Bad day for Milking the Cows

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Razor
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Bad day for Milking the Cows

Postby Razor » Thu May 10, 2007 6:49 pm

Hi all,

I actually played ER buy-zone and got a small -.50 stop, I then went and looked at some of the popular cows and noticed that quite a few set-up only to come back and hit stops.....just one of those day I guess, just would like some confirmation from others that they noticed a lot of failed buy zone plays today.

Cheers :D

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eudamonia
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Postby eudamonia » Thu May 10, 2007 8:38 pm

Razor,

No, I had no problems with 3 BuySell zone trades on the Russell this morning. All winners (although I waited for the 3rd trade to push support up through the zone). Did you get filled exactly? That can make a big difference.

If you read the other posts on the Russell you'll see that other Russell zone traders are using a 7-10 tick stop. However, none of this mornings trades ever went beyond 4 ticks so I'm rather confused.

Remember also, that this is a statistical system. You can't expect to win every time. However, if you use the zones and S/R together you can expect to win about 70-80% of the time.

Getting exact fills with this system is crucial in my opinion. You need to nail the exact edge of the buyzone. I accomplish this utilizing a stop limit order. This can be done with most brokers although it is often cumbersome. With NinjaTrader I can get a stop limit order with a single mouse click. This means no more missed limit orders.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

Razor
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Postby Razor » Thu May 10, 2007 9:15 pm

Hi Edward,

Thanks for the reply :D

Here is a chart of my exact entry and exit from today. If I would have had anything over a .50 stop I would have had a chance to make +.50 (assuming I would have got filled at the high which is not a certainty). I get exact fills (unless there is a serious jump in price which can happen at times on ER as we know :)

I understand that it is only statistics and I will be quite happy with a 70% win rate with a 1/1 r/r. I also started this thread as I saw so of the other equity cows struggled today as well for buy zone plays and wanted to hear some others comments etc

Is there any chance you could post a chart with trades from today ?

Also, any input on my chart and my trade from today would be welcomed :D

Yesterday I had one trade for a +.50 from this system, fwiw.

Cheers,
Ray

Image


eudamonia wrote:Razor,

No, I had no problems with 3 BuySell zone trades on the Russell this morning. All winners (although I waited for the 3rd trade to push support up through the zone). Did you get filled exactly? That can make a big difference.

If you read the other posts on the Russell you'll see that other Russell zone traders are using a 7-10 tick stop. However, none of this mornings trades ever went beyond 4 ticks so I'm rather confused.

Remember also, that this is a statistical system. You can't expect to win every time. However, if you use the zones and S/R together you can expect to win about 70-80% of the time.

Getting exact fills with this system is crucial in my opinion. You need to nail the exact edge of the buyzone. I accomplish this utilizing a stop limit order. This can be done with most brokers although it is often cumbersome. With NinjaTrader I can get a stop limit order with a single mouse click. This means no more missed limit orders.

Edward

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eudamonia
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Postby eudamonia » Thu May 10, 2007 9:38 pm

Razor,

Ah, that explains it. Check your Support and Resistance dots on the 5 minute chart. If you had been watching that you would have seen that Support was blocking this trade on the 5 min candle.

I did not get long until 4 candles after you entered. Basically I waited until Support had been pushed up through the zone (mostly) and entered on the pullback. If you wanted to play this strictly by the books you wouldn't have entered this trade. I will, however, enter these trades given that support can be pushed up at least 3 ticks into the zone.

I did get filled at 832.40 on my lots. I suspect if you had more than 5 lots on you wouldn't have gotten filled. I also don't stick around long in my trades and wouldn't have waited to get stopped out. If my trade doesn't hit the profit target within 2 min I'm out unless the 1 min candles are still making higher highs on their close. If I hadn't gotten filled at 832.40 I would have exited at the close of the next candle since highs were not sustained. Most likely this would have been a scratched trade.

Edward
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Postby TheRumpledOne » Thu May 10, 2007 10:22 pm

Ed:

I think you mean RESISTANCE ( red dot ) was blocking this trade.

Razor:

What's the reason you didn't get a short trade? Looks like lots of ticks/points to be had!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby eudamonia » Thu May 10, 2007 10:28 pm

Avery,

Oh, yeah that's what I meant :).

Yes, it looks like there are at least 3 good short trades.

Edward
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Postby Razor » Thu May 10, 2007 10:59 pm

Well shiver me timbers ! I didn't even realize you could short on a gap down day. I thought only long trades could be taken on a gap down day and short trades only on a gap up day. Do the same rules apply for taking shorts on a gap down day ? (The reason I thought this is I thought we were working off the stats that 75% of gap days filled so you want to be trading towards the gap fill).

Thanks again for the reply guys :D

PS: I didn't realize one should look towards the 5 min chart for resistance / support dots, I thought only the 1 min chart was used.

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Postby TheRumpledOne » Thu May 10, 2007 11:42 pm

Don't confuse FILLING THE GAP with MILKING THE COWS.

Some cows, like AAPL, usually fill the gap and that's a trade we look for.

But the BUYZONE IS ALWAYS IN EFFECT.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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eudamonia
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Postby eudamonia » Fri May 11, 2007 3:14 pm

Razor,

Also gap fills work very differently on the Russell than AAPL! I'm not entirely sure that most gaps fill on the Russell (unlike AAPL). In fact on large gap days (4 points or more) I would say the Russell has a tendency to continue in the direction of the gap.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby TheRumpledOne » Fri May 11, 2007 4:56 pm

Just run the STATISTICS!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!



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