I know you may not want others to address this matter. I follow the ES and you may use it for the facts you wish to have to make money on news. I will try to run this out for you in an understandable manner by editing this post before I present it. I trade SCT. This means that I extract money all the time when it is possible. today on bar 7 on a five min chart using ES you could see that a "long" was "taping". Translation: you have bars 2, 3, 4, and 5 running aling with equal volatility and each bar relative to the prior bar says that the trend is "long" by lookinf at the ends (extremes) of the bars. Thus I am in long as of 6:45:03 MT which is 9:45:03 New York time. I am in AZ and I do not trade first three five minute bars because market "end effects" prevent understanding what is going on for a person like me. I sit where you do but I do not look at "news" because I realize that I can not get the news. No one gets the news it turns out. I had a choice to end the long by reversing or covering. I trade all the time but I do not scalp usually. I earnestly keep taking money out of the market. For me to cover, I have to have a strong reason. I had one. There was news coming into the market. So I printed at 07:01:45. This is two ticks off what became the top of the bar, at 119.1. Now I will tell you how to replace what you are seeking with what is already there for you. Scientist, you will get a kick out of this. A beginner with me at my left saw the news arrive. Market depth for ES on the IB TWS was showing the five levels of DOM evaporate. This is a transition from 5 to 6K contracts totals on bid and on ask to a mear 1,400 or so. In ET this is know as FEAR. For SCT trading, it means take profits and reneter smartly when the contract volume resumes along with an orderly market. Bar 7 (10:00am bar) on five minute chart (for continuity reasons I use five min bar) ran as a combo high volatility stall and a short spike. I reentered on bar 8 when the bar 7 spike was covered (the bar went below the bottom of bar 7) and sufficient DOM (5K) appeared. News is presented to you by DOM evaporating. Thus stops remaining in place were run like a rabbit leaving the garden. Were you watching to know their final distribution you could have seen it prior to the run. Next you see the news has been taken into account on bar 7 and then on bar 8 (See bottoms) and the two DOM cummulative values: one small, the other "normal" for the time of day. the news is done market wise,. The volume resumes; the volatility resumes and the offset tend resumes "taping" until the volume finally will not support the trend at about 11:04 when the am is over. The low volume continues to let the price converge and center for the 12:30 BO on volume. This means that today their was no "talking heads" impact within the usual 30 minutes where you often see an "echo" in half time of the original "news" contained on bar 7 and somewhat on bar 8. No one need apologize for not trading a run through on stops. What you need to do on news is chack for contract evaporation. When it does, get out before the beginning of the stops being run. Wait and reenter when you have a DOM database that is reestablished. Skip reuters et al. Save this post. And check off the sequence on it with a marker about ten times each time you have news. Then it is glued in. Without it you do several things: you erase your prior profits in the am on bars 4 through 6; you lose money if you do anything else than cover (either fast or because of pain or impatience sitting in the hole; you lose a chance to make money on the market resumption; you will lack confidence as well as a side thing (this means your NLP pictures are mesy and more provisional). Greenspans start on bar 56 but you can check bar 55 for fun.
That was a very interesting post Grob.Thx. I think I understand what you mean by a "long" was "taping" I would appreciate it if you could explain this in greater detail. True it was making higher hi's but the volatility of the bars kept me from being interested in a long. Bar 7 actually made a new lo.
Bar 7 was the news bar. The "long was bars 2 through 6 and start of 7 up to pre news collapsing the DOM (depth of market). Then, you had to exit long to preserve the run. I suggest that persons draw the trend line on the right of the bars and then clone it over to the left side to know width. Taping is when the width of that drawn channel is usually filled with each bar because of the common volatility of the bars. When that happens, then I suggest that people use a slower fractal to observe the trend. Like going from 5 min to 15 min. It desensitizes vis a vis catching the whole trend instead of popping out too soon. In any event, the object for efficient extraction becomes getting in on the lower right side and exiting the upper left of each channel. Two things occur for you. You spend your time in trends as an "early segment of time" and you are in next trend when it starts in the overlap of prior trend. The bar 7 was mostly stops getting hit on a cascade of hits. This was well after the prior activity (long) had come to an end. A lot of people exit later than an optimum exit. Stops are common I see. Trend line breaks are better. Failure to traverse from right to left in the channel is better. Most extreme price is optimal. When the market is too briefly in a trend relative to the chart bars, I call that class FR's. Failure to resume was the standard today. A bar starts a trend by a BO; the next bar does not sustain the trend. The question is whether or not the trend will reume. FR, as a two linked trade event, is often a tape event. The initial trend formation bar extends, then goes to a spike status (closing on a several tick retrace.) The behavior of the next bar after, and if it covers, the prior bar extreme, triggers a reversal and hold until neutral (going way back to the BO values) is reached. The prorata volume comparison confirms the trigger. The volume will not be maintaining prorata volume of the prior bar. A starting trend is easy to catch; the issue is whether after a robust kick in, the trend will resume and continue once on a fast fractal it stalls, or dips momentarily. It seems from comments here that people are sometimes unprofitable. A major cause of this phenomena is the giving back of profits to the market and then, worse, locking in the losses after failing to read the market. I sited a beginner account timing where minimum risk is deployed to learn the rhythms. About three things came into play: What wasn't that? (meaning where is the volume to continue volatility; what follows a DOM collapse? (any buddies guess); and where are we risk wise at this second? (Big risk). When the price broke below bar 6 bottom, being out already is nice. Reversing into next trend off left side of trend