Random Line Theory - Traders Hideout | futures io social day trading
futures io futures trading


Random Line Theory
Updated: Views / Replies:68,802 / 358
Created: by Big Mike Attachments:100

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 – 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 don’t 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
 100  
 
Thread Tools Search this Thread
 

Random Line Theory

  #181 (permalink)
Market Wizard
Bangkok
 
Futures Experience: Intermediate
Platform: MultiCharts.NET, S5, Ninj
Broker/Data: AMP, S5, IB
Favorite Futures: ES
 
DionysusToast's Avatar
 
Posts: 2,670 since Nov 2010
Thanks: 776 given, 8,728 received
Forum Reputation: Legendary

So the lines on the ES.

So on the ES - according to my observations and it's personality. The lines I use are:

- Overnight high & low
- Yesterdays high & low
- Todays open
- Yesterdays close

Here is yesterday (or most of it)

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


We can see that the overnight high & yesterdays high were very close.

We can see that we hit the overnight high (light blue) first, pierced it by 2 ticks and then reversed down. As it went back up, we can see acceleration where all of these early shorts had to buy to cover. So - what eaxctly happened at the overnight high there?

My theory:

- Some longs had exit orders for some or all of their positions at this level as it's such a common target on the ES. This would cause the initial down move.
- New shorts would have got in as it appeared the market was rolling over. Still, it wasn't rolling over on new selling interest, just people exiting at a common level
- We probably also had some people playing the breakout of the overnight high, these people would have added to the selling as it rolled over and they had to cover

We now have a bounce off a common level, we have new people short, we have breakout traders nursing their wounds. We have a sum total of 1825 contracts net short from the swing high which is not much conviction to the downside at all. We can see that multiple attempts were made to sell down through 1312.25 and it's likely that someone was sitting there, possibly with an iceberg order sucking up all the selling.

At this point, a nudge upwards is all it'll take to have those shorts running for the doors. This is what happened, price moved up and we can see the acceleration as it moved through the high. It appears the process was repeated a second time with very little move to the upside. This push would have been an intentional move to create buying against which the 'pusher' could exit. A few thousand contracts and 5 or 6 ticks is decent reward for holding the market and then throwing some buy market orders at it.

At this point, we are still net long quite a lot of contracts on the day. We see the market looks 'toppy'. We can also see that the last push up (with delta marked 6473) didn't get much of a move for it's money. There's no follow through. Longs are waiting for a greater fool to come in and move the market up some more so they can make more $$$. No-one seems inclined to do that. If you were long now - what would you do? If you were one of those last 6473 longs - how nervous would you be?

Even more important - if you had an account that could easily sell 50,000 contracts - what would you do? Would you throw a few thousand contracts short at it seeing as you know there's little upside follow-through and there's quite a few people that brought the highs? Of course you would...

Well, we can see how nervous the longs were because a lot of them got out as they saw the days first REAL sell off. (delta -8069). It would be interesting to know how much selling it took to before the longs capitulated... Shame I was watching Red with the missus....

So - that is how I see these lines working on the ES. It's a game, it's hard to assess in real time but very simple in hindsight. The lines can't just be traded in isolation, the first bounce is often a fake. Most of the time, it'll reverse and push through the high a few ticks to benefit from trapped traders. In the end, the market can't be pushed higher artificially for long and it'll roll over if there's not genuine new buyers interested. Still these are the lines I use on the ES. I could not say they would work the same in any other market, even a correlated one as in a correlated market, there is still room for fun and games for 15-20 minutes.

To trade this stuff, you really do need DOM and Time and Sales to get an idea of what's going on...

On this market, my belief is that it's the same big money playing the game day in day out. That's why I think a specific market will have specific levels based on the type of operators playing it.

Does any of this make sense? Does this seem a realistic explanation of levels and how they'd be market specific?

Of course, you could just put a couple of indicators & some moving averages on the chart and not worry at all about who's getting in, who's getting out and who's getting nervous.


Last edited by DionysusToast; March 29th, 2011 at 05:24 AM.
Reply With Quote
The following 7 users say Thank You to DionysusToast for this post:
 
  #182 (permalink)
Elite Member
Milan (I)
 
Futures Experience: Advanced
Platform: Ninjatrader
Broker/Data: Kinetick
Favorite Futures: FDAX,6E,CL,YM,NQ,ES
 
redratsal's Avatar
 
Posts: 1,653 since Oct 2010
Thanks: 1,217 given, 2,067 received


Fat Tails View Post
I am so annoyed by this f...... Microsoft Windows. There are some shortcuts, which close your application immediately without saving anything.

One of these shortcuts is Ctrl-W. In German language all nouns have capital letters, and there are lot of nouns starting with "W". So, after having written some stuff for about 30 minutes, I will type a word with a capital "W" and miss the shift key with my little finger and hit the Ctrl key instead, which is located just below.

Windows will close the browser immediately and all my work of the prior 30 minutes is lost.

The engineers who have designed those shortcuts must be really stupid.

Hi Harry,

To avoid the problem you can remap windows keys; use this utility.

RandyRants: SharpKeys 2.1.1

Reply With Quote
The following user says Thank You to redratsal for this post:
 
  #183 (permalink)
Market Wizard
Bangkok
 
Futures Experience: Intermediate
Platform: MultiCharts.NET, S5, Ninj
Broker/Data: AMP, S5, IB
Favorite Futures: ES
 
DionysusToast's Avatar
 
Posts: 2,670 since Nov 2010
Thanks: 776 given, 8,728 received
Forum Reputation: Legendary


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


This is yesterday...

