This journal did start off on Trade2Win. I have decided to move it here because of the amount of people on that site who are clearly out to rip people off and more than likely to cause them to suffer losses of capital. As T2W does nothing about these people, I can't really be a part of it any more. So - first few posts here are going to be copied from there.
I have been watching this place for a while and although a bit quieter - the same nonsense doesn't seem to go on.
All
I am currently looking to supplement my trading with the addition of some analysis to better help determine the day type on the ES.
Generally speaking the ES is usually in a range for the day, although quite often this range is 10 points. To me, a range day could put in 2-3 good 'trends' and so when I talk about range days, I am not really talking about a choppy day with a small range. I am talking about a typical day that looks like this:
As you can see, this day ended where it started but it provided opportunity. A trend day of course will be one like Friday that looked like this:
Very clear right ? Of course it's very clear when you have the whole chart. I am a lot more succesful on range days that trend days and so I am now looking to see if I can supplement my analysis in order to better identify trend/range days early on. This journal is to record my observations with a view to deciding if I should bring in something else.
The method roughly speaking is.
1) Add levels of interest to a chart before the open (2 above the open & 2 below)
2) Look for developing levels during the day where there may be a reaction
3) Focus on DOM/T&S as we approach those levels
4) Stay away from news announcements unless a trade has breathing room
In terms of what I use now.
1) A review of the markets before the open to see what the key areas are around the open. This will vary depending on where we are - e.g. no point looking at yesterdays high if we have gapped over it already.
2) Tick chart with swing sizes marked out (up 3 points, down 2.5 points, up 4 points, down 2 points etc).
3) Cumulative delta
4) DOM /Time & sales
In terms of what I will be looking at to determine trend/range day
1) What I already use now - no reason to think what I use now won't give me what I need
2) VWAP (I have a ninja VWAP and need to investigate how accurate it is)
3) Sector/Industry analysis - I have a new screen up showing line charts for XLP, XLY, XLE, XLI, XLV, XLF, XLB, XLK, XLU, SOX, KBE. I will simply observe how the various sectors react in different day types. Theory is that if they all move in unison, we will probably trend.
4) 6E - just threw it up there to be honest but don't expect to get much from it.
I will probably also add NYSE TICK which may be useful for spotting trend days only. I think DOM/T&S will identify turning points much better than TICK but I am open to TICK being of use for trend day identification.