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Ok, here was a trade that just started when the class started this morning. I attended the webinar using an app for my android tablet. Unfortunately, it doesn't give you a chat box so I couldn't ask John about this setup.
It happened right at 10:30am ET. I usde to not do well with dp setups, but have been doing better after listening to Michael's presentation.
It was at a 15 min dp resistance area.
It had a VSA spike.
It wasn't at the end of a 5 wave, but it was an abc setup.
Let me know if you liked the setup or if there was a reason you would have passed.
Thanks,
Tom
Can you help answer these questions from other members on NexusFi?
Today's trade on the NQ. Would this be the right place to take the dp off of? If so, was a potential holy grail set up, but the stf wasn't strong when price reached the original target, so I took profits there. All times are on PDT.
We can say anything in hindsight but I'm not too fond of your stop placement.
when scalping (that's a scalp to me) I usually have a theoretical r/r of 1/1.
That doesn't mean the realized r/r will be 1/1. I may only take a third of that drawdown
and end up 1/3. I have to give my trade room to breath.
just my personal opinion. only you know what you need to adjust.
I think I am finally getting the advanced setups that John and Steve are teaching. First one looked like a holy grail setup and the second one was taken off the nq, but I took it based on the setup of the es. On the es, price was at the 15 min dp support area, on the 3 min chart, we had a dp signal that was also at a typical 5 wave low, so good place for reversal.
First trade stopped out for -1R and second one hit 3.2R target, so +2.2R for the day. The first trade was a standard setup, but I took it based on using an abc correction off of a swing up from a dp support area. The second would not have been taken as a standard setup, but I believe the advanced traders would have taken it.
Watch the structure. I do not agree with Steve G regarding STF color, STF is simply momentum, what I consider more important is whether its strong or weak, i.e. has it exceeded its STF band or not? And I watch the whole ETH data, not just RTH.
Watch how the structure of a perfect 5wave was beautifully de-lineated when price got to 1400, this structure is as pure as it can get.
Now, I was already done by the time price got to 1400, but it was the perfect long setup to take, especially as the STF had been exceeded in the previous swing.
It always helps to simplify the setup, for example - it was very hard to trade today for me (being a strong trend day). I failed to recognize that early on.
One thing to do is to wait for an abc correction and then take a trade in the direction of trend. if that doesnt happen, just sit and watch (NEVER ever, pick a top/btm on a DP unless its a very large frame).
So then, all I could do today was this -
I simply could not do anymore, there are a couple of small scalps I took which i consider advanced but those are not important, what is important is to simplify what you look for (one or two setups, and just take those)
In my book, more than two setups is too much. Simplify, and refine those setups, you'll be amazed at your returns.
PS - you will notice one chart is 987t, the other is 4181t. Very specific reason for that. 4181/987 = 4.235 (which is 1.618 x 1.618 x 1.618). The other thing you should notice is that my first trade today came at 1120AM, 4hours after I opened my charts. it is imperative one develop the ability to sit in the tall grass (very quietly), all day if necessary, and not click it, otherwise - you are an amateur begging to be taken to the cleaners
Thanks Deucalion for sharing your setups on 'tick'charts.
I've always found it difficult to get my head around how you determine what optimum value you have for tick charts.
Could you elaborate on the best approach for determining tick values for other contracts like YM,NQ and currency futures for example ?
I'd appreciate any insight you can give !!
@Aregon, You are asking me? What makes you think I know anything
However, too little info. What are you trading? And how...?
General answer...no such thing as an optimum chart. they are all good. And all bad. Stick to the one that appeals to you visually if you are a pattern trader. I am strictly a pattern trader - I don't care about volume, statistics and other mathematical mumbo jumbo.
If not, do some research, gather the average ATR on the instrument over say 10periods, and then 50periods, determine what the amplitude of the swing generally is on your small chart? Compare it to what what average stop loss is. Swings should be greater than your average target obviously, bar amplitude should be relative to stop losses. Although if you apply position size intelligently this should be relatively immaterial.
Since you question is very generic, I will attempt an answer to what I would do with NQ and YM, roughly. Guidelines (these are my beliefs) -
Patterns work
Elliot waves are fractal, and are created by nature, they exist and they work (nature creates them, humans are too puny to over-ride nature long term, regardless of HFt's, decimalization, blah, blah blah) - people make stuff complicated and over think shit. It isn't.
Wave structure (if found optimally) exists in waves of 3, each being some factor of 0.618 or 1.618, so I use 3 x 1.618 as a multiple - For example i would use Y, then 4.235Y, then 17.935Y and so on.
Also remember, wave structure is not ideal, it all fails frequently. As does everything in life.
These are my beliefs, Right or wrong. You MUST treat all this with prejudice, poke holes in it - if it sounds insane, it probably is
For YM and NQ a starting point would be to approximate 1Min chart to equivalent tick or volume size, then multiply that tick/volume size by 4.235 times for your larger chart. Or, use the 3min chart, get an equivalent to tick or volume size, multiply that by 4.235 times.
How?
You could use a charting program, something decent (like Ensign Windows), that actually breaks down the ticks in each regular RTH session, equate that to minutes in each RTH session. If not, do some simple trial and error. When Vix rises, use the larger chart only. if you like 1M, or 3M, or 5M - put some tick charts up, see if they approximate the time, then get the multiple for the larger tick chart. Above all, Keep it simple, it should make sense to you, keep noise away, so try to use bigger charts.
YM - these are the 144t, and 610t chart from today. I picked 144t randomly, you could use 233t / 987t, or 377t / 1597t...blah blah blah. Watch for symmetry, you will get it on one or the other, if not both. (On CT trades on a trend day, either use small size or very tight tolerances). Or not at all. That takes time obviously. For example the long can be full size, expect full target, the CT should be ignored, or minimal size, taken at first target, with aggressive risk control. People often say - what a trend day? My simple (perhaps foolish) reasoning is a market that will retrace 23% or 38% max, whereas a balanced amrket will retrace 38 - 61%. Roughly.
Each market has its own signature. CL hardly retraces, and when it does, it does so aggressively. So study your market, It's not that hard to put in screen time.
On 6E, Cl, TF - be careful, these are slave markets, symmetry exists on short frames for the very skilled (which I am not), or the very large frames only (which I don't usually trade). NQ - I struggle to find a trade-able pattern today, but I am partial to 233t / 987t combo on that. Same on TF.
@ Deucalion - Thanks so much for the critique and insight. I greatly appreciate your help and hope you continue to post your thoughts and share your experience.
I do have a question on this chart. You had a STF that exceeded the band, so one is supposed to stay in the trade for an extended move. That is at least my understanding of the rules that Steve has given us. However, it was the perfect place to take your profits. Was it because we already had a huge move up or was there another reason you exited the trade there.
