|
Ninja on Trend Turn Method |
Before examining the method I use, big THANKS go to 3 key people who helped me "get there"!
| 1. Buffy | For her relentless efforts to teach me what MOFs and Slings are, and convincing me that I really do need an macd (lol). While I still may not know the exact difference between MOFs/Slings everytime, I can at least "scrape by". :-) |
| 2. Jerry W | For his patience in teaching me about Dragons (Ws and Ms) and the art of support/resistance and targeting. |
| 3. Goinglite | I can never repay Going for what he's done for my trading! He showed
me 2 key pieces of the puzzle: a. a great entry method and b. how to trade "turns" (hopefully they're turns, lol) |
The method I use is simply a synergy of "trend following" (pullbacks
of various types) with so called "contra-trend"
(I think of it as trading "turns", not as trading tops/bottoms).
While I used to (and occassionally still do) trade a
"turn" setup on all 3 of my timeframes, I primarily look for a "pullback" type
setup on a higher TF, to be confirmed;
"timed"; and entered on a lower TF as a "turn" setup ONLY.
All of my trades are a "turn" setup on the TF used to enter.
Essentially, I just chose to enter a higher TF setup using a different entry
method (no buy/sell stops, bar take outs, etc),
but rather a lower TF "turn". Thus, in my way of thinking, I enjoy
the best of both worlds, that of trading "with" the "trend",
but with the benefit of tighter entries via "turns" as entries. Every
single type of pullback I know of (MOFs, slings, J30s,
retracements to fib areas, retracements to bands [bollinger,keltner,mas), etc.,
to be successful, MUST have one thing
in common………., a "turn" back in the direction
of the underlying trend! Thus, if I can (as objectively as possible) quantify
what this turn looks like, I can significantly improve upon my entry price
versus other "after the fact" type entries commonly
used. By entering as close to the "fire" as possible (sup/res), I
am able to truly "buy low" and "sell high".
This is NOT
for everybody!!!!! I am comfortable with this approach because I see it "work" day
after day, but it took practice
(and some definite simming and screen time). But then, in reality, any successful
method requires nothing less! Another
benefit to this entry method is that of allowing for harmless scratches of
trades. It is rare that Im caught in a move that allows
me no chance of scratching at BE +/- a tick. With such a tight entry, I need
only a slight favorable move (one which would "stop in" someone using
buy/sell stops for entry) to allow for a scratch exit if price suddenly reverts
back against me. In the meantime,
the person entering with "price action" suffers "heat" immediately
in this case, and will likely be stopped out. Having traded both
ways, at least this has been my experience. "Heatless" trading wont
always happen, but sitting through an occassional
couple of TICKS of heat is WAY better than a couple of POINTS of heat! Believe
me, Ive tried both! :-)
I use 3 primary TFs (2500 tick, 500 tick, and 100 tick).
Regardless of whether primary setup is on the 2500 or 500, I look to take
the actual entry on the 100 tick. Recently, I have also been using a 20 tick
as needed to further tighten my entries, as well as entries for any setups
on the 100 tick I may see. These timeframes pertain the the ES. An important
issue here is that of timeframe multiples. Many use 2 or 3 multiples in their
trading. This tends to not show enough "separation" of price structure
to isolate the turn setups (extremes and/or strong divergence) that I require.
When I have a short pullback setup on my 2500 tick for example, I expect to
see a nice uptrend (often abc type move) on my 500 tick. While this may seem
contradictory, it actually does
exactly what I need, it seeks to isolate a "top" or turn. It obviously
requires a rally for a pullback short, and with the 5 multiple, this becomes
more clearly evident. The lower multiples do not accomplish this as well for
me. Its really my adaptation of Elders Triple Screen, which utilizes the weekly/daily
charts (multiple of 5). I have recently begun posting with 1min, 5 min, and
25 min in an effort to allow everyone interested to "match" my charts,
as the minute charts should be virtually the same among data feeds. These TFs
mirror my tick charts, and could easily be traded in place of them.
I want to stress quite strongly that the concept is much more important than the tools used to apply it. That being said, there are many tools available, and I have my favorites, and these are shown in my posts. A point Id like to make regarding the tools to be used: some feel that "tweaking" indicators to better "fit" a market is not only not helpful, but even detrimental. Frankly, I disagree! Different markets have different personalities, and while I don’t strive to "fit" every occurrence I seek with my indicators, I may have some slight adjustments between radically different markets. The two markets I trade primarily (ES and Bonds) are both quite liquid, and trade quite a bit alike as far as my indicators are concerned, so Ive not needed to change them. If I were to trade the Russell andEuro constantly, I might "tweak" my indicators used to find extremes as these markets tend to have more extended moves before correcting. The concept would still be identical, but the the tools slightly different to match the nature of the markets.
Creativity in trading is invaluable in my opinion. Discovery is often nothing more than looking at the same thing(s) others look at, but seeing something different. :-) While most people will look at charts in the context of pullbacks with the trend, I look at all the turns (I have several turn "alerts" derived from so called "trend" indicators). Ever gotten a new car, and then suddenly started noticing how many other cars like yours there are? :-) We see what we want to see, sometimes in spite of whats right before us.
Heres a quick progression of how I would apply my method to various setup situations:
I use turns merely as an alternative entry method (versus say price action
or breakouts). I do so simply because for me, the
benefits far outway any drawbacks. Obviously, effective tools can greatly enhance
this method of trading. But, really no different
than any other method. Its more important that the method "fits" YOU
rather than the market youre trading. If it does, the rest
will take care of itself.
I hope this overview has conveyed the salient issues
and ideas. If this approach is of interest, study the available material,
and dig in (no real money until this has been applied successfully in sim)!!!
Once you understand it, and see the results you
strive for, then the skys the limit. Start slow. There are great setups every
single day, so no hurry to get there.
My main purpose in making this available
is that had this been available when I first came into Buffys several years
ago, this would
have greatly reduced my learning time (and saved many many $$$s). The idea
of focusing on market turns was, lets say, not
heartily embraced among the then participating Bliners. It has gotten somewhat
better, but………. :-) As Ive said, this wont be
for everyone, but if it reaches just one person that wouldn’t have had
the exposure to it otherwise (as in my case until Goinglite
began posting), then I will have somewhat repayed my debt (or at least an installment)
:-).
If the shoe fits……
Ninja