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Flag trading the trend

  • #9,261
  • Dec 18, 2015 11:50am Dec 18, 2015 11:50am
actually I am waiting for a trend to start and have a 20 ema on chart and when trend starts and goes below ema I trade the first pb to it and use the candle as a trigger bar as it goes down some more I then take the second pb to the ema
  • #9,262
  • Dec 18, 2015 12:18pm Dec 18, 2015 12:18pm
Quoting Divergence
actually I am waiting for a trend to start and have a 20 ema on chart and when trend starts and goes below ema I trade the first pb to it and use the candle as a trigger bar as it goes down some more I then take the second pb to the ema
thanks
  • #9,263
  • Dec 18, 2015 2:48pm Dec 18, 2015 2:48pm
Quoting Divergence
was able to bag 25 more total 76 today very acceptable so for 4 days of trading this week 620 ticks not to shabby so much more than I ever made with crude all I can say is Y M for ever
My two main traders have been the ZB (30 yr bond futures) and the YM. Today was a nice day for me on the YM as well: 114 ticks. She's thin, and I get a bit of slippage, especially when trading multiple contracts, but its all good in the end. I use 10 tick chart on YM, 6 tick on ZB, and I trade them based on the 5 minute price activity. Nice trading, Divergence.
Attached Image (click to enlarge)
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  • #9,264
  • Dec 18, 2015 3:37pm Dec 18, 2015 3:37pm
DD how many contracts you put on right now I am at 2 which is plenty and I get filled and no slippage
  • #9,265
  • Dec 18, 2015 5:05pm Dec 18, 2015 5:05pm
Quoting Divergence
DD how many contracts you put on right now I am at 2 which is plenty and I get filled and no slippage

I trade 1-5 depending upon the set up, context (proximity to S/R) etc. While I do not get slippage on every trade, I have gotten 1-3 ticks of slippage on a stop entry order on just 1 contract. I tried stop-limits, but too often I don't get filled at all and the limit keeps me out of a profitable trade. Under normal volatility/range conditions, I use 20 ticks as a first scale out. The last few weeks, I will set a limit at 50 ticks and trail behind the market. IMO, D, I think the YM is the best market for the small, stay-at-home retail trader. I'd like to see more small traders move from getting smacked around on the ES to trading the YM for fun and profit. As always, I appreciate your thread here at FF. Watching it develop has been a great pleasure for me. Funny that you started trading the YM here, as I have been contemplating opening up a journal thread to discuss my take of some of Mark Douglas's ideas and I was going to use either the YM or ZB as the mascot contract for the journal. I was leaning toward the YM. I'm just not sure I am ready and willing to commit to a journal. But I do think the Trading in the Zone stuff is important, and most here at FF are too focused on the next batch of indicators for their MT4 template

