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Don,
Thanks for this response to my questions. I have come to the same
conclusions about volume, but from longer time periods. I have
learned to ask if point x is a bottom, where is the reversal bars.
Miner explains this pretty well for the daily bars, but it could work
for any time frame.
best,
jerry
>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
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>> >>
>> >>
>> >> 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:
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>> >>
>> >>
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>> >>
>> >
>> >
>> >To unsubscribe from this group, send an email to:
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>> >
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>> >
>> >Attachment converted: hard drive:snap.gif 33 (GIFf/JVWR) (0003F0FB)
>>
>>
>>
>> To unsubscribe from this group, send an email to:
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>>
>
>
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>
>Attachment converted: hard drive:snap.gif 35 (GIFf/JVWR) (0003F269)
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