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Williams%R, SAR X-over 15 minute candles

Trade 1) Missed the down move that started awhile before the open, a bullish divergence formed so took a shot at that picked up a small win.
2) Tried picking up a down move after a tiny squeeze, no luck out for a small loss.
3) Slight bullish divergence again picked up another small win.
4) Slightly longer squeeze took signal down got a steady move down for a solid win.
5) Another bullish divergence got me a small loss.
6) BB's tightened but never really got the expansion I look for but the lower band was pointing down. PA was biased down so took a shot and it turned into the best trade of the day.
7) Again got a small squeeze with a continuation of down trend so took it for another solid win.

Hope this helps. A couple of things I tend to be on the aggressive side that's with both entries and exits. If I take a trade it's generally with a 20-25 tick stop
but I don't ever hesitate to get out if a trade move against me.
Again another back and forth day with a couple of small loses a small win and 2 nice solid wins making for a good day. I am done for the week.
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Quoting RickM
{quote} The best trade you take can often be the one you pass on Don't trade that rubbish, there is no trend on that chart you posted. Look at last night on ESZ24 (US500), that's what I call a nice trend. I didn't trade last night (unfortunately) but if I did - I would have taken that setup and maybe others later. Of course that is a historical chart and any one can be an expert looking at pass price action. A boring old Momentum indicator set at 12 works well if you need extra reasons to enter, just look for Short Squeezes with the Momentum Indicator...

hey bro. Perhaps you could detail down your exact trading strategy ? I’m exploring volatility breakouts and your posts caught my eye. Much much appreciated!
Quoting benjamintoh8
{quote} hey bro. Perhaps you could detail down your exact trading strategy ? I’m exploring volatility breakouts and your posts caught my eye. Much much appreciated!
Hi Ben

I trade 4 different strategy's but I will talk about the one strategy that's based on Volatility Breakouts on the Future's Markets ES & NQ and related to Rocky's thread.

Navinder Sarao - the Flash Crash trader and also known as the "Hound from Hounslow" was a ES trader (US500 Futures) who was jailed for spoofing the ES order books with hundreds of Millions of $$$ value placed on the order books any any one time without any intention of letting these orders being executed. He was trading against "THE FIRM" who are Algorithm trading bots who are designed to attacked high imbalances on the ES order book. Think of "The Firm" as a group of like minded algo's who use exotic order types like "Fill or Kill". For example in a area of low Volatility, these exotic orders are watching the DOM to only execution limit orders if there are a high amount of BIDS or ASKS above or below consolidation areas.

Navinder would place Millions of dollars of Sell Orders on the books 4 to 5 ticks higher and use a Algo to cancel the orders 1 tick before price could execute them.
He would at the same time place Long Market Orders on the books and waited for the Algo's to attempt to move upwards and close them.
His money was made by riding the move up and cancelling his Limit Sell orders before they could be closed. So he proved to the trading world there was this "FIRM" of Liquidity seeking Algo's attacking orders in the books and THEY CAN BE FRONT RUN.

This "Firm" is still currently running the books but as we cannot spoof any longer officially (will it still happens but to a less of degree), it therefore makes beating them harder.
These Algorithims execute around 75% of all orders on the ES books so it's a major issue.

OK how can we front run these Algorithims.?

It's not speed on Future Markets that matters unlike on Run Running orders are on the Stock Markets. We now know that outside of tight consolidation areas which is Low Volatility, Selling ASK orders build above this area and Buying BID orders sit below this area. So there is a high level of orders building on each side which can trigger these Algo's to run hard and fast and create a trend.
Therefore its Sellers Equity that causes Bullish Trends and Buyers Equity that creates Bearish Trends.

So here is my strategy - similar to Rocky's.
Using a Bollinger Band, I am searching for Squeezes when these Bollinger Bands move inside a Keltner Channel Bands (set to 1.5). Now I am looking to enter a trade before breakout once it crosses the 21 EMA if it continues current BIAS. So in a Major Bearish Trend, I want to enter within LOW VOLATILITY area inside a SQUEEZE before "The Firm" enter the market and attack high Bid/Ask imbalance.

Rocky is doing pretty much the same thing, take the Squeeze trade across the 20 EMA and staying in till it crosses back.
The major difference is I am only taking Squeeze's on Trend.

