Pattern within MP
E-Mini S&P500
I suggest that as the chart is a tad larger than the window that you use both the up/down and sideways scroll bars.
Click image for original size
I suggest that as the chart is a tad larger than the window that you use both the up/down and sideways scroll bars.
What does the market suggest ahead of the BB QE2
Click image for original size
It seems that many MP vendors avoid the concept of stops when talking about trades...they shrug it off saying "I trade the profile and wait to see the market structure" etc, etc , etc...
So here you are Alex suggesting some possible trade ideas. And my questions are as follows:
1)Do you teach traders to use a specific stop concept generated from your own work? Or are they left to figure out the hard part..
2)Will you take the short trade (the 72-74)in the overnight session or will you wait to RTH and if so where will the stop be?
3)Will you take the fade trade up above 1200 in the overnight or will you wait to RTH and where will the stop be?
The reason I ask these perhaps pointed and blunt questions is that I'm tired of seeing so many babble on about the profile and using all the same basic concepts but never addressing the RISK on each trade.
I'm hoping you can enlighten us on this long before the market opens or trades to either one of the prices mentioned. I've seen other MP gurus make excuses and come back with reasons AFTER the trade is over.
You have always been a "straight shooter" with this forum and I respect you even though this post probably sounds confrontational. I grow weary trying to figure out longer term profile trades and that comes across in this post.
Thanks
Bruce
So here you are Alex suggesting some possible trade ideas. And my questions are as follows:
1)Do you teach traders to use a specific stop concept generated from your own work? Or are they left to figure out the hard part..
2)Will you take the short trade (the 72-74)in the overnight session or will you wait to RTH and if so where will the stop be?
3)Will you take the fade trade up above 1200 in the overnight or will you wait to RTH and where will the stop be?
The reason I ask these perhaps pointed and blunt questions is that I'm tired of seeing so many babble on about the profile and using all the same basic concepts but never addressing the RISK on each trade.
I'm hoping you can enlighten us on this long before the market opens or trades to either one of the prices mentioned. I've seen other MP gurus make excuses and come back with reasons AFTER the trade is over.
You have always been a "straight shooter" with this forum and I respect you even though this post probably sounds confrontational. I grow weary trying to figure out longer term profile trades and that comes across in this post.
Thanks
Bruce
so far no response...I was hoping to nail this down way before FED day and before the trades come into play. I'll send him an email.
I'm not sure why some folks post and then never check for responses.
I'm not sure why some folks post and then never check for responses.
Bruce I apologise for the late reply. If you had emailed me direct earlier then you would have got a quicker response but the mypivots email to me did not get to my inbox until this afternoon. Better still if you had skyped me then you would have received an instant response. Blogs by their nature for me are slow. I have a life and a living to make and a website that I constantly update and don't always have time to watch to see if someone has commentated on one of my charts. Again apologies if I don't work within your timeframe.
I enjoy dialogue and frequently have found over the years that many don't wish to engage the debate nor wish to challenge for in reality they only want to be a trader who cares little for anything other than ripping money out in the one minute chart believing that they take little to no risk due to the ultra short term nature of their trade. They have no concept of the degree of risk inherent in day trading versus swing trading.
To take your questions and perhaps expand a little on them
1.Stops are a function of - in no particular order and by no means an exhaustive list - price, time, type of trader, timeframe of trader, account leverage, account size, influence by other events, pattern in the market, diversified or single market etc etc. There are no pure hard and fast rules along the lines of entry minus/plus x points. However I do operate with crash stops which are normally determined by standard deviations within a time horizon. A more simplistic approach could be for example to use a ATR and some percentage of that to determine a stop.
The trade that has never been on side especially within a 15-20 minute time period is not a good entry and one needs to manage the exit. Conversely the trade that is never off side is the one to hang onto for dear life and set a break even stop and go play golf.
