The Highest, High-Probability-Trade - Traders Hideout | futures io social day trading
futures io futures trading


The Highest, High-Probability-Trade
Updated: Views / Replies:10,837 / 38
Created: by tigertrader Attachments:20

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 20  
 
Thread Tools Search this Thread
 

The Highest, High-Probability-Trade

  #1 (permalink)
Elite Member
Philly, Pa
 
Futures Experience: Master
Platform: NinjaTrader
Favorite Futures: ES, ZB
 
tigertrader's Avatar
 
Posts: 5,948 since Jul 2010
Thanks: 6,314 given, 31,870 received

The Highest, High-Probability-Trade

It’s a trade that works in any time-frame and can be a very high probability trade with low risk / reward parameters, when the set-up is followed. A rally to the +2SD, and a break to the -2SD, falls under price exhaustion patterns and signals that the market is ready to reverse.

Ironically, range days, which offer the least amount of trading opportunity from a P&L standpoint, offer the most opportunities for trade frequency with this set-up, due to the market’s proclivity on these days, for trading out to the SDs, and subsequently returning to the VWAP.

The flatter the VWAP (more horizontal), the higher the probability associated with the trade. In this case, the market is going sideways, so you can buy weakness and sell strength, and trade with a fairly tight stop. Stops are a discretionary choice, that can range from a few ticks, to the next SD.

If there is a positive or negative slope to the VWAP, the market may climb up, (red diamonds) or creep down the SD line, making it difficult to limit your risk with your stop. In this case, it is better to initiate your trades in the direction of the sloping VWAP, i.e., buying weakness with a positive sloping VWAP, (yellow arrow) and selling strength, with a negative sloping VWAP.

Deciding when to initiate the trade is the easy part, of course. It’s when the market tests the +2SD or the -2SD, however, it is important to have an idea of where you will exit the trade. You must always have some kind of money management plan in place when trading.

The trade should develop quickly, due to the nature, of this type of trade. You can take partial profits when the market pulls back to the VWAP, and if you want to squeeze the balance, you can get out of the rest and flip, when the market gets to the opposite 2SD.

If you trade in this manner, you can expect an extremely high percentage of winning trades. I take this trade every time I see it.

Attached Thumbnails
The Highest,  High-Probability-Trade-es-12-11-15-min-10_11_2011.jpg  
Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Urban Samurai
Chicago IL
 
Futures Experience: Intermediate
Platform: Ninja, MT4,TOS, SC, Matlab
Broker/Data: CQG, AMP, MB, DTN
Favorite Futures: E/U, G/U
 
forrestang's Avatar
 
Posts: 1,039 since Jun 2010
Thanks: 226 given, 688 received


I am working something VERY similar.

Reply With Quote
The following user says Thank You to forrestang for this post:
 
  #4 (permalink)
Market Wizard
Columbus, OH
 
Futures Experience: None
Platform: NT 8, TOS
Favorite Futures: ES
 
Silvester17's Avatar
 
Posts: 3,332 since Aug 2009
Thanks: 4,579 given, 10,313 received


tigertrader View Post
Itís a trade that works in any time-frame and can be a very high probability trade with low risk / reward parameters, when the set-up is followed. A rally to the +2SD, and a break to the -2SD, falls under price exhaustion patterns and signals that the market is ready to reverse.

Ironically, range days, which offer the least amount of trading opportunity from a P&L standpoint, offer the most opportunities for trade frequency with this set-up, due to the marketís proclivity on these days, for trading out to the SDs, and subsequently returning to the VWAP.

The flatter the VWAP (more horizontal), the higher the probability associated with the trade. In this case, the market is going sideways, so you can buy weakness and sell strength, and trade with a fairly tight stop. Stops are a discretionary choice, that can range from a few ticks, to the next SD.

If there is a positive or negative slope to the VWAP, the market may climb up, (red diamonds) or creep down the SD line, making it difficult to limit your risk with your stop. In this case, it is better to initiate your trades in the direction of the sloping VWAP, i.e., buying weakness with a positive sloping VWAP, (yellow arrow) and selling strength, with a negative sloping VWAP.

