April 27th, 2017
OK, So I think the Open Trade using a 30 minute bar chart is a pretty good indicator of the early morning market direction.
I have been collecting data on this since September 6ht, 2016 and there is a statistically probability of just over 80% of taking a 1 point profit in either direction on any given day.
Looking at things like the close of the 8:30 30 minute bar, if there is a naked close signal, the direction of a 55 HMA brings the probabilities to 85% and in one case nearly 90%.
So, I decided to see what the 10,000 tick chart would be like.
So, I spent the morning going back through some charts and updating my spreadsheet with the 10,000 tick chart data. I could only go back to October 27th, 2016. For some reason I cold not pull up the historic data for some of the expired contracts.
Anyways it gave me a good sample of about 130 days.
What I found was that any random entry either long or short on the first 10,000 tick bar to close between 8:00 am and 8:30 am had a slightly higher probability of success than the 30 minute chart.
When adding the criteria such as how the bar closed, if there was a naked close, the direction of the 55 HMA the probabilities came up to nearly 90% in all cases and in a couple up to 95%.
These are pretty good odds.
Doing all this research meant I did not do any simulation trading in the morning.
Which is not big deal because the market was flat and there were not real opportunities.
So now we come to the open trade.
I'm watching it and the 809 bar on the 10,000 tick chart closes down (88% probability) and the price is below the 55 HMA (84% probability) so I take 1 contract short.
The next bar goes higher and closes at 8:31. Meanwhile I am watching the 30 minute chart and now it is giving me the impression I should be long.
So, thinking I have more of a track record with the 30 minute chart I flip the trade taking 2 contracts which keeps me net one and then the market drops and hits what would have been my target for the first short trade.
BUGGER.
So now I am long one contract waiting for some clear signal of direction in a market that has become range bound.
That's a lesson in having to many conflicting strategies.
Make a plan and stick with it.
Don't change strategies mid trade.
So, the market broke to the down side and once again I did not take the short signal because of the amount of contracts required, and of course it would have worked out fine.
This is a psychological and realistic problem of trying to trade the money management strategy with an account that is to small.
I will wait for a rally to get out of this long position.
Based on what Larry Williams is saying, he believes we are still in a Bull market and expects the markets to continue higher. We will go to swing trade mode with this contract.
So, I moved my sell order up to near the historic highs and switched to the simulation.
Simulation Trading
If only I could be as decisive in the real world as I am on the simulator.
Much easier when it is not real money and you don't have to worry about the account size.
The market found some support, made a double test of that support then rallied back above the open.
Picked up a number of good trades on the rally.
The rally was about 10 points top to bottom and a pullback must be expected.
That happened and there were a couple more good trades in the pullback.
The pullback was about 50% back into the days open.
The market started to rally back but did not have much strength making a lower high on the 2,000 tick and the 5 minutes chart then declined breaking the trend line on both charts and giving a sell signal on the 10,000 tick chart. Took a short but set the target to far out and the market rallied before hitting the target.
This rally also made a lower high on the 2,000 tick chart then gave a sell signal which I took putting me short 2 with an average price of 2384.25. Reset the target for a 1 point profit which was hit.
No follow through to the downside as the market formed a double bottom in the 2,000 tick chart and broke the trend line to the upside.
There was another long signal on both the 30 minute and 10,000 tick charts that I did not take as it was late in the day.
Ended up with $405 in the simulation.
I have been collecting data on this since September 6ht, 2016 and there is a statistically probability of just over 80% of taking a 1 point profit in either direction on any given day.
Looking at things like the close of the 8:30 30 minute bar, if there is a naked close signal, the direction of a 55 HMA brings the probabilities to 85% and in one case nearly 90%.
So, I decided to see what the 10,000 tick chart would be like.
So, I spent the morning going back through some charts and updating my spreadsheet with the 10,000 tick chart data. I could only go back to October 27th, 2016. For some reason I cold not pull up the historic data for some of the expired contracts.
Anyways it gave me a good sample of about 130 days.
What I found was that any random entry either long or short on the first 10,000 tick bar to close between 8:00 am and 8:30 am had a slightly higher probability of success than the 30 minute chart.
When adding the criteria such as how the bar closed, if there was a naked close, the direction of the 55 HMA the probabilities came up to nearly 90% in all cases and in a couple up to 95%.
These are pretty good odds.
Doing all this research meant I did not do any simulation trading in the morning.
Which is not big deal because the market was flat and there were not real opportunities.
So now we come to the open trade.
I'm watching it and the 809 bar on the 10,000 tick chart closes down (88% probability) and the price is below the 55 HMA (84% probability) so I take 1 contract short.
The next bar goes higher and closes at 8:31. Meanwhile I am watching the 30 minute chart and now it is giving me the impression I should be long.
So, thinking I have more of a track record with the 30 minute chart I flip the trade taking 2 contracts which keeps me net one and then the market drops and hits what would have been my target for the first short trade.
BUGGER.
So now I am long one contract waiting for some clear signal of direction in a market that has become range bound.
That's a lesson in having to many conflicting strategies.
Make a plan and stick with it.
Don't change strategies mid trade.
So, the market broke to the down side and once again I did not take the short signal because of the amount of contracts required, and of course it would have worked out fine.
This is a psychological and realistic problem of trying to trade the money management strategy with an account that is to small.
I will wait for a rally to get out of this long position.
Based on what Larry Williams is saying, he believes we are still in a Bull market and expects the markets to continue higher. We will go to swing trade mode with this contract.
So, I moved my sell order up to near the historic highs and switched to the simulation.
Simulation Trading
If only I could be as decisive in the real world as I am on the simulator.
Much easier when it is not real money and you don't have to worry about the account size.
The market found some support, made a double test of that support then rallied back above the open.
Picked up a number of good trades on the rally.
The rally was about 10 points top to bottom and a pullback must be expected.
That happened and there were a couple more good trades in the pullback.
The pullback was about 50% back into the days open.
The market started to rally back but did not have much strength making a lower high on the 2,000 tick and the 5 minutes chart then declined breaking the trend line on both charts and giving a sell signal on the 10,000 tick chart. Took a short but set the target to far out and the market rallied before hitting the target.
This rally also made a lower high on the 2,000 tick chart then gave a sell signal which I took putting me short 2 with an average price of 2384.25. Reset the target for a 1 point profit which was hit.
No follow through to the downside as the market formed a double bottom in the 2,000 tick chart and broke the trend line to the upside.
There was another long signal on both the 30 minute and 10,000 tick charts that I did not take as it was late in the day.
Ended up with $405 in the simulation.
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