So this elicits the question of how is my entry versus current levels versus the open, the close, the highs, the lows, the value area in development, the degree of volatility and therefore a look at range development. Rotation and therefore direction in the market is key especially when trying to identify the type of market response. IE buy dips sell rallies or initiate momentum trades. IE is the market developing higher lows/highs or the opposite and is it breaking the rotation to then develop from higher lows to lower highs. Markets will staircase and continue to staircase until they have achieved a level where one side can then overcome the trend and dominate the trade back the other way. Key is frequently to try to identify the timeframe that the market is auctioning. This might be 1 minute or it might be 4 hours. IE markets sometimes/frequently must be allowed to breathe and develop. Patience is a virtue lacking in many.
My charts are not always right and perfect and will always try to anticipate the forthcoming rather than the look back.
The chart said sell 1202 with stops above and pyramid back below 1186 and 1179. IE responsive sell the rally into what I had previously identified as a MP measured move target. the exact level is actually 1201.9. If this trade works then there should be a rejection within 15-20 minutes in which case the stop becomes a function of everything mentioned above including money management. IE I am looking for the market to walk into a brick wall otherwise the potential for it becomes just another scalp trade rather than a potential swing. Until the market starts to develop a rotation in the opposite direction then it is just a scalp where trading multiple lots can aid in terms of paying for stops whilst leaving a core position in place.
The chart also said sell the break of 1174 1172 and identified the current POC as being 1179-1180. So by inference selling a break would be an anxious trade until the market broke 1172 and started to stay below. Again as an initiative trade of selling weakness one would want instant gratification otherwise a stop back above the POC would/should be used. Also I operate on the principal that if a level failed then a reversal trade is to be entered.
The POC is one of those areas where one is able to scratch/exit poor location. I see nothing in terms of what was written on the chart to be ambiguous nor confusing and hope that my writing here is similarly neither ambiguous nor confusing.
2. I choose to show my charts in RTHs to overcome noise but mainly because there are sufficient hours in the day to trade just those hours and also because they represent 90% of the usual volume and activity. I am not saying don't trade the non RTHs, on the contrary one can be afforded fills that might not occur at dead lows and highs that you would not get in RTHs. I do take trades in post and pre market hours and the management is the same. The degree of stop can be quite small as in the case above 1202 (less than 1 point) or larger as in the case of below 1174 1172 (5-6 points). There is always an element of time spent at a price to determine whether the market is accumulating or distributing reflecting a lack of range extention that one also needs to look at in terms of whether activity is in the middle or at an extreme to initiate an entry. Again depending on this depends on the anticpated outcome especially in a market that is frequently controlled by an Algo that contracts and controls a range within 2 points
3.yes is the short answer and please re-read above
To take your other comments. Re Risk I entirely agree and the profile can afford one levels to determine risk. For example a market that closes in an upper quartile one day should engender the response of further range extention in the direction. If it then re-opens in the opposite quartile of the prior days range then most would probably fade that trade but I would not . I would press the new direction with a stop initially back at the prior days setttlement/ high that I would then try to drop say to a POC then the new day's open / entry as soon as I could. This might also involve a question about value and where and how it was developing because a move back inside value would likely force a stop out (and possible reversal) as well.
You say you grow weary of trying to figure out longer term profile trades. This is understandable in a world of Algo that frequerntly reverses the trend on volume that none of us could imagine doing but that's because we don't have the account balance to support that and they do. The key is the reversal pattern for the longer term trends
I tried to answer your questions and comments as if it had been answered last weekend and indeed I did not look at the chart to write this reply.