Deciding when to initiate the trade is the easy part, of course. Itís when the market tests the +2SD or the -2SD, however, it is important to have an idea of where you will exit the trade. You must always have some kind of money management plan in place when trading.

The trade should develop quickly, due to the nature, of this type of trade. You can take partial profits when the market pulls back to the VWAP, and if you want to squeeze the balance, you can get out of the rest and flip, when the market gets to the opposite 2SD.

If you trade in this manner, you can expect an extremely high percentage of winning trades. I take this trade every time I see it.

yes indeed, a very good setup. I keep a close eye on that one as well. but I need another confirmation before I take the trade. I guess I'm a little sissy.

was wondering. why do you use a vwap that starts after midnight and not the beginning of rth or eth?

Reply With Quote
The following 3 users say Thank You to Silvester17 for this post:
 
  #5 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,651 since Mar 2010
Thanks: 4,226 given, 25,597 received
Forum Reputation: Legendary


Silvester17 View Post
yes indeed, a very good setup. I keep a close eye on that one as well. but I need another confirmation before I take the trade. I guess I'm a little sissy.

was wondering. why do you use a vwap that starts after midnight and not the beginning of rth or eth?

Yes, the chart makes me cry. Below I have added the session VWAP for ES. The blue zone is the area between the 2SD and 3SD bands. which indicates an overbought or oversold condition. The orange line is the prior day's VWAP.

The picture is typical for a rangebound situation. The overall sentiment is bullish as price is above yesterday's VWAP. Price just retraces gently back to value during the night session. Under these bullish conditions you want to buy the lower 2-SD band near value (orange line).

There were few occasions to short during the night session as price never really reached the upper resistance area nor the upper 2SD band. The first opportunity came about 75 minutes into the regular session, when price broke above the previous established value area.

Now the bullish scenario was confirmed and you could either short the upper 2 SD band or buy the VWAP, which was possible at two occasions, when reversal bars were formed.

Attached Thumbnails
The Highest,  High-Probability-Trade-es-12-11-15-min-11_10_2011.jpg  
Reply With Quote
The following 12 users say Thank You to Fat Tails for this post:
 
  #6 (permalink)
Elite Member
Philly, Pa
 
Futures Experience: Master
Platform: NinjaTrader
Favorite Futures: ES, ZB
 
tigertrader's Avatar
 
Posts: 5,948 since Jul 2010
Thanks: 6,314 given, 31,870 received

Amen to that, my brotha!

Attached Thumbnails
The Highest,  High-Probability-Trade-es-12-11-15-min-10_12_2011.jpg  
Reply With Quote
The following 2 users say Thank You to tigertrader for this post:
 
  #7 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,651 since Mar 2010
Thanks: 4,226 given, 25,597 received
Forum Reputation: Legendary


tigertrader View Post
Amen to that, my brotha!

But I was just saying the same thing. I think it is a simple and robust approach to make profits, as long

- as you do not use it against the trend
- you are willing and able to keep your stops, just in case that there is no mean reversion

Let us look at today's night session. Tuesday's VWAP (orange) is higher than Monday's VWAP (magenta). During the early morning hours price was sitting in the value zone between the two VWAPs. With the European session approaching price move up a little bit, touching the upper boarder.

Shorting the 2SD band worked prior to the European (Frankfurt) Open worked. But when volatility picked up after one hour into the session, it would not have been a good idea to engage in a mean reversion trade AGAINST THE TREND, when the 2SD band was hit.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Reply With Quote
The following 7 users say Thank You to Fat Tails for this post:
 
  #8 (permalink)
Elite Member
Philly, Pa
 
Futures Experience: Master
Platform: NinjaTrader
Favorite Futures: ES, ZB
 
tigertrader's Avatar
 
Posts: 5,948 since Jul 2010
Thanks: 6,314 given, 31,870 received

High of the day, so far.

