Here are a couple of sample flash cards from a set of setups contextual filters I have used. The list of things I look at when trading Russell and ES Techniques / Systems / Price patterns used with lead lag as confirmation or for better entry: LEAD LAG - Follow leader SPLIT OPEN - Test prior day high and low SPLIT OPEN - Test prior day high and low ORBO - Time based breakout ORBO FAIL - rejection of breakout OR midpoint crossed for test of opposite extreme ORBO2 - Range based GAP FILL AND RESUME GAP FILL AND FAIL TREND DAY - High ADX, low individual 1-3 min bar ranges, low overlap buy pullbacks, buy consolidation breakouts after failed test in opposite direction SINE BREAKOUT SINE CYCLE SEEK AND DESTROY - Expanding ranges, multiple alternating/expanding HighD, LowD, 10:30 Bounce (best at closing gap) 11:15 turn - Run-up/down to AM session Highs/Lows or Opening Range 12:00 -12.15 noon balloon 1pm-1:30pm pre-mature move fade extreme range bars 2pm conviction 2:15 test/turn (exit filter) HI/LOW TEST REJECT W Bottom (takes out or comes within small % of day’s range of lows) W Bottom Fail (takes out peak by a few ticks then resumes downtrend rapidly on heavy volume) Head Shoulder Fail (range expansion up) Right Shoulder Short Suspension Bridge Short/ M top (takes out or comes within small % of day’s range of highs then drops) Wide Double Bottom (takes out or comes within small % of day’s range of lows) Extreme VAL/ VAH Rejections — Rejections of price beyond VA magnets, above prior VAH or below prior VAL — Rapid, thin trade — Gaps in the DOM volume profile (or very low vol nodes) Extreeme Range Rejections (trend weighted mean reversion on smallest timeframes) Premium Sell/Buy — Supported by Tick — $Tran — Cumulative tick — Filter by OR ADX - maturity and consistency of trend VA /VWAP Magnets (price targets for lower timeframe entries) DOM GAP FILL — Gaps in the DOM volume profile (or very low vol nodes) revisited (target for short term breakout) after trend exhaustion and new auction starts 1-2 Min breakaway magnets Gap Fill after a breakaway on very small time frames Can serve as an entry point on missed trades and a target exit. Extreme tick readings +900 / -900 Pair with cycle tops, look at key turn time of day Look for Sup/Res to corroborate Look for divergence Look for RSI extreme
Let the guy tell his own story and development. We're interested to hear it from him. OP, have you asked yourself why you don't prefer a systematic approach? I know you recognize some of the attraction to the drama but at the end of the day do you want to be glued to charts for years on end?
Mr. Scalp, I'm glad to have your feedback and notice that we have something in common: We both continue saying the same thing. I'll post some basic stuff when I start to trade and want to provide context. Thank you.
Yes, but the big difference is that I know what works, and what does not work. You have not got this far yet, but some day you will if you last. I am trying to help you, others are trying to see what you know, and if it is of any value. I can tell you now, it is not. You are wasting your time with trying to automate a system, as it will never be consistent, it just can not be so, no matter how hard you try to convince yourself. Do you want to be right, or do you want to make money!
When I'm trading with systems only, I end up watching systems all day long and feeling irritated that they give back profit or don't make more. When they lose I feel like I would have gotten out earlier. It's almost a competitive and agitated feeling. After watching them for a while I get a sense of how they'll perform and that helps my discretionary trading. Even then it feels like a nagging feeling in my gut. About being at the screen: When I trade discretionarily, I should only watch the screens from 9am until 11am. My stats since 2003 sho thatvim a net loser after 11am and ALL of my outlier losses are from trades I entered after 10:45 Am. When I'm monitoring systems all day, the desire to compete with them or trade something else is pretty strong. I have not developed full trust of the automation (I used Tradestation on collocated boxes with Remote Desktop as well as running TS locally and it's OK but things can go wrong...) I suppose if I really wanted to I would have invested in ways to ensure it worked and had failsafes or pay someone to monitor/manage but as I've said, I want to do it myself. Whether or not that is in my best interest remains to be seen.
There's quite a few things you've said above that still seems to me that you're playing some kind of dysfunction out on the market. Need to be right? Need to constantly be in control? Some kind of confirmation loop?
@mercurial I follow your journal with interest. I get the impression that you like to automate your ideas. But by the time you have done so, you don't seem to trust your implementation. Are your discretionary trades interfering with what your automated system is doing?
I agree with much of what you post, and knowing that most will spend huge amounts of time on programming automated systems, it is very tough to have a consistent day trading system without constant testing every few days and re-adjusting based on predictions, ex. Crabel's "NR7 or NR7-2" or so many upcloses in downtrend, although Crabel didn't use "over-all trend" in his book. And most will not be satisfied with much smaller profits per trade. I often see those who lean on programming first and chart reading second thinking their knowledge of programming will make the difference but it is far better to have charting knowledge, and enough filters to left of now to stop signals from happening. Scalping is reasonable goals and when made, cut back size or call it a day, scalping with retail accounts, you be surprised few bucks cheaper can be difference on having good week or breakeven. Makes more sense to go for bigger profits and smaller protective stops and fewer signals for day trading for retail than Scalping. I find it funny that it is same list of markets that are used for day trading or short term trading like Coffee, Japan Yen, Crude Oil, Mini Russell, Brit Pound, T-Bonds, Soybeans and Gold. For those who lack experience, slippage can be huge and where $100 seems to be way too much, it is often not nearly big enough. These markets can turn on a dime and make huge profits quickly and exits can never be quick enough, also, those who think they can use options instead of trading futures, check out the open interest. You can be up several thousand dollars in coffee of deep ITM options and can't get out unless you willing to throw away big money. Have seen 3 dollar spreads in coffee options, knowledge is king. When you first got into the long Put in mid January at your price, maybe there was 400 open interest and now has 6, what you think it will cost you to get out? Always Always Always keep track of open interest and volume on day by day basis on options.
Funny you mention OI, as you do not see many on here talking about OI for the ES! This is where "automation" is actually useful. If the OI on the ES is constant, and suddenly shifts to one side, then depending on the size of the shift, you might then start to see a change in range. Not too many brokers provide OI for ES, or do any provide same, as I do my own stats? ES futures, btw!