Figured I'd start a journal of sorts. Mostly for things I find interesting, maybe even egocentric with my trading, but the/my world at large is acceptable content as well. Likely it will be more blog-esque than a journal, with non-scheduled posts. BTW... someone asked me the origin of my ET handle Tiddlywinks. Here's the wikipedia definition... "Tiddlywinks is a game played on a flat felt mat with sets of small discs called "winks", a pot, which is the target, and a collection of squidgers, which are also discs. Players use a "squidger" (nowadays made of plastic) to shoot a wink into flight by flicking the squidger across the top of a wink and then over its edge, thereby propelling it into the air. The offensive objective of the game is to score points by sending your own winks into the pot. The defensive objective of the game is to prevent your opponents from potting their winks by "squopping" them: shooting your own winks to land on top of your opponents' winks. As part of strategic gameplay, players often attempt to squop their opponents' winks and develop, maintain and break up large piles of winks." So the answer is that the primary objective of the game is similar to trading: get winks(profits) into the pot! Simple as that.
So I was trying out some new stuff this week and traded MYM live this week for testing. Here are results of this week...
In reviewing the individual MYM trades from this past week, I decided to confirm my understanding of stops. To be triggered, my belief was stops required a TRADE at or through the price (as appropriate for either a buy stop or sell stop). It turns out, according to the CBOT rulebook (MYM is a CBOT product), a BID or ASK (dependent on whether a buy stop or sell stop) will also trigger. IOW, a QUOTE is enough to trigger a stop! So both an actual TRADE at (or through), -OR- the appropriate BID or ASK QUOTE WITHOUT A TRADE triggers a stop! For the micro-index futures, which are not liquid AT EVERY TICK as the related mini future, this is a very important distinction imo. A quote itself is enough to trigger a stop. Spoof-idy do dah. From the CBOT rulebook... STOP ORDER An order which becomes a market order when the price designated on the order (the "Stop Price") is elected as described below. A "Buy Stop" order is placed above the market, and is elected only when the market trades at or above, or is bid at or above, the Stop Price. A "Sell Stop" order is placed below the market, and is elected only when the market trades at or below, or is offered at or below, the Stop Price. Links to the rulebook definitions... CBOT: https://www.cmegroup.com/rulebook/files/CBOT_Definitions.pdf CME: https://www.cmegroup.com/rulebook/files/CME_Definitions.pdf
Deepest Backwardation Since ‘07 Shows World Short on Commodities Gerson Freitas Jr. and Michael Roschnotti Fri, April 30, 2021, 12:03 PM https://finance.yahoo.com/news/deepest-backwardation-since-07-shows-190318087.html
Because it is a Buy Stop Market, it basically robs you of the spread. Your buy stop is 100, it reaches the point where bid is 100, ask is 101, your market order is placed, you buy at 101. Instead place a Buy Stop Limit order. Stop at 100, limit at 100. Then, when bid reaches 100, your order becomes a buy limit at 100. May not get executed, but if the price keeps moving up, it will. And if not, then your undesirable action (buying at 101) doesn't happen. That's what you want, right?
The main point of a stop (for me) is to get out. Stop limit has no such guarantee. If entering via a stop, it would be a stop limit. The post was to verify... and in process, it exposed the dual triggers for stops... 1) An actual trade, at or through the stop price, 2) A BID or ASK (no actual trade, quote only) at or through the buy or sell stop price. I was not aware that a QUOTE-ONLY with no trade, was a trigger. I feel this is important to know, particularly with micro contracts. Now I suppose I need to verify what "touch" officially means in the use of a MIT order.
8:10am pacific. Starting to think the things Im working on are working. At post time, MYM has a RTH linear point range of 261. 258 of those points, net, have been extracted. 100% of the RTH range is my goal. Tests are done for the day.... back to the minis... Daddy needs new shoes.
I've been working on one of the banes of my primary trading method. My primary method is volume-centric. More informative to the ET community would be, the price/volume relationship based on Jack Hershey methodologies. Within Hershey methods is something that occurs within the price pane called "Laterals". I won't bore with details other than to say there are specific rules (not guidelines) as to how lateral structures are recognized to begin and how a lateral structure ends. Of note, lateral structures can have a duration of as few 3 bars and can last indefinately: that is, until the rules for ending are met. Since laterals exist in the price pane, they can occur in any bar chart that presents bars as a variable price range bar-to-bar. By default, laterals are not money making areas. However, lateral boundaries may suggest otherwise. Friday, using a 3 minute chart, laterals were smallish range, but occupied about 40 bars of a total of 130 RTH bars. About 30% of the RTH trading day. The smallest boundary (not including non-ending breaches) lateral was about 48 ticks wide... money is certainly possible!! Hence my experimentation. So anyway, I've been testing with a (momentum) indicator, stochastics, with settings of 13,3,3 and 88/11 bounds. I am using WITHIN LATERAL STRUCTURE only! I do not use any indicator, beyond my volume-centric methods outside of the lateral structure. So far, divergences in particular are proving helpful for me WITHIN LATERAL STRUCTURES. Heres a 3 minute NQ chart from Friday, May 14, 2021.
Something cool from todays RTH session. No other markup on this 3 minute NQ chart. I mentioned above, within laterals Im testing use of a stochastics to help me navigate. I merely "hide" the panel with the indicator. I unhide it when lateral is formed. SC is my trading platform. Just after 10:30am pst a lateral formed, I unhid, and a glaring divergence smacked me. Needless to say, I waited for a solid volume long identification, and caught the major chunk of the ensuing rally over 3 trades. 1 minuscule loser within them. I hid the indicator when the lateral formally ended. I have no intent of using stochhastics outside of lateral structure. But the divergence visual was damn cool!!