Breach HH = A Breach or breakthrough of the previous sequential oscillation where the outcome is a Higher High. PPF LH - Physical Price Failure = Price physically failing, through a sequential oscillation, to fail to make a HH, where the outcome is a Lower High. Those are extremely low risk trade set ups when taken on the Trading chart. Trade from a PPF toward a Breach in the direction of the Long Term & Intraday strength.
Prof This is the exactly main point I am trying to discuss here, how the bigger picture can be of great help in the day trading arena, and however you choose to do it, you should put your trading timeframe into a higher, bigger picture context, which can be of great help with your decsions, and certainly a great help to setting up a trading plan. Price and Volume can help with understanding the bigger picture. Maybe most traders already know this, but for a long time I tried to trade with an eye on only one chart, and I now know how very limiting this can be.
Well at this point we each have no idea how the other detemines a trade setup but I can see we are both trading in the direction of trend in our main timeframe, and perhaps do it in a very similar ways But here is a quick example of todays chart again.. I was taking short trades until volume told me the probabailities to do so were lower.... I saw the patient sellers come in to halt the bigger picture down move and I didnt take any more short trades after that..... Maybe you continued to take short trades because the trend was still down? But to my way of thnking we are now in a bracket, and I will wait for further develolments before entering new trades... I dont think what I am doing is any better or worse than any other way to determine trend for trading purposes, but like I said I have found that it helps with my trading decisions.
Remember, for me, big picture and Volume are separate from the way I look to execute trades....they confirm my setups, or not. That said, I whoile heartedly agree, that from an execution point I want to always get in ahead of the large orders exactly as you say. I can never, and will never try to predict if "support or resistance" will hold or not, and I am very comfortable buying and selling right before these points.
Your bracket at 31.76 is near enough to mine at 32.25, but I am lost on your level at 27.49 ... care to explain it's origins. regards f9
Fearless, I just put the horizontal lines quickly on the chart, and just so you know I personally look at all brackets and pivot points and trend lines as areas, not exact points. Price is always probing these spots, and accepting or rejecting them in different ways But where it says 27.49 on the chart for the low is actually a very clear area when you extend that whole area from todays lows to Fridays lows, etc...
Thunder, Again, good questions. Here is what this has all done for me. I now have a pretty mechanical way to define my trading sets up that flow in order from 8:30-3:15. I would say it averages between 15-20 setups a day in the time frames I am using. Also, just to mention, I am not looking to "scalp" a few ticks on trades...I have no problem with scaling out of postions to reduce risk in this way, but these are not the moves I am looking for on winning trades in the day timeframe. So in setting up a plan that would provide a healthy balance of trade opportunites vs. appropriate win/loss levels, my approach generates about 15-20 trades a day. That said, I have also evolved in my trading where I prefer to take less trades rather than more trades, relative to my trading goals. I certainly had a problem at one time overtrading, and for me I found a direct correlation between more trades and more losses. Also, I do think it is hard to sit intensely at the screen all day long, and I found that my best trading always involved fewer trades with bigger gains that lined up with the bigger and smaller pictures together. Also, I found I was much more comfortbale trading less, and only when everything lines up, even if I missed some moves along the way. Finally, I didnt want to be in a position where missing any one trade could have a major impact on my overall trading goals So, to answer your question, I have a very good idea about how each setup everyday falls in line with the big picture analysis I mention, without definitive records........I have no doubt, the good trades I miss are virtually offset by the small losess I would take in less than ideal big picture coniditions. Another way to put it, is if I sat at the screen all day and took every one of my trades I almost have no doubt that the winning and losing trades in poor big picture condtions would about even out, and it would be an overall unproductive effort in the long run On the other hand, when I now sit down at the screen, I can see the mechanical set up, always know the big picture context, and then trade only when everything lines up. In the end, I take less trades, it is less stressful, and with the odds more in my favor, I achieve my daily/weekly goals. But that is the way it works for me. I would simply prefer to trade less often given the variety of setups that evolve in the trading session for my trading timeframes, and the big picture of price and volume gives me a way to take only the trading setups that I feel are likley to be the best ones.
07-14-08- Follow up We started the day right at the top of a 1255-1240 bracket, and price moved straight down to bracket bottom where the patient buyers dried up. When we see drying up in an area, we know will move strongly away from this area. The patient buyers way below won the tug of war, and price moved strongly lower providing nice sell trades. Finally patient sellers stopped the down move, and after such a strong move down, the market made a very expected 40-50-60 % retrace before moving back to the lows where we start the day tomorrow. EMC2 TRACK RECORD FOR THE DAY- (1 Contract) +12.50
Where do we go from here? - I wanted to show how from a big picture standpoint, the ES is once again showing another consolidation in the macro downtrend. The last two consolidations were pointed out in an earlier post, and I described had one should look at any consolidation breakout up as a move to the big pic trendline first, and then monitor to see if the consolidation breakout high holds or not after that. In both cases we moved right back down. We are a long way from that scenerio right now, but I wanted to point out the three ways to consider longs from here, if a bigger picture perspective is important to your trading timeframe. (1) Price would have to move above, and hold consolidation high at the 1235 area. (2) Price would move down from here, and patient buyers would dry up. (Watch Volume) (3) Price would move down from here, and at some point patient sellers would step in and stop the down move (Watch volume) I guess you could buy right here, and hope number 1 happens..(lol), but actually that does bring up an interesting point. Im very aware everyone has their own way to enter trades, so lets say you did buy here with an outlook towards the bigger picture for exit. If nothing else, you should be aware that price will not move significantly higher unless it can first break and hold above the 1235 area. Maybe this is common sense to everyone here, I dont know, but I think whatever your trading style other than pure scalp (all in all out, scale out, etc.) It would be prudent to watch this area very closely if you are long and price moves up to this level, and you should be prepared to tighten stops, set up free trades (breakeven stops) etc.etc. But from my view anyway, the more conservative and higher probability way to look to the longside on the ES right now would only occur in one of the three scenarios above.
Track Record - I have received a few inquires regarding my Track Record Results. I know this forum is desgined for discussion, education, etc so Ill keep it at that, but yes, I have taken the Big Picture and Volume information I mention here, and developed a complete EMC2 trading approach which Im sure any of you can read more about if you look for it, or search for it. The trading approach is a complete trading framework that combines (1) Multiple Timeframe Analysis (2) Volume (3) Big Picture Market Structure to select High Probability trade setups on the ES over and over again with exact (1) Defining of Market Structure (2) Entry (3) Stop Placement and Adjustment (4)-Exits-(5) Trade Management. I list every single trade that is generated from the approach (entry/exit/time, etc.), every day, so in the end there is a clear track record for anyone to examine, and I think this is pretty rare to find out there. For those successful, experienced traders out there, this information is irrelavent. Perhaps it will lend some authenticity to the subjects I discuss here, but who knows. For those of you who already use a good, less structured approach, maybe some of the things I mention here can be of help in some ways Finally, for others still looking for a way to tie an entire trading framework together, perhaps the trading approach I use is something you are interested in exploring further, and if not thats fine too. As I mentioned from the very beginning, Ive learned a few things along this crazy road of trading. I don't claim to know it all, and Im sure there are other approaches more effective than mine, but that said, I do know I have some things to offer that can be of help to others in a variety of ways, and for those that aren't interested, or want to label me in all kinds of unflattering ways, I have no problem with that either.