Discussion in 'Strategy Development' started by doug456, Feb 14, 2004.

  1. doug456


    Has anyone ever tried this or know what the results would be for ES or any trading vehicle. At the open of the markets or right before key econ. releases, place a buy and a sell stop about 1.5 pt. above and below the current market and which ever gets filled wait until a certain profit traget(maybe 1.5-2.5 pts) to exit?
    Would this work?
  2. balda


    not without a stop loss.
  3. This is harder to pull off than it seems. The futures often spike one way and then dart in the other direction (i.e., the real move). This doesn't always happen, but enough to make this a tough trade to do for every econ report.
  4. doug456


    wouldn't a smaller profit target work then, instead of trying to let it ride for the full amount
  5. I suppose as a pure scalp play, it could be quite effective. The trick would be to figure out what is a good target to go after depending on what report it is and how it compares to the estimates.
  6. okwon


    Not sure about ES since I don't trade it, but I assume it's similar to other contracts. On major releases, you'll have major slippage if you're using stop markets and will miss fills if using resonable stop limits. If you use TT, look at the number of contracts actually traded between the start and end of the move, not many. You'll be last in line by the time your stop orders are hit unless you're wrong.

    But who knows, try it out a few times.
  7. Bracketing is a very objective alternative to prediction and targeting.

    There are three major opportunities for bracketing: The start of the afternoon trading; the open after the cash and futures synch; and A & R's(Announcements & Reports). Only the open is not a BO from neutral; the other two are. All are exempt from FBO, usually as a consequence of the application of the P, V relation.

    Bracketing is a method of using market tools for entry when a trending move is possible. The market moves to one of your predetermined risk oriented possible entries. You enter and then monitor the trend and exit at the end of the run. Almost all of these trend activities follow the simplest form of a trend so they are more or less relaible for trading when a person's experience or skill level is limited, especially by time in the trading world.

    Some market tools are not effective for using for bracket entries. the best ones are market entries.

    To scope and bound the opportunity just requires the consideration of a few elements. Others have indicated the primary two. In earlier times it was a custom for the floor to take out the inexperienced and at the same time get the best positon for taking the run. This was done by scalpers. It is possible to see what is available for scalping prior to the BO coming up.

    Use a chart to see the beginning situation for the opportunity. There is an arbitray center from which the market could BO either way. Scalpers arewilling to reach away from that center to a certain extent and no farther. It is a R?R measurement that a person can learn. Peg leg joe describes this move as he has seen it. Before the minis, it was fairly cut and dry. A person would just avoid this trap with the bracket values. That was that.

    Balda addreses the events just after the scalp event plj identifies.

    With experience, aperson uses the stop in such a manner to make money rather than just stop losses. This is done by using a stop as a reverse instead.

    No one does brackets as they were done before the advent of electronic trading. Lets review the electronic viewpoint objectively.

    The task is to always be at the front of the line for making money. At some point in a trading career it is evident that timing superceeds price. The tools for achieving timing then superceed the tools for achieving price.

    You have to set up for several things to bracket trade these two or three times a day.

    Taping fractal. Use the standard for the time of day.

    Hitch period. 2 to three bars max.

    Dip period. Add 2 bars.

    Stall period. Use intersection of stop offset and top of stall. Do not advance stops when the stall begins; you want to go out at the top of the stall when the hitch and dip bar count is first exceeded and not the bottom.

    Entry values. Set these outside the scalp range.

    Stops. Tight is the center in value. Loose is the other side of the bracket.

    Scale in values. Start two ticks after entry; add twice to get to partial fill level.

    Trailing stops. Use market pace to determine offset and frequency of C&R.

    Put all of these on your trading setup as ordersthat are not price dependant. Use a standard order of listing for each side of the bracket.

    Naturally, this stuff is all in your log ahead of time for use twice a day and for each A&R. It is kind of like doing arithematic homework in first of second form.

    I request that the usual detractors of my posts skip their nominal tattoo on this thread. So far the thread is constructive and instructive on the part of 100% of the contributors.
  8. You will get whipsawed and waste your time.
  10. Good the stochastics see what side the volume line is on...I think?

    Michael B.

    #10     Feb 14, 2004