Regardless of what I decide to do, I hope you and your fellow contributors here keep the good stuff coming. I love the thoughtful and respectful tone kept here
  • #9,266
  • Edited 6:02pm Dec 18, 2015 5:32pm | Edited 6:02pm
Quoting ddaytrader
{quote} I trade 1-5 depending upon the set up, context (proximity to S/R) etc. While I do not get slippage on every trade, I have gotten 1-3 ticks of slippage on a stop entry order on just 1 contract. I tried stop-limits, but too often I don't get filled at all and the limit keeps me out of a profitable trade. Under normal volatility/range conditions, I use 20 ticks as a first scale out. The last few weeks, I will set a limit at 50 ticks and trail behind the market. IMO, D, I think the YM is the best market for the small, stay-at-home retail trader....
thanks for the info so trading 3 or 4 lots is doable was a little worried cause volume is low. Also feel free to share your setups it's all about making money
  • #9,267
  • Dec 18, 2015 8:25pm Dec 18, 2015 8:25pm
Quoting Divergence
{quote} thanks for the info so trading 3 or 4 lots is doable was a little worried cause volume is low. Also feel free to share your setups it's all about making money
When trading 3 or 4 contracts, I like to enter all in and scale out, e.g. I might take profits on the first 3 at +15 +20 +30 and then let a fourth open with a +100 limit order out there but trail the stop 20 points behind. But context and current volatility/range is key: I will not be as aggressive and open ended when the 14 day ATR is 75 - 125 points as I am when the ATR in 200+. I use pretty traditional set ups, D. My main chart is the 5 minute for trend and trade direction and I'll use the 10R to catch the pullback entries. As you can see from today's set ups, one of the reasons your thread caught my attention is that you and I have similar interests in trading price action based on tried and true set ups. For psychology, I have, as you know, benefited greatly from the work of Mark Douglas. For trading, my main technical influence is an old copy of Edwards and Magee, and a few concepts I picked up from Victor Sperandeo and Linda Raschke.
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Click to Enlarge Name: YMH6 M5 12-18 Trend Day.JPG Size: 106 KB
  • #9,268
  • Dec 18, 2015 8:36pm Dec 18, 2015 8:36pm
<p>That's trading the flag in a trend have you been looking over my shoulder? I use 21 Ema and pps the find targets.i get all in and all out with 2 contracts. Goal is minimum 50 ticks a day
  • #9,269
  • Dec 19, 2015 7:19am Dec 19, 2015 7:19am
Quoting ddaytrader
{quote} When trading 3 or 4 contracts, I like to enter all in and scale out, e.g. I might take profits on the first 3 at +15 +20 +30 and then let a fourth open with a +100 limit order out there but trail the stop 20 points behind. But context and current volatility/range is key: I will not be as aggressive and open ended when the 14 day ATR is 75 - 125 points as I am when the ATR in 200+. I use pretty traditional set ups, D. My main chart is the 5 minute for trend and trade direction and I'll use the 10R to catch the pullback entries. As you can...

Hi DD,

Thanks for your contribution - I have actually re-read trading in the zone and its astonishing how much of it I have not actually applied the first time i read it.

How do you determine trend on the 5 min chart? do you use a moving average and then look for entries on the range charts?
  • #9,270
  • Dec 19, 2015 8:54am Dec 19, 2015 8:54am
Quoting specul8r
{quote} Hi DD, Thanks for your contribution - I have actually re-read trading in the zone and its astonishing how much of it I have not actually applied the first time i read it. How do you determine trend on the 5 min chart? do you use a moving average and then look for entries on the range charts?
A moving average can help. I often keep one on a chart as a quick reference and to keep me from doing something I shouldn't do. But trend is simply is the market making higher highs and higher lows? Then trend is up. Is market making lower lows and lower highs? The trend is down. Is the market chopping back and forth, with much of the last 5 or 10 or 20 bars overlapping the same price area? Then the trend is sideways. Some entries set up quite clearly in te 5 minute chart, such as on the past two days (12/17 & 12/18). Other times I look to the range chart.

The key for anyone is to learn first to identify patterns of market behavior that repeat on a regular basis. First must come the ability to recognize at least one pattern in real time that has a real edge (per Mark Douglas's definition of an edge), then comes the defining of the set up, imo. Too many would-be traders put the cart before the horse, so to speak: most want the set up, but do not care at all to understand the market behavior that creates the set up.
  • #9,271
  • Dec 19, 2015 9:21am Dec 19, 2015 9:21am
Quoting ddaytrader
{quote} A moving average can help. I often keep one on a chart as a quick reference and to keep me from doing something I shouldn't do. But trend is simply is the market making higher highs and higher lows? Then trend is up. Is market making lower lows and lower highs? The trend is down. Is the market chopping back and forth, with much of the last 5 or 10 or 20 bars overlapping the same price area? Then the trend is sideways. Some entries set up quite clearly in te 5 minute chart, such as on the past two days (12/17 & 12/18). Other times I look...
Thanks DD.I understand all you have said. Makes sense. I actually prefer 5 min charts to range. As mucb as I respect the range bars I like the time charts.So your rules are slightly different to divergences. Divergence waits for low or high to be taken out whereas you consider it based on higher highs and lows. Am I correct ?
  • #9,272
  • Dec 19, 2015 10:15am Dec 19, 2015 10:15am
Quoting specul8r
{quote} Thanks DD.I understand all you have said. Makes sense. I actually prefer 5 min charts to range. As mucb as I respect the range bars I like the time charts.So your rules are slightly different to divergences. Divergence waits for low or high to be taken out whereas you consider it based on higher highs and lows. Am I correct ?
spec it's the same if market was up and price takes out last H L trend has changed to downside
  • #9,273
  • Dec 19, 2015 10:32am Dec 19, 2015 10:32am
Quoting Divergence
{quote} spec it's the same if market was up and price takes out last H L trend has changed to downside
I see - I thought it was price has to take out the lowest point of the day to be considered a down trend. So it is the last HL.

