I made 2.2 points today trading countertrend and taking quick profits, no losers, 5 trades. although there was some trend after the opening (but not a lot of strong directional movement) the reversal after 30 minutes, lack of news and ADX dropping quickly told me this would not be a trend day. So I just faded every move I didn't believe like the one right now. e.g. I don't believe in today's market price crossing yesterdays low significantly in the last 30 minutes. It did cross two times just now and snapped right back. The first one could have made 1 point and the second one 0.5 points. I already got out. Today is not for T28 method although there was a nice move at 3:00 that went 2 points though. (didn't take it because for me it was still chop zone) regards, Ivo
What type of indicators do you use on choppy days like this? What time frames? That last I probably would have taken had it been a better day, even though it was still a little choppy. But since the whole day was bouncy I called it quits pretty early.
Im not sure how that is supposed to work. Could you explain? Is this just to see where you would have traded and how it would have worked out? I did actually make a couple points today on the ES (2.25), but that was using a different system, not this one. That system likes a lot of movement But as far as that chart you posted, what indicators are on there? I havent traded very long btw. It looks like a Volume, MACD, Slow and Fast Stochs.
This is a fun thing to do. As you do suggest some fun reasons. The other view is this one: "You should probably take those questions and start another thread with Jack. As big as this thread has become it has stayed surprisingly on-topic, but if you get Hershey started it will spiral out of control into an incomprehensible mess. I am not trying to be overly critical of JH (he may have the holy grail for all I know), only that I have never understood any of his posts, and they are the antithesis of "simple profitable method". Do a search and you will find plenty of his reading material to keep you busy for several lifetimes. Be careful with all of the "tweaking", there are no magic settings and you will drive yourself crazy trying to get an indicator to signal every move perfectly. Adding extra indicators, constantly changing the parameters, and deviating from the rules will kill everything: the simplicity, the profitablility, and the method." I'll take a chance here until my posts get deleted simply because the questions in the thread have come up over and over again and the policy in the TA forum is to not deal with the problem as you see above. This drill also tells you whn to use the "simple profitable method" so it isn't all bad news. My comments on the drill: Yes you are seeing the volume, the MACD set to the modern PC and real time data orientation, and two Stochastics one above the other and they likewise are defaulted for either entry or exit according to the modern era of the PC. This is like using a puzzle (since there is no price) to figure out what the market is telling you. You currently SEE the items and maybe you do not use the contemporay defaults either. The "simple profitable method" uses defaults that were common before the PC. So what happened over the years was that the "movement" of the market speeded up and the old defaults "float" on what is now called "chop". you made 9 ticks (2.25 points) today. so you get to use that as a starting point and work from there. It is a good place to start and you do know what happened today as well. This is not cheating it is helpful to you since it will verify something. Lets spiral further out of control here. Checking off turning points is a great thing to do. You get to see "when" and "where" they occur without looking at price. Just as a comment, these are places where you take profits and where trades can be started. All without looking at price. The next step is to note where the trends were as horizontal lines. You probably will have a check mark at the ends (start and stop) of most trends you draw. So some of the drill is done and you see some money making possibilities without even seeing the price as yet. yuo also get to rethink why you put check marks where you did and you also get to reconsider what is a signal for a trend "continuing". Once you have down how to watch trends continue, you get to see yourself "trade the whole trend" We have eliminated a lot of losses in trading already and we haven't seen any chop as yet. So far the drill is a drill to not do any chop stuff at all. So we ca say that our downward spiral has not gotten me into too much trouble as yet. By doing these two things you get to see how to make money all the times that the "simple Profitable method works". the method only works art of every day and that is a certain percentage more or less. I feel I am making a contribution and I know the "judge" thinks otherwise. Now we start the chop part of the drill. Joe Ross thinks this is 80% of the time. That is we draw lines horizontally (use a new color) to show these periods. It comes in two sizes: great for making money fast and not a money making time. we both know no one, practically speaking, is going to,do this here or even do it 20 other past days. It is fun to do for one reason; you get to make more money per day sooner in your life. Some guy might stay up all night doing this and the next week change his life forever. Anyway you can see where to make money now and where chop is. I'll do the other half of this later. Two hints: On slow trends you can trade both ways in the trend and for HVS chop you can trade each bar. High Volatility Stalls One chop of more than five ticks in vloatility you simply use volume to slalom. If you do tab it up see how much you make, how many traes you did and how much this profit represents of the margin you use as a %.
