Describe how the edge and setup traders operate and how that differs from the continuous trader? What is the diff between the edge and setup trader?
"Amateur Hour" = Love it! The morning (particularly on the ES) has the single most statistically predictable time pivots, thus is the most predictable time of the day altogether, if you know what's supposed to happen when. If you know the time pivots, you only need to know where the market is altogether in relation to its S/R levels, moving averages etc as well as relative to the other indexes. When you have that overall relative market position, you can estimate which way the pivots are going to go - But most of the time, they just go opposite the preceding short-term trend. In order to look at this the best, I trade between 9:30-10:10 on 15S-charts. I haven't heard other people of using it yet, everybody talks of tick charts. S-charts can draw a map for you if you want to trade the amateur hour. With a little patience and observation, scalping the amateur hour can by far be the most profitable trading endeavour in the day. What I mean is that during the first 1 hour, you can make quite a few more points than you could trading all the hours thereafter, even following large swings / trends! It really is amazing. I suppose that's one of the reasons why the pro's do it and move the market so much during that hour. Most of them have made their day long before they go to lunch Sincerely, ~The Scientist
dbphoenix, I'm still trying to figure out my strategy. It's certainly not clear to me which side to have been on before the report, which as far as I can see, is what was needed "to catch the bulk of the move down". Looking at a 1 min chart I see that the bulk of the move was in one 7 point candle starting at 10:00 EST. I'd be interested to know how one could have been positioned to get in on this move. (I do hate to miss them.) Richard
It wasn't necessary to be on any side before the report. Let the market tell you what it's going to do, then act accordingly. Using the 5m chart, for example, you'll see that there were retracements in all three indexes at the 0950 bar. An entry stop below this bar would have caught the downdraft that resulted when the CC number was announced. Exit at what you've determined to be the target. Playing the NQ, this would amount to approximately 15pts on this leg. If there were no downdraft, of course, there would be no downside entry.
dbphoenix, Thanks for your input but I still have a problem with this. However if we can go into further detail I think I can resolve it. I see the low and high of the 950 bar (where I assume, the time of the bar is in reference to its starting time as in QCharts) were 992.75 and 994.75 on the ES. So I assume you would be placing stops at around 991.75 and 995.75 (OCA). (Is that where you would have placed them?) So in this case one could have gotten in on the downdraft. However. I wonder what the slippage would have been? I can imagine by the size of the 1000AM one min. bar that it could have been 3 or 4 points. Is this being too pessimistic? On the other hand, I have seen on other report days that the initial price action is counter to the final resulting move. In this case one could have been stopped in long only to be put on the wrong side of the resulting move. I hope you see my trepidation in trying to trade the reports. Scientist, Let me say a hearty "Gedday" from one Aussie to other. However, I no longer live there (originally from the 'Gong and Sydney but now in the US). I like your idea of the trading book. It's going to be lots of work. Good luck. Richard
Did the ES completed a bottom Head and Shoulder at around 11:30 am? The market took off and in about 25 minutes made a 10 points move. Not bad.
I generally trade the NQ, but it really doesn't matter. If I had been trading the ES, I would have placed a stop-limit order to short at 992.5 with a relatively tight stop. Therefore, no slippage. As to countermoves, this sometimes occurs. However, if you wait for the market to tell you what to do, as with the last CC report, the probability of your being on the correct side is that much greater. You are, of course, not required to trade the price reaction to a report. However, the potential reward is so much greater than the potential risk, unless you have a very wide stop, that there's really no reason not to take the trade. Just consider your initial loss limit to already be gone. That way, there's nothing to fret about.