DOW - PA, Stops and hedging

I do not aspire to trade for living, neither do I live for trading, I trade for profits.

Description of full time/part time trader does not apply to me (in my mind), I make sure I am a profitable trader, I am not govern by what others think about it.
I trade when I want and decide to trade.

With consistent regularity I put self sabotaging practices like FOMO, anger ect... to bed and taking trading opportunities when they come.

Conditions for being able to trade:
- being physically and emotionally well or as well as possible
- not burdened with grieve, worries or being deeply upset or anxious - being in a state of stable condition in all aspects and being able to focus, controlling fear, greed and anxiety (Heartmath / Emwave-investigate it further)
- having enough time to maintain the trade, not rushing
- being comfortable

After a busy trading just relax with your favour drink, while being immersed in Chopin.



In this journal I will explore the past PA upon which I put grid of things which I have been using for a long time.
I do not propose a full description of trading system/strategy, what follows I use as a preparation for the next day/s or longer mid term trades, and/or afterwards for intraday and scalping trades between the London open and US close.

Not every single pointed concept is used at all times, some are interchangeable as one replaces the other, eg. Guppies MAs or Price channels.

If anybody tells you that trading is not risky, just ignore them, as there is no need to waste any time on them.

Some of the posts below make me cringe, few other posts I think are worth careful attention.
However, all the posts represent the true and not sanitised picture of my pilgrimage over the last few years, are set in posts I cannot edit.
Some present a record of experiment/s while being tested, others present things which I have used for a long time, and subjectively classify them as tested, therefore useful for my trading style.
Please do not spent your valuable time by scrutinizing every post searching for some hidden treasure, though some posts you might find useful.

It all can be summarised as pump & dump, and dump & pump ongoing cycle of trading v investing.
It takes time to develop the necessary art to know the difference between them and apply that knowledge to trading in practical and disciplined way as without it IMHO there is no persistently wining strategy.


Danger of self delusion and self defeat

Anything and everything that makes me think that I know the future PA is an extremely dangerous proposition, and I work hard to avoid it.
This is self-delusion, which is always harmful. This includes wise commentary on historic charts presented in a way as if i have known what was going to happen. Indicators might well fit into that category, especially if they are not studied and assessed for they possible usefulness in accordance with market condition/s and a given TF. That is why many traders eventually stop using them, and concentrate solely on PA.
If PA is the most important and indicators are derived from it, it looks sensible to concentrate on PA and not suffer from the overload of suggestive information indicators supply.
I find that last several daily bars or a substantial move on H4 creates a heuristic bias in my mind, and I have to either eliminate that bias or somehow control it, otherwise my expectations and perception of what is happening on a lower TFs is badly effected. At the very least it is important to be aware of the natural heuristic biases that we create or the ones that somehow enter us, taking account that some of them might be well hidden biases. For me personally, dealing with these biases created by unlearn but natural instinct/s (heuristic) demands some active discipline, some are easier to eliminate, or starved of oxygen by things like a profitable trading strategy and trading plan based on that strategy. A practice of not adding to a loosing trade/s, and adding to a wining trade/s is also useful, and the utility of this practice grows with positive experience, when profits push out the otherwise entrenched convictions and heuristic biases, often useless and harmful that one needs to eliminate.

PA - Market structure
This is by all means the most important.
The structure of HH/and HL or LL/LH is indicating that there is probability of continuation, just over 70% that trend will continue

Wide Range Bars = WRBs and other bars and bar's formations provide is a useful insight into the PA and adds an important additional explanation to the Market structure,
https://www.forexfactory.com/thread/...hedging?page=8 (Page 8, post156, )
https://www.forexfactory.com/thread/...8#post15145378 Page 37 post 729
https://dotnettutorials.net/lesson/w...ding-strategy/ - useful further study
https://www.amazon.co.uk/dp/11181140...v_lig_dp_it_im


Stop Loss and Protective Stop are implemented in accordance with the trading strategy and a given TF.
If I do not have any idea where to put SL, I do not trade.
Position size is important, especially for the initial trade from which I build a larger position.


