Wednesday, 7 April 2010

All Milk no Cream

I came across an interesting study here that looks at emini ES volatility historically and then compares it to trading the Euro FX future (6E).

You can only make as much money as the market allows. I trade the ES because of its deep liquidity. I have spoken about using FloBot to enter trades and then managing the trade manually. This is one of the reasons why. Often, a trader can recognise the context that he is in and see that the market is not going far so he goes all in and all out rather than scaling out.

There is an argument that the real liquidity of the Euro FX future is even greater than that of the ES because the arbs are in the 6E market and will keep it in line with the cash FX market which trades trillions.

Another plus of this market is that it has three "hot" zones as the world turns, so traders in all the time zones have an active period.

If the real liquidity of the 6E is still an issue for you, have you thought about trading the cash Euro/$US market but using the 6E charts, where you have proper volume reported, for your analysis?

Today's ES trading was quite boring again. FloBot tried to get some trades going but I took profits quite early, mostly smallish profits, as there was no follow through and momentum died. Barely milk from the cow today and definitely no cream.
The second smoothed CVD


  1. Tom: If you had traded 6E you'd of had plenty of opps to trade! :-)

  2. Your "flobot" really triggers on the low of the arrow marked bar or the beginning of the next bar?.

    Any ideas to get the trigger nearer the top of the arrow bar or that is really impossible as "the flow" does not exist at that moment?



  3. Hello Tom,

    you mentioned in a post, where we had a slow day, that days like this should be traded "outside in", what criteria do you use to determine, whether it is better to trade outside in or not.

    Thanks very much!

  4. Jefe, you are correct!
    Anon 19:01, when the EMAs are horizontal is one way. Trading every spike in the VB works if the bar closes in the right direction.

  5. Elocal, the thing is that those bars never "close" really till the next bar opens, by that time you are lagging at least 1 bar.

    Or am I missing something really basic here?.



  6. Tom,

    I thought about how to trade range days,
    after viewing charts I came to the following setup conditions:
    1. Price is at or reenters top/bottom volume bulge or S/R
    2. Bar closes above/below MDot with VB green/red in Tradedirection
    3. CCI 6 crosses Zero
    This is just an first attempt,
    but is this worth thinking about?


  7. Looking at your chart seems so obvious entry points. But I know that is in hind sight. Doing it live is still a challenge as these opportunities come and go. I guess I get distracted a lot due to twitter/emails/internet browsing. I am not focused enough. Any advice

  8. Hello Tom
    I am following your blog for almost 2 months, I am still in sim, but improving every day, I have some questions:
    In the MP which is your start time, or what is the time where they begin the OPT's?
    I've noticed that sometimes it takes a little advance tickets, such as a long, the CCI6 already on the positive side> 100 but CCI45 has not crossed the line of 0. You look to really hit the trade will go in your favor?

    Thank you very much for all your teaching

    How's Kiki doing?


  9. EL, thanks for the post. Which Forex brokers are best? I don't have much experience in that market but I've read that many Fx brokers operate like bucket shops.

  10. Hi EL,

    what is CVD and why you use it ? Thanks

  11. newb, there are 2 posts in the blog that explains exactly how to anticipate the close of a range bar.
    Anon 19:42, backtest it for 5 days. If its what you want then backtest it for 3 months more and then go back a year. Its part of the process to becoming CP.
    Anon 0:47, Turn it all off except the music or switch to autotrading.
    Doug69, this stuff is all covered in the blog.
    Anon 04:26 Get a personal recommendation and make sure that the FX broker is NOT one who takes the other side of your trades. You need a true broker.

  12. TST, CVD is cumulative volume delta and it's all explained in the blog.

  13. BTW Kiki is doing good, there will be a post about her progress soon.