Definitely a thin, jerky market. Stick with fading up moves on $TICK down trends and down moves on $TICK up trends. If you have to think about the entry, you probably missed it.
What strategy do u mean? There were lack of ES divergences w/ $tick as far as I remember. Or u mean u have entered on $tick pullbacks while u was sure that the trend will continue?
A book could probably be written to completely explain. In short, the market typically stays in a relatively narrow range 70% of the time, while having a strong trend day 30% of the time.
So, most of the time, the market will bounce up and down creating small 3-wave patterns, especially on the 1-minute chart. When I sence that the market is changing short-term direction, I wait for the $TICK to correct in the opposite direction. If I think that the market will make a downward 3-wave pattern, I wait for the $TICK to go to + 400 to + 800 to short. If I think that the market will make an upward 3-wave pattern, I wait for the $TICK to go to - 400 to - 800 to go long.
A lot of this has to do with the nature of the computerized and frequent trading strategies. Dont' try to fight these people, but learn how to play their game. They will create these short-term corrections. Wait for them to happen.
And yes, you don't always get a divergence signal. So how do you know that the 3-wave pattern will be completed? You don't. That is where you need to follow your money management rules when entering a trade. Determine your stop point based on your expectations of the magnitude of your potential profit.
Thanks for the full explanation one of your approaches. In my case, I can't use such strategy. Do watch $tick on quote.com only, w/ 2-3 minutes delay, while refreshing page, respectively.
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What strategy do u mean? There were lack of ES divergences w/ $tick as far as I remember. Or u mean u have entered on $tick pullbacks while u was sure that the trend will continue?
ReplyDeleteHi Meques,
ReplyDeleteA book could probably be written to completely explain. In short, the market typically stays in a relatively narrow range 70% of the time, while having a strong trend day 30% of the time.
So, most of the time, the market will bounce up and down creating small 3-wave patterns, especially on the 1-minute chart. When I sence that the market is changing short-term direction, I wait for the $TICK to correct in the opposite direction. If I think that the market will make a downward 3-wave pattern, I wait for the $TICK to go to + 400 to + 800 to short. If I think that the market will make an upward 3-wave pattern, I wait for the $TICK to go to - 400 to - 800 to go long.
A lot of this has to do with the nature of the computerized and frequent trading strategies. Dont' try to fight these people, but learn how to play their game. They will create these short-term corrections. Wait for them to happen.
And yes, you don't always get a divergence signal. So how do you know that the 3-wave pattern will be completed? You don't. That is where you need to follow your money management rules when entering a trade. Determine your stop point based on your expectations of the magnitude of your potential profit.
Charles
Thanks for the full explanation one of your approaches. In my case, I can't use such strategy. Do watch $tick on quote.com only, w/ 2-3 minutes delay, while refreshing page, respectively.
ReplyDelete