channel is very productive but you would cover when risk of volume collapse registered mentally. If you were expert tough guy you are hunched over picture from "I am playing news and just knocking it all down" viewpoint. This is simply an attitudinal setting called FR play takes everything off the table and is the set up for "after the news game". How to catch those cars? lol. The market is set up for you in a button pushing manner. Always do the clicking a head of time. Push the buttons when you need that pop. There are, as people say where real time trading is going on. Use a few of those to see what people put on their account sheets to anticipate the possibilities. Someone here said they play news. On this shot it looks like they be sure to be sidelined as their set up (or be doing an AMT (long) and trade inside the long with partial cover/adds). Or then perhaps they have a bunch of rows ready to trigger at some point to get off sideline: Take the short? Take the bounce? Scale on each? or all of the above. Some of this action is a 30s or 1min deal with a good print reliability. I'm making money before the news. The news (not substantive facts and stuff) is telegraphed by stages of data changes (See the plexiglass stuff to hype it even more (we were here)). Then go into a making money modus with the level of capital you use. A small percent here must have scaled reversals from long to short (less than 1 min) and then scaled reversals to long (about six mins). There were pages of T&S on this. for future considerations print about 15mins worth. Mark the collapse in red along right side. Mark the return in green along right side. Segment the scaling reversal on the left in red (going short) for your cars. Do the same later for the second scaling in green (going long again.). What % of capital flowing was your capital? When do you get in a box on this? Set up the lines (rows on your account sheet) Do you care which order you use each subset? Did you notice that there are a lot of pages of stuff in the fifteen minutes and that it can handle any account size. Reality check...it did handle everyone it turns out.
Damn. Now Ive got to go back and study all your posts. "trend line breaks are better". Today in the ES was a good example. Never did break the lower trend line after 10. edit: then you interpret "common volatiltiy" in bars as a confirmation of trend? I dont want to drive you nuts with questions but you have opened up a whole new area for me.
Beautiful and succinct assessment of today. The market came off a base and just ground out the day. telegraph after telegraph of what was to come. A little over six points of H/L range on ES. The taping is a trend pacifier in some ways. By grinding steadily within a range of steady values, you get to just watch the DOM slowly revolve on up the line and resonably retrace somewhat without any suddenness. On the 30 min bar periodicity the ES was taping most of the day and as you say off the bottom from the beginng. Back on the 5 min you see the 30 min bar filling in as traverses of bunches (6 bars) of bars traversing. There are some neat opportunities to trade each traverse to build to a multiple of the H/L spread in points. Two trigger zingers are easy to see for trading fun on this type of day. The two tick bar and the VDU bars. Very Dry Up on ES is singular bars below 2500 contracts per 5 min. The 1000 contract level is more where it's at. If you print out three sets of the day with bars separated a goodly amount you can do some mark ups that will really set you up for the rest of this week. Both of these triggers are the "failure to tape" exceptions that start taping up again. It is always fun to do taping if you know it is going tostart up again. This will give you about 15 trades today over 1 point each. That is nice for a 6 point H/L spread. Monday was more exceptional because there were 1 tick bars punctuating the market. Two tick VDU combos are especially definitive as taping precursors. Once you get the taping hang with the trend. On one sheet cicrle the two tickers (2) and circle the money making after them. Dwell on the sequences of these pairs. Do the same for the VDU bars (6) and their corresponding profit making sequence. there is a100% overlap today so you have 6 trades. On the third sheet do FR's which are trade pairs. Bars 7, 10, 38, 48, and 64. Five pairs for ten trades here. You see a BO. the bar turns into a spike. The next bar is an insider that tends to "cover the spike BUT.... no go. You nail the BO you reverse on the failure to resume the BO. All the other stuff is taping using the channel lines. Four levels of efficiency with those. There are about 6 of these too. Summary. The pairs of stuff from two ticks and DVU's gave you three bar trends so you know they last 15 mins usually before they poop out. More than six points net there. The ten trades of the FR's are equally rewarding by doing three steps to get in two trades. They end where they began so that is nice. Give yourself 8 to 10 points there too. Now the main event: taping using channel lines. These six can have optimum yields or just regular results like breaking the trend line as a linked reversal. If they do not reverse (they won't at R of S levels, but otherwise on slow pace they will as they are away from R and S. (This is what phoenix ought to discover in the next while.) Anyway if no reversal just practice the old washtrade to stay relaxed until the next profit taking comes up. The main events make more today than the other trading formations. That would be over 6 points. When you add scaling to it on say 2 or three levels, you will be trading every half a point usually. Often a dwell on a tick is up to 1500 contracts(most are placed and pulled, however). It turns out that button pushing is the groove you want to biuld here. I weeded the stuff out from the tapes to see the main event is tapes. Volatility is key then as you look at the opened door. it's presennce leads you into scaling the cars. This is where you discover that there is time to smoothly apply and extract money as the tick Bbid and Bask streams for you. It gets smooth and subtle and KISS.
Now Im a little confused. I went back to study your first post again. You said you entered at 9:45:03 est which means you entered on the 4th bar. The preceding three bars all had lower highs and lower lows so what was the basis for going long? When you say "extremes of the bars" are you referring to the tails of the candles? If that is the case then its a little clearer.
I just missed the move down this morning! Why? Because I used a limit order (not filled). I will never again use a limit order to get in. Are you using limit or market orders?
never say never Baruch. I still use limit orders 90% - and miss out on some/many runs. It's a good topic.