Trendlines, MAs, momentum oscillator/s and 3_Level_ZZ_Semafor and renko charts
Hand drawn and automatically trendlines and trend channels by an MT4 indicator called Auto Trendlines and Auto Trendchannels
I use trend channels, created by MAs
The concept of trend, range and the median are useful
https://dotnettutorials.net/lesson/b...ding-strategy/
MAs are usually helpful
EMA 200
Smoothed MA5 set to close together with Smoothed MA5 set to open alongside Smoothed MA5 shifted forward 5 spaces set to close - MA5 I refer to as MA5 Price channels

EMA 100 with FIB channel on some charts - the top and bottom of this channel is useful to establish PTs and when reached to get ready for possible rotation

GMMA is a great tool, read Daryl Guppy books and check GMMA on the internet


ADR - top and bottom zones useful to establish PTs and when reached to get ready for possible rotation. I have set ADR to start at the NYSE session close.

MA5 which I use to assist Stochastics set to 5,3,3, and Stoch(14,3,3)
Please read the thread https://www.forexfactory.com/thread/...llback-trading
further explanation on page 10 post 195 https://www.forexfactory.com/thread/...edging?page=10
When I use term "in play" it means intention to trade with momentum, my particular interpretation is when Sochs are in agreement with MA5 on a given TF, use MTFs analysis, and always indicate which TFs are considered, Stochs settings are 5.3.3 and 14.3.3 (pair on every TF I use)
When I use term "aligned" it means intention to trade with the trend, when MA5 is aligned with the channel created by EMA72 - EMA20
There is a concept of taking trades to the mean
Also return to use MACD_OsMA_4ColorH_2LVar_mtf nmc - I find that especially useful for scalping and intraday trades, histogram useful for other uses too

3_Level_ZZ_Semafor - For further explanation please go to page 10, post 196
https://www.forexfactory.com/thread/...edging?page=10

I use two sets of renko charts, bricks set to 25 points for the DOW (have stopped using Renko charts in 2024- they are useful but have other things I am currently using)

Gearing between TFs (follow the trend of a higher TF) - post 78, p4
M1 / M5 / M30 - intraday
M5/ M30 / H4 - intraday and longer
M30/H4/Daily - intraday and longer
H4 / Daily / Weekly - intraweek and longer
Session candle bars

M5, M30, H4 and Daily are very prominent
For intra day trading M30 is of great importance.
Additional set of TFs useful for VSA and monitoring the WRB -( M5)/ M15 / H1 /(H4) the last three use the gearing of 4 (post 157 page 8)

It is all to do with the distance to the initial SL
Trades that last longer that intraday are usually involved with the Quarterly Futures, most often of DOW Quarterly Futures

It is useful to study the inside bar formation within the segments of the market structure, paying attention to known continuation or reversal bars.
The concept of control bar is worthy to study, practice and pay attention to.

Stochastics set to 5,3,3 together with MA set to 5 on the charts on the used TFs.
Stochastic is a very sensitive indicator, have been using it for years, correctly used it quickly provides useful insight, at a glance, but do not be mislead that it can be used without prior understanding and in relation to TF gearing, as in my case, eg a very sensitive indicator on H4 in relation to M30 and M5, do some observation.

VSA
Using volume indicator on charting software like MT4 IMHO one is falsely led to believe that one trades volume rather that V For Volatility, the Volume issue has been discussed many times on different forums and threads, if in doubt set tick chart to a given numbers of ticks and add a volume indicator.
Foe some instruments like FX pairs it is impossible to have a meaningful number related to volume, apart of the historic COT.
Compounded tick Volatility (wrongly assumed as volume) of a given session (on MT4)
Tick volatility (on MT4) indicated against the average volatility set for any amount of days back (currently set to 5 days back and displayed as a shadow in grey colour)
Average Daily Range, current range set against the average range of any amount of sessions back (currently set to 5 sessions back and displayed as a shadow)

Fibonacci, symmetrical moves, pivots - waves?
Use Daily Pivots with Mid pivots, pivots can be calculated in traditional way, or using fibs, fib pivots especially useful for weekly TF.
Schiff Pitchfork in relation to Fibs, waves/market structure, I very rarely use Pitchfork, but it is a useful concept.