Now let's look at what happened subsquently. Monday the market traded down post 3pm to the 1174 1172 level. That late in the day on that extreme one would question why take the trade. After all the trade was a higher open that reached for the high from 10/25 with no further extention. by definition the market was no long advancing and a short trade with a stop above the days high should have been entered long before the market traded 1174. But let us assume that you took the trade at 1174 and the stop was the failure to extend within a time bracket of 15-20 minutes followed by upward rotation post 3:30pm that took out the settlement from the prior day and involved a reversal that assuming a day trade regained half the earlier loss. This level at roughly 1179 became what I would refer to as a hidden pivot and had greater influence for susequent and especially for today's trade and now is the break down level for a medium term swing trade. The question about the 1202 level has not yet arisen but I have discussed this above. However for the sake of continuing the theme and as many people are driven by rote rather than flexibilty what if the same principal - IE selling a break down - had been applied to today's chart. Where exactly does not matter for what I want to address is the move back to Monday's settlement and then below it. Well it should have seen further selling to take the market down to roughly 1170h to create the symmetry of price but it reversed almost immediately from 1180 and regained the settlement and if one had been slow then the 6 point rotation would have stopped one out. However to address this correctly why wait for the 6 point rotation when it was obvious that the timeframe the market was auctioning was a one minute due to the FED news. In reality the rotation occurred at 1183.75 which is less than 6 points that probably should almost always be applied for that is the extent to which the Algo is prepared to risk so maybe what's good for them is good for us.
I am sure you will have further questions and comments and frankly I wish that others would join in the discussion.
I enjoy dialogue and frequently have found over the years that many don't wish to engage the debate nor wish to challenge for in reality they only want to be a trader who cares little for anything other than ripping money out in the one minute chart believing that they take little to no risk due to the ultra short term nature of their trade. They have no concept of the degree of risk inherent in day trading versus swing trading.
To take your questions and perhaps expand a little on them
1.Stops are a function of - in no particular order and by no means an exhaustive list - price, time, type of trader, timeframe of trader, account leverage, account size, influence by other events, pattern in the market, diversified or single market etc etc. There are no pure hard and fast rules along the lines of entry minus/plus x points. However I do operate with crash stops which are normally determined by standard deviations within a time horizon. A more simplistic approach could be for example to use a ATR and some percentage of that to determine a stop.
The trade that has never been on side especially within a 15-20 minute time period is not a good entry and one needs to manage the exit. Conversely the trade that is never off side is the one to hang onto for dear life and set a break even stop and go play golf.
So this elicits the question of how is my entry versus current levels versus the open, the close, the highs, the lows, the value area in development, the degree of volatility and therefore a look at range development. Rotation and therefore direction in the market is key especially when trying to identify the type of market response. IE buy dips sell rallies or initiate momentum trades. IE is the market developing higher lows/highs or the opposite and is it breaking the rotation to then develop from higher lows to lower highs. Markets will staircase and continue to staircase until they have achieved a level where one side can then overcome the trend and dominate the trade back the other way. Key is frequently to try to identify the timeframe that the market is auctioning. This might be 1 minute or it might be 4 hours. IE markets sometimes/frequently must be allowed to breathe and develop. Patience is a virtue lacking in many.
My charts are not always right and perfect and will always try to anticipate the forthcoming rather than the look back.
The chart said sell 1202 with stops above and pyramid back below 1186 and 1179. IE responsive sell the rally into what I had previously identified as a MP measured move target. the exact level is actually 1201.9. If this trade works then there should be a rejection within 15-20 minutes in which case the stop becomes a function of everything mentioned above including money management. IE I am looking for the market to walk into a brick wall otherwise the potential for it becomes just another scalp trade rather than a potential swing. Until the market starts to develop a rotation in the opposite direction then it is just a scalp where trading multiple lots can aid in terms of paying for stops whilst leaving a core position in place.
The chart also said sell the break of 1174 1172 and identified the current POC as being 1179-1180. So by inference selling a break would be an anxious trade until the market broke 1172 and started to stay below. Again as an initiative trade of selling weakness one would want instant gratification otherwise a stop back above the POC would/should be used. Also I operate on the principal that if a level failed then a reversal trade is to be entered.
The POC is one of those areas where one is able to scratch/exit poor location. I see nothing in terms of what was written on the chart to be ambiguous nor confusing and hope that my writing here is similarly neither ambiguous nor confusing.
