when the 2 indicators are diverging the move in their direction is weak.... when they converge the momentum is heating up...when the envelope { the area between the indicators} is clear and a strong angle run is on, watch the envelope for indication of weakness..if tick closings stay below enveope going down/above envelope going up , stay with the trade. Fractional points and scalping is a high risk venture and panics one out too early losing easy big points. Down runs are stronger than up runs, usually. An additional long term indicator is helpful. Don't think of long term trendline as a long term trade tool. It only gives the direction price is likely to continue going , and I think that is more important than most anything...price direction...severity of angle 45 degrees or greater..money management....buy low, sell high..that means low/high in the projected channel...not dollars or points..most good runs create a channel..some narrow, some wide. kserra, you have the correct indicators to whip the market....if you complicate your system, you will be in the same boat as the 95% that we read about.....Your stops are in the perfect range. 3 to 4 pt. stops work well with your indicators....2 pt stops will put you out of business..imho
Why would I want to change my stops so that I am risking more than I am expecting to make on a move ? Like I have said before, most moves rarely continue after I have been stopped out, so why would I want to widen my stops ? Even if I were to change my profit target to a bigger number, the probability of me achiveing that target would greatly diminish when compared to the targets I am shooting for now. THis is something that I am personally not comfortable with and therefore I have made my system to reflect that. I prefer a trading system with a higher than 50% probability of being correct. The only reason I would change my stops is if I were to change my time period, as you can see from me changing to the 5 minute my stops have been widen because of a larger spread in the 5 min as opposed to the 3 min, thus widening my stops and profit targets while reducing the frequency of trades. But currently I am not planning on changing my time frame because 5 min is about all I have patience for at this point in time. If you are going to talk about magic numbers, please provide some proof, mathematical or otherwise as to why they are superior.
..Patience is golden...I truly hope you are very successful in this business.. I am not qualified to advise...
Porgie, you do a lot of advising here at ET. Why don't you start a journal of your own so we can see how you trade?
the angle shows the level of emotions behind the move right? if the angle is nice and steep... and the move is up.. that means there's blood in the streets, meaning shorts' blood. you know the feeling? the feeling is in the air. there's prolly some roar in the pit going. emini guys are all pumped up glued to the screen. everyone's trading, there's volume. so in this case shorts will continue to get squeezed up. now there seem to be an exception to this. when the angle is created by a single crazy huge up/down candle then there's no geniune mojo behind the move. Usually candles like that are result of news or program buying/selling. And after a spike like that it usually turns right around and races the other way. Kind of sick volatility with no real direction. SOrry for rambling L(
I find this last paragraph to be really true especially during the first half hour, which is why i stay away until about 10 eastern. Although right now a move is playing out that looks like something you have just described.
Trades for 11-10-03 Trade # 1: Short @ 1048.75, Cover @ 1047.00, Stop @ 1049.75, +1.25 pts 8:20 the short was taken, the slope was reasonable however did not feel like the momentum was really there berhind the move, decided to get out slightly premature, but still a good 1:1 trade. Trade #2: Short @ 1048.00, Cover @ 1047.25, Stop @ 1049.25, + .75 pts 11:10 trade was taken stop was then moved to fib retracement level after target was reached, anticipating a further move, however then the slope changed dramatically and I decided this was a sign of momentum change so I got out of the trade at what turned out to be good timing. There was a signal @ a little after 12 that I chose to ignore, I did this becuase I felt there was a significant amount of resistance right below the signal, Although the trade looks profitable in hindsight I realize that i would have been stopped out before making any money in this trade. Profit/Loss for day: 2.00 pts Overall Profit/Loss: 12.75 pts Today was a slow day, however I am happy with my performance despite the fact that there were very few trades and that none of them panned out as homeruns I was able to keep my patience and not force myself into any sort of overtrading scenario.
I will not be trading tomorrow 11-11-03, due to prior engagements and also in observance of veterans day And trades for wednesday and thursday are questionable as well.
I hope you make millions of dollars trading this stuff...Today was a fair day for kserra's system.......long term indicator said sell all day..time frames can cause a lot of loss...if you pass up the good trades because u r programmed to NEVER TRADE @ THAT TIME..R LIMITED...STIRS THE EMOTIONS .TRADE WHEN THE MARKET IS MOVING..A GOOD SYSTEM DOESN'T FAIL @ ANYTIME/ANY MARKET. This is only in my honest opinion...no advice intended..Money management works well....if you please...I sincerely hope you'all are successful.....
I worked for a man who had many millions of dollars...He did not make it trading, but he had the desire to own a trading company. He spent a few hundred thousand in equipment and people...He lost over and over because he said " I don't want to leave anything on the table"..used 10 point stops and had a system that was flawed....and wasn't willing to admit it was flawed...We traded the Emini S & P...He exposed me to the best of all that was available...I have literally spent thousands of hours studying charts.....maybe I have the good answers to success..I will find out shortly....MY SYSTEM IS UNBELIEVABLE...early entry and late exit..DISCIPLINE AND EMOTIONAL CONTROL WILL TELL THE TALE...SOON... .but, one thing is for sure.....it is easier to up the contracts than to up the points captured...You are on the right track IMHO. 2 points net per day X 2 contracts???then 4??? The millionaire said we get rich when we capture 5 pts. per day...he was right...