Posts tagged ‘futures trading’

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.

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: Pivot and Fed Announcements, Commentary.

By , 8 November, 2009, No Comment
ESZ9
For 11/09/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1072.67 1079.08 1063.08 1056.67 1047.08

Fed and Agency Announcements

Monday’s Pivot info is above.
Not a whole lot relevant of day trading info on Monday, with the exception of some bill and note auctions.  All sorts of chatter on the ES Emini day trading chat boards, the doom and gloom crowd is out in force, and with good reason, though there is an infinite realm of political and economic possibilities.  I can’t say I fully understand the market of late, and I am thankful I am a scalper so I don’t have to try to pick the market direction.  I have not the slightest idea which way we are headed.
If you haven’t watched these FREE Videos, you are missing great info

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The Stock Index Secret Trade: A Powerful Trading Technique for the Novice Trader.

By , 6 November, 2009, No Comment

I have been involved in the securities business for my entire adult life, having been a trader at both the retail and institutional level. Trading stocks, or forex pairs is a wonderful way to stack up money, if you have the experience and knowledge to trade successfully.

Unfortunately, that learning curve can be a steep one, and expensive. With that in mind, I looked over a program to trade equities that is specifically designed for beginners. As you may know, most stock indexes are composites of a basket of equities trading on either the NYSE or the NASDAQ exchanges. These indexes are traded in a variety of methods ranging from Options to Futures Contracts, and usually originate on the Chicago Mercantile Exchange or the CBOT. The nice thing about stock indexes is there is great transparency in trading these issues. The markets are well regulated, liquid, and orderly.

Many novice traders purchase trading robots or exotic trading systems that may cost as much as $10,000 a year, and might gave limited success. I do not recommend purchasing bots or high priced systems to start. I also recommend that all traders “paper trade” on demo account until they are proficient in a single market. I do not recommend trying to trade multiple markets in the learning stage of trading, as each market has a distinct personality and demeanor. Learn to trade one market proficiently, then you might choose to move on to others. Several trade set-ups repeat themselves on a regular basis in the market. This can be attributed, theoretically, to a number of factors.

1. Technical traders trade in tight parameters and use similar indicators. Thus, support and resistance may become self-fulfilling trading patterns.

2. Some behavior economists believe the human response to a given set of trading stimulus is a constant, thus the repetitive set ups for profit.

3. Wave theorists believe the market moves in distinct and predictable patterns based upon the actual chart formations. Whatever the reason, if a novice could learn just one of these consistently profitable trade set-ups, he could be quite adept at trading the markets.

stock and futures trading trade revealed

stock and futures trading trade revealed

German trader Karl Dittman has identified one of these patterns with great success and accuracy and has published his work and received a very receptive response, from experienced and inexperienced traders alike. His book, Stock Index Secret Trade would allow the greenest trader to be very profitable over a long period of time. The single trade he uses, is very easy to spot, often overlooked, and is consistent winner. Any novice would profit greatly using this simple but effective system

Daily Pivot and Fed and Fed Agency Announcements

By , 4 November, 2009, No Comment
ESZ9
For 11/04/2009
How To Use
Symbol R1 R2 Pivot S1 S2
ESZ9 1041.83 1042.42 1041.42 1040.83 1040.42
ISM Non-Mfg Index
[Report][Bullet10:00 AM ET

New Video: More on the Scalping Style of Daytrading

By , 3 November, 2009, No Comment

Day trading the ES emini using the short time period and small gains is called scalping, and it is the style of trading I use. I don’t long for long term trends, and I don’t hold trades overnight…

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