2. I choose to show my charts in RTHs to overcome noise but mainly because there are sufficient hours in the day to trade just those hours and also because they represent 90% of the usual volume and activity. I am not saying don't trade the non RTHs, on the contrary one can be afforded fills that might not occur at dead lows and highs that you would not get in RTHs. I do take trades in post and pre market hours and the management is the same. The degree of stop can be quite small as in the case above 1202 (less than 1 point) or larger as in the case of below 1174 1172 (5-6 points). There is always an element of time spent at a price to determine whether the market is accumulating or distributing reflecting a lack of range extention that one also needs to look at in terms of whether activity is in the middle or at an extreme to initiate an entry. Again depending on this depends on the anticpated outcome especially in a market that is frequently controlled by an Algo that contracts and controls a range within 2 points
3.yes is the short answer and please re-read above
To take your other comments. Re Risk I entirely agree and the profile can afford one levels to determine risk. For example a market that closes in an upper quartile one day should engender the response of further range extention in the direction. If it then re-opens in the opposite quartile of the prior days range then most would probably fade that trade but I would not . I would press the new direction with a stop initially back at the prior days setttlement/ high that I would then try to drop say to a POC then the new day's open / entry as soon as I could. This might also involve a question about value and where and how it was developing because a move back inside value would likely force a stop out (and possible reversal) as well.
You say you grow weary of trying to figure out longer term profile trades. This is understandable in a world of Algo that frequerntly reverses the trend on volume that none of us could imagine doing but that's because we don't have the account balance to support that and they do. The key is the reversal pattern for the longer term trends
I tried to answer your questions and comments as if it had been answered last weekend and indeed I did not look at the chart to write this reply.
Now let's look at what happened subsquently. Monday the market traded down post 3pm to the 1174 1172 level. That late in the day on that extreme one would question why take the trade. After all the trade was a higher open that reached for the high from 10/25 with no further extention. by definition the market was no long advancing and a short trade with a stop above the days high should have been entered long before the market traded 1174. But let us assume that you took the trade at 1174 and the stop was the failure to extend within a time bracket of 15-20 minutes followed by upward rotation post 3:30pm that took out the settlement from the prior day and involved a reversal that assuming a day trade regained half the earlier loss. This level at roughly 1179 became what I would refer to as a hidden pivot and had greater influence for susequent and especially for today's trade and now is the break down level for a medium term swing trade. The question about the 1202 level has not yet arisen but I have discussed this above. However for the sake of continuing the theme and as many people are driven by rote rather than flexibilty what if the same principal - IE selling a break down - had been applied to today's chart. Where exactly does not matter for what I want to address is the move back to Monday's settlement and then below it. Well it should have seen further selling to take the market down to roughly 1170h to create the symmetry of price but it reversed almost immediately from 1180 and regained the settlement and if one had been slow then the 6 point rotation would have stopped one out. However to address this correctly why wait for the 6 point rotation when it was obvious that the timeframe the market was auctioning was a one minute due to the FED news. In reality the rotation occurred at 1183.75 which is less than 6 points that probably should almost always be applied for that is the extent to which the Algo is prepared to risk so maybe what's good for them is good for us.
I am sure you will have further questions and comments and frankly I wish that others would join in the discussion.
btw I am not an MP vendor ;)
I am adjusting the 'above 1202' trade stop to 1204 for I have based off today's charts a further measured move at 1203.1 to match in with a previously computed level at 1201.9. so rather than just offering maybe a better strategy would be to wait with the finger on the trigger from 1202 thru 1203.
I also consider that should tomorrow break and close below 1192 that a sell signal will be hoisted that requires a stop close 1292 scenario versus the intraday break
I also consider that should tomorrow break and close below 1192 that a sell signal will be hoisted that requires a stop close 1292 scenario versus the intraday break
Originally posted by alleyb
...don't always have time to watch to see if someone has commentated on one of my charts...