timing/seasons/cycles?
Prefer to trade during the London or NYSE sessions, DAX during London session,S&P500, DOW,NASDAQ during NYSE session. Though i only post DOW charts.
Usually all intraday trades are closed around the NYSE session close. All other trades are closed well before the relevant Triple Witching Friday, at the longest.
I use a grid of 3rd Fridays on the month, the year is divided into quarters in accordance with the quarterly accounting dates (triple Witching Fridays dates), I also have another charts with lunar months, prefer the 3rd Friday time grid as it is linked to option expiries.
https://www.forexfactory.com/thread/...hedging?page=7 post 134
Earnings calendar
Extremely important - learn and be ready to take advantage
https://www.ii.co.uk/investing-with-...eason#calendar


Fundamentals
Demands time spent on reading and with charts on longer TFs, news needs to be carefully interpreted and allow time for the PA to settle after the initial large movements, which often provide opportunity to fade these larger moves.


Inter-market analysis
John J Murphy, "Intermarket Analysis" useful book to study.( I have added crypto as a fifth class to the four well described in that book)
I also keep eye on the Volatility index, USD index, Bitcoin, and other things pointed by J Murphy

Gaps - different types of gaps - abbreviations
PSCG - Previous Session Close Gap - is a gap created by the difference between the Previous session close and the open of the immediately following new or current session. This Gap has different ways to be utilised, and it depends also on the traded instrument/security.
PSCGs are very useful for trading indices, and for me its utility is often limited to the session that immediately follows that close, although if that gap is not closed I keep an eye on that.
https://www.forexfactory.com/thread/...8#post15145378 Page 38 post 745
ISG - Intra Session Gap - Gap between the different sessions what it has been
https://www.forexfactory.com/thread/...hedging?page=6 post 114
DPG - Gap to the DP, when the DP is missed
https://www.forexfactory.com/thread/...ow-with-missed?

Other gaps- Intra Day Gap and Intra Week Gap - These gaps are also flagged by PSCG and/or ISG
Please note that intra day, intra week or indeed any gap that exists between the closing and opening bar on any TF, where there is a gap created by PA is a formidable display of market activity, and as such demands attention and purposeful action/response well prepared in advance.


PA, charts in relation to the news and views of different market gurus
Having strong bias based not on charts is very dangerous.
News and opinions need to be filtered trough the sieve of charts, if not trade either news without charts or charts without news.
Trading charts without news and other people opinions tends to be more profitable versus the alternative.

In the making:
Never double down - When possible double up
Never add to a losing position - Never double/triple down -especially when scalping, or inter-session or intra-day trading
WHY?
- the initial entry badly prepared. impatient, counting to add to the looser if things go wrong
- inviting unsubstantiated motion that market will somehow reward mindless risk taking, inviting fate, and getting exited about it
- then comes justifying failure and doubling down
- next, the motion arrives of rescuing the trade
Confirmation bias is a cognitive bias (an error in thinking) that describes the human tendency to search for, interpret, favour, and remember information in a way that confirms or supports one's existing beliefs or expectations, while simultaneously ignoring or downplaying evidence that contradicts those beliefs.

The 4/06/2019 Intersession gap filled.
I have left some historic gaps that have been filled too.

There are 2 gaps to the upside, these gaps will be filled - patience and PA has to confirm rotation
Where there is a cluster of gaps - very possible it indicates significant zone/s of S/R, the S/R insight is useful.

DOW H4 a closer look at the newly establish intersession gaps, of which one is a gap between Fri and the following Monday, still as intersession, but created over the weekend.
There is a positive divergence, and a lower session volume (compound volume, explained in the next post) with M30 DOW chart

DOW M30

There is a cluster of the 2 intersession gaps, (NYSE intersession) suggesting significant zone.
I look for PA, VSA and Fibs, to see what is happening, I do not assume or predict.

In the first indicator window is a compounded session volume, on MT4 it is less accurate than the real volume (if there is one available - Black pools scenario). I also use other chart with a real volume, but MT4 is easier for posting, anyway the idea is there. In that same widow is AO, just to look foe possible divergence, three sister and continuation, nothing special, just an oscillator.
Lower session compound volume, selling pressure less prominent, buyers, not in a great force, not yet. (VSA - selling climax? -a bit too early IMHO), but nevertheless useful info. I use VSA on shorter TFs including volume candles.

