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Scalping the Mini Dow off the M1 Charts

  • #61
  • Jan 9, 2015 9:58am Jan 9, 2015 9:58am
Today was NFP. Taking a look at the first 2 trades in more detail, coming into the morning open, just 1 minute before the cash open we had a run up in price, breaking through yesterday's highs and making a run up to 864s, the highs set by the run on NFP news.

That looked like this.

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When something like this happens *before* the cash open, it is a little unusual, but in almost all times that I've seen something like that, you can bet that it's the pros setting up the market so they can sell the opposite direction.
If you can't tell what the herd is doing...you probably are the herd.
  • #62
  • Jan 9, 2015 10:05am Jan 9, 2015 10:05am
This is a hourly chart from June 6, 2014. The huge bearish engulfing candle is what ensued on the cash open - nearly a 150 point move to the downside.

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What's interesting is how this move was set up. Looking at the 1 minute chart, 10 minutes before the cash open, there was a massive breakout in price. The market then goes sideways, and then immediately on the 9:30 open, the mass selloff begins.

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If you can't tell what the herd is doing...you probably are the herd.
  • #63
  • Jan 9, 2015 10:15am Jan 9, 2015 10:15am
When the market has clearly formed a bull trap (or bear trap) like that, I've found that more often than not, whatever the first obvious level of support (or resistance) stands in the way, it is likely to be taken out. In this case, it is the level drawn at 810s.

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What makes it even better, though, is when you do see buying or rejection off of that level (e.g. a pin bar), such that it suckers traders into thinking the support level is a good level to buy. They're just providing liquidity for the pros to sell into the move.

This is the resulting move as it appears on the H1 chart, as of right now.

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If you can't tell what the herd is doing...you probably are the herd.
  • #64
  • Jan 11, 2015 4:24am Jan 11, 2015 4:24am
very nice
Im also scalping the 1m Chart at eurcad, I like this crazy lady, because of the volatility of the pair, I also look for the opening of the day, London opening, Im from spain, so trade the 2 main sessions: european and ny session.

First Chart shows the opening of the London session at 03:00 ET

Its a range and a breakout

Later in the us session we have NFP and employment data from CAD so it's was going to be a crazy session
It a an exemple of a pinbar with a retest and finally a breakout to the upside crazy session, I was tempted to trade the pinbar but I was in the trade before the NFP and was happy with my lucky trade, It was a technical trade because I saw rejection from resistance, but I recognize it's crazy opening a trade just before NFP
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  • #65
  • Jan 11, 2015 9:54am Jan 11, 2015 9:54am
Good stuff! What is your spread on EURCAD?

Quoting pipburner
very nice Im also scalping the 1m Chart at eurcad, I like this crazy lady, because of the volatility of the pair, I also look for the opening of the day, London opening, Im from spain, so trade the 2 main sessions: european and ny session. First Chart shows the opening of the London session at 03:00 ET Its a range and a breakout Later in the us session we have NFP and employment data from CAD so it's was going to be a crazy session It a an exemple of a pinbar with a retest and finally a breakout to the upside crazy session, I was tempted to trade...
If you can't tell what the herd is doing...you probably are the herd.
  • #66
  • Jan 11, 2015 1:17pm Jan 11, 2015 1:17pm
How many times have we said 'if only I'd done the opposite'. Uniquely this thread explains very clearly why 'the opposite' happens to us. Great thread with great analysis, pleased I stumbled across it and to quote Arnie, I'll be back'.
  • #67
  • Jan 12, 2015 9:42am Jan 12, 2015 9:42am
The amazing thing is, the pros do this to (buy at the worst place possible, sell at the worst place possible). Time and time again you can see this on a footprint chart / T&S. I happened to catch this beauty a while back but it's a great illustration of large size going through to buy on the break of a level.

That's $2,240 per tick (not your average retail size). Now if 224 contracts can't push the market higher, where can you expect the market to go?

Attached Image (click to enlarge)
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Incidentally, a day or two later Natural Gas (the chart above) exploded to the upside in one of the most parabolic moves in history. But it's the entry that's astonishing.