continuation. The combo of volume, indicators, etc. will help you to be able to go back to the process of just using price annotations and volume ultimately. But first, it is a good idea to have a complete and reinforcing answer sheet. The first 10 or so times ou do this, you become familiar with how the market operates. Lets say I did another bar by bar annotation in ET of all the bars and every few bars during the day I posted what was coming up on the next few bars along side the annotation of the immediately prior few bars. Every person can actually fill in his log sheet of trading mostly in advance just as you did for the drill. What is the thing that makes this possble? It is the interconnectedness of the chart data taking items. And it is the fact that each individual item follows a sequence of happenings all by its self. It is detective work. Lets read the "judge's" comments again: "You should probably take those questions and start another thread with Jack. As big as this thread has become it has stayed surprisingly on-topic, but if you get Hershey started it will spiral out of control into an incomprehensible mess. I am not trying to be overly critical of JH (he may have the holy grail for all I know), only that I have never understood any of his posts, and they are the antithesis of "simple profitable method". Do a search and you will find plenty of his reading material to keep you busy for several lifetimes. Be careful with all of the "tweaking", there are no magic settings and you will drive yourself crazy trying to get an indicator to signal every move perfectly. Adding extra indicators, constantly changing the parameters, and deviating from the rules will kill everything: the simplicity, the profitablility, and the method." The first paragraph about lifetimes of reading and the spiralling out of control into........ here is the punchline: "an incomprehensible mess." Is where to to take a step back and see something. "the incomprehensible mess" is where the money making is. The two things: the interrelationships and the sequencing is what is the key to making money. You can see that every little bit of every part of the incomprehensible mess is speaking to the listener. No you can't see that. You only get to see it if you look and work. red volume means that the price is _______. black volume means that the price is________. increasing volume bar to bar means price is_______ So you take every item that every thing does and you make a statement that starts with the item and ends with: Means price is_____ and you fill in the blank. We all know there are only a finite numberof combinations of these things taken five or six at a time. what if you stop looking at markets as single items of information upon which to act? Then you are not like the judge. The items for each source of information number the ones you see and the list for price and its annotations. About seven n number and the set ony has one item from each source. These collective and populr sets of items are called "edges". in the trade. They are "edges" for entries only and entry edges do not have exit corresponding edges. The result is that 90% of pepople screw up as long as they have money tolose ad they learn on thing as they lose money. They learn to fail. Learning repeated failure usually lasts as long as the money a person has. What is the price of the alternative? It is hours of work and knowing how to work. Here is the stated comments of the judge on this subject, Technical analysis: "Be careful with all of the "tweaking", there are no magic settings and you will drive yourself crazy trying to get an indicator to signal every move perfectly. Adding extra indicators, constantly changing the parameters, and deviating from the rules will kill everything: the simplicity, the profitablility, and the method." I have given you the magic settings for trading the ES. Every proper indicator signal works for all fractals as well. Adding extra indicators is what allows you to see and reinforce the price volume relationship if you use the right default of modern times. So we need to deviate, temporaryily from the simple rules to find out exactly when the rules are working and exactly when they are not working. We did get that out of the way once and for all. The first part of The drill does that for you. You did it by using check marks and horizontal ines. Okay you didn't do it you just spiralled down into an incomprehensible mess. But you always still have the chance to do it and there is an answer sheet posted in another thread where people do this every day. Say by the end of 2008, you do do it. Then you get to look further into making money. Lets do that right now. Look at just the places whee the market is in chop. The Simple profitable method does not apply here. So do not use it durig this time. If you do the chop drill first part on 10 charts for 10 different days, you have learned how to do it as the day proceeeds so you know exactly when the simple proftable method ends when it ends everydy form then on. Chop starts. the question is whethr or not you can make a lot of money or whether there is no money to be made. Do this Draw the lateral channel and be sure how volatile it is within no time flat. Simply draw two lateral lines at the bar ends where the check mark is for the end of simple profitable method. One line is at the chck mark the other is opposite the check mark and is as wide as the channel that ended the last trending move. This is a geometric extension laterally. Sell at the top and buy at the bottom until you can start to make check marks again (at the BO of the lateral channel which is known as a HVS (High Volatility Stall). So you can't do it. But you can watch the chart do it day after day. As you do you get to go through the deja vu of this post. Say