Navinder Sarao made 80 Million proofing the order books, but sadly loss it all to scammers
He's still my hero
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Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi Ben I trade 4 different strategy's but I will talk about the one strategy that's based on Volatility Breakouts on the Future's Markets ES & NQ and related to Rocky's thread. Navinder Sarao - the Flash Crash trader and also known as the "Hound from Hounslow" was a ES trader (US500 Futures) who was jailed for spoofing the ES order books with hundreds of Millions of $$$ value placed on the order books any any one time without any intention of letting these orders being executed. He was trading against "THE FIRM" who are Algorithm trading...
If you are entering before the trend happens, how do you know which side of the orders above/below the squeeze area will be triggered?
Quoting RickM
{quote} Hi Ben I trade 4 different strategy's but I will talk about the one strategy that's based on Volatility Breakouts on the Future's Markets ES & NQ and related to Rocky's thread. Navinder Sarao - the Flash Crash trader and also known as the "Hound from Hounslow" was a ES trader (US500 Futures) who was jailed for spoofing the ES order books with hundreds of Millions of $$$ value placed on the order books any any one time without any intention of letting these orders being executed. He was trading against "THE FIRM" who are Algorithm trading...


thanks so much for your detailed explanation. You mentioned squeeze so many times I can’t help but recall this thing called TTM squeeze by John Carter. Is it the same thing ? If I recall it also involves bb bands and keltner channels
Quoting Merka
{quote} If you are entering before the trend happens, how do you know which side of the orders above/below the squeeze area will be triggered?
Hi Merka

Normally provided its not near news or London / New York open, 82% of Squeeze Trades result in a nice profit if it follow the current trend (follow the EMA Ribbon basically).
If it moves back over the 21 EMA, changes are there is NO IMBALANCE or IMBALANCE has flipped.
GET THE FUCK OUT QUICK

If you read Rocky's posts, you will notice he will also exit his setup quickly if trade moves against the EMA.

Cheers
Trading thin liquidity at the boundary of the charts
Quoting benjamintoh8
{quote} thanks so much for your detailed explanation. You mentioned squeeze so many times I can’t help but recall this thing called TTM squeeze by John Carter. Is it the same thing ? If I recall it also involves bb bands and keltner channels
Hi Ben

Bollinger Band Squeeze trades have been around since 1980, JC developed it further.
So YES

My angle comes from me trading the ES (US500 Futures) solely on a DOM for 2 years with NO Charts because I was attempting to understand how Liquidity really works.
JC says a Bollinger Band is like a spring which contains energy just waiting to be released.

Trading solely on a DOM for those 2 years taught me that JC got this one wrong. It has nothing to do with energy inside the Squeeze, it's all to do with Bid/Ask imbalance being formed on either side of BB Squeeze. Therefore it is not a release of energy, rather its an decrease of Buyers Liquidity on a upside move by 3 to 1 (Limit orders not market) or the decrease of Sellers Liquidity on a downside move by 3 to 1.

THE FIRM exploit this imbalance by applying Algo's to attack this imbalance which typically last for 30 second to 2 minute bursts.

This is the CREAM - the imbalance on a up move will rise to over 1500 contracts excess ASKS (Selling Limit Orders) briefing on ES during some periods.
So a fail safe trade can often just be jumping aboard high imbalance with a market order and hitchhiking alongside these Algo's. This is my favourite setup regardless of whether I am trading a SQUEEZE or other strategy's.
HOWEVER in Navinder Sarao days - liquidity was actually 2 to 3 times more in 2010 than today. The clampdown on spoofing has lowered the valued of trading on DOM's in 2024

The markets are becoming broken - moves occur without any liquidity some how.

The DOM trader is becoming an endangered species.


Cheers
Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi Merka Normally provided its not near news or London / New York open, 82% of Squeeze Trades result in a nice profit if it follow the current trend (follow the EMA Ribbon basically). If it moves back over the 21 EMA, changes are there is NO IMBALANCE or IMBALANCE has flipped. GET THE FUCK OUT QUICK If you read Rocky's posts, you will notice he will also exit his setup quickly if trade moves against the EMA. Cheers
Thanks a lot for all these info.
I know you mainly trade regulated markets but
Can your strategy used on FX as well?
If I were using time based candles rather than renko, I'd not use the the Heiken Ashi and I would use straight M1 or M5 bars instead, and I'd add the TTM squeeze indicator that RickM is using.

Here is the squeeze indicator for ninjatrader:

Squeeze Momentum Indicator - NinjaTrader Ecosystem
My objective is to learn the skill of flawless execution of my trading plan
Quoting RickM
{quote} Hi Ben I trade 4 different strategy's but I will talk about the one strategy that's based on Volatility Breakouts on the Future's Markets ES & NQ and related to Rocky's thread. Navinder Sarao - the Flash Crash trader and also known as the "Hound from Hounslow" was a ES trader (US500 Futures) who was jailed for spoofing the ES order books with hundreds of Millions of $$$ value placed on the order books any any one time without any intention of letting these orders being executed. He was trading against "THE FIRM" who are Algorithm trading...
Thanks for sharing. What length for Bollinger Bands and Keltner Channels

After some anaylsys seems like the squeeze is lasting to long after price has crossed over 21, and getting in too late.
Quoting MachineLearn
{quote} Thanks for sharing. What length for Bollinger Bands and Keltner Channels After some anaylsys seems like the squeeze is lasting too long after price has crossed over 21, and getting in too late.
Hi Mac

Set Bollinger Bands to EMA, Keltner Channel bands to 1.5.

