We are making a strong effort to get info out to people. So far we have determined how we are going to do it and who will be helping out. This Thurdsay is D- day for explaining the ways to access everything. The camtasia and pdf will then be on the record. Just PM me your email address and a helper will be assigned to you to get to you the above stuff. I will also get my self trained up to be able to attach stuff in ET by zipping it or something. There are a lot more extensions than ET accepts. The MACD is a vector trend indicator that uses volume components to show trend strength and trend direction. There are also two crossover type signals (axis and indicator lines) This will appear in the archives, the learning model and the Global Positioning Glossary.
My answer here is designed to cover all the bases in a brief manner. Doing 20 the 40 actions a day, largely involves taking profits and making sure that you are on the right side of the market. It is now the "last half" of the year and the daily H-L is expanding daily. So there is a lot more money to b made these days compared to before the dull listless days before labor day. It is very unwise to use hold as a default if you do not have a firm grip on what is going on. All excellent trading systems always have sufficient information to be able to make decions with all data sets that can be collected. The key rule is to always have collected a "sufficient" data set to move on to analysis where a conclusion is paired accurately with the data set. As reversing comes on the table, your chore is to be on the right side of the table. We had an an exit (not a reversal) today on a market order that gave a print of 21.25 (21.1 as I log the price). Look at the three extraordinary bars of volume. You were also seeing a "stonewall" of 4K orders on all levels above 21.50 (21.2). Trailing on the bid side were only two pairs of "light" bids off the exit pair. This is the CLUE on FINE that says to you that a fast strong paced "trending" day is only going to have terrific profit making "long" advances AND no chance to make money on the short side for two reasons: the "short is just a low volume (relatively) "drift" that is so low in channel volatility that 3 tick regular slaloms are not possible. If a person is monitoring and cannot collect a "sufficient" data set when he feels a reversal is in the offing, then is is best to sideline and observe. Using a 5 min fractal to trae (ES)and a leading 2 minute fractal (YM) as part of the monitoring data set always affords you lots of sweep time. There is a continuously onfolding broad set of data that is always available. As you get to the place of an action, you have gradually gotten to this place after several sweeps. It is very very true that there is a set of traders that is operating in "reaction" to the markets. They usually collect one element data sets and "act" immediately. This is in marked contrast to, after seeing one element, collecting enough other data elements; then, comparing the data set to the conclusion set to get the appropriate conclusion element from the set; then, pairing a decision with the conclusion element; and then taking he appropriate action for that decision. This mental work excludes "reacting" and drives a person to be skiiled and expert. The felling asociated with this is a comfortable feeling that you know what is going on and you know what to do at all times. Getting to this place is an effort that is like doing sets of physical conditioning exercises at your physical limits. You know you are putting out and you are getting extreme results because it is your common workout practice. If you log on the log sheet, you are going to see a major change in what is going on. The market's operation will appear to slow down more and more as a day goes by. you will be reversing in slow motion and you will know when to just tak profits and sideline on fast paced days that are just one sided (low volatility stalls following legs of advancement (rockets, often). In a fast paced trending day a person can be hyper or very relaxed. That is constantly concerned about the advancing price and then the lateral low volatility moves back to the channel TL. Or being relaxed and just shifting to the15 or 30 minute fractal and understanding the overlap of the consceuctive bars. The middle ground is the place to be. That is, leaning forward. This means taking clear comprehensive data sets and following the routine. You can creme the advances from the extreme valuse at each end of an advance. Then just sideline when no money can be mae on the low volatility extended stalls. It is like doing physical training sets. You put out, take the rewards and then go back to work when the time comes. Five pages of logs is what a workout for the day looks like. 30 points on a 10 point H-L is what conditioning gets you. You saw the day start with 2 point legs (4) intersperced with sets of HVS 3 tick trades every bar inbetween the spurts (2 or better point legs). The PM was less eventful as time passed because the daily range was beeing expended and then price hung at R on low volatility. To summarize on your set of Q's. Keep alert and take profits as the DEMANDING activity; if you need to look after that to see what is what, do it from the sidelines and get back in if you find that is appropriate. Do not do the "hope" thing, thinking that you have a bar to decide stuff; the market is "not on your side" by then. You have to stay on the right side of the market; the market does not have an obligation to stay on your right side, ever.
