All Articles

Quarter End Markups

Are prices more likely to rise at the quarter end? Do the fund managers mark up the prices?

Contract Specifications

Contract Specifications for the S&P 500 and the Nasdaq 100 and the two e-mini contracts based on the same indices.

$TICK and $ADD

A few observations about these two indicators.

The Quality of Divergence

An explanation of how to distinguish high and low quality divergence.

Divergence

An explanation of what divergence is using DeltaT as an example.

Spikes

The Anatomy of a Spike. A forensic breakdown of a spike that happened in the ES with a discussion of what makes a spike and how you can benefit and protect yourself from spikes in the market.

Chart Types

A discussion on Chart Types and how they relate to each other. Specifically comparing time, tick and volume based charts.

Correlation between Oil and S&P500 futures

An article on the correlation of the short term price moves in the CME S&P500 e-mini futures (the ES) versus the moves in the Nymex Oil Futures (the QM).

S&P 500

Shows how different capitalized stocks have more or less effect on the movement of the S&P 500 index.

Rollover Days

Explains rollover day in the emini (and other future) contracts and shows the volume change from one contract to the other on rollover day.

Fed Days

5 minute E-mini S&P500 (ES) charts showing previous FOMC days. Useful page to look at to get a feeling of what a trading day in the ES might be like if it happens to be a "Fed Day."

Record Keeping for Day Traders

You need to keep a record of the trades that you take. Here is how.

Rules

What are the rules that traders follow? What is the most important rule to becoming a successful trader and consistent winner. When can you break the rules? How do you monitor your performance against the rules?

Trading the Plan

Easy, simple and fast trading plan that you can setup and implement in about half an hour and then get real results out of it for as long as you want.

Following the Rules

How do you know if a rule is helping or hindering your trading? How can you get feedback on the effectiveness of your rules?

Win/loss ratio

How good does your win/loss ratio have to be to make a living from trading? Discussed in this article along with calculations on what you need to do to earn a net $96,000 per year (after commissions) from trading.

Limit and Market Orders

How to work out what type of entry (and exit) to use for your trades. When do you use a limit order and when do you use a market order to enter (or exit) your trade.

Stops and targets

One way of using stops and targets. Delta and T1 signals are used as examples of entry signals.

Bluffers/flippers/flashers...

An article that discusses what flipper/flasher/bluffer is and takes a diagnostic/forensic look at one in action in the market trading the ES.

Timing the High/Low of the Day

Some notes and calculations on when the most likely time of day is for a high or low in the ES. This article has been rewritten three times and each time more data has been used in the study to corroborate the findings.

The Edge

It's no secret how winning traders win and take the profits from everyone else. They have an edge and they exploit that edge day in and day out. It's a number game. If you buy a can of beans for 30 cents and sell it for 40 cents you make a 10 cent profit. Do that 10,000,000 times and you've made $1,000,000. Trading is the same. If you make (on average) $50 for each trade you place then you execute 20,000 trades and you've made $1,000,000. Simple isn't it?

The Risk of Ruin

How long will it take to turn $5,000 into $0? The article is a follow-up to the article The Edge - How long will it take to turn $5,000 into $100,000? In this article we discuss the probability of a trader wiping out his/her account and how long that could take even though they are applying a sound strategy with good risk and money management behind it.

Is day trading gambling?

In this article we discuss and compare 2 types of classic gambling (roulette and blackjack) to 2 types of day trading (signaled and random) and look at the odds of success when viewing day trading as a gamble.

Is tick size Important

Can the size of the tick make profitable trading more difficult. The tick size of the E-mini S&P500 is about 2.5 times the tick size of the Dow Future.

The Bid/Ask Disadvantage

A worked example of disadvantage the bid and ask creates for the trader and the change in the required probability to compensate for it.

Trading versus Poker

A comparison of similarities and differences between Poker and Trading.

Time Segment Bias

In this study we look at the change in 4 different mini sized index futures (E-mini S&P 500, E-mini NASDAQ-100, E-mini Russell 2000 and mini-sized Dow ($5)) and their propensity or bias to rise or fall in any 30 minute segment of the RTH trading day.

Where is the market likely to close?

The purpose of this study is to determine where the market is likely to close and trade given one of three Market Profile positional openings.

The 80% Rule

The famous 80% rule from Market Profile.

Initial Balance

Knowing (and calculating) the average and extremes of the Initial Balance.

Double Initial Balance

Working with Market Profile's double the Initial Balance.

911 Chat Room Log

This is a compilation of what was said in the Othernet IRC chat rooms (channels) at the time of the 911 disaster on 11 September 2001. These chat rooms specialize in trading.

Pivot Points

Exactly what are Pivot Points?

Do Pivot Points work?

An analytical look at the probability of Pivot Points working in certain markets.

Calculating Pivot Points

How do I calculate pivot points? Popular methods to calculate Pivot Points.

Pivot Point Calculators

Where can I find Pivot Point Calculators? A list of popular Pivot Point Calculators.

Back testing Pivot Points

Some pointers on how you can back test pivot points without buying any software or data.

Expiry Fridays

Expiry Fridays - Bullish or Bearish? Article (back test) showing that weeks with expiry Fridays are generally more bullish than your average week.

Using Excel to Back Test Trading Strategies

The first of what may become a series of articles on how to use Excel to back test trading strategies.

The Turtle Trading System

The theory and logic behind the Turtle Trading System.

The end of the big S&P500 futures contract

Discusses and calculates when trading in the big S&P500 futures contract (the SP) will dry up completely and trading in this previously popular futures contract will cease altogether.

Fading the Gap

Fading the opening gap is a classic day trading strategy. How well does it work? Here we examin the results of some stats about the gap fade strategy as the answers to 20 questions.

Size of Position

Following a winning strategy without enough contracts can cause losses.

Time of Day and Target Size

How a winning strategy for one trader can be a losing strategy for another trader and how to solve this problem based on time of day entry and targets.

Conspiracy Theory

Are They really supporting the market or is this a rumor?

The Perfect Trade

Do you need to be perfect? Does every trade have to be a winner?

Unlocking the Subconscious

When can the subconscious automatically trade for you?

Gap Fade June 2006

What went wrong in the Gap Fade strategy in June 2006.

Selecting a Trading Service

Some things to think about when selecting a trading service.

3 Days of Unfilled Gaps in the ES

A comparison of other runs where there have been 3 days of unfilled gaps in the E-mini S&P500 futures market.

Kool's Tools - Putting it all together

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Kool's Tools for price

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Kool's Tools for Time

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