Friday 24 June 2011

In Search of the Perfect Market to Trade

There are now hundreds of futures markets to trade. If you add stocks currencies, ETFs, options and others, there are thousands of markets to trade. Yet each market finds it's participants. Traders find a market that suits them and make it their "home", at least for the time that they try to master it and then as they earn a living from it. Some markets disappear after a time due to a myriad of reasons.


But what attracts people to a certain market? Each market has it's own "fingerprint" - the way it trades. The market that took me the longest to master was the DAX. It's now my favourite market. It's super volatile and takes no prisioners. I paid my dues and surely was the source of the money for a few traders to build their swimming pools. Since then, I've been able to pay for my own needs from that market at the cost of the traders trying to master it now. The DAX has the qualities I like: extreme volatility, lots of stops that are run, a good daily range, and large tick size. Others like it can be the Russell2k, Hang Seng and Light Crude.

Chart below is the Russel. I traded the DAX in the morning (London time) and switched to the Russel for RTH.

Posted by at

11 comments:

  1. Anonymous24 June 2011 at 16:35

    Can you share some thoughts on the dax an what you found? How trading I is different from the euro for example? Thx.

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  2. Anonymous24 June 2011 at 22:47

    Hi EL,

    How do you enter trades when using Renko bars? Do you put your limit order in at the projected close of the brick/bar?

    Thanks,

    Carl

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  3. Anonymous25 June 2011 at 00:15

    Can you give me some background on why you did not take a long trade at 14:38 hrs? Some detail would be helpful in why such setups appear to be good, but then go nowhere.

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  4. Electronic Local25 June 2011 at 04:28

    Anon, 16:35, DAX has hi vol, lots of stops everywhere, great daily range.
    Anon 00:15, Didn't take it because mkt was in an uptrend/sideways. Big CCI > 0 and EMAs horizontal.

    ReplyDelete
  5. Electronic Local25 June 2011 at 04:49

    Carl, yes.

    ReplyDelete
  6. Anonymous25 June 2011 at 21:24

    EL, Thanks again for the useful insights via this blog. Are you using the FootPrint chart much these days? In the past have seen you refer to using MarketDelta's "inside the bar" info, which I believe is based on Footprint charts. But recently the charts posted here are range bar candlesticks or Renko.

    Thanks,

    Dave

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  7. Electronic Local26 June 2011 at 06:12

    Dave, yes, MarketDelta stuff is great for discretionary trading. Footprint needs to be seen in real time not on static chart pics.

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  8. Anonymous26 June 2011 at 18:07

    Placing a Limit order at the "projected close of the brick/bar"? How does that work? My broker does not let me place a buy limit order above the market, nor a sell limit order below the market. Only stops or stop with limit.

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  9. Electronic Local26 June 2011 at 19:24

    Anon 18:07, yes, Stop Limit. It trades at the price to finish yje bar and then enter at that bar close limit.

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  10. Anonymous26 June 2011 at 20:31

    Tom - Didn't understand your comment on Anon 00:15 comment above. I was suggesting a long trade as CCI was positive and there was a minor pull-back at 14:38 and another at 14:40 or so. With EMA's up or flat at worst, why not go long there? Was the degree rise of EMA's not sufficient to go long? Thanks for your response.

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  11. Electronic Local27 June 2011 at 11:54

    Anon 20:31, I misunderstood the question. The answer is MP resistance of 22June where PreRTH market failed at 804 ish. I wanted to see the resistance taken out and my vision was a downwards distribution.

    ReplyDelete

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