Attached Thumbnails
The Highest,  High-Probability-Trade-es-12-11-15-min-10_12_2011.jpg  
Reply With Quote
 
  #9 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,651 since Mar 2010
Thanks: 4,226 given, 25,597 received
Forum Reputation: Legendary


tigertrader View Post
High of the day, so far.

Any reasons, why you use the calendar day VWAP (EST) and not the VWAP of the trading session?

The Calendar Day VWAP starts 7 and a half hours later, so it is narrower during the RTH session than the Session VWAP, which means that the bands are hit earlier.

Below are a couple of screenshots which compare them for ES, YM and CL.

Attached Thumbnails
The Highest,  High-Probability-Trade-es-12-11-14-min-_-es-12-11-15-min-12_10_2011.jpg   The Highest,  High-Probability-Trade-ym-12-11-14-min-_-ym-12-11-15-min-12_10_2011.jpg   The Highest,  High-Probability-Trade-cl-11-11-14-min-_-cl-11-11-15-min-12_10_2011.jpg  
Reply With Quote
The following 3 users say Thank You to Fat Tails for this post:
 
  #10 (permalink)
Elite Member
new york
 
Futures Experience: Beginner
Platform: SC, NT
Favorite Futures: CL, GC
 
Posts: 213 since Sep 2009
Thanks: 99 given, 113 received



tigertrader View Post
Itís a trade that works in any time-frame and can be a very high probability trade with low risk / reward parameters, when the set-up is followed. A rally to the +2SD, and a break to the -2SD, falls under price exhaustion patterns and signals that the market is ready to reverse.

Ironically, range days, which offer the least amount of trading opportunity from a P&L standpoint, offer the most opportunities for trade frequency with this set-up, due to the marketís proclivity on these days, for trading out to the SDs, and subsequently returning to the VWAP.

The flatter the VWAP (more horizontal), the higher the probability associated with the trade. In this case, the market is going sideways, so you can buy weakness and sell strength, and trade with a fairly tight stop. Stops are a discretionary choice, that can range from a few ticks, to the next SD.

If there is a positive or negative slope to the VWAP, the market may climb up, (red diamonds) or creep down the SD line, making it difficult to limit your risk with your stop. In this case, it is better to initiate your trades in the direction of the sloping VWAP, i.e., buying weakness with a positive sloping VWAP, (yellow arrow) and selling strength, with a negative sloping VWAP.

Deciding when to initiate the trade is the easy part, of course. Itís when the market tests the +2SD or the -2SD, however, it is important to have an idea of where you will exit the trade. You must always have some kind of money management plan in place when trading.

The trade should develop quickly, due to the nature, of this type of trade. You can take partial profits when the market pulls back to the VWAP, and if you want to squeeze the balance, you can get out of the rest and flip, when the market gets to the opposite 2SD.

If you trade in this manner, you can expect an extremely high percentage of winning trades. I take this trade every time I see it.

I'm see the same setup after I put the vwap band on. Today is my first time using the vwap. I was doing quite well until this week, then I was slaughter by the market.

I don't think my setup has failed. I think my setup is on strong trending or swing day. But for (strong) trading range days like the today and yesterday, I am going to get hurt.

How do you enter on this setup? on break of the bar?

Reply With Quote
The following user says Thank You to cw30000 for this post:

Reply



futures io > > > The Highest, High-Probability-Trade

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Coding required for "High Probability Trading Setups" Manfred MetaQuotes MetaTrader MQL Programming 2 September 9th, 2011 08:10 AM
Gold Falls From Record High, Silver Tumbles in Asia Trade Quick Summary News and Current Events 0 May 1st, 2011 11:30 PM
High Probability Trades-My Journal Ronin Trading Journals 19 March 26th, 2011 02:50 PM
Meet Getco, High-Frequency Trade King redratsal Traders Hideout 12 January 8th, 2011 01:03 PM
"It's a high probability trade" shodson Traders Hideout 6 September 4th, 2010 09:12 PM


All times are GMT -4. The time now is 10:35 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
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.
no new posts
Page generated 2017-12-10 in 0.17 seconds with 20 queries on phoenix via your IP 54.221.73.186