Thursday, 3 March 2011

Neutral Days

I said I would report back yesterday and by now you all know that yesterday's Neutral Day went according to Hoyle or rather according to Steidlmayer - after it became neutral (range extension in both directions), it traded back to the middle of the range. This is a powerful piece of information and although neutral days only occur relatively rarely, they are money in the bank for me.

Lots of ways of profiting from this. If the range is big enough then options provide a contained risk without needing a too accurate timing. Using futures as I normaly do requires observation of the change in order flow, usually leaning on a support or resistance counter in the Profile or off the range bar chart.

I have a number of less frequent occurrence pictures in my trading arsenal that I roll out when I recognise them. They add up nicely over the month and provide a good addition to the bottom line. There are plenty of them around and can be found through observation and then testing.

I started trading the DAX this morning, probably the most difficult of markets as it's managed by the big guys. When I switched to the ES later in the morning I was thinking Gap trade way too early and it took a couple of losing trades to bring me to my senses and listen to the market.

I went long just prior to RTH open - Flo was in charge -  and enjoyed the pop on the open, scaling out as price climbed. I got a second chance when Flo kicked in again, but this time I called it a day when I exited at the second fav Fib.


  1. Tom,

    My entries were near identical to yours today. May I ask? Why did you not take the trade around 10:13 New York Time (16:13 your time, I believe)?

    After the fast CCI became extended then turned back up, the slow CCI turned up, and the order flow seemed to go positive, I entered on the close of the range bar. I scaled out at 1 point, but scratched my second contract.

    I followed my trading plan, but I'm still learning and as such curious why you avoided that trade. Thanks in advance for any help. Your blog has already helped me reach CP more quickly than I planned.

    I then re-entered where you did around 10:33 which worked well.

  2. Jeff, If we are looking at the same time, order flow looks negative - this is reconstruction from the charts as I don't remember what I was thinking.

  3. Thanks for your reply. I'm in TradeStation, so I'm also seeing slightly different values for volume breakdown, too. I appreciate that it's these subtleties that make it "discretionary trading."