Im do not use many indicators in my trading but, i was just wondering what indicators or combination of reversals do you use to help you indicate a reversal for the day or i could even say the high or low of the day. pat
I have found for myself "hands down" delta divergences have always put me into some great reversals......day after day. I am still holding swing SHORT ES positions from this reversal entry........... http://www.charthub.com/images/2006/09/21/ES_317_VB_3.png and my reasoning for attempting a swing trade from this signal............. http://www.elitetrader.com/vb/showthread.php?s=&threadid=77220&perpage=6&pagenumber=3
In a "perfect world", the daily extremes take place during the first and last hour of the session. In Market Profile parlance, it's called a "trend day". Another Market Profile item is to look for "long tails" on the intraday chart. The end of the tail is usually a daily extreme.
Knowing key MP levels is highly beneficial in the "where" to look for reversals also imo. I agree that a full understanding of "auction market theory" is fundamental to highly successful reversal area "picking" capability (if this is what you are attempting to optimize). These last two weeks I had 4 very profitable SHORT trades off the 1336.00 level (one of my MP levels). I expected to see reactions at this price level (reversals or breakouts), so my radar was up each time price traded to the 1336.00 level. All 4 times that price level was met with a very clear "delta" divergence with delta shift for SHORT entry. I was able in my mind to take highly optimal "reversal" of price trades from the 1336.00 level, as I expect heightened price reaction at MP levels.....all 4 trades worked for good profits. I use the MP levels to have an idea "where" reversals (or breakouts) may take place, and I use the delta to see if price at these levels has the heightened reaction (and gives me a delta based entry signal) to take trades from....kind of a one, two punch. Here were a few of those 1336.00 level trades........ http://www.charthub.com/images/2006/09/15/ES_317_VB.png http://www.charthub.com/images/2006/09/15/ES_317_VB_2.png http://www.charthub.com/images/2006/09/15/ES_317_VB_3.png
When it seems to me that everyone wants to buy and I am the only one that wants to sell then I am probably looking at a peak reversal. I rarely trade this way. It is only correct about 50 % of the time. Lots of times prices continue rising. I find following the trend works just as well as selling the peak but the feeling of glory associated with selling the top is not there. So what. I trade for money not for glory.
I have read some of progers posts and I don't think he is the going for glory type.....he is looking for increased probability of set-up and there are ways to accomplish this imo.
Also occurred on a peak in oil, I think the Katrina top. On the ES look for the 5min bar that makes new highs and closes below the prior bar. Add some filters/conditions to improve reliability and Bobs your uncle. Looking very closely at volume helps me to judge reversals. Certain things I see over and over again that I cannot explain logically. The basic would be capitulation volume.