how to manage false breakouts on NQ ES

Simtrader · Jun 11, 2003

I hereby officially terminate this thread. 57 pages is enough already. Please everybody move over to Johnny Rotten's new thread for further discussion of today's or any day's trading. It'll be up in 5 minutes.

THANK YOU AND GOODNIGHT. NO MORE!

K.C. · Jun 26, 2003

Quote from jack hershey:

If posters go to B C pair to avoid screw ups at B time, then if the screw ups are cured, we can then trade through A to B to C. Darned if that doesn't make us ask about what is the C a precursor for. A fair amount of time it is A. Other wise it is a "D" genera. Don't worry.

I combine all this stuff on a matrix and you do not want to learn about that. For now lets get the BO failure taken care of.

To make money you need to go to where the market is operating. Let's grant that past comments by posters do not allow that for now.

The one thing that precedes everything above is how we get to an A state. BO's occur after the market has gone into a period of dullness and inactivity. the noise ratio is highest and often dominates all signals. The absolute signals are on neutral and the relativistic ones are running full scale blips in a random unconnected way. The one thing to look at is people. Potential particpants are not in the picture to speak of except that the two groups they divide into at all times are definitely in disagreement. This healthy normal thing gives us our marching orders. We also know of their recent views and where they have done the MOST to express them. and their least efforts were made at the times when the market was most extreme recently. The gangs all here and before a BO they are in total disagreement. It is a powerful time for one set of players. The very small group who first agree with each other from opposite sides of the fence.

We need, therefore to watch only one thing. All of my SEC citations come from this set of observations.

I would name it "critical mass sustainment" (CMS). Success or failure hinges on this alone always and it is easily measured as a leading indicator of price. Iwill give you the price indicator to compare it to also.

The best way to do this is to move to the operating point of the market. Skip that though because of the stress factor impossed to most. Stay where you are and just fall into line when it gets to your places.

I posted the maths for this in the early nineties. It has been posted in ET recently as a courtesy of some nice person. You don't need this unless you want to program it for being automatic. Lets keep it simple as a beginner thing.

I will move in to the focus by zooming from the longest term investing to the shortest. It all works the same. No one has to move from where they operate. I do move because I am a person who optimizes stuff.

the way people get to disagreement is by fretting. as they fret, the market gets dull and noise begins to show up. So you can see that. Fretting is called congestion. Experts love this stuff The market has a periodicity of moving laterally in ups and downs that have little amplitude and continue the move along CONSISTENTLY. You can see this. Our indicator of its progress to the BO we want is volume.

Volume ordinarily increases as a measure of continuing a trend. that is half the P, V relation. Volume decreases when change is coming up. When volume is steady the market will decline in quality and get dull and drift. In congestion the volume is low and not sufficient to allow the market to operate. so you will see a whole set of formations come up as congestion is not sustained because the volume is lessened. All the pennants, convergence and centering formation show you this. In fast paced markets trends first stall for a 3 to 5 min period
then the stall becomes a dip aftr the next spurt has occurred. All of these are marked as low volume and delcining volume.

We know a change is coming now. It is just "when" time. This is easy to know. You just look back in time and peg the previous volumes for each of the happenings. You calibrate yourself on volume. No one here is calibrated. And you do not look much at the market players.

Wilders RSI is terrific for corrolating with this stuff. Do not use the default he came up with. The one I use Pring wrote up about five years after most of us started using it. All defaults have to be changed to take into account electronic trading. For us we can use VDU (vey dry up) volume as an RSI alternative. There will be one bar that is lower than the noise level of volume. This is the calm before the storm. BO will be just after the volume resumes and picks up. This is the breeses of volume preceding the gusts coming. If you are on the operating pace you see all this. Most of you just get slammed suddenly.

Volume moves much before price moves. They do not move together. If you think they do you are in the wrong place.

I hope this gets you to see A coming into being. The BO occurs; we then have time to enter when and if we want.