Were these levels relevant? Yes.
Is this specific to this market? Yes.
Will this work in other markets? I have no idea.
Is it self fulfilling? Yes.
Will it work all the time? No.
Will you lose money trading these levels every time price approaches these levels. Yes!

Reply With Quote
The following user says Thank You to DionysusToast for this post:
 
  #184 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,652 since Mar 2010
Thanks: 4,226 given, 25,601 received
Forum Reputation: Legendary

Today's Random Lines

TF 30 min chart Support/Resistance. Fibonacci Confluence Zones.

Attached Thumbnails
Random Line Theory-random-lines.jpg  
Reply With Quote
 
  #185 (permalink)
Elite Member
Quebec
 
Futures Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker/Data: Stage 5 trading/AMP/CQG
Favorite Futures: ES, NQ, YM
 
trendisyourfriend's Avatar
 
Posts: 3,697 since Oct 2009
Thanks: 3,041 given, 4,496 received


DionysusToast View Post

This is yesterday...

Were these levels relevant? Yes.
Is this specific to this market? Yes.
Will this work in other markets? I have no idea.
Is it self fulfilling? Yes.
Will it work all the time? No.
Will you lose money trading these levels every time price approaches these levels. Yes!

sounds like a discussion between Batman and the Joker. Or the ending found in one of Tigertrader's daily commentary:


The burning question now is, " Is that going to happen tomorrow, April 27th, the end of June, in 6 months , or a year from now.

Reply With Quote
 
  #186 (permalink)
Just starting out...
Roma
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: forex
 
giovi's Avatar
 
Posts: 4 since Apr 2011
Thanks: 0 given, 0 received

HI guys , my first post here...i tried to post my random for EURUSD 5 min, chart , but i cannotpost....ridicolous rule......never mind ...i wanted also post my forecast chart......

Reply With Quote
 
  #187 (permalink)
Just starting out...
Roma
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: forex
 
giovi's Avatar
 
Posts: 4 since Apr 2011
Thanks: 0 given, 0 received


giovi View Post
HI guys , my first post here...i tried to post my random for EURUSD 5 min, chart , but i cannotpost....ridicolous rule......never mind ...i wanted also post my forecast chart......


was nice...euro respected the random levels........

Reply With Quote
 
  #188 (permalink)
Elite Member
Portland, OR
 
Futures Experience: None
Platform: tos
Favorite Futures: NQ, SB, 6J, CL, GC
 
Massive l's Avatar
 
Posts: 1,458 since Mar 2011
Thanks: 922 given, 1,821 received

Well...

A lot of people 'got it' and a lot of people didn't. Excellent thread. 5 stars.


IMO
Professional money > supply and demand > price and volume > support and resistance

S/R lines are great for validation levels but I usually never trade off of them.

I spent over a year and a half tearing the ichimoku indicator and its concept apart.
I tried every setting and strategy you could think of. I married it for a period of time.

At the end of using it, I found myself repeating the same thing over in my head before
every trade. "These signals can change in 1 min because price may change'...and invalidate
my signal to enter the trade. I kept repeating, "it's lagging" and I found myself taking these
signals with a grain of salt. That's when I went back to the drawing board (and found this thread)
and started over from scratch. I've been trading off price and volume only for 1.5 months now
and I couldn't feel more enlightened. I feel sort of dumb for doing everything backwards. I was looking
for a holy grail in the heart of an indicator and I came to the conclusion that most indicators don't mean sh!t.
Everything you need to know is in price and volume. The foundation.

Back to Ichimoku - After all of the different settings and strategies I noticed one thing in particular.
No matter what I did, price would almost always have some sort of reaction/tussle/move/validation/bias confirmation with the setting or strategy I was experimenting with.

What you believe, becomes. Keep an open mind because bias is easily confirmed with your own thoughts or beliefs in the market.

Reply With Quote
The following 2 users say Thank You to Massive l for this post:
 
  #189 (permalink)
Just starting out...
Roma
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: forex
 
giovi's Avatar
 
Posts: 4 since Apr 2011
Thanks: 0 given, 0 received

i created random levels on EURUSD daily chart...are valid for 3 days.....let see......

Reply With Quote
 
  #190 (permalink)
Elite Member
Berlin, Europe
 
Futures Experience: Advanced
Platform: NinjaTrader, MultiCharts
Broker/Data: Interactive Brokers
Favorite Futures: Keyboard
 
Fat Tails's Avatar
 
Posts: 9,652 since Mar 2010
Thanks: 4,226 given, 25,601 received
Forum Reputation: Legendary

Sexy Lines


These are pretty lines. You should careful consider each of them before entering a trade.

Attached Thumbnails
Random Line Theory-pretty-lines.jpg  
Reply With Quote
The following 4 users say Thank You to Fat Tails for this post:

Reply



futures io > > > Random Line Theory

Thread Tools Search this Thread
Search this Thread:

Advanced Search



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

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
How advanced mathematics and gaming theory can help you as a trader RM99 Psychology and Money Management 203 February 5th, 2016 03:10 AM
Using Dow Theory indicator as a filter in automated strategies nanobiotech NinjaTrader Programming 8 March 28th, 2015 07:56 PM
Economic Theory PandaWarrior Off-Topic 10 May 15th, 2011 12:06 PM
Ryans Chewing Gum theory Ryanb Psychology and Money Management 2 December 8th, 2010 10:25 AM
GAME THEORY tigertrader Off-Topic 3 October 7th, 2010 09:16 PM


All times are GMT -4. The time now is 05:00 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 2017-12-13 in 0.17 seconds with 20 queries on phoenix via your IP 54.90.92.204