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MP Spoos Mar 7th


The only question is : Are people now bearish? Anecdotally I can tell you that from the calls I received this evening the answer is not really BUT there are now some trapped money above who need the voodoo wand to be waved to get out of jail. IF this week is a NORMAL week then we should rally back close to Monday's highs but I have left other levels to think about on the chart as well. So to pre-empt the proverbial question how wold I trade it. The answer is I would look at the development of trade (in every aspect - Clse vs Open vs current vs volume vs time of day vs....) and using the analysis that I have already outlined make a decision.





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quote:
Originally posted by alleyb

...So to pre-empt the proverbial question how wold I trade it. The answer is I would look at the development of trade (in every aspect - Clse vs Open vs current vs volume vs time of day vs....) and using the analysis that I have already outlined...


Ally do you swing or day trade the S&P? If day, then how many trades do you typically do a day and what is the max number of trades (complete strategies - i.e. adding in the same dirrection would still be 1 strategy) that you have executed on the S&P in the last year? Also, am I correct in assuming that your implementation of S&P trades is through the ES?

What I'm trying to get a handle on is the answer to the 'proverbial question' that we ask you. For example, I'd like to know how many times you would scale into a trade? Or do you just stop out and look for another entry point?

Thanks!
I swing and day trade. Recently more day trading. If I start to trade more than 4 or 5 times then I am overtrading and above 9 I definitely am overtrading. Scale in methods have been shown to be appropriate for certain strategies and are really applicable in range markets. You have to understand the type of day unfolding. read comments on MP Spoos Mar 13th for example
Thanks Alley! I agree with your strategy of scaling on range bound days. I am trying to work on a strategy at the moment that I want to back test which uses 2 or 3 standard trading techniques and switches between them when it determines what the day type is. Problem that I have at the moment is defining the probability of day type by (say) 11am.
defining day type is not that difficult if you look at the patterns. yes there are days where it starts as one type then switches but within the dominant trader view of the weekly and monthly charts allows one to understand the day type quite early
90% of my research at the moment is involved in identifying day types early on. It's tough work but in my opinion the identification of day type is the holy grail. Once that the day's potential has been established your trading style can be modified for the possible day type.
its only tough work becasue you are opinionated. Get rid of that and read the profile then you will find it easier and you will become intuitive to the unfolding structure. But yes you are right it is the holy grail
quote:
Originally posted by alleyb

...you are opinionated. Get rid of that and read the profile then you will find it easier and you will become intuitive to the unfolding structure...


You are correct. More objectivity and less subjectivity is required.