If you're hanging in there with this thread you deserve a medal! Right now I am just focusing on narrow range triggers within the context of a momentum setup (these are not real or even paper trades). The charts are for my own edification to demonstrate low risk entries with defined stops to enter a fast moving market. Once again the indicator is simply ATR1: Bull market (overall context) NK missile launches only cause a short term dislocation (fast selloffs that are quickly bought) What is the entry? Simple, check out the tail (buyers entering the market), expansion bar near the lows (aggressive buying) and the narrow range bar near the highs of the expansion bar (dummy entry). Although I did not trade this in any fashion my immediate thought upon hearing about the launch was any selling would be short lived. Momentum/news based momentum trade.
MB trading has extremely low day trading margins and I used it for a bit many years ago. The platform was more reliable than interactive brokers.
The difference between selling pressure based on valuation concerns and sector rotation is that sector-rotation selling pressure often comes to an end much sooner, quite often the day it began, and sharp reversals can take place on an intraday basis. https://www.marketwatch.com/story/t...100-will-happen-repeatedly-in-2018-2017-11-29
Once upon a time I had a friend who coached his son (running back) in pee wee football. Each year his team went undefeated for the season. Simplicity was the key! Granted, he wasn't going up against the NFL. However, my plan is the same for the market: 3bt on the 30' (cl, nq, es) 5' momo in clean air (still testing) 5' momo on market moving news The 3bt pattern rarely presents itself! Trading off the 5' has always been difficult, but if these momo strategies work, they could be my bread and butter. One thing is for sure, they keep me out of trouble and do present low risk opportunity. That's something I did not do before on the 5'.
Remember the Alamo: Walking into the break room of Waste Management with my eyes barely open, hungover from the night before, I saw a rare sight. My fellow front end drivers were unusually cheerful. "The stock went up $4 yesterday!" These were not day traders or day laborers. They were a group of men who clocked in two hours before the sun would make its daily appearance. Their work was done with a similar consistency. Whereas roll off drivers will more often than not barely be noticed on a construction site, or the residential refuse hauler who is intentionally ignored except for a few ladies who were notorious in all of their gloriousness as they hurriedly dragged their garbage can out in the morning wearing only a short tee barely covering their panties - if they had undergarments on at all - the front end driver was constantly rewarded. BBQ, seafood or cold, hard cash, it seemed as if everyone was attempting to beat the system. Private contracts were forged between the end customer and the purveyor of the service. The black market at work. Capitalism at its core. However, your livelihood, insurance and reputation were all on the line if you were caught. Thus the need for exemplary service. Thus the requirement for exceptional compensation. Most of us played the odds and gamed the system. Waste Management's stock rose to a high of $30. I only remember because of the day it was cut in half! Kevin would come in every morning and give an update on the upward trajectory of the stock which most of us had in our 401k. Luckily some of us had a few pennies socked away in a Vanguard fund that tracked the S & P. Not Kevin. He was a lifer! Even after his heart attack he came back to work for the company that gave him so much. Kevin had quit high school to support his family after his Dad died. He worked his way up through the company and put all of his chips on black, WMI. Kevin wasn't betting on the market. He was betting on people like himself. Hard working. Honest. Capable. He was months away from retirement. Once again I came in hungover. I didn't check out the money honeys on CNBC because I had never heard of them. Nor was I in tune with the daily fluctuations. I was in it for the long haul. Let's just say my chips were on red. Bloodshot eyes. The red light district. People with my particular personality disorder live for the moment, because of a sense of misplaced optimism and a strong survival instinct. "What the fuck is wrong with you this morning?" "Johnny, it was cut in half!!" "Dude, what are you talking about?" Kevin never took payment for extra service. In fact, he did not even give it away. He was the type of driver that would radio the office and make sure the customer was charged retail for the extra dump. He would patiently wait while you reloaded the eight yard can. Kevin had ethics. Morals. A strong work ethic. He did not take shortcuts. Too bad the management at the highest levels of our company were not more like Kevin. Luckily, for them, the scoundrels with golden parachutes were not charged for their criminal actions. Cooking the books! They were let go. Who knows if they landed other jobs, retired to their beach house or opened a consulting firm? I only know what Kevin did. Kevin died right after WMI hit a low of around $7. He left behind a wife, three kids and a 401k plan that was one quarter what it once was. Watching Kevin caused me to watch the market. It would be a few years before my first trade. It has been a few years since my last trade. It will be a few years before my next trade. That's okay. I have time. I know how to do time. How? Live in the moment. In the meantime, I remember the Alamo. The end of bull markets bring action: Stocks are the talk of the town, not bitcoin. Initial public offerings set records as people cash in on the mania. I witnessed from afar the dot com boom. I participated and got whooped up by the oil Gods at the end of that mania. I am not calling a top in bitcoin, but I would probably cash in quite a few chips - if I had any - between now and the day bitcoin futures are offered next year. Average out, if you will. However, my love is the stock market. To be accurate, my passion turned many years ago to playing the indices via the eminis. Leverage. The elusive goose with platinum eggs! But here is what I remember about the Alamo(s). There is a ton of money to be made at the very end of bull markets and the relatively short period when the bear comes out of hibernation. The bull has room to run and I just want to be there at the end. Jump on his back for the final eight seconds. Take a few bruises for the glory that comes with risk. Be ready for the riches that await when the bear devours good and bad companies alike. We are not there, yet. Not even close!
Momo play: 30' and daily were favorable Gap up with an open higher than the high from the previous four days (bear trap) Entry on break of 3rd 5' bar Fizzled out, but this is the play Trade management would have been difficult (break even, small gain or small loss) I have a book on Python programming, but the left side of my brain has probably been damaged from too much lefty thinking and drug use. Nevertheless, I will keep plugging away until I understand it. Hopefully, backtesting may give some idea of the odds for the best way to play the trade over time. I am hoping that by posting these charts and looking at the actual trades I may get some idea of the structure I am looking for.