Archive for ‘e-mini’

ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 16 November, 2009, No Comment
ESZ9
For 11/16/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1097.42 1103.33 1090.08 1084.17 1076.83

Fed and Agency Announcement

Retail Sales
[Report][Star]8:30 AM ET

Ben Bernanke Speaks
12:00 PM ET

We had some decent reports today and the market is off to the races.  Let’s see what Big Ben has to say later today. I have no doubt we will be treated to glowing reports and rosy prognostications.  Still, it just doesn’t feel good.

ES Emini Day Trading: When to Exit a Trade Using Average True Range Indicator

By , 15 November, 2009, 2 Comments

When do you exit a futures trade?  Day trading related literature is chocked full of trade setups, but the advice on trade exits is very general, almost non-specific.  Ironically, I find proper exits more challenging than entries when trading the ES emini.

When do you cut your losses?  When do you trade out of a winning position ES Emini position?

From the onset, let me say that I often trade a simple 12 tick bracket on my positions.  This strategy is a good one for general trading, and I don’t know that you can go wrong with it, if you understand that you don’t have to stop or limit out to exit a position.  That is to say, if you are clearly on the wrong side of a trade, and your indicators indicate the price action is in the opposite side of your position, why not exit?  Save yourself some money.

So we have established that you do not have to stop out or limit out in order to exit a position, is there a great way to know how much to let a trade run, both for a profit or a loss?

There is an indicator called the average true range that I have found most helpful.  This indicator has been used for a variety of purposes in trading over the years.  Some of the uses have included entry timing, exit timing, and the indicator wasn’t always effective.  So it has received a some bad press.

Average True Range is just one of the wonderful ideas in Wells Wilder’s “New Concepts in Technical Trading” The Average True Range is an exponential moving average, and gives a trader a good idea as to the volatility of the market.   I generally trade a preset multiple of fraction of the market.  The idea is simple, really.  I want to avoid getting stopped out by the market noise of the day, but still retain the chance of pocketing some great gains.

For example; lets say the Average True Indicator is 2 (using a 14 period time setting), and I was setting my stops at 2X the Average True Range,  my stop loss would be set at 4.   In very volatile markets I may decide to trade at .75 of true range, which is what I did last year during those volatile months mid-year.

Whether you bracket your trades or use the Average True Range Indicator, it is important to have a sound exit strategy.  A well-thought out strategy, not a strategy that the market dictates.  Your exit strategy is in your control.

Oh, and never let a winning trade become a losing trade.

ES Emini Day Trading: More on Decision Bar Trading

By , 14 November, 2009, No Comment

I field several requests for information on DecisionBar every week.  For ES Emini day trading, it seems people are looking for that magic bullet that puts them over the top.   Trade setups are evaluated through a filtering process, which is to say that a numbers of indicators are used to select a profitable trade.

When I see a trade setup in the offing, I consciously try to find reasons not to take the ES Emini trade.  That sounds a little counter-intuitive, doesn’t it?

Not really.

One of the biggest mistakes a trader can subject himself/herself to is chasing the price action.  We have all done it, usually with disastrous results, and I consciously try to fashion a trading image of myself as a cautious trader.  Not scared, but cautious.  This may be a blow to the ego of some traders, but futures trading is no place for an ego.

Decision Bar makes a fine filtering device, and has kept me out of some ruinous trades.  It is also a great indicator for breakouts and breakdowns.  Of course, it is not hard to spot a breakdown or breakout, but when you combine the DecisionBar oscillator with the DecisionBar indicator, you find yourself will a lot of information at your fingertips.  Filter, filter, filter.

So I use DecisionBar as one of my primary filtering devices when trading.  I have found the price exhaustion signals on DecisionBar to be unreliable.  This, of course, my be a function of my reluctance to enter counter trend trades, especially when the price action is significantly above or below the 89 period SMA.  I should point out that less than four or five points on the ES Emini does not necessarily exclude a trade, but it does cause a red flag.  I want to trade with the trend and not try to make a living discerning when the market is going to change direction.

The DecisionBar manual even points out some great filtering devices to use when trading the ES Emini and use the Decision Bar program as your primary indicator.  Judging from the reviews by traders on chat boards, it is obvious that most have not taken the time to completely familiarize themselves with the manual provided.  Additionally, there is an easily accessed page on the Decision Bar site called Decision Bar hints, and this resource should be read, too.  There is a wealth of information available on Decision Bar, and once a trader learns the program, there is no reason to complain about using the program profitably.

Finally, there is some concern about the quality of customer service Decision Bar provides.  This is not my experience.  If you call customer service with a trading problem, there is a good chance you will be asked to read the manual.  However, if you have some technical issues, there is no doubt in my mind that you will find the service just fine.

