Hello! Sorry about the late reply. I'm having a bit of a hard time deciphering where your entries are exactly, I apologize. One thing I would recommend is putting a 1 period MA on the TICK (if you are going to use it). I judge a "strong" TICK reading as a reading where the SMA closes above 500. A "weak" TICK reading is a 1 MA close below -500. With the one period MA you can really see how 500 / -500 can be the battleground for the trend. If you look at the morning session there were brief "kisses" of +500, but there were loads of closes below -500. That might help keep you on the right side of the market. I do not look at longer term TL's at all, I find that the TL that is in play for that particular wave is what is important. For the morning session, try looking at the TICK from the day before to get an idea of what the TICK's might mean. Oftentimes, the TICKs at the end of the day will give a pretty obvious heads up about how the morning session will go. If you are still exploring this, please post up some more charts and I will see if I can help.
THANK YOU for your kind reply. Don't worry, your reply is timely & GOOD!
I did not indicate entry, only show conditions exist for trade entries but market is weak hence should not
engage counter trend trade. However, 3rd entry is possible because it shows sign of reversal for morning session.
I shall study the 1 period MA.
ES trade setup on 20May.
Red Trend Lines.
11.03am Volume trend line broken
11.09am Price trend line broken
11.16am Enter trade at 1332.25. $Tick chart retraced to near zero line. It was in the positive zone and went above +500.
That's nearly as good as it gets. The only way that would have been better would have been if price would have come back and touched the broken TL from the other side and used it as support. When you factor in other things, such as there being a higher high (on price), you have a pretty great case for a long.
Last edited by pinkieman; May 23rd, 2011 at 09:24 AM.
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After Volume spike has occurred and $Tick has confirmed the direction, how long can one wait for trade entry?
I reckon 5min wait is max. and price chart (as you mentioned higher high & support/resistant) will determine entry.
Do you consider the magnitude of volume spike? If so, what the minimum?
Yeah No more than 8 minutes if I remember my research correctly. Eventually the move gets "stale" and the pullback can mean something totally different once the context has changed. I have been keeping an eye on the size of the spikes, but I haven't collected enough data to make call one way or another. I have some theories that I'm flushing out, as far as each successive spike in relation to the one prior, but nothing concrete.
Volume for ES is tricky to determine. Some days are low and other days are high. Volume spikes have to be relative to the daily average level. Sometime volume spikes can be misleading as well, sending one to the wrong direction.
It requires more observation and understanding of ES movement. Hence nothing concrete as you mentioned.