It is generally 12 ticks according to my studies. However, lately it has been more like 9 ticks. The YM has been really slow given this low range, low volatility rally.
I suggest, however, that you study the rotations for YOUR particular chart. If you are triggering off of a 3 min chart, then determine what it is for that chart. We can cover that some time.
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- When do you expect your new website to be up?
- Can the customer choose his FCM of choice when opening the account?
- Do you support ACH transfers out? Is there a fee?
- How do you handle sub-accounts? I like to have different accounts for different styles of trading. Is there a master balance that can be divided across multiple sub-accounts for risk assessment (margin)? How would your metrics work with more than one account?
Thx again for your time. Sorry I don't have any profile questions for you
My ES harmonic rotation is 2.5 to 3 pts; not 2 pts.
No, I don't use a 1 pt stop currently. That is what I was doing when I was collecting that data. Today's market tends to churn a lot before pushing in a direction that may be favorable to the position. 5 years ago, a trader found out fairly quickly what the outcome of the trade is fairly quickly. Post 2008/2009, the market tends to battle in a zone for a lengthy period before one side steps in and pushes in a direction. I feel like a wider stop is necessary unless you don't mind getting chopped up a lot until you catch a runner.
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Good point, but I disagree. This could be a lengthy topic. While I can argue that I can scalp multiple times around a swing trader and extract many more points, that is not the audience I'm addressing. From a strictly mathematical perspective, all-in and all-out is superior in the instance of someone using short targets and trading more frequently. But this trader must also have gotten over their psychological hang-ups. In my experience, the trading plan (if there even is one) is not the problem. The issue is fear and psychology.
Again, this can definitely be a lengthy topic. My perspective is inspired by what most folks really deal with.
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Yes, it does change. I'm not a fan of this Fed-driven, 1-way trade. The market usually goes into price discovery and then re-auctions lower levels to make sure there is a base. It is a bit like building a staircase and then walking down and bouncing a bit to make sure that it is sturdy for the higher structure above.
The best analogy would be: It would be like a surgeon who operates at a top notch hospital in Chicago with MRI's, CT Scanners and a good set of tools suddenly finding him/herself operating out of a tent in Darfur. We can still get the job done, but it is not as clean nor pretty.
I resort back to rotation statistics, measured moves, patterns, daily statistics, etc. The volume profile leaves a clear footprint of what is going on in certain areas. The alternative is to get the data, adjust it and apply it to my charting software to see what was above from before September 2005.
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The market operates a DNA chain. When one molecule changes, there is a complex reaction across what might seem like unrelated parts of the chain. The products you are referring to are all Equity Index products. The FDAX/FESX are governed by their underlying German/European stocks until the US market opens. Once the US market opens, there are other correlations that come into play because the companies underlying the indices are global.
For example, a semi-conductor plant in Singapore burns down and you will see a reaction in all equity index products because it affects everyone from Dell to HP to Samsung to Siemens to Boeing and so on.
If Siemens reports great earnings in Europe through its electronics sales division, then other companies across the world are likely to see a boost in that sector and so investors would react accordingly.
As an individual, you can now participate in the market through many avenues. You want to be heavily weighted in technology in your portfolio? You might buy QQQQ's, XLK, outright AAPL or GOOG stock or you can buy the options on those stocks or options on the index or options on the ETF or simply go and buy NQ, etc etc.
One word of caution, trading one index by using the movement of another is a game that I cut my teeth on as a trader. It is no longer smart to initiate a position based on one product's movement over another (buy ES because TF is breaking new highs, etc).
As always, those are my opinions and anything can happen.
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I stalked an initial short this morning at 42 based on the fact that we had gapped down hard, pulled back to 1) a resistance area, 2) the lower end of an up channel/wedge, and 3) as well as the overnight highs at 43. So I felt there was some confluence for a short there technically. (Based on what I look at). I waited for orderflow to start getting absorbed at the area, and took the trade.
You can see the entry under the red arrow down on the chart here.
My question is this (with the understanding that of course losers are inevitable and that's fine):
I don't currently using any volume profiling tools. In your opinion, did volume profiling/or related tools scream not to take this short trade? I'm always looking for ways to enhance my edge, and I totally buy into the auction market stuff.
I switched to long, quite soon after stopping out of the short, and managed that position for most of the remainder of the day, but I'd really appreciate any commentary on the initial short. Yes there were opportunities to scratch the trade, but I'm going off your principle of not trying to get "smarter" during a trade.
Product selection has many dimensions including account size, liquidity, trading hours for the underlying products, risk tolerance, tick size, fees/commissions as a ratio to range value, market conditions, etc. A whole lot depends on your temperament; are you ok sitting in something like the 10-yr notes where it might not move from the bid/offer prices you entered at for 15 minutes? Do you prefer the zip and power of the FDAX? Can your account afford the margin? Can you afford a $780 per contract move in the FDAX on a news in 12 seconds?
I would only suggest a different time frame or instrument as a last resort really. The idea in trading, in my opinion, is not to treat the market like a casino where you can play Blackjack and then switch to nickle slots then quarter slots and then roulette or craps for entertainment and action. The market is more like the selection of a skilled craft to pursue. If you are going to be a master cabinet maker, then you wouldn't be advised to be a plummer just because your plummer friend is busy for 6 months and is making money.
In my opinion, it is best to get REALLY, REALLY good at whatever you choose. What I see the most of is folks who dabble and spend a bunch of money to learn and then lose a bit. Then they dabble some more somewhere else. Then they fall for a promise of great returns and dabble again because some guy is doing a free trial of his chat room.
This business is about committing a lot of energy for a one-pointed effort to master something specific. I believe that your ability to compete in this effort is based on having a structured approach, good record keeping and iron-clad risk management. This is what I'm focused on creating for traders now through the brokerage and new education material.
Look at it this way, you wouldn't be paid highly as a surgeon if you repair tires full time on the weekend for income. You get paid highly because you have committed to the craft of being a surgeon and are better and more dedicated at it than others.
Wouldn't you agree?
Good luck!
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