Lets all enter and make money. as we make money all is well we pick off three points to see the channel that formed and as the trend picks up the traverses of he channel occur. The pairs of traverses, forth and back continue to make money faster and slower respectively. Scalpers say to us they can't handle this. Kelw. So be it.

the first traverse is during the BO and it is high velocity money making. The points per bar chit chat.

We have to look at the end of the traverse appearing and see if there is a slower money vleocity, a zero money velocity or a negative money velocity. How does the price get to and bounce off the right trend line?

Volume answers all these questions. BRB.
More...

Do I understand it correctly that Jack is saying that ES volume is affecting ES B/O???

K.C.

dbphoenix · Jun 26, 2003

Quote from K.C.:

Do I understand it correctly that Jack is saying that ES volume is affecting ES B/O???

K.C.
More...

God knows what he's saying at any time, but, yes, volume affects BOs, ES or any other kind.

CrescitEundo · Jun 27, 2003

"Do I understand it correctly that Jack is saying that ES volume is affecting ES B/O???

K.C."

yes

K.C. · Jun 27, 2003

Thanks, for the information guys. Until today I thought that E-mini S&P 500 futures contract is derived from the change in market price of the S&P 500 index.

K.C.

jack hershey · Jun 27, 2003

Quote from K.C.:

Thanks, for the information guys. Until today I thought that E-mini S&P 500 futures contract is derived from the change in market price of the S&P 500 index.

K.C.
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The value of the ES is a combination of many things. My orientation to posting is related to making money.

In making money I believe and practice using a minimum combination of things to make the most money.

As you can see phoenix doesn't know much about me. What he told you may be just backwrds as well.

As you look at the ES you can count on the fact that its price value is tied the the value of both the full futures S&P and also to the "cash S&P 500. This is a very important thing to see.

It tells you that there is nothing about ES that allows it to jump around indepenantly of either of these other two I mentioned.

AS for making money, you can make use of other information to be able to be very effective in taking money from the market by trading. Since you are new here, you haven't found out yet who takes how much out of the market. Most people think what I say about this is bullshit. Most of them by my figuring are not takiong out as much as I do, however.

As far as indicators for making decisions, volume is the most single important one and price is second most important. when you look at the P,V relation, the hypothesis is volume based and price follows the hypothesis on volume.

K.C. · Jun 27, 2003

Well, if I understand it correctly you are saying that as soon as there is a prem between cash and ES arbitrageurs come in and thatâs what makes the volume spike in ES so I should go in in the same direction. Great system, thanks. I canât wait to start to use it on Monday and make those big bucks.

K.C.

jack hershey · Jun 27, 2003

Quote from K.C.:

Well, if I understand it correctly you are saying that as soon as there is a prem between cash and ES arbitrageurs come in and thatâs what makes the volume spike in ES so I should go in in the same direction. Great system, thanks. I canât wait to start to use it on Monday and make those big bucks.

K.C.
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No I did not say that.

You should consider that what I said is this: Skip thinking about arbitrage. Think about waiting to go into the market at the open in the am until all three settledown and are in sync price wise.

Think about using Volume as stated in the P,V relation to help you see where price is going and where it isn't going.

If you can find a comment of mine on volume spikes please paraphrase it here. Let me also know "what" is going in the same direction as volume as well.

dbphoenix · Jun 27, 2003

Quote from K.C.:

Well, if I understand it correctly you are saying that as soon as there is a prem between cash and ES arbitrageurs come in and thatâs what makes the volume spike in ES so I should go in in the same direction. Great system, thanks. I canât wait to start to use it on Monday and make those big bucks.

K.C.
More...

Yeah. Easy. Don't know why everybody doesn't do it.

KGB · Jul 13, 2003

No offense to any pit traders reading this, but having experience myself in the pit, the vast 97% of pit traders are just glorified thieves and beggers. They suck brokers ***** to get customers orders and steal markets made by real traders who stick they necks on the line and acually step out and assume risk. So your boy Greenspan will not help you make money unless you feel like doing some ass kissing like he does.