Buy Sell Zone on the Russell

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zeller4
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Postby zeller4 » Thu Apr 26, 2007 8:26 pm

I use 1.0 zone and a trailiing stop when it gets near 1.0 that I can dial down to .3 or .4 with the intention of making at least .7. TRO has some good info regarding scalping that I'm still trying to fine tune. I've found that when I see it falter if I'm in the wrong direction, I can flatten with about a .30 loss. Many mornings (9:30 EST) I've found it will move through within 1-3 minutes. I'm using a couple other things to tell me if it's choppy or undecided and then I just wait for a stronger move.
Kirk

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eudamonia
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Postby eudamonia » Thu Apr 26, 2007 9:04 pm

Kirk,

That sounds very similar to my experience with the Russell. When I'm wrong I can usually spot this in time to either scratch the trade or take a loss of .30 or less.

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 jeffx » Thu Apr 26, 2007 10:37 pm

Good discussion

I've been paper trading for a couple of weeks, and started for real yesterday with .5 zone, .7 stop (2 ticks below or above open line for longs or shorts). 2 tick stop from the open line seems to mostly hold (in recent observations), if it doesn't turn into an actual reversal into the opposite zone. I also filter with a momentum indicator.

During the time I was able to trade yesterday, I traded 2/2 wins, and it went 4/5 through the day, not counting the very last bar of the day, which would also have won.

Today I started 2/2, then lost the next 2 in chop, TRO Dynamic S/R prevented me from entering again, fortunately, before I went to work.

I've thought about widening the zone from .5, but price seems to stop right at .5 profit more often than not. I'm open to changing that if can be more profitable of course.

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eudamonia
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Postby eudamonia » Thu Apr 26, 2007 10:48 pm

jeffx,

Thanks for your input, I agree this is a good discussion.

This morning was a tough one. Very choppy. I had +5, -2, +5 for my trades this morning. It got very choppy towards 11:00 est and I decided to opt out of those trades.

I agree that 5 ticks seems to a good stop most of the time.

Edward
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Postby jeffx » Thu Apr 26, 2007 11:08 pm

Edward, nice job coming out ahead, on a day like today. It was the toughest chop around the zones that I've seen over the past couple of weeks. I prefer the chop that at least makes it through 1 zone, then the other.

I've gone into this with the idea that, from the open, I'd take every trade with some momentum behind it into every zone, then let stoploss and/or dynamic S/R resistance prove me wrong...which it did today.

We'll see how that works over time

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eudamonia
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Postby eudamonia » Thu Apr 26, 2007 11:43 pm

Jeff

Thanks. I think the key to keep in mind is to follow the momentum. When you see a movement stalling that's a sign that you need to be looking for an exit. Typically if you watch attentively you'll get some sign of this and have about 10-30 seconds to react.

Also, remember that if you're worst day is -5 ticks that's no biggie. You can make that up easily in a morning. That's the way that I look at it anyway.

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 » Thu Apr 26, 2007 11:46 pm

zeller4 wrote:You know, saying it 3 times really helps! I hope I "get it" this time!
LOL!
kz


I guess I STUTTERED!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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4x=0
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Postby 4x=0 » Sun May 06, 2007 10:43 pm

eudamonia wrote:Jeff

Thanks. I think the key to keep in mind is to follow the momentum. When you see a movement stalling that's a sign that you need to be looking for an exit. Typically if you watch attentively you'll get some sign of this and have about 10-30 seconds to react.

Also, remember that if you're worst day is -5 ticks that's no biggie. You can make that up easily in a morning. That's the way that I look at it anyway.

Edward


Your posts are extremely valuable Ed, thanks!

the 10 - 30 second reaction time is awesome...

So simple yet so advanced... ...try programming THAT into a computer.

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Re: Buy Sell Zone on the Russell

Postby jstockman » Mon May 07, 2007 1:38 pm

eudamonia wrote:I've had a request from a couple of people to show my setup for the Buy Sell Zone on the Russell. The settings I use are .5, 1, 1 for the BuyZone, BuyZoneHI, BuyZoneLO inputs.

Today was a very straight forward day and you could have easily bagged +1.5 points. I'm looking to enter the zone for a buy zone trade this morning at 776.2 and exit at 776.7 (five ticks or $50/con). On the sell zone I'm looking for an entry at 775.2 and exit at 774.7. If things go wrong I look to exit at 6 ticks (5 tick stop market order).

So here is my expectancy with a with an 80% win ratio:

5 ticks * 8 trades (40 ticks) less 6 ticks * 2 trades (12 ticks) = Net 28 ticks or about 2.8 ticks per trade.

With an average of about 3 trades per day I can expect to net about +8.4 ticks per day or about $80 per day per contract. Trade this with 5 contracts and you're looking at $400 per day. Easy.

So you might be wondering where I'm getting my "statistics". Simple, this has been my observation so far. It isn't statistically significant (yet) with a mere 15 trades (need at least a minimum of 30 to be significant). So if you decide to use this - use your head first and paper trade it!

BTW, this is certainly not the only way or even the best way, it's simply one way of looking at the Buy/Sell zone on the ER2. I haven't even bothered to use Avery's statistics in Radar. So if you think your way is better, then please post it and let me know. Thanks.



Ed,

Do you know how your settings for the buyzone correspond to Michal's inputs for the Entry Staddle on NT.

jstockman :?:

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eudamonia
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Postby eudamonia » Mon May 07, 2007 3:30 pm

jstockman,

No I didn't know that. Weird.

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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