end of my formal presentation. It was my first chat, so please excuse the mistakes. Thanks!
Andre (Oct 30, 2003 4:59:38 PM)
Great, Andy... thanks.
Andre (Oct 30, 2003 5:00:11 PM)
I'm sure there are some questions... the charts flew by.
losloslos (Oct 30, 2003 5:00:58 PM)
How does AdvancedGET manage celebration days and weekends ?
Andy Bushak (Oct 30, 2003 5:02:36 PM)
I assume you are asking about calendar days versus trading days? We generally do everything in trading days. Our Price and Time Tool can project in calendar days.
Thunderdog (Oct 30, 2003 5:03:15 PM)
...That is to say, is the composition of the False Bar explained?
Thunderdog (Oct 30, 2003 5:03:40 PM)
Is the "False Bar" a proprietary indicator?
Andre (Oct 30, 2003 5:04:03 PM)
Opps, wrong order there... that should make more sense.
Andy Bushak (Oct 30, 2003 5:05:34 PM)
Thunderdog, the false bar is a proprietary feature added to the stochastic. Chart 6 gives you a clue, as we look for range expansion versus time.
Thunderdog (Oct 30, 2003 5:06:15 PM)
ok, thanks.
dkm (Oct 30, 2003 5:06:18 PM)
do you rely upon the False Bar stochastic to determine whether you are trending or in a trading range?
Andy Bushak (Oct 30, 2003 5:08:35 PM)
Good question dkm! This is why the FB Stochastic becomes a powerful indicator because not only does it help identify trading ranges, but it confirms a trend. Remember the market makes it's big runs in an overbought or oversold situation. That's where the Stochastic flat lines.
dkm (Oct 30, 2003 5:09:58 PM)
I'm just curious how this strategy might be used without the FB stochastic
peaches (Oct 30, 2003 5:11:40 PM)
what moving ave did you use?
trader333 (Oct 30, 2003 5:11:45 PM)
Is moving ave exponential or simple
Andy Bushak (Oct 30, 2003 5:12:24 PM)
Yes, you can use it without the False Bar. The False Bar makes it easier to spot. You can pull up any chart and when you see the False Bar, you know you have a potential trend. If you do not have the False Bar, use something to help you confirm a trend.
dkm (Oct 30, 2003 5:12:50 PM)
ok thanks
Andy Bushak (Oct 30, 2003 5:13:01 PM)
peaches, I use a simple 50 period ma.
cajunboy (Oct 30, 2003 5:13:40 PM)
all time frames for 50 SMA
Andy Bushak (Oct 30, 2003 5:15:06 PM)
cajunboy, this works on all time frames. We are just reading the data. The timeframe is important to the type of trader you are.
Thunderdog (Oct 30, 2003 5:15:28 PM)
However, does it work better in certain markets or time frames than in others?
Andy Bushak (Oct 30, 2003 5:18:17 PM)
First of all, if you think in terms of bars, you will get a better feel. In any strategy, if you are right, the market should start moving in your direction in 5 to 8 bars. This is 5 to 8 min. on a 1 min. 5 to 8 hours on an hourly. 5 to 8 weeks on a weekly. So, this should help with timefrmes. If I'm trading a 1 min., it will be fast but the signals will still be the same as on a Weekly.
mrmike11 (Oct 30, 2003 5:19:46 PM)
Andy, do the stochastic settings depend on the time interval of the chart, or is it always 14,3,3?
Andy Bushak (Oct 30, 2003 5:21:48 PM)
mrmike11, it doesn't matter too much. I try to keep it simple. the 14 seems good for this type of set-up.
Andre (Oct 30, 2003 5:23:03 PM)
FOlks, we've got plenty of questions, still... but let me get to a few questions about eSignal and AdvancedGET...
JadeTrader (Oct 30, 2003 5:23:11 PM)
which esignal services to subscribe in order to have the regression trend line and flase bar indicators? thx.
Andy Bushak (Oct 30, 2003 5:24:45 PM)
The regression comes with all the services. It's a standard tool. The False Bar is part of the GET Studies, which is an additional subscribtion.
Andre (Oct 30, 2003 5:25:31 PM)
Do you have to subscribe to eSignal data to use AdGET EOD?
Andre (Oct 30, 2003 5:25:37 PM)
EOD = End of Day
Andy Bushak (Oct 30, 2003 5:27:15 PM)
No Andre. GET Eod reads multiple formats like TC2000, ascii, etc. But, we do recommend our eod data, because it allows for delayed updates during the day.
