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Making a 100 a day

  #19 (permalink)

Dayton, Ohio
 
Trading Experience: Beginner
Platform: TOS
Favorite Futures: GC, CL, Eurodollar
 
Posts: 34 since Nov 2017
Thanks: 25 given, 9 received


lax99 View Post
Simply put, a rotation refers to up and down price movement. Have you used renko bars before? They offer a pretty easy way to describe it. You might have 5 bars up, 2 bars down, 4 bars up, 1 bar down, and so on. These are rotations in the market, as price explores higher prices, finds sellers, pushes lower, and finds buyers to drive it back up.

It is important to understand the rotations in your market in your time frame. If you trade intraday, knowing the statistically significant rotation in CL can help you determine reasonable targets and stops. Regardless of indicators or pivot points, if you've entered at $60.00, should you exit at 05? 10? Similarly, where should your stop go? 99? 80?

Imagine entering the market with a 1 tick stop and target. In this case, you're not really trading, but rather flipping a coin and seeing whether a buyer or seller will hit into you first. Now imagine entering the market with a stop aligned with the market's rotation, and a target slightly higher than 1 rotation. If you're wrong, then crude will have to move against you by a statistically significant amount to stop you out. If you're right, and the market is trending, then you'll capture a statistically significant move in crude.

FT71 has a bunch of great webinars on this site that cover this more in depth. If you're on Ninjatrader, there are some swing high/low indicators on this site that can help you collect data on rotations in your time frame.

Sent using the futures.io mobile app

Thanks kindly for your reply, @lax99

I've never used renko bars before (never heard of them) and I use TOS as my main platform, so I'll give them a call and see if I can install the bars.

All I see available on TOS are monkey bars!

So when you say "Crude loves to move in 8 tick rotations, the ES in 5 tick rotations, and the treasuries in 4 tick rotations" - you mean that one should set the "brick" value at 8 points for crude, so that another one doesn't get drawn until there's 8 ticks worth of movement?

How did you come up with the rotations figure for each commodity?

Here's the site I used to find out what renko bars are: Renko Charts [ChartSchool]

Thanks again.

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