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Yesterday Close Setup


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Yesterday Close Setup

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  #1 (permalink)
Buddha
San Jose
 
 
Posts: 11 since Jan 2010
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Hi this is my first contribution. Hopefully someone will find this helpful. This setup works in a range day. Attached is a picture for today short setup in ES. The concept is that market is at an equilibrium on a range day. The distance from the day's low will be equal to the day's high. So for today, since it went down first we look to go short.

1. Look at yesterday close. ES closed at 1128.75.
2. ES went down to 1125 which is -3.75pts from yesterday close.
3. ES went up to 1132.75 which is +4pts up from yesterday close.
4. Short at the high and exit once it came back to yesterday close.

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  #2 (permalink)
Buddha
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I forgot to mention in the picture that yesterday close is at 1128.75

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  #3 (permalink)
 sam028 
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The question is: how do you know that today's high will be xxx ?
Except after the fact ?

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 cclsys 
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Hey Buddha,

(always wanted to start a letter that way!)

Put up a chart using FibBands based on previous close except in this case since close so close to a POC (Point of Control) price and the close in Gold is not all that clear practically speaking, used that. Then threw bands around that price based on standard deviation calcs used in vwap which include the current range starting at midnight each day. The bands are based on the mid-line / previous close though, not the vwap. Little white and red dots are targets based on when a new band is penetrated.

To set to a manual price
a) choose Manual as MAtype
b) enter the price in the ManualOverridePrice input.

There are different type of band types to play with as well. You might find it of interest.

Chart:

the white lines are dynamic POC's. I just didn't take them off.
The flatline darkmagenta is the previous close around which the bands are made.

Again, different types of band possible, some more responsive than others, can also adjust ratio to fib numbers etc.



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  #5 (permalink)
 cclsys 
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I got confused and thought for some reason your thread had Crude. Anyway, here is a 500 vol Crude chart using YCl as mean price. Look at how many of the #1 Tgts (red dots) were later hit. Nice approach on sideways days but as Sam said above: how do you know it's sideways at first. Well, maybe you don't. But maybe later you do.

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  #6 (permalink)
 cclsys 
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OK, same thing with ES. Works very nicely on range days like you say. Thanks.

I drew some arrows showing the targets (horizontal) and the entry to exit journey (diagonals). There is no fancy math in there apart from the std deviation bands. Idea is that the target is exactly same distance away from the mean when triggered by penetration of a band. In the right market conditions, this is a very dependable approach as Gio pointed out in BM's FibExpansion indicator thread.

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 Dragon 
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sam028 View Post
The question is: how do you know that today's high will be xxx ?
Except after the fact ?

I asked a trader once "How do you know when you will see the daily hi?" He said, "You can just tell." Mmmriight... Everytime a new bar goes up you see a new daily hi. You just have to enter and expect a huge drawdown. Heck, don't even use a stop because you don't know when it will reverse, but eventually it will reverse and you will make money then. Just grow a pair of iron balls while you wait. Or you could just enter the market in whichever direction you want and wait for it to go that way until you are happy with your profits. Then close the trade, as long as your broker doesn't care and you have enough margin to cover. It's all about money management and your psychology anyway.

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 cclsys 
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Dragon, this is not to disagree with your general point, but I believe it is possible to sometimes gauge whether or not a market is trending or mainly rotating. Of course this is always easier after the fact, however consider the ES example today.

We did have a closing price to serve as original marker to compare current with previous prices. So: market thrust down a ways below it twice soon after open. But then very quickly and sharply bounced to about the same level above as below, as Buddha pointed out. At this point we know we have a yo-yo effect in play. Whether it will remain as such or end up being a new big uptrend remains to be seen, but as of right now ( say around 10.45 as the high is being made) we can look for a pattern entry to fade the move and accept getting stopped out above the RH; or we can wait to see if after a pullback it will continue on up again. If it doesn't, as happened here at 11.15 with a failure to challenge the 10.45 high and an OVB reversing back down, chances are that at the very least we are going to go back down to the middle if not all the yo-yo way back down to earlier low levels since it really doesn't look like we have a trend day.

And this was all set up by the first yo-yo move which meant that despite the fact there were sellers in the beginning, also there were buyers. In other words, a mixed market. This was clear within the first 30 mins so until it is very clear there is not a mixed market, maybe the smart thing to do is to take what evidence is there and assume we are in a rotational mode today and start selling high and buying low.

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 Dragon 
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cclsys View Post
This was clear within the first 30 mins so until it is very clear there is not a mixed market, maybe the smart thing to do is to take what evidence is there and assume we are in a rotational mode today and start selling high and buying low.

That's ok. I was thinking maybe I should respond because I may have been a little harsh. I think Sam's point is more geared towards a daily hi type play I was responding to. I have traded this style on rangy days with a swing hi/lo, pretty much Al Brooks style, except you don't use the close as your anchor, you use the 20 ema.

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Buddha
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sam028 View Post
The question is: how do you know that today's high will be xxx ?
Except after the fact ?

Sam, I don't know if today high is indeed the high. What I do is gauge if today is a range day and go with the setup. Alot of time after one big run up day like yesterday, market would pause for the next day to catch a breather assuming there is no major news coming out. Also, I need some kind of resistance line to confirm the point of entry. I use market profile line or whatever may work for you.

