Sep 242013
 

In between my last post and yesterday, I didn’t take any trades.  I actually entered one and then saw something I had overlooked that invalidated my setup and so I immediately scratched it.

Yesterday I took at trade without confirmation from the order flow, and no surprise that it didn’t work.  The trade was a pullback to IB Low.  I didn’t want to miss it so I took it and took a stop.

Notice in the chart around my entry there are blue arrows pointing up which indicate a bullish bias from the order flow.  And the absense of red arrows which would be bearish.  There was a red arrow just after I entered but it was overruled by two blue.

ES Trade without Order Flow confirmation

Sep 162013
 

Tonight I got a good setup and thought this would make a good preview of the indicators.  I’ll write more about them but on the price chart the arrows show a directional bias from the order flow.

Big picture I’m bullish, but NQ was very weak and ES broke out of its IB (orange box) to the downside so I took the pullback to get short.  I entered on the weaker retest of the bottom of the IB range.  Risk was 1 pt and target was 83.50 which was 9 pts.  This is a no brainer for me and it’s a trade I’d take every time.

2013-09-16_2115_es_trade

I could have gotten out when I saw bullish order flow when it made the higher low, but I didn’t want to take myself out of a potentially large winner so I let it go.  I had my stop at +1 tick.  This is a trade where I don’t mind stopping out.  Taking +2 or +3 pts isn’t going to make me money over the long run.

I’ll write more about the arrows soon, but there is one thing to notice in the chart.  If a signal doesn’t immediately fail, it generally has follow-through.

 

Sep 152013
 

The summer flew by so quickly.  Since my last update, well June was my last month on my consulting assignment.  In July we spent a week and a half at La Motte at the largest equestrian competition in the world.  That was exhausting but a lot of fun.  Then we were off to the USA for vacation.  We had a particular eye out for places to live.  New York was great and the highlight of our trip, but may not be best for the kids.  Cape Cod was wonderful for vacation.  Boston seemed like an excellent place to live and has a lot of hi-tech jobs.  And Portland Maine was great for outdoors activities like Kayaking.  And then back to France for the new school year and all the kids’ activities.

I haven’t traded much since we got back and the time off has done me some good.  But we’re starting to get settled down and most of the meetings with the teachers is over.  And it’s back to my time window (last 2-3 hours).  I’m actually looking for a consulting assignment now but I don’t  want to trade Globex due to lack of volatility and so I’m just sticking to my normal time period despite being home during the day.  I’ve been using my days to work on another project.

In the past I’ve made available my order flow signals.  The challenge in doing that is that my order flow algorithms make observations in the market and then I take this information and line it up with my trading plan and decide when to enter trades.  There is a bit of discretion involved and no simple automated algorithm is going to make money long term.  As a result, for someone who didn’t have access to the behind the scenes information from my indicators, the signals were not as useful as I hoped.  One question many asked was that they wanted to run them on their own PC and not be dependent on getting them realtime from me.  And that made a lot of sense.  So I decided to provide a Ninjatrader indicator that will provide the “behind the scenes” information rather than just giving a long/short signal.  This will require some interpretation, which means it’ll require lots of explaining and practice.  But I think it’ll be far more useful.  The trick for me is to do this without giving away the logic behind the proprietary algorithms.  I think I’ve reached a good compromise.

I’ve identified two indicators that I will make available.  Initially I’ll do a private test with people who have purchased previous tools from me (the zones indicator, the signals, etc.).  And if feedback is positive then they’ll be available publicly soon after.

The cool thing about making these public is that when I post trades, I can show my screens and explain how I interpreted the data and used it to enter a trade.  I think that will make the blog much more useful.

I’ve been using these algorithms for several years.  They’re integral to my trading and I hope you will find them useful too.