Mr. Hershey Would it be possible for you to give me the sequence of events that tell you a rocket is failing?
I am very interested in rockets because Mr. Hershey says they are no-risk trades. I believe he means that you enter on momentum and that momentum prevents a sudden reversal from trapping you so you can then do a wash trade if it does not work out. They have been working pretty well so far but some days they dont so I would like to find out how to know when they are going to fail. I am pretty sure it has to do with volume. Here are todays rockets.
Would someone be kind enough to point me where I can read what constitutes a "rocket"? I have read almost this entire thread (and attachments), but I've missed it somewhere. I sincerely appreciate the help.
The lack of response to your query may have an explanation. The topic you raise is an old fruit whose juice, perhaps, has been sucked dry for people who have gone through the process of the Stochastics thread and the subsequent Paltalk sessions. A "rocket" or, as I like to call them, a "sprocket" is simply a transference tool invented by a skilled person to convey to an unskilled person the truth that the market may be viewed as having discrete operating periods that can be connected to a person's risk of participation. The transference tool was built primarily with the stochastic indicator. The specific truth conveyed is that there are periods when the market allows a person with almost no KSE (knowledge, skill, and experience) to participate with little risk of loss using a simple set of go/no go monitoring elements. The direction of participation is accounted for in the go/no go set. So is the duration of participation. The entry is always late; the exit is always early. A novice begins with the knowledge of the existence of rockets which he obtains through listening to or reading the words of the skilled person and through trust. Using rockets, he gains skill monitoring the market at a rudimentary level and experiences successful participation which leads to more knowledge and skill. Naturally the person progresses to consider the set of go/no go elements outside of rocket participation from the perspective of a meta-rocketeer, asking "when they are going to fail" and when they are likely to occur and so on. He seeks the context surrounding the set of go/no go elements he has been calling rockets. To get the context for anything, a person has to go beyond the thing. "Rocket" is merely a term of convenience. To see the market as having discrete operation points has its usefulness, but the market is a continuous flow smoothly transitioning through and across its various states and scales that people call timeframes, fractals, etc. The smooth transitions mean that a beginning is always also an end; an end is also a beginning. Ostensibly the transition event marking the end and beginning is the BO, which a rocketeer may catch on to eventually. There is, of course, a preceding event that is more subtle. In any case, it is always good to know the context for anything. For the sake of ESL readers, the response to the poster's query is context. To know the context for rockets requires looking beyond rockets.
Thank you for your response although most of what you said went over my head. I have figured out that they are basically breakout trades. What I probably should have asked is how do I stay out of situations where the rocket has a good chance of failing rather than failing after I am in it. I am using volume as a filter, time of day as it seems most good ones are early or late in the day, and I only go with the trend as determined by looking at a larger time frame. This works pretty well but I would naturally like to eliminate as many losers as possible so am looking for more filters.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=14129&perpage=6&pagenumber=1 It deals primarily with "rockets." As an aside - what you are looking for regarding rockets is really in the edge-trading category. The purpose of the transference of knowledge is so people can get out of making edge trades and begin to gain knowledge, skills, and experience in listening to and obeying the market. The market will always tell you what you need to do.
You are correct, rockets are BO trades AFTER the possiblity of FBO has been exceeded. I think you may be unintentionally looking to try to predict. a good antidote for the prediction bug is to go through the 4 steps. (monitor, analyze, decide, act). this is easier said than done if you look at the rest of ET which is full of the prediction stuff. I still find myself falling into old habits, it's not fun. 12:30-1:30 the volume shuts down generally speaking so the fuel for your rocket isn't readily available. drawing in the IT, ST, Carryover, and overnight hi/lo channels is a very useful practice...it imposes the larger contexts onto your trading fractal. more filters is definately not the answer. A deeper understanding of the PV relation is probably more helpful. I am posting MY understanding of rockets as it stands to date. (in the attachment) I may be incorrect on some points. I would ask Icarus or Grob or MAK to look over my scribble and perhaps point out where my understanding is faulty? what has been vexxing me personally more than anything is 'what does jack mean by stop logging'? as it relates to rockets, he says (2 back for fast, 3 back for medium, and 4 back for slow)....what i have never seen asked is...IS he talking about individual BARS, or something else? my understanding is that he's talking about the bars themselves...but some dialogue i've read has thrown doubt in my mind on this point (i can't think of any quotes specifically at the moment). I guess it's cause he never used the WORD bar. thanks in advance.
thanks tx, i've read that over many many times, but every time i read it something bothers me. if FEELS like i'm not understanding what he's saying. the way i've been doing it is, example: rocket entry short (fast pace obviously)...place stop two bars back at the bar high plus a tick. next bar is medium pace (stop is effectively the same because I go 3 bars back) and so on... what is your understanding, if i may ask?