You can subscribe to any topic that you start. If you do that you'll receive an email if someone replies to it. You won't receive another email until you visit the forum.
Thankyou day trading. I get a gazllion and one emails per day yours would become just one of too many. Think I will keep to the old fashioned way for what works for you may not work for me but thankyou all the same.
PS I write a substantive reply to BruceM and I assume you read it? or did you? for the only thing you can comment on is the reply by email facility
I repeat I welcome discussion and debate from all although as I kept BruceM waiting for his reply I dare say he will in turn keep me waiting and thats ok but surely there are others out there or do you all fall into the camp of what I referred to as those .....
If that's the case then the lack of dialogue/questions/comments/challenge from others would probably confirm that view in which case I suspect your broker loves you
Please guys and gals I am urging a debate / discussion. BruceM says
In other words he is suggesting that he sees the merit of MP but does not know how to apply that within his own concept of risk and money management and brings one back to the question of what type of trader are you and are you a trader that does things purely by rote. If so then the debate of risk managment (in pure simplistic terms ...stops) probably is a subject that would bore you for it involves maths
PS I write a substantive reply to BruceM and I assume you read it? or did you? for the only thing you can comment on is the reply by email facility
I repeat I welcome discussion and debate from all although as I kept BruceM waiting for his reply I dare say he will in turn keep me waiting and thats ok but surely there are others out there or do you all fall into the camp of what I referred to as those .....
Originally posted by alleyb
.....who cares little for anything other than ripping money out in the one minute chart believing that they take little to no risk due to the ultra short term nature of their trade. They have no concept of the degree of risk inherent in day trading versus swing trading.
If that's the case then the lack of dialogue/questions/comments/challenge from others would probably confirm that view in which case I suspect your broker loves you
Please guys and gals I am urging a debate / discussion. BruceM says
It seems that many MP vendors avoid the concept of stops when talking about trades...they shrug it off saying "I trade the profile and wait to see the market structure" etc
In other words he is suggesting that he sees the merit of MP but does not know how to apply that within his own concept of risk and money management and brings one back to the question of what type of trader are you and are you a trader that does things purely by rote. If so then the debate of risk managment (in pure simplistic terms ...stops) probably is a subject that would bore you for it involves maths
this will take me some time to respond but wanted to acknowledge your reply.....These "wordy" replies intimidate me and my 3rd grade writing style but I will take some stabs at getting back to this.
thanks for being specific in your response...I'm always envious of those who can articulate what's in their brains so well....I'm not sure why you received negative feedback...I'm wish some would join in to this....lots of great minds out here but few get involved
In general as for me and MP, I am evolving to more of a volume profile trader and don't even look at VA highs and lows currently...I'll ramble so more later and get to some of your specific ideas Alex.
thanks for being specific in your response...I'm always envious of those who can articulate what's in their brains so well....I'm not sure why you received negative feedback...I'm wish some would join in to this....lots of great minds out here but few get involved
In general as for me and MP, I am evolving to more of a volume profile trader and don't even look at VA highs and lows currently...I'll ramble so more later and get to some of your specific ideas Alex.
BruceM thks I imagined it would take some digesting, after all it took me more than a few minutes to write it.
Re negative feedback its not its a lack of any participation and again to anyone reading this I urge you pls get in involved. I most certainly do not have any monopoly on being right and if someone has a better idea than me than I am very willing to embrace it. After all we are all on the same side just trying to make a living
Lastly BruceM I pay more attention to the volume pattern, always have done, than pure volume if thats of any help
Re negative feedback its not its a lack of any participation and again to anyone reading this I urge you pls get in involved. I most certainly do not have any monopoly on being right and if someone has a better idea than me than I am very willing to embrace it. After all we are all on the same side just trying to make a living
Lastly BruceM I pay more attention to the volume pattern, always have done, than pure volume if thats of any help
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