ES likes to rally from certain windows of time, say after 7:05 PST or just after 8:00 PST. Usually if the open price or just below it is going to hold, you will get a swing above the open and an open retest first. There are high percentage times of the day to look for a early selloff fade. Like LF said, this is a day type that comes up quite a bit when we are in a bull market. Enjoy the ride!
Care to elaborate? I heard quite contrary, that indexes like ES are not to be trend traded intraday. As you said, if it's trending only 10% of the time then 90% of the time it is not. Besides, how do you now it is a trend day? You don't until the day ends. It may start like one... just like today, doesn't it? 10pt drop from the open on good volume above 20day avg. I could see one entering short for continuation after pull back to 25-26. But holding till the end? I mean so many sell offs are bought back and retraced almost entirely that holding till close on any down trend day makes little sense to me. And if a trend day was to be determined by one additional criteria like close in the top/bottom 25 percentile then holding till the end would be counterproductive 90% of the time. I'm not trying to contradict anyone, instead I'm open for discussion to learn something and try whatever pill you have there, be it blue or red.
I believe there is an edge to watching order flow and level 1 data. Moves down that are likely to retrace have a different look to them from an order flow perspective. It takes practice to lock those differences down, but they are there. Similarly as the market is going up, you can watch the DOM to see if you are getting real selling (or a lack of buying). The more you see those differences, the more confidence you can have that you should hold to see what you can get into the close.
How do you identify a day as a trending day, like last Friday, before it occurs? After the first half hour here are some of the signs of a trend day. not saying this is the only way - just my way since you asked: * Breaking out of a muti day/week/month consolidations or narrowing ranges - often taking out many days of highs or lows - look for very large volume. * Up or down volume charted on the spot indexes will show one going parabolic and the other nearly flat. * Adv/decl will also be at extreme readings. * tick will hardly breach the 0 line and will peg at extremes through the day. * price will open away from VWAP and stay that way through the day. VWAP line will have a much more defined trend as compared to previous days. * Leadership sectors & high flying stocks will peg new highs through the day - new 52 week highs/lows will start pegging. I set all this up so that it is charted - very visual & simple - one glance and I know the chance of a trend day is very good. This should take you all of 15 seconds to look at if you have this charted in one work space.
Seems to me that slower grind with very little to no pullback usually goes much farther that faster move. As far as the order flow, I watch the DOM and but since ES is a derivative and it is the underlying that really trades, how reliable is that? I mean some are trading ES, some are trading underlying stocks only, so if there is an flurry of activity at the level that means someone will be right and other will be wrong.
comagnum... while you say that is easy to understand, I think it would short circuit my brain. I try to keep it simple. I trade from one chart, and could do it with only one computer monitor, I have a second for convenience, email, etc... a simple chart for price action with a volume piece on the bottom. I have added ATR, but just for info for now I have seen trade station setups that I think are crazy. like 10 monitors and god knows how many indicators. see below for example..
How can price open away from vvap? You mean from globex vvap or you wanted to say it "stays" away from vvap. I don't have advences/declines, tick, trin and stocks so I can't watch those BUT is the last Fri a very food example? I mean with some underlying stocks being part of different indexes, some might be dragging down while others may hold. And last Fri all 4 indexes hit ATH before pulling back and only NQ ended down. ES was marginally down but if anything it was trending up from the open for the full 60minutes, so I don't get it. There is so much correlation between the indexes that it was hard to see that NQ trending down while others were holding up so well, especially after going opening close to the top of consolidation ranges and gunning for ATH first.
I think we are getting way off topic... but I'll talk about anything related to the markets. Cause I love it. I am from the keep it simple group. I share a sample of my trade setup chart. I hope it is the simplest you have ever seen and that someone makes fun of me for how basic it is. I need simple. We have to make quick decisions and I cannot deal with filtering out a ton of indicators. By the time I do that the trade will be gone
How can price open away from vvap? You mean from globex vvap or you wanted to say it "stays" away from vvap. Your right - my error. I meant to say price breaks away from the VWAP line , usually early in the session and in a parabolic move.
In order to even make a tick, you need a half-point of movement, *and* you must let the market grind through everybody in front of you in the book. "Bang." You're hit. Now, just to make a tick, you have to have the market rise, and then burn throw *that* tick, *or*else*, pop the (now 0.50) to the next tick to clear out where your {long} exit. Yow! And to respond to jdesey: "so what is the number for ATR to be a go vs. no go ???" For me, it's between 0.60 and 0.90 -- above 0.50 (where I have a barrier line) and 1.0-ish. "say 1.0 ??? or above " and there you go. "appreciate your input. I am reluctant to add another piece of criteria for my trades, but if it helps then great. Maybe ATR is more important than volume. HMM, ???" Other things give you the region; ATR gives you the neighborhood; volume&TICK&the cumulative bid and cumulative ask of the ES give you the street and house.