Quoting Tanglewood
How many times have we said 'if only I'd done the opposite'. Uniquely this thread explains very clearly why 'the opposite' happens to us. Great thread with great analysis, pleased I stumbled across it and to quote Arnie, I'll be back'.
If you can't tell what the herd is doing...you probably are the herd.
  • #68
  • Jan 12, 2015 9:58am Jan 12, 2015 9:58am
This morning's trading video.
Inserted Video


Yes - I am slightly annoyed with myself for taking a long off the open. I was already sizing that area up for a short but at the last second just reacted impulsively. The joys of scalping. A lot of this kind of trading is reactionary and involves kinetic response (e.g. swinging a racket to hit a tennis ball. When it comes time to swing, you don't really think about how your muscles are moving, you just do it. All the work that goes into it initially comes through long and hard practice time.)

You'll notice the warning signs as price was breaking to the upside where it was twice rejected (forming a wick). When the market is strongly bullish, price generally will not get held up like that and just continue to build upwards.

This however led to a strong case for the short on the next trade. Thinking about those traders (myself included) that got suckered into going long on that break, with no sign of followthrough a short is usually in the cards.

My target extension was purely playing the probabilities that, having broken and failed one side of the range, it would trade to the other side of the range.
If you can't tell what the herd is doing...you probably are the herd.
  • #69
  • Jan 12, 2015 10:03am Jan 12, 2015 10:03am
On that third trade, you'll notice there was that flash where, for a brief moment, it looked like price might reverse off of 668s. It even looked like a pin bar.

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Given the context of the bull trap that formed above, and the quick rejection of that "pin bar" by the bears, another trade short to ride the continuation of this move was in play.

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It's worth noting today that Oil has again made a new low which is likely the fundamental catalyst for equities making such a sharp downturn this morning.
If you can't tell what the herd is doing...you probably are the herd.
  • #70
  • Jan 12, 2015 10:37am Jan 12, 2015 10:37am
I used to keep the order book open to compare the read I was getting on the candles. When I used to see things like that, would I be totally wrong to say that a big player was actually closing out 224 short positions from whenever which created that block of buy orders. Then the market gets pushed down with momentum since it was heading there just enough for the big player to really Buy again with buy orders at a better price for that explosive long that happened days later, which they probably knew was coming? These are just the things I would do if I had the power. Am I way off? I'm always curious what others think about the order flow.


Quoting felixcattus
The amazing thing is, the pros do this to (buy at the worst place possible, sell at the worst place possible). Time and time again you can see this on a footprint chart / T&S. I happened to catch this beauty a while back but it's a great illustration of large size going through to buy on the break of a level. That's $2,240 per tick (not your average retail size). Now if 224 contracts can't push the market higher, where can you expect the market to go? {image} Incidentally, a day or two later Natural Gas (the chart above) exploded to the upside in...
SPC * Swollen PocketZ Crew!
  • #71
  • Jan 12, 2015 10:55am Jan 12, 2015 10:55am
Yup absolutely correct, to be fair, we never know if they were initiating or exiting so that 224 could have merely been a stop-out of a prior, profitable short position. That said, one way or another it's still a buy market order and it's always "interesting" to see it happening on the break of a level at a high.

But a lot of times this type of thing happens where the market is making a new monthly (or longer term) high or low where it's impossible (or extremely unlikely) that anyone had been in the market at a better price beforehand (so they would have had to be initiating there, not getting stopped out). That's always amazing to watch but it confirms that big money is not necessarily smart money.

Quoting JoeNY
I used to keep the order book open to compare the read I was getting on the candles. When I used to see things like that, would I be totally wrong to say that a big player was actually closing out 224 short positions from whenever which created that block of buy orders. Then the market gets pushed down with momentum since it was heading there just enough for the big player to really Buy again with buy orders at a better price for that explosive long that happened days later, which they probably knew was coming? These are just the things I would...
If you can't tell what the herd is doing...you probably are the herd.
  • #72
  • Jan 12, 2015 10:58am Jan 12, 2015 10:58am
Yes very true.... precision entries probably doesn't matter much to them especially when they know a really big move is coming. They would rather go to lunch and enjoy some cocktails then worry about a few ticks (-;

Quoting felixcattus
Yup absolutely correct, to be fair, we never know if they were initiating or exiting so that 224 could have merely been a stop-out of a prior, profitable short position. That said, one way or another it's still a buy market order and it's always "interesting" to see it happening on the break of a level at a high. But a lot of times this type of thing happens where the market is making a new monthly (or longer term) high or low where it's impossible (or extremely unlikely) that anyone had been in the market at a better price beforehand (so they would...
SPC * Swollen PocketZ Crew!
  • #73
  • Jan 12, 2015 11:16am Jan 12, 2015 11:16am
Amen to that. I would love to be able to whack a large order and go off to lunch and cocktails!

