Nice Signals

Monday 5/1/2007 ES Futures

Here is my first chart. I apologize in advance because I expect that it will be very hard to "see" everything in the chart. But I have to start somewhere and see what it looks like. I may have to break the day up into 2 - 3 charts to view the details better.

For now I'll say that you should notice up to 8 markings on the chart. They are:

1. Red Down Arrow Big
2. Red Down Arrow Narrow
3. Red Dot
4. Red angled Line
5. Green Down Arrow Big
6. Green Down Arrow Narrow
7. Green Dot
8. Green angled Line

Only the lines were manually drawn in by me to note signals that are not coded yet. The big arrows are drawn close to the close of the candle they highlight and may no longer be valid (and disappear from the chart) by the close of a candle. The dots and narrow arrows are definite signals as of the open of the candle they mark.

I hope it is obvious. The Red indicators mark short trade entries and the green mark long entries. Yes, yes, I know. I can not take all of these signals or I'll get eaten alive. But my broker would love all the commissions I'd generate. :-) I'm working on my definition of trend and filtering the trades to only take (and eventually display) trade indicators in the direction of the trend.

One of my worst habits was to try to take every signal. Because that will give me the most profits right.... WRONG. Often the NEXT signal would be a counter trend trade. Then (at first with out realizing it) I'd manage to get myself locked into a series of counter trend trades.

So I take the next trade signal. Now I try to let this trade run until I think I should take some or all of the profits. If the trade is a counter trend trade, price action may go in my favor some. I may even justify taking some initial profits on part of the position, but the price action is coming back against me and will stop out some or all of my trade.

A good counter trend trade will go far enough to justify taking some profits and "protecting" the remaining contracts at break even. So would this have been a good trade? Just think about what happened.

When the first trade is counter trend, I pass on the next signal (with the trend) wanting to let the trade I'm in run for more profits. The markets come back against me and stops me out. What is the next signal....

Well.... It will be another counter trend entry. So by taking EVERY signal when I don't have a position, I could end up fighting the trend all day if I was not careful. And what will eventually happen, you get to the point where price makes the exponential move. Only this time it is going against you and may not have gone in your favor much at all. You are stopped out on a full position.

So now I just want every signal in the direction of the trend.

Trade Wise, Trade Well

John