Thursday, 5 May 2011

My Morning, Step by Step

I started my day looking at the MP. ES was rallying and got to 1348.00, above yesterday's VA, and in the single selling tail. Asian stock markets were weakish overnight. I know it's a zipper but not in the normal sense and at this time of day (7am London). I saw the previous day's VAL at 1350.25. I decided to start selling with a view to scaling into a position. My first scale in was 1348.00 and I had scale outs all the way down to yesterday's close of 1343.00. My plan is (and I'm writing this after my first sell) to add to shorts on a rally up to 1350.25 and to stop myself out if price is accepted within the value area above that price. I'm trading other markets and may comment on those too.

I scaled out 2/3rds down to 1345.00 at the 33EMA. I then saw a picture to go long, so closed the balance but did not go long, rather looking to re-short at a higher price.

Well, it didn't happen. I had the right idea but did not maximise the opportunity. But then there was the DAX.

You can see from the attached pic that I tripled the 45CCI setting and cut the normal DAX range bar setting to 6 ticks. The result was pretty good, although there were a couple of scratches before the big payoff at just after 10.30am London time. For me it's important to keep the discipline of getting TP complying trades on. I may to and fro and scratch but I MUST get the trades on. Imagine having traded the earlier morning and getting frustrated with myself as I wasn't getting the follow through and then missing the trade. Using Flo helps a lot. The sequence below had fixed targets of Euro150/contract. The DAX is relatively thin so trade size is also small. Nonetheless, the sequence shows a profit of nearly Euro1,000/contract.

The message I am trying to send is that the methodology is always the same: trade the pullbacks in the trend. How I can best see those pullbacks depends on context and volatility. That's why its called discretionary trading.


  1. EL, can you explain why you use TradeStation, MultiCharts and MarketDelta? Why 3? Isn't 1 enough? Thanks-

  2. I have students using those platforms and we do a lot of testing. I love the completeness of MarketDelta and all its functionality, particularly for volume and MarketProfile stuff. I use MultiCharts for testing as I'm more fluent in easylanguage than RTL although I'm getting better. As we test all day and trade all day we can't use the same platform for both trading and testing at the same time.

  3. We had a huge trend day in EuroFx with lots of pullbacks and an even more interesting day in ES: range extension down, up and once again down. It seems the market can't decide where it wants to go.


  4. EL: How do you know which setting range bars to use? I mean do i use 6,9 or 5 tick ? Does it depend on volatility? What is the trigger that makes you change the set up and how do you determine which is the best one?


  5. john, lots of posts on this bit the main criteria is that I use the shortest range bar that has the least overlap to show vertical movement. I then validate by back testing my standard pictures using Flo.

  6. EL,

    I am currently using TradeStation, and I see that you have a "All CCI" indicator in one of your TradeStation charts that you have posted. TradeStations Mkt Profile is practically useless, so I am guessing that if I want to learn your methodology I would need to use a different charting package that is able to merge, split profiles, etc. If this is correct, where do you recommend one start with charting and brokerage? Infinity and Mkt Delta I assume? I know it's pricey, like $200 a month for the Professional version if my memory is correct, but I guess you can get the data for free with some effort, so maybe that is not so bad.

    If I can use TradeStation to learn your methods, where can I download the "latest" TradeStation indicators and Mkt Profile set up that you or your students are using? Thank you very much.


  7. Allan, its a matter of functionality and budget. We,ve got students using most charting packages. It all works, just some have a bit more functionality than others. Its all trend identification and trading pullbacks. I've repaired the link to the TS and MC Indicators or you can find them at