Andre (Oct 30, 2003 5:27:31 PM)
Thanks.
clayidus (Oct 30, 2003 5:27:41 PM)
Hi- I am an equity trader based in India. I own a copy of Advanced GET EOD,and I received your flier regarding a FREE 3 months subscription to e signal wizard,plus a new upgrade to the software- but unfortunately due to the slowness of the Indian system , I received the offer after the expiry date viz. after Sep 30.Can you still grant me the same priveleges outlined in the flier even though I am very late in responding to you.Also,i had contacted an e signal representative,but he told me to contact the Advanced GET guys.Could i have Andy Bushak's or any other Adv. GET emplyee/partner' s telephone number and also an email address pertaining to queries about Adv.GET and not an email of esignal
Andre (Oct 30, 2003 5:29:10 PM)
If we're really interested in AdvancedGET, should we go through eSignal, or is there contact information for someone specifially that deals with AdGET issues?
eSignal Raphel (Oct 30, 2003 5:29:30 PM)
To find out more information on eSignal’s Advanced GET, please click here: http://www.esignal.com/advancedget/
Andy Bushak (Oct 30, 2003 5:29:43 PM)
email pgera@mail.esignal.com and he will take care of you. You can call us at 330-645-0077.
Andre (Oct 30, 2003 5:29:59 PM)
Great.
clayidus (Oct 30, 2003 5:30:10 PM)
Thanks
eSignal Raphel (Oct 30, 2003 5:30:28 PM)
If you have any questions, or for more information, please call: (800) 815-8256. In Europe, call +44 (0)20 7825 8770.
Andre (Oct 30, 2003 5:30:47 PM)
Ok, back to some trading questions...
simsim (Oct 30, 2003 5:31:04 PM)
How are the reversals indentified?
Andy Bushak (Oct 30, 2003 5:33:03 PM)
Simsim, it's easy with the False Bar because once you see it, you wait for the market to go to the opposite extreme. When it does that without a False Bar, you jump on it after a Regression Trend Channel confirmation.
trader333 (Oct 30, 2003 5:33:32 PM)
Andy chart #10 you showed has a false bar before the arrow trade but market still went down
Andre (Oct 30, 2003 5:33:42 PM)
http://www.esignal.com/advancedget/charts/chart10.asp
Andy Bushak (Oct 30, 2003 5:36:47 PM)
trader333, that's the trade: I see the market in a down trend with a False Bar below 25 on the Stoch. Once the market corrects with a Stoch above 75 and NO False Bar, that's the ultimate place to look for a short.
Andre (Oct 30, 2003 5:38:43 PM)
Folks... we've got time for a few more questions.
cvragel (Oct 30, 2003 5:38:55 PM)
Can you place the stochastic indicator over the price bars, or does it have to remain on the bottom?
Andy Bushak (Oct 30, 2003 5:39:58 PM)
In the new 7.5 Beta, you can actually overlay any indicator on the price bars.
Andre (Oct 30, 2003 5:40:19 PM)
Nice.
gdtrader (Oct 30, 2003 5:40:46 PM)
Andy, what are your favorite time frames to use for day trading? 5 15 30??
cvragel (Oct 30, 2003 5:41:05 PM)
yes, when will that be out? Have eSig now...
eSignal Raphel (Oct 30, 2003 5:41:25 PM)
7.5 will be out at the end of November timeframe.
eSignal Raphel (Oct 30, 2003 5:42:09 PM)
To view or attend an eSignal Advanced GET class, please click here:
http://www.esignal.com/events/default.asp Learn how to trade at our live or online events with eSignal. We offer a variety of classes for every level of trader. Click on the subject to see the latest schedule by type of event.
Andy Bushak (Oct 30, 2003 5:42:10 PM)
The 3 min. is good on the emini SP for me. I still like to reference levels on higher timframes for support and resistance.
Andre (Oct 30, 2003 5:43:09 PM)
Folks, there comes a time when we simply have to let our guests go. And that time has come. Andy... thanks so much for joining us today.
eSignal Raphel (Oct 30, 2003 5:43:30 PM)
Please visit eSignal Central at http://www.esignalcentral.com/default.asp for all of your trading needs. Here, you'll find a place to learn, share and profit from fellow traders and eSignal users. eSignal's goal is to provide traders worldwide with the best trading tools.
Andy Bushak (Oct 30, 2003 5:43:59 PM)
My pleasure. Maybe, we can do it, again. See ya!
Andre (Oct 30, 2003 5:44:09 PM)
We'd love to have you back, Andy.
Andre (Oct 30, 2003 5:44:22 PM)
And while this chat session may have ended, the discussion doesn't have to. For additional questions and comments, please see the following thread on our message board: http://www.elitetrader.com/vb/showthread.php?s=&threadid=23949
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