This was my entry in that situation. It was not perfect, but it worked out well. <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1686674>
And this is what followed, and my reversal point: <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1686679>
I have checked a 1 second bar chart of YM and ES on many days, the high and lows of the significant swings are usually on the same bar or just a few bars (=seconds) apart, like the example on yesterdays chart (attached). Maybe i misunderstand the 'ES points of change'? It would be very nice if someone could show me these points with the leading YM on a 1 second bar chart. Thanks
Why? Look at my last 2 posts how YM formed its tape after FTT and broke down with volume increase, before ES at its point of change (decreasing volume after VE).
cnms2 Thank your for your time and patience this evening. I didn't understand the significance of that link which you posted a few days ago, I've read, re-read and given Tums some hassle but now the penny has dropped. I hope this exercise has been helpful to other residents of this thread. We will keep working at it to perfection. I hope Jack is looking in every now and then to see how much progress we are all making.
Maybe i misunderstand the 'ES points of change'? Points of change need not of necessity be equated with so-called significant swing highs and lows. This is not to quibble about what is a "significant swing high or low" but rather to say that there is more to this trading methodology than the simple matching of points in the YM and ES. There is context and that, if I understand things correctly, is what channels and the other critical aspect of this methodology, volume, provide. It might therefore be interesting to see what these considerations add to your, if I might say, interesting finding. I am not speaking for cnms2 but I think that's what he is saying and if it isn't, I'm sure he'll correct me. lj
Because i didn't see the YM leading the ES on the 1 second bar chart, at least at the points i have looked (swings). I understood that leading means the change (turns, swings) could be identified earlier on the YM than the ES, thats why i used the 1 second bar chart. I thought that the FTT's, which are also significant highs or lows, signal change. I think that a 5min ES chart shouln't be compared to a 2min YM chart to find out if there is a leader, it should be the same time fractal. Why? If leading doesn't mean earlier swing high/lows but earlier break of trendlines, these trendlines should be drawn the same way. Especially for tapes, where only a few bars are used, the lines on a 5min chart can be very different than on a 2min chart. If you look at the extreme case of a 2 bar tape, the defining times are 5min apart on a 5min chart, but in reality these 2 points could be just a few seconds or 10 minutes apart, so you could have a much bigger or smaller slope on a chart with shorter (=precise) time bars. This could lead to the effect of 'the 1min ES leads/lags the 5min ES' On the Volume side, i think there is a tendency to draw different conclusions from the volume histograms for different time resolutions, just compare a 15min (forest) with a 1min (branch?) histogram. So i think to see if and how the YM leads, the bar intervals should be the same, because of both, the trendlines and the volume. I have drawn some trendlines (tapes) on a 1 second bar chart, i couldn't see the YM break its lines earlier than the ES. It would be interesting to see if volume provides the leading effect. I hope you understand my german-english, its difficult for me to find the right words.
add a down trend line starting at 11:05 and the 20SMA to your ES chart and it will add additional perspective. I entered at 1430.50, probably a little late but I like the above mentioned lines to be cleared.