NexusFi: Find Your Edge


Home Menu

 





Initial Balance and the New York Open


Discussion in Emini and Emicro Index

Updated
      Top Posters
    1. looks_one ValueFocused with 2 posts (7 thanks)
    2. looks_two trendisyourfriend with 2 posts (5 thanks)
    3. looks_3 tderrick with 2 posts (0 thanks)
    4. looks_4 Big Mike with 1 posts (2 thanks)
      Best Posters
    1. looks_one chartmojo2 with 5 thanks per post
    2. looks_two ValueFocused with 3.5 thanks per post
    3. looks_3 trendisyourfriend with 2.5 thanks per post
    4. looks_4 Big Mike with 2 thanks per post
    1. trending_up 8,016 views
    2. thumb_up 21 thanks given
    3. group 9 followers
    1. forum 11 posts
    2. attach_file 1 attachments




 
Search this Thread

Initial Balance and the New York Open

  #1 (permalink)
 
tderrick's Avatar
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
Platform: Ninja / Jigsaw / 9G
Broker: AMP / CQG
Trading: NQ, YM and ES
Posts: 1,588 since Sep 2010
Thanks Given: 4,260
Thanks Received: 2,532

I'm looking to find some correlation between the IB and the remainder of the trading day, if not just for
the next hour or two.

I've just started gathering data and I have a few questions for those that have some experience with IB.

First, what is a good time amount for the IB.

I seem to get a lot of data from just the first 5 min candle and I certainly have an idea by the first 15 minute
candle.

Now, the first difficulty I am having with my data collection is the amount of variables that come into play.

Was the day prior a huge mover or narrow?
Was the ON in a tight range or moving?
Is the current leg we are on very decisive no matter what has happened?
...etc.

So, my main play / trading concept is fade everything. I am the consummate contrarian trader.

If it's a BO, I never believe it - I fade it
I love large candle rejection wicks at SR. I will place a fade limit order at the proper volume cue every time.


so.... back to the original concept -

If I can determine by my IB that price is likely to range a bit. It's like shooting fish in a barrel for me
to fade the edges of any range I come across. Whether it's the ON range or just a 5 or 15 minute range bar.

the question is, I suppose, is how long do you guys wait before you believe the IB is complete?


gratzi


AJ
Nashville, Tennessee


"Life On The Edge of SR"
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote

Can you help answer these questions
from other members on NexusFi?
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
Better Renko Gaps
The Elite Circle
NT7 Indicator Script Troubleshooting - Camarilla Pivots
NinjaTrader
Exit Strategy
NinjaTrader
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
 
  #3 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,397 since Jun 2009
Thanks Given: 33,173
Thanks Received: 101,537


The IB is 60 minutes in length.

Many times the IB will generate a daily low or high, in my experience. Here is a chart of the last week, IB in light cyan.



Also FWIW, I think you'll find more discussion on IB in the main Profile thread:



Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #4 (permalink)
yafed68
Donetsk, Ukraine
 
Posts: 29 since Jun 2013
Thanks Given: 0
Thanks Received: 4

its really interesting them. I know that its important for trader to check about confidence of IB forming relatively to open price. If Ib relatively to open price is formed to downside, so market has conviction about short and visa versa.

Reply With Quote
  #5 (permalink)
 ValueFocused 
Chicago, Illinois
 
Experience: Advanced
Platform: NinjaTrader
Trading: ES, YM
Posts: 60 since Jan 2011
Thanks Given: 2
Thanks Received: 103


tderrick View Post
First, what is a good time amount for the IB.

That all depends on what you're trying to do. The classical definition is the first hour's range, so I would start my search there. Now, you can use different time periods depending on how you want to trade it, but if you just like to fade, I wouldn't put much stock in the first 5 minutes' range.

One idea for you would be to export chart data on the time frame you trade to excel. At that point, you can start testing. A few suggestions: look at how often that time period formed the high or low of the day, or of the next x hours, etc.



tderrick View Post
Now, the first difficulty I am having with my data collection is the amount of variables that come into play.