you do this for four months or so. Maybe then one day you can do it all of a sudden. This is what it is like as you spiral up out of an incomprehensible mess into a place where everything is like what others are posting every day in ET, charts, annotations and trades and all. naturally i will show you the chart that has been doen this way today. I may post two of them done by different people. They are already posted in another thread like I a being told to do by the judge. We still have to deal with the DO NOT TRADE at this time chop. It is the chop where the lateral lines yo drew are only 5 ticks apart. That is a good limit for not trading lateral chop. BUT if the lateral lines could be tipped up or down a little then the chop is tradable even though i is only 5 ticks wide. Only trade it in the direction of the tippiness. So now almost every inch of all charts can be traded once you get to undertand how to check and draw horizontal lines. Who teaches you the details of this and where to look? You do and it takes 10 charts of days to get started. Go back and get some days and do it. the fast stoch gives you entry signals. The longer stochastic gives you exite signals. The MACD gives you entry and exit signals and the volume gives you entry and exit signals and the direction to go in. The rays on the volume tellyou how much money you can make per minute. It is the market pace. The stochs tell you the market sentiment. It is long above 50% and short below 50%. The market always has sentiment and pace. So you can now go to the answer sheets. http://www.elitetrader.com/vb/showthread.php?s=&threadid=56555&perpage=6&pagenumber=731
First decide if the day will be choppy. 1. Is there any news? Will there be any news tomorrow. People do not like to trade before the news comes out because people do not like risk. 2. How's premarket volume and volume of first 10-15 minutes? 3. How is the opening? A lot of movement in one direction or prices coming back 4. Where is price right now compared to opening range and compared to yesterday's market. If current price is "away" this allows for bigger/trending moves. If it is an "inside" day so price trades between high and low of yesterday and between high and low of today = choptime. 5. I use ADXR indicator. If it's dropping quickly after opening then choptime starts. ADXR tells you how strong the movement in one direction is. 6. What's time of the day? Usually the opening and last hour are the mose volatile/trending because they have the most volume. 7. What is the day of the week? Wednesday is the most trending, then Monday and Tuesday. Thursday and Friday may be choppy especially if there's no news. 8. If MACD circles around zero line all the time and going horizontally = choptime So based on this you get an idea if the day will be choppy. Remember, it's all probabilities nothing is sure and usually as soon as it becomes really obvious it's over because it's the market's job to deceive us . When it's choptime price just bounces between support and resistance and buying and selling are in balance. I use 5 minute timeframe and bollinger bands. If price goes out of BB and back in creating a shadow that is (preferrably) longer than the body I open a position at the close of that bar aiming for 1 or 0.5 points. Stop at 1 tick above or below the shadow. The longer the shadow, the better the trade but this also implies higher risk because the stop is further away. However, you can use a timestop; close position if no good move in 10 minutes or whatever. If you can combine this with the high of the day for example that's even better. I mean, price is approaching high of the day, right before lunch hour and the day is choppy. Price makes slightly new high (marketmakers pushing etc) and snaps back into BB. It is unlikely price will make new highs now (especially on second test of old high). If it doesn't make new highs it will go down. A trade like this has a good chance because of the several indications you have. Just psychologically it may be hard because you are trading against the trend at that moment and because price may be going up quickly it is hard to imagine that it will go down. Of course you wait for confirmation (the shadow) Be careful to use this during the opening. T28 sorry to be of topic. It's not as scientific as Jack (H) is writing above here but I try to keep it simple because after all this is about a simple profitable method Another way to trade in choppy times is to look for patterns. Patterns occur between the trends. For example yesterday at 3 pm (last hour when volume increases..) after zero line cross there was a perfect bear fllag on 2 minute ER2 and I remember a triangle the day before on the 5 minute ER2 that took hours to complete with breakout to the upside. So: no T28 method during choppy times. regards, Ivo
Jack, you're just proving my point. When you have to divide your post into two, its not simple any longer. I did not criticize whether or not your methods work (I have no idea what you are even doing), only that they are not simple. I don't mean to speak for T28, but the point of this thread is that you don't need all of that other stuff to trade profitably. If it works for you, then great, but I have seen way to many beginning traders get lost in 100 indicators only to quit in frustration. If they want something like that, I am sure they can find out all they need to know on your journals.
I see a lot of resemblence between this method and what Jack calls rockets. I would think input along those lines would be more appropriate for this thread. I experimented a bit with assigning minimum values for the macd to differentiate trend and chop and it did increase the winners but it also cut into the profits. Seems like everything about this business is a compromise, at least for us mortals.