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Trading the 6E Old School, With a Twist
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Trading the 6E Old School, With a Twist

  #451 (permalink)
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Whole numbers & more?

Something that I've been eyeballing in addition to the fabulous information that @Cashish has laid out here

We obviously have the price action at whole numbers 50 and zero zero

How about 1/4 numbers 25 & 75?

I've the grid on my chart set to .0025

I dunno

Maybe I'm a numbers freakazoid

-Bill


Last edited by WilleeMac; November 12th, 2013 at 11:36 AM. Reason: clarity, info, add
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  #452 (permalink)
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How to update COT Data for XLS (spreadsheet)

Go to most recent report.

Commitments of Traders - CFTC

Scroll down to Chicago Mercantile Exchange, click Short Format.

About half way down this page ---> CFTC Commitments of Traders Report - CME (Futures Only)

Data is between Japanese Yen and New Zealand Dollar.

Manually enter columns M, N & O (O I, change in O I, total traders.)

Left click, highlight 103,333 through 50,467, right click copy.

Go to spreadsheet right click cell C223, click paste.

Go to toolbar, left click data, text to columns, make sure fixed width is selected, click next (data will be segregated to columns), click next, data will be formatted as general, click finish.

Do same for changes from, percent of and number of traders.

Now that the data has been entered highlight cells C218 through K221. Click the yellow paint brush on the toolbar.

Left click cell C228 and the data is no formatted.

Cheers and keep the rubber side down.

-Bill

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  #453 (permalink)
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WilleeMac View Post
How about 1/4 numbers 25 & 75?

I don't want to detour you from your efforts, but I always thought a simple system could be built using the '80 and '20 levels. I relented pursuing the idea but still harbor strong feelings for these levels, good luck.



WilleeMac View Post
Maybe I'm a numbers freakazoid

If you stick around this thread you're sure to become one, if you ain't already.

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  #454 (permalink)
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Tough lesson today

I will only use CME numbers

I will only use CME numbers

If you use "the numbers" that are documented here, please trust me on this one

-Bill

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  #455 (permalink)
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I thought this was very interesting, a little "off topic" but then again it is often said, it doesn't really matter what you're adding up, it's all just numbers.




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  #456 (permalink)
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TED.com

I very much appreciate the heads up/ so you know, info

esp Mike Rowe

Thank you

-Bill

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  #457 (permalink)
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Thanks for the great post. If you don't mind me leaping in again despite my historical performance, I've got a few questions about what you've described.

My setups are all dependent on finding the start of a trend at a decision / support / resistance point. A lot of my support and resistance lines are interestingly very close to the lines you've used but are generated just by swing highs and swing lows on the 60min chart. I am dependent on detecting the beginning of momentum which gives me a good crack at profiting from a move to the next level.

I'll make no pretence at profitibility and probably one of the things holding me back is impatience and the desire to take more trades than those that occur nicely at my setups. Although my main concentration in pursuit of improvement is to tone down my over-enthusiasm, my curiosity in your methods is intense because a lot of the rangey market behaviour happening at the moment mostly provides setups that aren't worth taking, yet seems ideally suited to strategies based on ranges and the fluctuation around ranges, as opposed to the moves away from those ranges.

Do you know where and when to get in at the extremity of your ranges/levels through a combination of favourable price action and averages - rotation, candle size, volatility? And then just leave a limit order in the way? Or is there more involved as well - DOM, volume, etc?

You can discover what your enemy fears most by observing the means he uses to frighten you.
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  #458 (permalink)
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There's no School like the Old School

The Mario Bar


I've been working on this post piece by piece all weekend, running back and forth from one computer to another. The next couple of weeks are going to be busy here at the house and my trading time will be limited. My family will experience a "red letter day" on Wednesday and the anticipation is high, I hope to share more about that in the future.

I wanted to post a few comments and opinions about the movements of the market since the huge 236 tick "Mario Bar," of Nov 7th. I believe the rate cut by the ECB caught many traders by surprise and sent them scurrying to adjust their positions. Below is a simple chart of the Nov 7 daily bar. What caught my attention was not the 236 tick range but the 134 tick pullback off the low. When I see a bar like this I think, Bullish. A 236 tick move is nothing to sneeze at, it blew thru 5 whole numbers and 3 of them at least twice! Looking for a level of support or resistance going forward into the next few days can be challenging. The first two levels I chose to watch were the Settlement price (close) 1.3428 and the 50% level 1.3412, as it turned out, they served me well all of last week.


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This chart shows how price appeared to respect these levels throughout the week and may have begun to pull away from them on Friday.


