Noticing Decision Points

[tombtrader]

Can anyone suggest a technique of noticing the DPs on intra day charts as they occur during trading?

Watching a number of charts at the same time makes it easy to miss these trades.

I use eSig.

[d-day]

Can anyone suggest a technique of noticing the DPs on intra day charts as they occur during trading?

Watching a number of charts at the same time makes it easy to miss these trades.

I use eSig.

Hi Tombtrader,

I too have had the same problem since Steve added this great tool to the MTP toolbox. In recent weeks, I have come up with a routine that has helped me be better prepared for these set-ups.

I also use e-signal. Additionally, I trade through Interactivebrokers and I use the stand alone version of IB's Traderworkstation (TWS).


A. Markets for Daytrading

First, I trade only these markets: YM, ER2(AB), NQ, ES, QM(mini-nat gas), QM (mini crude), and YG (mini-gold). I no longer day trade stocks. It is much easier (and far more profitable) for me to focus upon seven futures contracts when I am not also flipping through a list of stock charts as well.

B. e-Signal Set-up

1) For each market, I have 4 charts: one chart I toggle between various timeframes(from 1 minute to weekly, though hourly is most useful for me), a 3 minute and a 5 minute chart for trade entry and management, and a 15 minute chart to track support, resistance, and DP monitoring. Each chart is minimized, and symbol linked in each group of four, and each market group is stacked together.

2) In the e-Signal quote window, I show only the cash indices quotes and the futures markets I trade.


C. Watching the Market

1) I focus on watching the price of the markets I trade in the trading tab window in IB's Trader Workstation (TWS), not the charts. If an MTP set-up occurs, the alert window will direct me to the appropriate chart. And I do not need a chart to "see" that a market is trending or has become dull. I can watch all of my trading markets at once in one quote window, and I will be able to tell when it is time to go to the appropriate chart.

2) Seven Charts every 15 minutes: It takes me less than one minute to flip through the seven 15 minute charts at the end of each 15 minute bar. I have various DP's on each chart (it is useful to go back a few weeks and add DP's from older swing highs and lows to the chart -as I believe Matt has stated elsewhere, it is the price element of the DP's and not the time element that is most important). When a new swing high or swing low is formed, I add the newly associated DP to the fifteen minute chart.

3) When I see price is trending toward a DP, then

a. I note the price range, and then
b. I expand that range by adding 1/2 of the range to its upper and lower boundaries, and then
c. I type this range into the notes field in the trading window of TWS.

4) If I see price approach the boundary of the nearby DP I had noted, I then start actively monitoring the 3 and five minute charts, checking for divergence, and otherwise prepare to enter the market should a valid trade set-up occur.

While this has not completely eliminated my missing a DP trade, I now only miss a trade when the market moves more quickly than I am able to respond, or because I am away from my desk.

My set-up and routine will likely not suit you and your style, but I hope it may give you some ideas that could help you come up with a solution that will fit your needs.


Good trading to you,

D-Day

[tombtrader]

Many thanks D-Day for that.

I am marking the DPs before trading begins but am still missing many that are created during the trading day.

I'll try and grab some of your ideas.

I don't look at TWS at all now as I use Bracket Trader but you have given me some things to think about.

Thanks again.

[Eddo]

Thanks for that information David,

I suspect that it will only be a matter of time before Steve adds an automatic Alert trigger (like we have for TS1,2,3,and 4 setups) when a DP is hit - if we have that (:) I believe that what is already about as perfect as any trader could want (i.e. MTP) will be even more perfect (if thats possible).

Chris

[Steve Griffiths]

Hi Guys,

I understand and agree, but the DP is a purely "manual" technique based around Oscillator (STF) divergence.

Yes, I have looked at automating a DP alert, but have found this this will also miss some great trades that can be found by the human eye. yet again, this is a perfect example of how much better us Human Beings are at at spotting patterns than Computers.

Chris, yes I will work on it some more, (I will see if I can do something amazing in the new v6.0 of the software for you all) but for now, the best DP trades are found by manually looking at the charts and looking for STF divergence around a good clear DP level reversal.

Thanks

Steve

[mindfool]

Steve

Is DP only on eSignal? I can't seem to find it in the EOD version.

[Steve Griffiths]

Yes, on eSignal and TS8. it will be in the next EOD v6.0 when it is released later this year.

Thanks

Steve

[jtrade]

3) When I see price is trending toward a DP, then

a. I note the price range, and then
b. I expand that range by adding 1/2 of the range to its upper and lower boundaries, and then
c. I type this range into the notes field in the trading window of TWS.

4) If I see price approach the boundary of the nearby DP I had noted, I then start actively monitoring the 3 and five minute charts, checking for divergence, and otherwise prepare to enter the market should a valid trade set-up occur.

D-Day

David - thanks for your interesting post above, one part of which I would like to clarify, please : in 3b above, do you mean you add half the vertical range of the DP itself, as opposed to the price range of the instrument you are monitoring ? I am assuming the answer is "Yes" and that I have understood you correctly.

I also mark the DPs on my TS8 charts in multiple timeframes. I am using them primarily as a filter / confirmation for trades set up with another method & am finding them very effective.

J.

[d-day]

in 3b above, do you mean you add half the vertical range of the DP itself J.

Yes.

In fact, if you watch Steve's latest Monthly seminar, he instructs us similarly to treat the WPT's when assessing weather or not a standard MTP set-up is valid or not.

Also, it is interesting that you use MTPredictor to assess other trade set-ups. If you take a look at the 5 minute YM TS3 long from 3:15 EST yesterday (2/13) you will see that not only did MTP get you in at the start of the latest swing up, but that the YM formed two consecutive bull flags that would have enabled you to add to your position on the way up this morning.

I am attaching a screen shot of this trade. The ATR stop was hit as I was finishing the text notes, hence the reference to Open trade equity.

Good trading.

[jtrade]

Thanks for the clarification, David.

Great YM trade !

J.

[Steve Griffiths]

Hi Guys,

I know sometimes it is tricky keeping an eye on all the markets looking for DP trades, but it is defiantly worth the effort, as shown by the massive 14x porfit on the 15min YM long trade in today's report.

This was a perfect example of a DP trade, right form the perfect initial set-up to managing using the ATRStop.

Turning an initial risk of approx $390 into a profit of just over $5,600 in just two days............ trades like this make the effort of looking for these trades worth the while :)

Steve