Jul 162012

Thanks to Todd for telling me about the IRT homework study #3 which did the same thing, and that let me compare my results with theirs.  I had an error in my Excel which made the time get out of sync and that compounded and ended up making the last period H/L more often.  Doing these stats in Excel is a bit complicated, but worth the time & effort in my opinion.

I updated my previous post, but here is the updated chart:

This fits better with convential sayings that the first period is most often the H/L.  Lately that may not seem like the case, we’ve had many mid-day reversals.  But over several years, that is the correct pattern.

The last time period is the second most likely to be high low.  And since by the last 90 minutes, we already know if the first few periods are likely to be high or low, we can guess the last period will be the opposite and use that for a directional bias if supported by context.

Another important implication of this is that trying to fade the intraday trend mid-session is not a good idea.


Dec 162010

Hello everyone.  I hope you all are doing fine with your trading, or at least making improvements.  The forums have been a big success with over 100 registered users.  We now have sponsors for Bund, ES, NQ, & EuroStoxx with people posting their pre-market plan & sharing their trades afterwards.

Today I went short on the stoxx and covered half at the open swing low.  That’s where Markus went long.  I stopped out on the second half of my short and he did well on his long.  By sharing our trades we can see the market from another point of view.  He was clearly on the right side of the market this morning and it was interesting to see how he saw it and traded it.

To me this is the most important part of trading – sharing & learning with others.  Which reminds me of the survey results:

Since multiple answers were possible, I put the number of votes corresponding to each choice in orange.  I was really surprised, 41 people are interested in a trading room for the European morning!  And 36 for the US morning session.  That’s surprising to me because there are only a few of us posting our plans & trades in the Stoxx & Bund forums.  I have an idea on why this is the case and it’s that there are a lot of traders who are interested but don’t feel comfortable sharing their plans & trades, or are a bit lost in the process.

As FT71 said in his latest blog post, “A rising tide lifts all boats”.  I’ve heard that before.  For example when a sector is doing well then all the stocks in that sector benefit.  And when a trading group is doing well everyone benefits.  I used to think that I had to keep everything secret as it was my “edge”.  Now I realize just how silly that is.  If several of us trade the same way it will help. If I buy a support level and others buy it too then that increase the chances of it going up.  This is why SMB can post their “play of the day”.  They’re not worried about competition, they want others to push their stocks up for them.  They want a rising tide.

So for the people who may be lost, FT71 has a webinar series that covers his method.  They require a small donation to a non-profit charity which is great because it’s a small amount and it’s for a great cause.  Here is a list of the topics:

I cannot recommend these webinars enough.  If you want to participate in the forum discussions, then you simply need to watch these webinars and then practice!  The fourth one is about Daily Homework.  I cannot tell you the difference this has made in my trading.  I used to fly by the seat of my pants while trading.  Now I define where I’ll do business before the market opens and I let the market come to me.  “IF .. THEN ..” scenarios help me take discretion & decision-making out of market hours.  As my trader friend Jeff Castille says “You do your thinking outside market hours”.

So Webinar 4 part 1 is due to be released today.  I’m really looking forward to it because I need some guidance on how to do my homework and prepare.  And based on my interpretation of the survey results, there are 40+ people who need help as well.  I hope some of you will decide to post your ideas & trades and get feedback.  It will definitely help you to improve.  Even if you just ask questions, that’s a good place to start.

Back to the trading room or review sessions – I’m still considering it.  A few people expressed concerns that it could be distracting to my trading.  I totally agree that it is a valid concern.  But I also think there is potential to help.  For example this morning on the bund I could say “I think I’m going to exit here it’s stalling” and someone else could have said “that’s your monkey talking, stay in the market hasn’t proved you wrong”.  Absent of a group environment we have to learn to say that to ourselves and I think it’s really important that we learn to do that, even if in a group.

I’d still like to create a room but I need to focus on a few issues with my own trading first.  The new year is around the corner and I’d like to start making decent money.  But I haven’t forgotten about it so please stay tuned.  In the meantime, you’ll find us on Twitter using the #FT71 hashtag.  I’d like to start using that more while trading if there is interest please let me know.  For me, being more active on Twitter would be an intermediate step before a trading room.