The original idea was the Alert comes as BB bands move inside the Keltner Channels and the Signal to trade is when the bands Exit the Keltner channels.
This is too late often for Shares or Futures - but it's safer on Forex Markets. Forget the liquidity stuff here, its just PA on Forex.

Here is EURFPY Market and the Box in the corner tells me there is a Squeeze on M15 and the 1 Hour.

On Forex setups, you can get cut up to shit at times so best to wait on a signal till there is a breakout on PA & Squeeze breakout.

Personally I have made some big money trading the Squeeze on the Stock Markets - like most Squeeze Traders.
In August I closed two trades for $150K profit and my biggest trade is still open on a Weekly Squeeze which is currently in profit $331,390.

All setups from a Bollinger Band Squeeze.
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Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi Mac Set Bollinger Bands to EMA, Keltner Channel bands to 1.5. The original idea was the Alert comes as BB bands move inside the Keltner Channels and the Signal to trade is when the bands Exit the Keltner channels. This is too late often for Shares or Futures - but it's safer on Forex Markets. Forget the liquidity stuff here, its just PA on Forex. Here is EURFPY Market and the Box in the corner tells me there is a Squeeze on M15 and the 1 Hour. On Forex setups, you can get cut up to shit at times so best to wait on a signal till there...
Beautifully put, ill give it a shot on monday. Thanks Rick
Quoting vidvad
If I were using time based candles rather than renko, I'd not use the the Heiken Ashi and I would use straight M1 or M5 bars instead, and I'd add the TTM squeeze indicator that RickM is using. Here is the squeeze indicator for ninjatrader: Squeeze Momentum Indicator - NinjaTrader Ecosystem
Hi Vidvad

Renko works as well, unfortunately you can't use the TTM Squeeze Indicator but instead you can place the Bands on your chart.
Change the BB bands to 1.5 instead of 2 and Renko works fine.

By the way, trade Futures on the 2 Minute chart for better setups.

Here was a Chart I build when I first visited Rocky's thread and thought - WOW Renko HA
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Trading thin liquidity at the boundary of the charts
Quoting RickM
{quote} Hi Vidvad Renko works as well, unfortunately you can't use the TTM Squeeze Indicator but instead you can place the Bands on your chart. Change the BB bands to 1.5 instead of 2 and Renko works fine. By the way, trade Futures on the 2 Minute chart for better setups. Here was a Chart I build when I first visited Rocky's thread and thought - WOW Renko HA {image}
Hey RickM,

Everything you posted, it is very very helpful!
Thank you so much!
Quoting RickM
{quote} Hi Mac Set Bollinger Bands to EMA, Keltner Channel bands to 1.5. The original idea was the Alert comes as BB bands move inside the Keltner Channels and the Signal to trade is when the bands Exit the Keltner channels. This is too late often for Shares or Futures - but it's safer on Forex Markets. Forget the liquidity stuff here, its just PA on Forex. Here is EURFPY Market and the Box in the corner tells me there is a Squeeze on M15 and the 1 Hour. On Forex setups, you can get cut up to shit at times so best to wait on a signal till there...

very beautifully explained bro. Do u mind sharing the names of the indicators or scripts u have in that TV screenshot. It’s beautiful
Quoting rockypoint
….. A couple of things I tend to be on the aggressive side that's with both entries and exits. If I take a trade it's generally with a 20-25 tick stop but I don't ever hesitate to get out if a trade move against me.
Thanks RP for the insight. From memory I can’t recall you taking a stop of more than 10 tics. A breach of the centre line of the Bollinger bands generally has you closing positions.
Thanks again for sharing your thoughts
Quoting tonycostadin
{quote} Hey RickM, Everything you posted, it is very very helpful! Thank you so much!
Thanks RickM. I myself have moved away from the renko charts over the last six months or so. I was posted that more to give rocky food for thought than anything else. The squeeze indicator seems like a very good fit for him given his current iteration of his method using the bollinger bands. I find I have a much better feel for price action using M5 and M15 candles. I'll use M1 or M2 at times. I had to take a break from trading for much of the summer and only started back regularly about a month ago. During that time I have found that the most reliable set ups for me are defined using M5 and M15 while referencing the daily and weekly levels.

Thank you for your response. You're good at sharing good stuff here and you can see from the responses you get that your participation in rocky's thread is appreciated.
My objective is to learn the skill of flawless execution of my trading plan
Another crappy Monday, very jumpy PA. Basically looking only at tightening BB's. Not a stellar start to the week with 2 straight losses, followed by a small win then a decent win. Will keep watching see if PA improves.
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2 more small losses and an OK win to end the day. Made a few bucks.
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