In the second indicator window average range of the US session, white bars actual range during the US session, shaded is a an average range set over the last 5 sessions, so I van compare these two.
In that widow there are two Stochastic, I find them useful.

In the third indicator widow is MT4 volume, shaded is a projected volume set to calculate the last 5 days, the colour bars is the current volume imposed on the shadow bars of the projected volume, again MT4 volume.

I find these intersession gaps useful, but am careful. I do expect the current gap to be of some R before it is eventually surpassed to the upside.

There is also another GAP between the current price and the last US session close! Another type of a useful gap.

DOW Daily

Possible ABC symmetric move, eventually?
APP - Robert Miner - Alternative Price Projection

Again some useful zones, but one needs to see whats happening around these fib numbers, I do not assume it will work because in the past it has worked sometimes.
PA is the King!

I find these intersession gaps useful, but am careful. I do expect the current gap to be of some R before it is eventually surpassed to the upside.

There is also another GAP between the current price and the last US session close! Another type of a useful gap.


PA has been following gap's rules today, first close gap to the last session close, and went north to test R, of the cluster of two NYSE sessions gaps, PA also hit the round number too - cannot ask for better GAP play. VSA on shorter TF has been useful too.

The cluster of these two gaps acts as R, until well surpassed.
Wander if there will be a third retest in the 25000+ zone, and continuation of the move down to achieve one to one symmetrical move.
However the minimum of an ABC corrective has been already established and surpassed at the 61.8 fib.
I am ready for both scenarios.
I am not posting during active intraday trading, I am considering to establish Long position on March futures, especially if PA moves well above the cluster of these two Inter US session gaps, till that happens only intra day trades.

taking longs on Dow since London open towards 25000

Will intensify after NYSE open

I will pause on the round number and see whats happen there

not a big round number on DOW (2500) today
0.5 interest rate cut by the BOE, that has made me consider the temporary seriousness of the situation.
Catharsis is required to blow the cobwebs from the system and 1 to 1 symmetrical looks possible.

Failure to make an attempt to close the gap to the last session close also has been an indication of further decline. An observation that proved helpful many times.
There is a reason why things happen, or decisively do not happen. I am working on taking advantage of that fact, also seen by the PA.
Used intra day volume candles set to 444, 888 and 1550 alongside of M2, M5 anf M30, of course had checked other TF but not for intra day trading.
I had traded both ways, with a bias to go short, long only from the "extreme" to the median, shorts following the well establish market structure.
With such high volatility, each trade proved to accumulate good points. I have been scalping, but in points gained it felt like longer intra day trades.
Obviously, there has not been time to post the live trades on the thread dedicated to such insights.
My stop loss has been 1 to 1 set to 75 on longs, and 120 on shorts trades, due to high volatility. Such arrangement is hardly a recommendation, but today it has brought reasonable profit. In multiple entry trades (my usual practice) the initial PT stayed on, some added entries were less profitable, but, grab what you can rather that be a parading peacock with great looking system but on day like today delivering profits rather than parading readiness - for another day.

DOW is printing one to one symmetric move atm.
Not catching the bottom, just reacting to PA

Warning - Mt4 with has been totally unreliable during high volatility and in various parts of the us session, even now, after US close is over 500 points apart from other charting software,
This is the first time I have observed such discrepancy.
not a great advert for mt4

what a day

heavy scalping day
in such high volatility used volume candles set to 444, and 888. also M2, M5 and M30 in the background, but maily volume candles, proved useful in holding the trend.
150 - 200 points a trade - scalping??? what a day
Found it stressful, as it all could have gone any way any time. Stressful and profitable, I have allowed it to be stressful, somehow I have to work on that side a bit more.

MT4 only 150 points away from other software prices atm, will ask the platform customer service if they offer education on guessing their prices using mt4.

US indices stopped trading again according to my brokers
are we witnessing a dead cats bounce? I wander.

DOW's Quarterly June 2020 futures opened with the larger spread (difference) to the daily cash, signalling a downward pressure for the time being.
I am trading both ways, with a bias to the short side.
Quarterly futures are not attracting additional charges apart from a larger spread to start with, and the difference to the current cash price, but I use them for trades which I keep for longer periods. unlike the cash which I usually use for intraday trades only.