Thanks guys
  • #9,274
  • Dec 19, 2015 10:38am Dec 19, 2015 10:38am
When I start day that's how I start but as day progresses in this very trendy market if price takes out swing I will start trading the pullbacks especially where like yesterday in the over night trend was up then it pulled back then it attempted to go higher but it couldn't that last swing of HL then got taken out then it began to trend down and down and down. When this market trends it trends just start trading the pullbacks
  • #9,275
  • Dec 19, 2015 10:55am Dec 19, 2015 10:55am
This pair trends better than any forex pair example the dow e mini moves 200 to 300 ticks a day if you trade forex get out and here's why. First you must deal with the broker issues whether it's the spread, slippage spikes and your are trading against them but most important is the safety of your funds. Here are the benefits of trading futures and especially this market the dow e mini the futures are regulated so money it truly segregated secondly no spreads that right no more spreads. There are exchange fees and commission which add up to 3.30 per contract. The YM trades at 5.00 a point so 2 lots is 10.00 a point. I have been trading crude for about 2 yrs and just switched to the YM this week I trade 4 days a week and this week made 625+ ticks so I rest my case</p>
  • #9,276
  • Dec 19, 2015 10:56am Dec 19, 2015 10:56am
thanks D - it makes sense for YM as it seems to have long trends and easy to jump on the wagon.
  • #9,277
  • Dec 19, 2015 11:25am Dec 19, 2015 11:25am
Outstanding results last week, H : well done .

dd : I love your naked chart - very Al Brooks. I use Stop Limits a great deal with futures, but have never traded more than 4 contracts on YM with 1 tick offset- usually filled. That said, have only been trading European markets in my morning lately.

Side note : futures do in fact have spreads, as shown in dd's DOM a few posts above (showing a 2 tick spread : I'd expect YM to be between 1 & 2 ticks during US market hours); the point is indeed that the spreads are tight and the market is regulated & you can sometimes be filled on Buy orders at the bid and Sell orders on the Ask.

Daily range on index futures is huge at the mo, but there will be times when it's sideways a great deal of the time (but doesn't seem like anytime soon, as the world lurches from crisis to crisis)...
  • #9,278
  • Dec 19, 2015 11:29am Dec 19, 2015 11:29am
Quoting ddaytrader
{quote} My two main traders have been the ZB (30 yr bond futures) and the YM.
dd - I'm very curious as to how you trade ZB & if you approach it differently to a market with (usually) much greater ADR, other than modifying stop and target sizes ?

As far as I can see, with only $500 margin and $31.25 / tick, it has by far the most bang for the buck of any other futures contract...
  • #9,279
  • Dec 19, 2015 12:22pm Dec 19, 2015 12:22pm
Don't know about that jt I have been entering on buy and sell stops and getting filled everyone at price with no slippage. It's fifo always
  • #9,280
  • Dec 19, 2015 2:09pm Dec 19, 2015 2:09pm
Quoting Divergence
the dow e mini moves 200 to 300 ticks a day
But that is the exception, not the norm. There are times that the Dow's range will contract for long periods of time into a 100 tick or less range.



Quoting jtrade
{quote} dd - I'm very curious as to how you trade ZB & if you approach it differently to a market with (usually) much greater ADR, other than modifying stop and target sizes ? As far as I can see, with only $500 margin and $31.25 / tick, it has by far the most bang for the buck of any other futures contract...
ZB is another where trading four contracts and taking 3, 5, and 8 tick scale outs with the last lot left on for a possible runner works for me. It is market that exhibits some very recognizable and regularly repeating behaviors. A week or two of watching and observing it prior to actually trying to trade it will cut the 10000 hour thing down to about 20 to 40.
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