I am trading on a 1-minute chart of the ES. When looking for a channel I am going though the discretionary steps below to confirm a channel, but I bet I could find it sooner somehow: 1. If price is on an uptrend, wait for a top 2. Wait for the retracement to bottom so now I have a ^ shape. 3. I have a candidate channel at this point, and I have a candidate channel range. I'm waiting for it to retrace upwards to double-test the high. If it does, I end up with an N shape. 4. The last step to confirm the channel is for it to run up against resistance at the top of the N and NOT breakthrough. If it bounces back down for 1 1-minute tick, I'm in a channel, and I'm going short. That's more or less what I'm doing. I'm not looking at volume or any other indicators though, just that 'N' shape and a downtick after the N tops. Can I do better? (ie, find it earlier, or get fewer false positives)
It is very simple to use this function. Need to know the time frames. You can use the Regression channels. I really like darvis box. You can use EMA or SMA Mvg avg. with special settings.
Your first question leaves a lot to be desired considering the depth of the question. I mean your first mistake is not knowing how to draw a channel. Second mistake is trading a 1minute chart. So let me try and help. Spend the next few months studying Technical analysis to even have a clue of what you are in for. Trade nothing less than a 5 minute chart if day trading the index futures. you seem to be wrongheaded from the start thinking you can trade noise on a 1 minute chart. Drop that idea, is is a sure loser. Spend a couple years on perfecting this well worn market axiom "cut the losers short and let the winners run" and then you will be ready to ask the next question. Just trying to help. Also remember this "there is no such thing as an absolute in a game of probability". One of the hardest lessons for new blood in the game is to admit to self that losing is part of the game. Can you imagine how much money A-Rod would be worth if he had a batting average above 400? Point being: prefection is a myth. I can tell you something about yourself right now that is going to give you a HARD time in this game. your idea of a 1 minute chart shows me you are afraid od losers. Good Luck Sorry to be so blunt but i have been that way since being a kid. ..
<i>"Trade nothing less than a 5 minute chart if day trading the index futures. you seem to be wrongheaded from the start thinking you can trade noise on a 1 minute chart. Drop that idea, is is a sure loser."</i> Absolutely. Can make much more money trading a 5min chart than 1min chart for eminis. Logical deduction is that scalping 1min charts can control risk better than a 5min chart: in & out quick, etc Actual reality is that a 1min chart will chop all but highly experienced, extremely skilled traders to pieces. Something we all have to try at least once before our trading account explains the truth to us in cold, hard fashion.
Linear Regression Channel Investor R/T - use this indicator set as a "channel" to your liking. http://www.linnsoft.com/tour/techind/linReg.htm
Yeah your're right. NinjaTrader charts have some good things and some bad things, but this concept seems to work pretty well.
start out with a 9,6,3 month channel,start drawing trendlines ,see how it stays within ,breaks above ,,comes back in ,belo, comes back in,breaks and starts new channell, notice the steepness ,the flatness,notice that it does trend for a while, that trend of the larger channel is the bias u want, we've been in a down channel since oct so the long trend trader would still b short,notice within that channel, a direction rarely holds for a fifth day,we've recently sold off 4 days in a row, we are do for a bounce,monday is the last day of the month,typically,money managers try to mark up the stocks they have bought for their customers to improve they're monthly statements, that channel has a top around 1330 and botttom around 1310,so if we bounce you look for a 5 minute up channel,if we get one you would be buying on the support line and selling on the res line,i typically would open all my positions from the long side ,sell at that top line and wait for the bottom line to get long again,keep in mind that 4 day channel line,skilled traders would go long and short,you might wait for that til you get better, remember that we are in a longer term downtrend and that could resume at any time,if we touch a line and u buy ,have a stop below the line,these trends change 4 or 5 times thruout the day recently,wiith a stop you won't have to worry about it and you can be more aggressive,you are going to have plenty of losers, a new trader maybe 60%, if you have stops in ,these losses will b small and you will stay in business,u will also learn to trade and make money while taking losses,that is harder to learn than finding trendlines,
if we break above or below that 4 day channel,you want to know where the next multi day trendline is or multi day top or bottom