Monday, February 23, 2009

Monday 02/23/09 - Nov. Lows Broken

Well, my slightly bullish bias didn't hold but that's not a concern since it proves an important point that I've been reiterating on the blog: put the bias aside and trade what you see; trade in the now moment opportunity flow. Easier said than done though. Looking at my trades today, over half were placed on the Long side, and I completely missed the shorting opportunities. Could this have been due to my slightly bullish bias? I don't know but it sure looks like it. Here's a screen shot of today's trades:



I wish it had time stamps next to each trade, but unfortunately the Trades window in the AT platform doesn't store that level of detail. At the end of the day, I was up +10.25 points which isn't bad but it could have been much better. I was using a single 1-min ES/TICK chart all day, and the only positive finding is that I was able to stay out of trouble even while taking counter-trend setups based on the TICK. The TICK continues to perform day in and day out, and is an excellent indicator.

Gap filled within first 30 minutes


ES/TICK (3-min) Note where TICK spent most of its time: Below Zero-Line. Price stayed below mid-point all day. ES couldn't even retrace back up to its 1st hour low indicating major weakness.


ES Market Balance (5-min Day Session)


TF Market Balance (5-min Day Session)


TF/TICK (3-min) Same deal with the TF. Price remained below mid-point all day. It got within 1 tick of its 1st hour low, but couldn't reach it. Major weakness signal.

11 comments:

  1. Greetings:

    Thanks for your very interesting blog. I have a couple of questions. Why and how is your TICK indicator set up like that? It looks like you have 3 types of MA on the tick.

    More importantly, I have read some entries you have that mention TICK divergence. It has not been clear to me in all places what you mean by this. Sometime it seems like a normal tick fade (short at +1000/long at -1000)and sometimes like you are using a divergence in TICK and price trend. Do you have rules for this setup?

    Also, what is the TICK ceiling and how did you calculate that?

    The mid-point indicator you have also seems interesting. How did you start using that, and where did you get the code?

    Best (from Beijing)

    semuren

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  2. Hello,

    I got a question regarding the trading around 13:30 on chart: 20090223_TF_3min_Tick.jpg

    If i look at the charts, it looks nice to go long just below 13:30, however there is a sharp decline afterwards.

    I wonder how can a trader avoid going long at that timeframe. Or when to know to step out fast?

    I see on your chart that the 400.51 Vol Trend seems to be resistance at that time moment.

    Is this a correct observation?

    Grtz

    Peter

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  3. Just right click on the window in AT (i.e. on the blue part on the top) and you'll see a "configure columns" part where you'll be able to add the time stamp, among other things.

    That's pretty good that you were able to not lose while trying to go long today. I got killed in the first hour trying to go long, then I sensed we may be seeing the start of a downtrend. Made it all back and then some in the afternoon by shorting that final climb and holding till near the lows. But man were the losses hefty before that!

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  4. Looks like the $TICK is turning out to be great tool for you!

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  5. Thanks for all the comments guys. I'll try to answer the questions one by one.

    semuren, I was just messing with the TICK one day and decided to throw three moving averages on there to help me visually identify the trend. I use an exponential MA, triangular MA, and a weighted MA; all set to 9 period. I also only plot a Dot on CLOSE of the TICK. This creates a scatter plot style chart with the moving averages plotted on top. I plot the zero-line, and then a TICK extreme/ceiline line around +850 and a bottom at - 700. These #s change based on the behavior of the TICK over time. If I notice a trend where the Tops of the MAs are making higher highs; I will adjust the two extreme lines. Regarding the TICK setups, I don't have time to go into detail in the comments section here, but just search the blog for "tick" and you'll find several posts where I've included detailed screen shots of the setups. I use TICK/Price divergence setups (price makes higher high; tick makes lower high, so I short this). I also look for TICK convergence to support continuation of trend. I'll also look at zero-line rejects; or zero-line bounces as well as tick extreme rejects/bounces. And finally, I look at WHERE the TICK spends most of its time; above or below the zero-line to form a long/short bias.

    The mid-point is the Average price for the trading day, and can be calculated by taking dividing the day's range by 2: (High of Day + Low of Day) / 2. This is an indicator I got from Joe Baker from Trade Pilot Pro (check the TPP Balance indicator on www.tradepilotpro.com). If you'd like details, search for TPP Balance on the blog and I'm sure you will find a couple of posts with further details.

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  6. Emini Player is a master of the TICK! I'm impressed (as usual) with the consistency and poise you trade with the markets.

    Hope today ended well for you.

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  7. Peter, I post the 3-minute charts as a general reference. In my trading, I use a 1-min ES/TICK chart. First, I use a relatively tight stop (1.5 pts - 2 pts), so getting stopped out is not a big deal. No method will produce 100% winners, so it's important to have a positive risk/reward ratio. There are days when I hit 3-4 losers in a row, and then 1-2 profitable trades wipe out all the losses and produce a net hain on the day. I'm usually very quick to get out of a losing position; a lot of times at break-even or couple of ticks loss. If it's not working out, I bail, and look for re-entry signals.

    Now, looking back at the 1-min TF/TICK chart, you'll notice the TICK MAs had just made it past the zero-line and turned down prior to 13:30. Price was also hitting resistance at the continuous volume trend (you made the correct observation). I would wait for some confirmation before going Long in this area because even in an up-trend, a pullback would be expected in that area.

    Hope that answers your question.

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  8. Matt, you did a great job of staying on the right side of the market today so kudos on that. I made the same mistake as yesterday, and let my bearish bias get in the way today.

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  9. Just a thought Awais, but plotting moving averages of the TICK based on just the close doesn't seem to make much sense to me. The CLOSE of any single TICK bar is just an arbitrary moment in time. The TICK could have been bullish around +1000 for the whole minute and then happen to be at or below zero for a few seconds when the bar closes. A moving average of the (High+Low+close)/3 would give a much better approximation to the actual TICK values that should go into the MA, instead of just one random closing value. Just a thought.

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  10. Hi Ziad, I guess I'm using it on such a small time-frame (1-min) that it doesn't make much of a difference either way. I changed the MAs to plot based on (High+Low+Close)/3 and compared the charts side-by-side, and it barely made a difference. It did smooth them slightly, but not enough of a change that it would affect the setups. Thanks for the observation and advice! Btw, I finished reading Golf Is Not A Game Perfect last week; excellent book. Lets plan on catching up over the weekend.

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