Emini Day Trading: Why Trade Just the ES and YM

By , 13 November, 2009, No Comment

There several emini contracts out there to day trade, and I have been deluged with mail asking me why I just trade these two indexes.  How about the other emini contracts?

It is a fair question.

In some of the postings on this blog you will see an important admonition:  Day trade  one contract with consistent success before you start trading with real money.  I think that is an important consideration when learning the emini contracts.

I am intimately familiar with these two stock market indexes, as they have been an important part of my life for quite a while, and I am very comfortable with the price action in these two contracts.  I might add, as an aside, that the NQ contract is a wonderful contract to learn.

That being said,  I feel most comfortable with the ES and YM contracts because I am familiar with them.  The ES in particular, because of the heavy volume (which results in wonderful liquidity) is a favorite of mine.

I have yet to experience slippage in the YM, though, when trading less than ten contracts and I feel confident in saying the YM is an easier contract to trade than the ES.  I’ve had numerous novice traders tackle the ES from the onset and had less-than-satisfactory results.   But when they switched to the YM, their luck changed along with the results.  I just think the YM is far better starting point than the ES.

There are all sorts of anecdotal theories on why the YM is easier to trade, and none are definitive.  Suffice it say it is simply easier and less subject to unusual movement at the odd moment, which is not to say that you don’t have to trade a YM chart, you had best pay close attention.  But once you have found your groove on the YM, it will produce.

ES Emini Day Trading: Pivot-Fed Announcements-Commentary

By , 12 November, 2009, No Comment
ESZ9
For 11/13/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1098.00 1108.75 1090.25 1079.50 1071.75

Fed and Agency Announcements

Charles Evans Speaks
10:30 AM ET

The question in my mind is where this market is headed.  How long can this gravity defying stock market rally continue?  I know, I know, I thought you were a scalper?  In my trading life I am a scalper, but spending so much time day trading makes you like an intimate friend of this rally.  Just when you think the market could not go higher, it seems to find a way…

ES Emini Daytrading: Daily Pivot, Fed Annoucements and Commentary

By , 11 November, 2009, No Comment
ESZ9
For 11/11/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1092.42 1092.58 1092.08 1091.92 1091.58

Fed and Fed Agency Annoucements

It’s Veterans Day and the Fed is taking it easy.

ES Emini: Daily Pivot-Fed Announcements-Commentary

By , 10 November, 2009, No Comment
ESZ9
For 11/10/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1099.75 1107.75 1084.00 1076.00 1060.25

Daily Pivot-Fed Announcements-Commentary

Redbook
[Report][Bullet8:55 AM ET

Dennis Lockhart Speaks
9:15 AM ET

Janet Yellen Speaks
10:00 AM ET

Richard Fisher Speaks
7:30 PM ET

ICSC-Goldman Store Sales
Released on 11/10/2009 7:45:00 AM For wk11/7, 2009
Prior Actual
Store Sales – W/W change 0.1 % -0.1 %
Store Sales – Y/Y 1.9 % 2.9 %

Highlights
ICSC-Goldman’s same-store retail index ended six straight weeks of gains, down 0.1 percent in the Nov. 7 week to mask a plus 2.9 percent year-on-year rate that’s the best since August last year. ICSC, which stands for the International Council of Shopping Centers, often conducts special surveys, and their latest indicates that shoppers plan to put off holiday shopping until the Friday after Thanksgiving, which the report said is now being dubbed “Bargain Friday” instead of “Black Friday,” the latter referring to the first day of retailer profitability. The report, as others, expects year-on-year rates to continue to improve as retailers lap comparisons with last year’s deep recession. Redbook will post their results at 8:55 ET.

Redbook
Released on 11/10/2009 8:55:00 AM For wk11/7, 2009
Prior Actual
Store Sales Y/Y change 0.9 % 1.7 %

Highlights
Year-on-year rates are definitely on the increase in the retail sector which is beginning to benefit from easy comparisons against last year’s deep recession. Redbook reports a plus 1.7 percent year-on-year rate in the Nov. 7 week, the best since September last year. ICSC-Goldman, issued earlier this morning, shows the best year-on-year rate since August last year. But what this means for the month-to-month comparison is uncertain. Redbook’s first take on October vs. November is very positive, showing a 4.3 percent gain but one a little weaker than the targeted 4.8 percent gain. Redbook says retailers are promoting hard trying to make each day a “Black Friday” with deep discounts and early holiday displays.

Lots of Fed Speak this afternoon as two FOMC give separate speeches this afternoon.  Perhaps the market may take some interest in these speeches, though I cannot discern that the market, at this juncture, is paying attention to anything.  Also, plenty of sales data, which should give some guidance on how the Christmas shopping season may play out.

We made new yearly highs in several of the stock index contracts yesterday. which I wrote about yesterday afternoon.  I would suspect that much of the volatility we experienced earlier in the year may return as the market thrashes about in full bull or bear market rally mode.

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