Here is a drill for you. Its called the emergency exit (reversal) drill. The optimized SCT makes entries on the TL (right channel line) and exits on the left channel line where price movement completes the most progress on a move. Through out annotation, your observation that a forming bar and its prior bar used as a reference is de rigour. A trading day has three levels of channels at work for us as we trade. The market puts up the bars and we put up the annotations on these three levels. Channels within channels within channels. The small short term inner channels we do in almost unobtrusive grey lines that are projected. Here is the drill. Trade on the grey channels. Trade the long diagonal of the parallelogram staying in the channel on the "right" side as long as price stays in the channel. When you have an FTT in the grey, reverse. This is the end of forward progress. IF YOU MISS THE REVERSAL OF THE GREY CHANNEL, REVERSE INTO THE NEXT GREY CHANNEL AS THE RIGHT CHANNEL LINE (TRENDLINE) IS BREACHED ("THE BO") as an emergency exit action Do this until you never have to do an emergency exit and you are, then, catching the optimum traverse for each profit taking. The amount of profit from doing emergency exits to doing FTT reversals gives you about half the points available per day. Emergency exit strategy will give you a multiply of the H-L as a starter. The drill is more about doing good annotations of channels than anyhing else and it keeps you glued to adjacent bars and to seeing that you are always making money when you stay on the right side of the market. You will always notice, too, that you cannot be "holding and catching your breath between spurts of doing work" while thinking that this is an "okay" way of working out in spurts. NB: Trading through a whole day using SCT is not a possibility at the beginning. A normal trader would get too pooped to continue to put forth the effort. When you start doing this working at an SCT level for an hour is an accomplishment. SCT trading is a severe mental effort and it requires being in shape mentally. When you get to "sports memory" it is much less taxing. There are six drills for getting in shape mentally. they have not been posted as yet except to say they replace the six drill propsed in Forbes a while back.
Hi Jack, I have been reading your posts for awhile, you mentioned somewhere that "volume is the leading indicator". I would like to ask, for trading ES on 5min timeframe, how would you use volume as part of your decision making? Do you compare the volume at an important formation of a pattern with its preceding 5min bar's volume? Or perhaps compare the volume of the current potential ftt you are considering to the volume at the most recent fft? Hope you understand what I am trying to ask. Thanks. laurana
Hi, Jack Tanks for posting your trading brief, a picture really worth 1000 words. I have a question on 09/07 ES trading. Please explain why did you reverse at lower low (trade #7)? As I can see we have increasing red volume, both on ES 5 min and YM 2 min. I can only suppose it was DOM based trade. If it is right can you explain why did you move to fine level at this point when coarse and/or medium indicated "continue"? I can suppose you didn't see sufficient activity at bid side i.e. bid volume PRV was too low to continue down move. So your decision was "reverse" at lower low. Right? P.S. This question is repost from your blog but I'm not sure that you still pay attention to this blog.
Three are three important considerations. For the deep think part of this go to a generalized commentary By MAK in Automated Trading under Basic example of AT in equities. Synopsis= PV>>maths>>>indicator>>>unusual volume>>>unusual returns. how would you use volume as part of your decision making? Volume signals give you advance warning for taking actions. In between volume is the reference for continuing to make money. For taking action, you go to the most fine place to get the timing of the move. I have a clock on the last tick pair (B/A) of ES so I know the residence time on the tick. Naturally I have its volume as well. Going out from this detailed place there is infomation, shell by expanding shell of data sets. I am able to "see", then, when the most propicious moment is for taking action. after a stall on a tick pair (large clock value) and the successive volume bars on ticks goes to abot nothing, then I know I am going to have an action coming up to make more money. I am probably at an extreme tick pair movement place on the chart or one tick pair inside the extreme (this is a two tick pair situation). All volume readings on all levels of sensitivity go from the tick to the five min volume like dominos going away from the tick level. "unusual" volume (relatively speaking) becomes the trigger. That is MORE volume in time, as compared to the immediate past. I act by beginning the trade with a market order on the extreme tick pair of the two pairs. The fill is the centerline of the two pairs. I have left a tick on the table. I operate in the space between hyper and relaxed that I call leaning forward. Also I have a set up that lets me SEE the markets. SEEing the markets is very uncommon for traders. Hope you understand what I am trying to ask. I do and as you can see the 5min on ES is the trading fractal that keeps a person restricted to 20 to 40 actions a day. As an action looms, I am very far away from reading or looking at that chart. this is because i have a multi screen view of precisely what is going on in the markets. As the tick clock shows you, making money is way past reading the DOM, even. Volume on all levels "telegraphs" all price moves ahead of the price move as it operates as a vector. (direction and magnitude) The long term average daily profit of one point per contract on the ES is like a myth to me, in terms of having some sort of daily income goal. Racking up a net point in 6 1/2 hours, for me, is not something that has any reality whatsoever. I have only been posting in ET between being banned for a couple of years. It takes a while for any person locked into the traditional wisdom and conventions that allow 90% of traders to lose money, to begin to grasp what the market is offering and then to set up a computer to monitor it. Roughly speaking the majority of the traders are operating blind.
LOL.. your DOM screen shot shows your quantity to trade as 2 !!! 2 ES contracts. Be careful with that huge size. <img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1200296">
The charts for all days after Labor Day are up on the blogspot. The contract level on the illustration of the is the startingpoint for the trading in the Tucson office it is presently at 1 for entries and exits (left side) and 2 or reversals (right side). Each time we change, as skill levels improve, we will make a note of that in the blogspot. The plan is two use capital doublings and move up from no risk trading to 2 and 4, 5 and 10, 10 and 20 to about 25 and 50 as the standard SCT level for the person whose charts are being posted in blogspot.
Jack doesn't have Tradestation on his computer screens - nor even on his computers. However, one of the students Jack mentors does. - Spydertrader