R zone held well assuring the well being of the shorts.
Friday turned to be a flight for safety over the weekend, with the quarterly options expiration, usually signalling very high volatility.
One never knows, so I trade what is there displayed on the chart.
Used shorter TFs and volume candles, for the Junw 2020 futures I use a simple trend following renko on the top of that, nothing special.

Good weekend to all,

2be

very busy day, intra US sessions gap, filled and acted as R on this occasion, read on gap's utility. VSA gave good insights on M30 and volume candles with MA provided good entries/exits both ways.

high volatility brings good trading opportunity, but only to those who are ruthless with themselves by employing strategy and trading plan

PA - Market structure ( paramount) - its construction, continuation and failure of continuation in relation of different TFs.

Some MAs are useful, and so possibly channels or bands, if used Market structure overrides them, so make your own decision.

I cant edit the first page, so I will not bore with selective insight/s of strategy, no point.

I am ready to react to PA, I am of the opinion that DOW will surprise many of us, especially those holding strong biases.

DOW M30 buying climax
The candle volume chars set to 444, the MA, stochs and TDI, very accurate, judge for yourself
I use similar tpl fot M2 and other TF, plus the real volume added and displayed in a separate box
Scalping on DOW for 100 or more points, waw

Trade what you see!!!
I have been using this setup for a long time, and when I am well focused, it is profitable around the day, and also during the US session.
Spreads have been increased so each trade has to have a considerable more points profit, this has changed a bit from the usual scalping when 20 -50 points were more the "norm". Not complaining, but it would be easier having the "usual" spreads.

after US close DOW chart
ISG - Inter Session Gap
PSCG - Previous Session Close Gap

whatever strategy is used it HAS to have clear basic components
- Entry point/s
- Profit taking level/s
- When to add or subtract from the position
- Stop Loss, BE and proactive Stop

Scalping or other intraday or intraweek trades have to have these clearly marked and implemented.

Scalping DOW is usually very fast activity, no time to post, ( have posted few live trades today on the other thread, but believe me it has cost me some good points!!!)
I need to concentrate, especially while scalping!!! Not good in multitasking.
My system for scalping is simple and colourful and I take profit/s seeing PA interpreted by candles in the regions/zones indicated by band/keltner channel, and faster stochastic. Candles patterns, basic interpretation, and so on.
Trades are taken to the mean, or continuation of the trend. MAs serve also as a guidance, very useful.
Nothing of that is special, just a common sense, no special knowledge, corporate insights or all that stuff scammers try to get you interested in.
You need a reliable charting software and data supply.
MT4 in fast moving times is slow and IMHO inadequate, its ok for longer TF but I do not relay too much on MT4, also volume on MT4 is a tick volume, I prefer volume directly from the exchange. Nothing is 100%, dark pools ect, but I find exchange provided volume much more reliable and useful.

I wander if today's gain is not a dead cat bounce.

Heard on FOX News - 6T stimulus. Decisive action, great news for the Wall Street.
As usual, when stimulus is enacted, the cash will naturally find its resting place in responsible hands though for a time it will assist many.
Than the many will complain again that there is not enough especially when compared with them who saved and used it wisely, nothing new under the Sun.

At the retest of the L I shall be thinking about establishing Long position on DOW Quarterly future and run it for a longer time.

Active day, during US session alone got 68 trades, a bit below average for scalping, 50 winners, 18 losers
Messed few trades trying to adjust Stops and Limits manually, got destructed a bit, but reorganised and traded what I have been able to see.
Some trades profits have been taken prematurely, some have had a good runs.
To begin with I suspected the rally, and got shorts, it worked for a while, that I lost few short trades and reversed to Longs, mainly Longs, in last hour was eyeing 22000, but DOW did not reached that, instead went down and created a US session Doji - its ok with me.
Overall good day, but busy watching PA and related instruments.
It looks that for scalping orders with preset numerical Stops and Limits work better, as long as these setting reflect range during the active trading times.

DOW has filled the PSCG (LSCG on the chart) and the previous R became S for the rest of the session - the zone indicated by red box.
From this zone DOW just gone up.