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I also wanted to throw in a few comments about rotations around these whole numbers. The Mario Bar has offered (what I believe) a great opportunity to see how this played out. I threw these charts together fairly quickly but I hope they assist in making my case for two theories about price rotations around whole numbers in the 6E. The Mario Bar is omitted from these charts, only the price movements after Nov 7 are charted. The two concepts I want to highlight are; 1.) Price is attracted to whole numbers and 2.) An area I refer to as having a gravitational pull on prices. Detailing this and putting it into words may get confusing, but I believe the charts may help. A little refresher may help those readers who are new to Volume Profile (VP). The RED line on the VPs is the point of control (POC) it signifies the most actively traded price, or simply the one price level where the most trading volume took place.

Another note I feel needs mentioning before going forward are the levels that I believe hold the gravitational pull. At first glance these charts may appear to be pretty much covered with gray bands leaving only a sliver of space in between each level. So I invite readers not to think of these as 4 levels, but think of them as 8 separate ranges, one above and one below each whole number. For example, if price moves away, either above or below a whole number less than 23 ticks, the gravitational pull of that whole number will (My theory) pull price back to that whole number.

This first chart shows the Value Area (70% of the Volume) of all trades traded since the Mario Bar. Notice the peaks of the VP, and their location in reference to the whole numbers, 1.3400 and 1.3450. Also notice the low volume area near the center of the profile, (more on this later). If I look closely at this VP and take notice of the five (5) price levels which indicate the highest volume, four of them are very close to whole numbers. However, the actual POC of this VP although it is within the defined range (gray area below 1.3450) it is the furthest away of all five. Why?


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I believe this chart answers the Why? This chart breaks down the previous profile into individual trading days. Remember there are 8 separate ranges defined here, one above and one below each whole number. Just to be clear, all the POCs of the Value Areas on this chart are within one of these ranges. The theory is, these POCs will gravitate towards the whole numbers. Of the six (6) on this chart, four (4) of them are within 11 ticks. Two (2) of them (Nov 12 & 13) are 16 and 19 ticks away respectively, obviously there's a reason for this.


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The chart below shows the entire VP of each trading day, every day last week price returned to the area of the 50% level (1.3412) or the Settlement price (1.3428,, close) of the Mario Bar and rotated around these levels. On Nov 12 & 13 price rotated thru both of these levels attracting heavy volume. The price rotations of these two days combined with the heavy volume in this area shifted the "6 day" profile's POC up from 1.3408 to 1.3434 then down again to 1.3407 on the 13th. Thursday the 6 day POC shifted up again to 1.3434 and eventually on Friday to 1.3436. (See the second chart below with these levels marked in yellow.)


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OK, so what does all this have to do with anything? Look at the chart below, (I know it's tight, but it's a start) and notice how often price wanders out to the edge of the "gravity" range and returns back to the whole number. Remember there are 8 separate ranges, one above and one below each whole number. By simply looking at this 5m chart it is pretty easy to ascertain the speed of price movements from one level to another. Knowing how price behaves during consolidation periods prior to a news event or economic report can be very helpful in building confidence when contemplating an entry. Small prolonged trading ranges of 20 or 30 ticks ain't that exciting but often they offer opportunity for one of these 14 or 16 tick moves back to the safety of a whole number. And often these moves will "slice thru" the whole number and wander out to the edge of the "gravity" range on the other side.

Stupid is as stupid does. Am I saying run out and buy or sell every price level marked on the chart, no. Price is "here" for a reason, maybe it's yesterday's high or low, maybe some "fib" level for God knows where, maybe yesterday's POC or today's value area. The point I want to make is whole numbers attract price. Bring up a daily chart and look at the highs and lows, compare those levels with the "nearest" whole number and study how price behaved after the high or low was made. Of course many times these levels (highs and lows) are made in the blink of an eye, often around a news event, leaving price to wander and range for the rest of the session, these levels outlined in this post often play a roll in these situations. Most traders who use Volume Profile will agree, initiating a trade near the POC or high volume area often creates another type of situation, one where price just rotates around a handful of ticks up and down and hours may pass before a decent move out of that area materializes. The knowledge of the "pull" of a nearby whole number or the edge of the "gravity" range can often come in very handy in go nowhere markets. I hope I presented the concepts in a manner that shows the theory may be worthy of your further individual study. For those who wish to "travel down this rabbit hole" I invite you to watch the price movements leading up to the PMI numbers, the IFO and ZEW when they are released this week in the Eurozone.


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  #459 (permalink)
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Old School

Back just not sure for how long. Recuperating from a recent surgery. It's SIMPLE but not EASY! This is what I saw. Hell, I may even have the Trend Reaction Numbers wrong.
One and done...can't be at trading station for long periods.
The RISK was well worth the potential REWARD...IMO

emini

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Last edited by eminitrdr; November 18th, 2013 at 07:18 AM. Reason: added RISK explanation
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Old School Follow Up


Is this the rotation Mr. Cashish described in his latest post above? A rotation above a WHOLE NUMBER less than 23 ticks and a gravitational pull back to the whole number. Damn close if you ask me. Could be totally wrong...been away too long
Would expect @Cashish to correct me if I'm wrong.

emini

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