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  #11 (permalink)
Buddha
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Going forward I will also let you guys know if there is setup for NQ and TF as well. We'll keep this thread open until there is no longer interest in it. This setup does not occurs everyday.

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 Dragon 
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Buddha View Post
Sam, I don't know if today high is indeed the high. What I do is gauge if today is a range day and go with the setup. Alot of time after one big run up day like yesterday, market would pause for the next day to catch a breather assuming there is no major news coming out. Also, I need some kind of resistance line to confirm the point of entry. I use market profile line or whatever may work for you.

BTW... to futures.io (formerly BMT). Sorry about my more or less unwelcoming post earlier.

An extremely useful tool for all members on futures.io (formerly BMT) is the Ignore List in the User CP. Don't be ashamed to use it.

Watching the first half hour is a good way to do this like cclsys suggested. I posted PVP in the download section, probably produces similar results to your market profile line. Despite what I said earlier I would be interested in seeing some screenshots when you have time of some trades you take with this method.

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 cclsys 
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I also posted dynamic PVP (which I find very helpful):


Buddha: I hope you do keep posting examples. I think it is very interesting and helpful to highlight one particular approach and then others can also chip in with similar examples. That way there is a learning process.

For example: from your post I got the idea to base the midline not on the close but the closing PVP/POC. I think this is something I might end up having as a separate chart every day to use as reference in the first hour or so of market action. I found it helpful this morning in Gold to see that there was a very strong up trend developing early on because price couldn't get back any where near yesterday afternoon's closing POC. This tells me that the overall perception/commitment has shifted upwards in a convincing fashion and that upside follow-through is more likely than not. So the same indicator setup that works to help determine if it's a range-type day also works to determine that it isn't.

At least for now....



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Buddha
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CCLSYS, you have very good observation. Another setup in my yesterday close system is watch for gaps not fill. Normally people play for gaps fill but I do the opposite. It is the same concept as yours. In this example, TF gap up overnight. Look at the the blue arrows I draw in NQ and TF. NQ crosses the yesterday close but TF today never did. I then look to go long TF on the assumtion that market won't drop any lower since TF gap never fill.

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Buddha
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Another small change trade today with ES went down about 3pts first from the yesterday close of 1132. It then went up to +3pts triggering a short entry with target price reach of yesterday close again for +3pts gain.

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Buddha
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I found this indicator. It is suppose to tell you if the market is in a range visually. Maybe it well help out with this system giving it an extra confirmation. Since I am new here I can't test it out because I can't download it. Perhaps someone can try it out to see if it works.


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Buddha
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Another winner today for +4pts potential. First it came down -5.5pts from yesterday close of 1133. Then it went back up to the top range of +5.5pts from yesterday close. Short is enter for a nice winner. However, it never came back down to yesterday close.

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beowulfit
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cclsys View Post
I also posted dynamic PVP (which I find very helpful):

Buddha: I hope you do keep posting examples. I think it is very interesting and helpful to highlight one particular approach and then others can also chip in with similar examples. That way there is a learning process.

For example: from your post I got the idea to base the midline not on the close but the closing PVP/POC. I think this is something I might end up having as a separate chart every day to use as reference in the first hour or so of market action. I found it helpful this morning in Gold to see that there was a very strong up trend developing early on because price couldn't get back any where near yesterday afternoon's closing POC. This tells me that the overall perception/commitment has shifted upwards in a convincing fashion and that upside follow-through is more likely than not. So the same indicator setup that works to help determine if it's a range-type day also works to determine that it isn't.

At least for now....


I'm very interested in your pvp indicator, but I can't find it following the link. Can you help me to find it? Thx.

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 cclsys 
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View Download Details - Big Mike's Day Trading Forum

(I believe Dean in the Ninja Forum has made newer versions, also 7 compatible. Also Cory has a rolling Value Area indicator which has a dynamic PVP/POC if I remember correctly. I am no longer trading since did not, and still do not, have sufficient spare capital. But I do follow markets for a few hours most days when have idle hours and at this point have had the same workspaces since February and the main thing on the charts is the CCLBands + this dynamic PVP indy. It is extremely helpful at showing key support resistance areas beyond simply keeping track of tops and bottoms after they have formed. I also have a skew indicator posted here in downloads (CCLskew?) which often works as bona fide leading indicator for immanent trend change, also based on dynamic PVP.)

Of old the skilled first made themselves invincible to await the enemy's vincibility.
Invincibility lies in oneself. Vincibility lies in the enemy.
Thus the skilled can make themselves invincible.
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 cclsys 
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Just for fun: threw up a chart (TF) with Bands based on previous PVP on close, saw that current price is way above typical daily range (3rd outer band) so just put on shorts in expectation that before the open market will at least attempt to work back.

Will post pic later as to how it unfolded.

Well, that was fast.

Just noticed that the Skew indicator had turned bearish on bar I entered (was not looking at it, but is good example of how this can be a good leading indicator). The skew is the relation between dynamic PVP and VWAP. If the latter is below the former, the skew is negative and vice versa. By no means infallible, but helpful to keep track of as a way of gauging the degree to which market is 'stretched' or 'coiled', i.e. extending away from or remaining around the VWAP as well as where extra volume has come in away from or close to VWAP. Especially helpful towards end of day when unless powerful moves underway there is often a return to VWAP move before the close. But that is not relevant for this opening approach thread I guess.

Just realized this is pre-open. Will do again after actual open around 9.30 EST.

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