Quoting JoeNY
Yes very true.... precision entries probably doesn't matter much to them especially when they know a really big move is coming. They would rather go to lunch and enjoy some cocktails then worry about a few ticks (-; {quote}
If you can't tell what the herd is doing...you probably are the herd.
  • #74
  • Jan 12, 2015 11:40am Jan 12, 2015 11:40am
Quoting felixcattus
The amazing thing is, the pros do this to (buy at the worst place possible, sell at the worst place possible). Time and time again you can see this on a footprint chart / T&S. I happened to catch this beauty a while back but it's a great illustration of large size going through to buy on the break of a level. That's $2,240 per tick (not your average retail size). Now if 224 contracts can't push the market higher, where can you expect the market to go? {image} Incidentally, a day or two later Natural Gas (the chart above) exploded to the upside in...
May I ask whoch T&S is this? Does it reconstruct the block trades (just as the jigsaw tool?)
It's all psychology...
  • #75
  • Jan 12, 2015 11:55am Jan 12, 2015 11:55am
This was from TradeStation. To the best of my knowledge does not reconstruct block trades, no. I've since moved over everything to NinjaTrader.

I actually have the ACME Time & Sales Pack by Rancho Dinero which supposedly does aggregation like Jigsaw but I haven't tried it yet. I might take some time to study it.

Quoting LamerTrader
{quote} May I ask whoch T&S is this? Does it reconstruct the block trades (just as the jigsaw tool?)
If you can't tell what the herd is doing...you probably are the herd.
  • #76
  • Jan 13, 2015 1:32am Jan 13, 2015 1:32am
Hi Jason,

first of all, great thread.
I just watched your YouTube Videos about your setups, they are awesome and very well explained.
A little offtopic, but your piano skills seem to be very high above average...are you a professional concert Pianist?

I got a question: Do you know if your setups are also working on other indices or currency pairs? Or have you found something special about the Dow to make it work only there?
  • #77
  • Edited 7:29am Jan 13, 2015 7:09am | Edited 7:29am
And another question: do you currently trade all the described setups in your YouTube Clips or did you make any changes or add/remove some setups?

PS: Your Clip from 12th of January is not working.
  • #78
  • Jan 13, 2015 8:49am Jan 13, 2015 8:49am
Thanks for the kind words I was going to be a performance major - backed out at the last minute because I didn't want it to become "what I do".

Just about all the setups I trade do work in other liquid markets. Some though (that rely heavily on price action) are more difficult to execute in the thicker markets though. I will try to post some charts in other markets that involve the same concepts.
Quoting Olarion1975
Hi Jason, first of all, great thread. I just watched your YouTube Videos about your setups, they are awesome and very well explained. A little offtopic, but your piano skills seem to be very high above average...are you a professional concert Pianist? I got a question: Do you know if your setups are also working on other indices or currency pairs? Or have you found something special about the Dow to make it work only there?
If you can't tell what the herd is doing...you probably are the herd.
  • #79
  • Jan 13, 2015 9:01am Jan 13, 2015 9:01am
All the setups in my YouTube clips, yes. That said I still learn new things every day and exploring ways to trade momentum. Trading with the immediate trend, when warranted, is something I'm still learning to be comfortable with. Trading countertrend is more my forte.

Thanks for the heads up about that video - YouTube does that sometimes (blocks it in some countries) due to the music I choose Should be fixed in a moment.

Quoting Olarion1975
And another question: do you currently trade all the described setups in your YouTube Clips or did you make any changes or add/remove some setups? PS: Your Clip from 12th of January is not working.
If you can't tell what the herd is doing...you probably are the herd.
  • #80
  • Jan 13, 2015 9:34am Jan 13, 2015 9:34am
This morning's trading video. What a day.

Inserted Video


Clean momentum moves like this happen every once in a while and it's great to be on board it when it does. I've faded enough of these kinds of moves (and got chewed up in the process) to know the times when going with the trend is the right thing to do.
If you can't tell what the herd is doing...you probably are the herd.
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