Welcome to trading. It seems simple, then complex, and eventually simple again.



tderrick View Post
Was the day prior a huge mover or narrow?
Was the ON in a tight range or moving?
Is the current leg we are on very decisive no matter what has happened?

Context is huge in trading. Figure out the context, and making money is fairly easy.


tderrick View Post
So, my main play / trading concept is fade everything. I am the consummate contrarian trader.

If it's a BO, I never believe it - I fade it
I love large candle rejection wicks at SR.

Do NOT start identifying yourself like that. You will become a one trick pony and eventually fail at this.

Let's get back to context. In a tight market, fading is the way to go, as long as you can admit to being wrong and not let your losers get large. When volatility expands, however, you will get blown out just fading everything. You MUST pay attention to market conditions. Would you surf in a hurricane? No, you get to cover. Conditions are everything.




tderrick View Post
If I can determine by my IB that price is likely to range a bit. It's like shooting fish in a barrel for me
to fade the edges of any range I come across.

Ok, let's put up some charts. In the stock market we are currently experiencing a minor volatility expansion. I will start with the classical IB, 60 minutes. Now, in more normal, ranging market conditions, a fairly large IB is a potential fade. You wait for the market to attempt to move out and meet opposing activity. If you see that, that means there's a good chance that this is a range day, in which case you should be fading.

However, in more volatile and trending environments, you tend to see sustained moves out of the IB, i.e. not good for fades.

I attached a chart of the ES. Note how, recently, fading the extremes of the IB has been a bad play overall. That's why context is so important.

Attached Thumbnails
Click image for larger version

Name:	ES 12-13 (60 Min)  11_14_2013.jpg
Views:	414
Size:	134.1 KB
ID:	128746  
Reply With Quote
Thanked by:
  #6 (permalink)
 
trendisyourfriend's Avatar
 trendisyourfriend 
Quebec Canada
Market Wizard
 
Experience: Intermediate
Platform: NinjaTrader
Broker: AMP/CQG
Trading: ES, NQ, YM
Frequency: Daily
Duration: Minutes
Posts: 4,527 since Oct 2009
Thanks Given: 4,171
Thanks Received: 6,018

Here is my simple plan... it is said that on the ES a top or bottom is established in the 1st 30 min. roughly 60% of the time. So just flip a coin after the first 30 min. and trade in whatever direction the coin suggests using at least a 2:1 risk/reward based on the ATR or other volatilty measurement.

Reply With Quote
Thanked by:
  #7 (permalink)
 Itchymoku 
Philadelphia
 
Experience: None
Platform: corded black telephone
Trading: ticker tape
Posts: 2,894 since Apr 2012
Thanks Given: 1,683
Thanks Received: 3,681

I've heard of some people using the first 30 minutes, I think it was PrivateBanker, but I could be wrong. I'd be very interested in seeing some statistics on the subject but I think the main thing is that it's relative. The initial balance provides volatility and liquidity to help get things moving almost like a news release that is a composite of the overnight sentiment. IMO Market profile and auction market theory work well in the context of the bigger picture based on the news, reports, previous profiles, etc. Being able to compute these vague larger picture scenarios is one of the last pieces of the puzzle humans have against the machine so it's probably best to have some sort of relative formula. I personally trade back toward the poc after leaving the value area if I find clues, but if the market has been ranging for 2-3 days with each subsequent day I expect the inevitable trend to take place.

R.I.P. Joseph Bach (Itchymoku), 1987-2018.
Please visit this thread for more information.
Reply With Quote
Thanked by:
  #8 (permalink)
 
tderrick's Avatar
 tderrick 
Nashville, Tennessee
 
Experience: Intermediate
Platform: Ninja / Jigsaw / 9G
Broker: AMP / CQG
Trading: NQ, YM and ES
Posts: 1,588 since Sep 2010
Thanks Given: 4,260
Thanks Received: 2,532

Grazie, for all the great info and time given....

When I say I fade everything, it basically means I never take a break out. So I will never buy at the top or
sell at the bottom. If price is in an obvious trending situation , I will catch the pull backs like everyone else -
which I consider FADING that leg.

