I've been a long-time lurker of your blog - always great stuff!!
For the charts you showed for this post, I don't see any real strong indicators for potential trades? Although I did see the VIX jump at 14:00. How did you approach yesterday?
This is what I try to do each day, and I must continuously remind myself of my rules based on experience.
The thing(s) that takes precedence over all others is market structure (Higher or lower highs and lows) on the 620 tick chart, and the trend of the $TICK based on their 20 and 38 period EMA's. All other indicators play a supportive but not primary role.
After 1000 ET, both price momentum on the 620 tick chart and the $TICK momentum turned red or bearish. Even though the Advance / Decline Line and the VIX were indicating slight bullishness, they were both trending toward bearishness in the early morning activity. I prefer to enter when the futures corrects back slightly past the 38 EMA line on the 620 tick chart. I did take a long trade just after 1100 ET when the futures tested the recent low, and the $TICK was showing a bullish divergence. After lunch, both the 620 tick chart and the $TICK EMA's turned red again for possible short trades. I also use a 1 min chart with the futures and $TICK to help with timing. This has been working lately with these large daily ranges and trendiness. If the market goes back to a 2005 type of market when the Average True Range was just 8 points, a different strategy may be needed.
But for now, when both price and $TICK are trending in the same direction, you should trade in that direction unless you see a strong divergence indication.
Hope this helps. Trying to explain without writing a book.
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Hi Charles,
ReplyDeleteI've been a long-time lurker of your blog - always great stuff!!
For the charts you showed for this post, I don't see any real strong indicators for potential trades? Although I did see the VIX jump at 14:00. How did you approach yesterday?
Thanks!!
Chuck
Hi Chuck,
ReplyDeleteThis is what I try to do each day, and I must continuously remind myself of my rules based on experience.
The thing(s) that takes precedence over all others is market structure (Higher or lower highs and lows) on the 620 tick chart, and the trend of the $TICK based on their 20 and 38 period EMA's. All other indicators play a supportive but not primary role.
After 1000 ET, both price momentum on the 620 tick chart and the $TICK momentum turned red or bearish. Even though the Advance / Decline Line and the VIX were indicating slight bullishness, they were both trending toward bearishness in the early morning activity. I prefer to enter when the futures corrects back slightly past the 38 EMA line on the 620 tick chart. I did take a long trade just after 1100 ET when the futures tested the recent low, and the $TICK was showing a bullish divergence. After lunch, both the 620 tick chart and the $TICK EMA's turned red again for possible short trades. I also use a 1 min chart with the futures and $TICK to help with timing. This has been working lately with these large daily ranges and trendiness. If the market goes back to a 2005 type of market when the Average True Range was just 8 points, a different strategy may be needed.
But for now, when both price and $TICK are trending in the same direction, you should trade in that direction unless you see a strong divergence indication.
Hope this helps. Trying to explain without writing a book.
Charles