Wednesday, 20 January 2010

Four Dips from the Well

I usually only trade 3 trades in a continuing sequence but today there seemed a disconnect between trade 1 and trade 2 so I started counting to 3 from what was trade 2, if that makes sense. As it turned out, the trend was one way - down - as I saw from the 45 CCI and both the EMAs. The market is back to 1129.00 as I'm writing this, but if we can break around 1125.00 with some decent order flow, we can go right down a zipper to 1118.00. Sadly I'm finished for the day (note to Kiki: work faster on the Kiki FlowBot).

As you can see, it wasn't rocket science today either. Just a nice retracement move back down with a number of pullbacks letting me re-enter after what were all in, all out trades. Why were they all in, all out? I had a number of distractions and it was easier to exit each trade, to attend to the distractions. Had you been  short at trade 1 with a little size, there would have been no reason to exit your whole position, even now. Scaling out bit by bit as the ride continued would have been a good strategy if that was part of your trading plan. A close above the 33EMA with a close of the 45CCI would be a final good exit signal after the CVD had turned green.

Click to enarge


  1. Hi Tom, can you elaborate on why you had no interest in taking a long trade at the close of the 13:07 bar when price looked like it was trying to force it's way up?

  2. EL, what a great trending day, wow! I was wondering though, when we are trending, what determines whether or not you sell a Turbo WCCI crossover the +/-100 mark, or whether you wait for turbo to cross back over the zero line? Is it determined by where price is in relationship to the Keltner channel and the 33 EMA?

    Also, you mentioned that one Fib number is important to you, but I don't know if I caught which one it was or how you use it. Is that something that you explained earlier and I missed it? Thanks as always for your insight.

  3. Hi Tom
    please could you explain a few words how do you use MomDots ???
    Thank you

  4. Great blog. Can you explain what role does the splitting of single prints off of yesterday's
    (1/19)open have in determining S/R? Thanks

  5. Matt, 13:02 was a red candle, 13:05 I did consider sa long, and you could have taken it, but it looked to me it was some position squaring ahead of the numbers. It just looked wrong as a picture, CCIs told me to wait for a 45 zeroline cross. When it cam the candle was red and the two CCIs definitely showed loss of momentum. Don't knowhow we'll code this for the FlowBot but probably it would have taken the trade and made b/e or small loss.
    Mike, turbo shows pullbacks while the 45 shows trend. Fib: 1.272
    Kuky, MomDots can be used for bothe entry and exits. I also look how they are trending.
    Anon, I just got the single prints out of my way to see the distribution. I could just as easily not split it. It was what Dalton calls an opening drive I think.

  6. Tom,

    Does your methodology/plan change when the 33 and 99 emas are horizontal? I.e would you still prefer to trade inside to out?
    Many thanks,

  7. Matt- A good way to avoid inside out trades that might potentially burn you is to look for divergence on the Turbo WCCI. If we are crossing over, but the Turbo WCCI is making a lower high, that can signify weakness. That would have kept you out of 2 longs that eventually went nowhere this morning, and given you more confidence to enter the shorts, which (as you can see) turned out pretty amazingly. Tom, pardon me if I am stepping on your toes! ;)

  8. Thanks Tom, much appreciated.

  9. Chris, I still trade inside out when the EMAs are horizontal as long as the distance between the entry point and the Keltner Channel is greater than my first scale point. Yesterday's ES was an example of this before the break down. I'll post on this today as its important.