So I really look at everything as a fade or reversal. My job is to find the price where it reverses. My entries will
always be counter to current leg - typically at some consolidation or classic candle formation at SR.

I just can't seem to jump on a moving train. I would rather stand in front of it ..after it slows down
a bit of course.

I trade the NQ mostly these days and have found the battle is typically over within that first hour, so that
seems to be working for me...

So, I suppose I'm always trading pull backs in one form or another.




ValueFocused View Post
That all depends on what you're trying to do. The classical definition is the first hour's range, so I would start my search there. Now, you can use different time periods depending on how you want to trade it, but if you just like to fade, I wouldn't put much stock in the first 5 minutes' range.

One idea for you would be to export chart data on the time frame you trade to excel. At that point, you can start testing. A few suggestions: look at how often that time period formed the high or low of the day, or of the next x hours, etc.



Welcome to trading. It seems simple, then complex, and eventually simple again.




Context is huge in trading. Figure out the context, and making money is fairly easy.



Do NOT start identifying yourself like that. You will become a one trick pony and eventually fail at this.

Let's get back to context. In a tight market, fading is the way to go, as long as you can admit to being wrong and not let your losers get large. When volatility expands, however, you will get blown out just fading everything. You MUST pay attention to market conditions. Would you surf in a hurricane? No, you get to cover. Conditions are everything.





Ok, let's put up some charts. In the stock market we are currently experiencing a minor volatility expansion. I will start with the classical IB, 60 minutes. Now, in more normal, ranging market conditions, a fairly large IB is a potential fade. You wait for the market to attempt to move out and meet opposing activity. If you see that, that means there's a good chance that this is a range day, in which case you should be fading.

However, in more volatile and trending environments, you tend to see sustained moves out of the IB, i.e. not good for fades.

I attached a chart of the ES. Note how, recently, fading the extremes of the IB has been a bad play overall. That's why context is so important.



AJ
Nashville, Tennessee


"Life On The Edge of SR"
Follow me on Twitter Visit my NexusFi Trade Journal Started this thread Reply With Quote
  #9 (permalink)
 
trendisyourfriend's Avatar
 trendisyourfriend 
Quebec Canada
Market Wizard
 
Experience: Intermediate
Platform: NinjaTrader
Broker: AMP/CQG
Trading: ES, NQ, YM
Frequency: Daily
Duration: Minutes
Posts: 4,527 since Oct 2009
Thanks Given: 4,171
Thanks Received: 6,018


Itchymoku View Post
I've heard of some people using the first 30 minutes, I think it was PrivateBanker, but I could be wrong. I'd be very interested in seeing some statistics on the subject but I think the main thing is that it's relative. The initial balance provides volatility and liquidity to help get things moving almost like a news release that is a composite of the overnight sentiment. IMO Market profile and auction market theory work well in the context of the bigger picture based on the news, reports, previous profiles, etc. Being able to compute these vague larger picture scenarios is one of the last pieces of the puzzle humans have against the machine so it's probably best to have some sort of relative formula. I personally trade back toward the poc after leaving the value area if I find clues, but if the market has been ranging for 2-3 days with each subsequent day I expect the inevitable trend to take place.

You may find this info interesting. Lots of stats:
Investor/RT - Homework, Research, Statistics

Reply With Quote
  #10 (permalink)
 tflanner 
Chicago, IL
 
Experience: Advanced
Platform: Ninja
Broker: Ninja
Trading: ES, Ym, NQ, VTI, SPY, VXUS
Posts: 166 since Jan 2013
Thanks Given: 797
Thanks Received: 320


I use the 1st 15 minutes for the IB.

Seems more and more the High/Low of the day in the Indices is in the first 15 minutes....or very close. We are in very strong trend now...so maybe that is why the IB seems to be the extreme of the day more often.

If the IB is not the high or low of the session, then you are in for chop.

For what it is worth, recently listened to a Linda Raschke webinar and she considers the first 20 minutes as the IB for the ES. Markets move much quicker now....hence IB had to be shorted from the 1st hour to the 1st 20 minutes.

Reply With Quote
Thanked by:




Last Updated on November 6, 2018


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts