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Jerry,
Actully the ES is traded by quite a few people with a knowledge of
statistical relevancy. You have to remember that
the Black Scholes equation won a Noble Price in economics in its method of
determining value. The Market Profile
is a concept that takes each half hour and asks, "What is the distribution
of the transactions by price in this half hour"
Infer what you will from that.
I think for me the thing that really tells it, is the volume, where does
volume come into play at key resistance and supports.
I run, off of a one minute bar chart of ES, a 60 minute average volume. I
plot one and two deviations of this 60 period
average. I alarm with a yellow any bar that has tick volume > than +2
deviations, blue dot any bar that exceeds one deviation
and white arrow any bar that has less than -1 deviation. So then you have
to ask yourself... what happened at the high of the day?
It was running into the 50% of a two day range with each successive thrust
being made on less volume, it was a two yellow terminating with a blue dot
at the high. Then a ton of stops were hit when the bulls realized they
couldn't sustain a usually bullish .382 retracement of a the
previous swing and today's OPEN. Major Yellow arrows .. then notice the the
rally back up to yestedays close did not make it up on any volume,
(Not even a blue dot!) hence it is only traders who were short covering..
Then every bear out there is thinking, HEY, if it can't close up above
Thursday's close where is it going to go?.. Hence you see the fatal white
arrow(exhaustion of buying) followed by a yellow arrow of all the sell stops
and mkt orders being hit.
Then another yellow arrow as all the stops are hit on one of the classic
pivots. finally a capitulation volume at 1148.50.. I haven't figured out
yet why it stopped at 1148.50.. Probably because it made 80% of the range of
the day??? Brighter minds than I know..
Don Thompson
----- Original Message -----
From: "Jerry Swanson" <swanwoods@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, March 22, 2002 2:10 PM
Subject: Re: [RT] S&P Day Trading
> Don,
>
> I have a simple question about the Fibonacci series that I really
> never understood and that is the origin of .618 and .382 is any
> given number divided by the following number, for .618, and any
> number divided by the second following number, for .382. But so
> what? I never really understood what that had to do with the
> Fibonacci series and for that matter, what they have to do with
> trading. Of course, they occur at points of support and resistence
> and expansions and contractions from multiple pivots overlap at
> major turning points, but, not always, and even then not with
> anything that could be called statistically relevant. It seems to
> me that in trading, because of rapidly changing market conditions,
> there is really very little that is statistically relevant, that is,
> very few patterns that are better than random chance. Of course it
> is exciting when you pick a top or bottom, but isn't this just a form
> of trader's placebo, to borrow a term from medicine?
>
>
> jerry
>
>
>
>
>
>
> >Ron,
> >
> >One book that deals with geometric ratios other than the Fibonacci
Series.
> >Here in you will
> >discover that there is more to life than .618 and .382.
> >Square Root 2, 3, and 5 and the reciprocals and the expanding and
> >contracting of the series.
> >
> >Bryce Gilmore's first book ( Market Geometry) is a pretty apt description
of
> >the numbers and ratios that are out there that a freely
> >traded market will work to. Gilmore is the one who brought the .786
> >retracement to view for traders.
> >It is left to you to see how it all fits together. So you have a bit of
work
> >cut out if you don't have a utility to calculate it easily. In ES such
> >geometry works really good.
> >
> >His third book, Trading With an Edge, is a pretty good book about how he
> >thinks, basically he uses his expertise
> >in time and price to figure good guess as to current trend in the market,
> >but when it comes to trading it is all
> >pattern and low risk entry. His main point is to find those trades with
low
> >risk and load the boat, since they never
> >come back on you. He doesn't hold over night. Also his method is pretty
> >much pure price with no indicators, just
> >the chart.
> >
> > A good example in ES is in the gif. the scale is the current days
range
> >at about 1:30,
> >the point is that traders on the second rally at 1:30 sold at 1163.50
limit.
> >The buy stop is one tick above 1164.00 or
> >1164.25. So you only risk 3/4 of a point to figure if you are right or
you
> >are wrong. This is a low risk entry and
> >is a discretionary kind of thing, as far as I know. This is one that
will
> >come back on you, but the internals were
> >pretty grim so probably not. The biggest thing is to be around
successful
> >traders who are making money in the market
> >that you want to trade! It will be really inspiring, and as you watch
them
> >work the market, you begin to see that it can be done.
> >
> >Don Thompson
> >
> >
> >
> >
> >----- Original Message -----
> >From: "Jim Johnson" <jejohn@xxxxxxxxxxxxxxxx>
> >To: "Ron Cernokus" <roncer@xxxxxxxxxxx>
> >Cc: <realtraders@xxxxxxxxxxxxxxx>
> >Sent: Wednesday, March 20, 2002 7:17 PM
> >Subject: Re[2]: [RT] S&P Day Trading
> >
> >
> >> Hello Ron,
> >>
> >> couple of ideas for you--
> >>
> >> I trade intraday SP's and have found I've learned most about patterns
> >> from:
> >>
> >> Teresa Lo of www.trendvue.com. her chat room is OK for a while. her
> >> Trader's Manual is very well written, clear, stripped of jargon and
> >> fluff. good stuff on simple patterns and how she trades them.
> >>
> >> Linda Raschke course (expensive) is very good for that. the
> >> StreetSmarts book is only fair for that purpose.
> >>
> >> Joe Ross's book Trading as a Business has some good stuff but is very
> >> overpriced i think. his setup patterns are probably better explained
> >> and used by T Lo above.
> >>
> >> Nisson or Morris for candlestick formations. a few basic ones are all
> >> lyou need.
> >>
> >> Ultimate Trading Guide by Hill, Pruitt and Hill is very good for
> >> patterns in the first half of the book especially.
> >>
> >> Although not geared to patterns only, Trader Vic by Vick Sperandeo has
> > > some good stuff.
> >>
> >> I've just begun Alan Farley's Mater Swing Trader but it promises to be
> >> very helpful.
> >>
> >> The one thing I've noticed is that after you strip away all the cute
> >> names etc, many of these chart patterns are old as the markets. Many
> >> of these current authors are repeating, with the help of easy-to-make
> >> charts the same stuff old timers like Schabacker, Sklarew, Wyckoff,
> >> Kerr, Dunnigan, Dow described earl in the 20th century. Candlesticks
> >> are even older.
> >>
> >> If I could buy only one, it would be Teresa Lo's manual.
> > >
> >> --
> >> Best regards,
> >> Jim Johnson mailto:jejohn@xxxxxxxxxxxxxxxx
> >>
> >> Wednesday, March 20, 2002, 6:47:16 PM, you wrote:
> >>
> >>
> >> RC> Don,
> >>
> >> RC> I also trade in the discretionary style you mentioned here.
However I
> >> RC> feel the need for better short term pattern recognition skills.
Is
> >> RC> there any text that you or other discretionary traders might like
to
> >> RC> recommend for short term pattern recognition. Comments
appreciated.
> >>
> >> RC> Ron
> >>
> >>
> >> RC> Don Thompson wrote:
> >> >>
> >> >> John,
> >> >> Your first catostrophic stop loss is $3000 or 12 S&P Points?
Whew..
> >that
> >> >> takes alot of balls to trade that level of
> >> >> a stop. My inclination is to get it down to two points or so.. no
more
> >than
> >> >> that. I can see you might have to make
> >> >> a system do this kind of stop loss if you aren't looking at the
actual
> >> >> prices during the day trading it. The
> >> >> day traders I know who are successful don't have more than a 2
point
> >stop
> >> >> loss and when in doubt they get out
> >> >> at 1 or .50 at best. But they are purely discretionary traders that
> >work off
> >> >> of price and pattern.
> >> >>
> >> >> Don Thompson
> >> >> ----- Original Message -----
> >> >> From: "profitok" <profitok@xxxxxxxxxxxxx>
> >> >> To: <realtraders@xxxxxxxxxxxxxxx>
> >> >> Sent: Wednesday, March 20, 2002 1:52 PM
> >> >> Subject: Re: [RT] S&P Day Trading
> >> >>
> >> >> > hello john
> >> >> > I can not see how you can make money if your profit objective is
> >SMALLER
> >> >> > than your stop loss
> >> >> > nice day
> >> >> > Ben
> >> >> > ----- Original Message -----
> >> >> > From: "John Cappello" <jvc689@xxxxxxx>
> >> >> > To: <realtraders@xxxxxxxxxxxxxxx>
> >> >> > Sent: Wednesday, March 20, 2002 6:44 AM
> >> >> > Subject: [RT] S&P Day Trading
> >> >> >
> >> >> >
> >> >> > >
> >> >> > > My system has not performed at max this year so far and I am
doing
> >> >> > > adjustments to current market conditions mainly related to
> >psychology
> >> >> > > of the market and ranges. I am still trading it at a low
contract
> >> >> > > levels 5% of asset allocation. After debugged will step up.
> >> >> > >
> >> >> > > Adjustments being made.........entry and exits not limited to
Level
> >2
> >> >> > > and 3 Supports and Resistance.
> >> >> > >
> >> >> > > Widen trading ranges..............expected today [1179 to 1183]
> >sell
> >> >> > > points [1165 to 1169] buy points. No trade if total range
beyond
> >> >> > > 1183 to 1165 at open.
> >> >> > >
> >> >> > > My personal stops are $3000 ; min profit target $2000 ;
trailing
> >stop
> >> >> > > once $1500 profit reached is $750 ; MOC or OCO if tweaked.
> >> >> > >
> >> >> > > John
> >> >> > >
> >> >> > >
> >> >> > > To unsubscribe from this group, send an email to:
> >> >> > > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >> >> > >
> >> >> > >
> >> >> > >
> >> >> > > Your use of Yahoo! Groups is subject to
> >> >> http://docs.yahoo.com/info/terms/
> >> >> > >
> >> >> > >
> >> >> >
> >> >> >
> >> >> >
> >> >> > To unsubscribe from this group, send an email to:
> >> >> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >> >> >
> >> >> >
> >> >> >
> >> >> > Your use of Yahoo! Groups is subject to
> >http://docs.yahoo.com/info/terms/
> >> >> >
> >> >> >
> >> >>
> >> >>
> >> >> To unsubscribe from this group, send an email to:
> >> >> realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >> >>
> >> >>
> >> >>
> >> >> Your use of Yahoo! Groups is subject to
> >http://docs.yahoo.com/info/terms/
> >>
> >>
> >> RC> To unsubscribe from this group, send an email to:
> >> RC> realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >>
> >>
> >>
> >> RC> Your use of Yahoo! Groups is subject to
> >http://docs.yahoo.com/info/terms/
> >>
> >>
> >>
> >> To unsubscribe from this group, send an email to:
> >> realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >>
> >>
> >>
> >> Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> > >
> >>
> >
> >
> >To unsubscribe from this group, send an email to:
> >realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> >Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
> >
> >
> >Attachment converted: hard drive:snap.gif 33 (GIFf/JVWR) (0003F0FB)
>
>
>
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