Spydertrader's Jack Hershey Futures Trading Journal

Anyone interested in downloadind quotetracker beta the site is http://www.quotetracker.com/beta and install it over existing program. No need to uninstall old version. once installed ,r click chart and add indicators. Add volume or volume+ema. next to them is an edit button, click edit and in new window is a checkbox for "show projected" check that box and your good to go!

 

The Syllabus

January 1 - ES Chart: Price, Volume, Channels and the FTT
February 1 - YM Chart: The YM leads the ES?
March 1 - Gaussians and PV
April 1 - STR / SQU (Stretch - Squeeze)
May 1 - Fundamentals Review
June 1 - DOM (Depth of Market) / Time and Sales
July 1 - TIC Charts and Two Pairs
Aug 1 - Flaws Summary
Sept 1 - Additional Signals for Change
Oct 1 - Putting it all together
Nov 1 - Real Time Video Example Trades
Dec 1 - Dec 20 - Final Exam

 

Before: (see chart)

The 0930 bar forms on large volume, heads down, hits support wall and immediately heads back up. Very volatile compared to prior bars.

Price settles and during 0945 bar I know a lateral is forming. Price has entered the lateral from below so I anticipate it breaking out from the top (see arrows).

 

After: (see chart)

 

PointOne,

How do you add volume ray and pbar onto the quotetrack chart? And the remaining timer on your chart is cool too. Thanks.

 

Depth of Market (DOM)

Our first foray into the World of Intra-bar Signals of Change brought the STR / SQU Indicator into our Toolbox. Unfortunately, STR / SQU only brings us so close to the actual ‘signal of change.’ STR / SQU certainly isn’t a scalpel, and although quite effective at the appropriate time, it only provides a broad signal. However, with the use of the DOM (and its partner - T & S), we have the ability to anticipate signals of change before they occur. In this context, STR / SQU then can provide a confirming signal – again when used appropriately. While I plan to roll out different aspects of the DOM over the next few days, I wanted to provide a place where everyone can begin to use this tool.

As I always, I expect everyone to monitor the DOM at first – noting the changes in the various levels as they appear over time. This does not mean “stay glued to the DOM all day.”

We want to look for a “wall of contracts” on either the Bid or the Ask side (See Attached).

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1486683>

As Jack has often noted, the minority rules this situation. When Price encounters a DOM Wall, Volume must come in and eat through the wall (or contracts must be pulled off the Price Level) before Price can proceed through this Price level. In other words, if the wall remains intact, we can anticipate change. If size eats away at the wall (without other contracts replacing those filled) we can anticipate continuation.

Imagine taking a bucket of water and dumping it onto your kitchen floor. The water spreads out in all directions, right? Now, place a brick on the floor. Dump the water in the same spot. Notice how the water hits the brick – and bounces away. Remove the brick, and the water can, once again, head in the direction previously occupied by the brick.

In essence, the above example provides an excellent analogy for what we hope to see using a combination of The DOM and T & S. We want to monitor to determine if our ‘wall’ remains in place, disappears entirely or ‘moves’ to a different location. For now, we should focus on monitoring for when a wall remains in place vs. disappears. This leaves us two questions: What do we look for (the wall) and when do we look?

In an uptrend, if we notice a wall on the Ask (See Attached), we can anticipate change as long as the wall remains in place.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1486686>

In a down trend, if we notice a wall on the bid (See Attached), we can also anticipate change as long as this wall remains in place.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1486687>

Please, do not assume the levels shown in the above examples to be absolute in nature. The numbers of contracts on a wall are less important than the changes which take place across the Bid / Ask pair.

How do we know if we have size eating away at the Price Level or if the ‘spoofers’ (those individuals who ‘fake’ orders on the DOM) are pulling their contracts? We can see this through the use of T & S (Time and Sales). If we have a wall decreasing its size without a corresponding trade on the T & S, then we can safely assume the smart money has decided to ‘pull’ their contracts in anticipation of Price continuing the trend. The same is true when we see multiple trades of size (greater than 50 contracts) eating away at the DOM Wall. Normally, you’ll see a combination of these two (pulled contracts and size hitting the wall) when the market finds itself in continuation mode. If we see, no (or very little) size hitting the wall, and the wall remains stable (no, [or few] pulled contracts) we can anticipate change as the smart money anticipates Price heading in the opposite direction.

O.K., so, when do we look at the DOM?

For now, I want you to look at the DOM at the extremes of price – meaning at the Right, or at the Left Trend Line. Once you have witnessed the creation of, and how price reacts to, a DOM Wall, then, and only then, should you place the DOM into your Toolbox.

Once in the Toolbox, the order of use works like this:

1. When ES approaches a trend Line, look to the YM.
2. If the YM is approaching either of its Trend Lines, look to the STR / SQU.
3. If STR / SQU sits in neutral (-2 to +2), look to the DOM / T&S.
4. If The DOM shows a wall, monitor that Price Level by watching the number of contracts on that Wall and Monitoring what (if any) size hits the T & S.
5. If the wall comes down, we have continuation.
6. If the Wall remains intact, we have change.
7. Take appropriate Action (Hold or Reverse).

The above information should get everyone started.

I plan to have additional information posted over the weekend, but for now (and even after I post the additional information), everyone needs to focus on quickly locating and then determining continuation or change based off the DOM Wall remaining in place or not.

Lastly, as with all the other tools, we should only use these tools at the appropriate resolution level in an effort to avoid heading too far down the rabbit hole. Trust me when I say, now that we have Intra-bar tools at our disposal, its now easier than every to follow Alice and head rapidly of the reservation.

I hope everyone finds the above information useful.

- Spydertrader

 

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vol 5 posted. links to the old ones too for those who missed them.

spyfut.vol1.zip
spyfut.vol2.zip
spyfut.vol3.zip
spyfut.vol4.zip
spyfut.vol5.zip

 

Thx Tums, RE: posting my charts, I' m still in the process of finding a way to trade equities and learn to trade Futures. As you know, it takes a lot of focus to do it efficiently.

At the moment I'm using what I'm learning here and in journal III, to improve my trading with equities (transition from beginner level to advanced).
They are based on the same concept, just a different fractal.

I spend my nights studying the material here and drawing ES-YM charts.
I expect to do it in real time in a week or two ,I just need to automate a couple of things.

I know most of you guys have a real job
... , I wonder where you find the time, sheesh I want my life back!