A Jack of Small Trades

If you have not been complaining about ES lately, well then, you either don't trade ES, or you are serene budhist monk who trades ES.

I talk to a lot of traders and have heard a lot of chatter about the goddamn ES.

We all wanted the volatitlity to pop after Labor Day, but it didn't.

So what's a trader to do?

If you trade based on order flow, as I do, then you can apply the same supply and demand concepts that work in ES, on other markets.  This is simply because the laws of Supply & Demand don't change.

If there is overwhelming demand, price will go up.  If there is overwhelming supply, well then, price will go down.

If you trade order flow, and are seeking more volatility, consider both CL & GC as alternatives to ES.

If we go back and look at the average daily range for the following markets, and express that average range in terms of dollars x ticks, we get the following:

Market Average Daily Ticks Dollar Value
CL 140  $                         1,400
GC 136  $                         1,360
ES 54.4  $                            680


The above matrix shows a better than 2:1 ratio for both CL to ES, and for GC to ES.

The implication is that if you were the world's greatest trader and bought the low tick of each market, and sold the high tick of each market, you would make more than twice the profit trading either CL or GC than you would ES.

The takeaway here is simply that you have more intra-day dollar variations on GC and CL than you do with ES.

For me, a trader who likes quick trades, the rubber meets the road, and then leaves the road and pulls into the parking lot, much more quickly trading GC and CL than ES.

Since January, I have been primarily been trading GC.  I have found it a market that provides consistent order flow setups, and quick trades.

If you have any questions regarding how order flow impacts the Supply & Demand curve, and the Price Discovery process, feel free to reach out to me by opening an help desk ticket here and suggest a few date\times that work for you for us to speak and share a screen.

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14-JUN-2016 | ES - Long [S&P 500]

1)  In this morning's example of a Head & Shoulders pattern using a 4 tick range bar in the forward e-Mini S&P 500 electronic futures contract, the ES had been in an Downtrend since Monday June 13th 10:31 am. ET.

2)  The left shoulder with a left strength of at least 5, occurred at about 03:56 am ET.  The Head occurs at 04:45 am ET.  At the head we have a Sell Programs Waning order flow event. Immediately after the head we have a +2 Standard deviation uptick Raio, a Reversal in MacDaddy and MacDaddy Institutional becomes bullish versus MacDaddy Retail. We are now looking for a right shoulder with a left strength of at least 5 and tape in order to enter the trend.

3)  A right shoulder with a left strength of at 6 occurs at 5:24 am. ET. Our Right shoulder occurs concomitantly with a Sell Programs Waning and a Long Strong Tape Imbalance order flow events.

4)  Immediately after the right shoulder we have a reversal in MacDaddy, a +1 Standard deviation Uptick ratio, and MacDaddy Institutional becomes Bullish versus MacDaddy Retail. As the move continues we have a few "short" indications in the tape. Macdaddy continues to show higher highs despite these "short" indications.

06.14.16 1st right shoulder
For a deeper dive into how to use Better Data trade the Right Shoulder of a Head & Shoulders pattern click here.

...sceeto

The supporting order flow data that is presented on this page was generated by ...sceeto.

If you find this type of information and trading approach, as interesting as we do, please feel free to take a free trial of ...sceeto.

If you are curious about incorporating Better Data into your trading, please feel free to set up a complimentary consulting call here.

06-JUN-2016 | ES - Short [S&P 500]

1)  In this morning's example of a Head & Shoulders pattern using a 4 tick range bar in the forward e-Mini S&P 500 electronic futures contract, the ES had been in an uptrend since Monday June 6th 7:50 pm. ET.
There was a pull back in the uptrend from 11:39 am ET to 12:55 pm ET.

2)  The left shoulder with a left strength of at least 5, occurred at about 12:51 pm ET .  The Head occurs at 12:55 pm ET . Immediately after the head we have multiple indications of that infer that price will continue to rise. We have a +1 Standard Deviation Tick ratio followed by a long Strong Tape Imbalance order flow event and a High Frequency Trading Buy Surge Order Flow event. During that time we also have a reversal in macDaddy Followed by steady Green indications in MacDaddy. We also have a reversal in WIND and Wind settles at Steady Green. We are now looking for a right shoulder with a left strength of at least 5 and tape in order to enter the trend.

3)  A right shoulder with a left strength of at 6 occurs at 1:31 pm. ET. Our Right shoulder occurs concomitantly with a +2 Standard Deviation Volume Ratio, a +2 Standard Deviation Number of Trades Ratio, a High Frequency trading Buy Surge order flow event and a Long Strong Tape Imbalance order flow event. These indications occur while WIND is Strong Green and MacDaddy Institutional is Bullish Vs. MacDaddy Retail.

4)  As the move continues, we receive a plethora of indications on the tape that continue to infer the continuation of the upmove. we have 5 +1 Standard deviation Uptick Ratios, 2 High Frequency Trading Buy Surge Order Flow events and a Long Reversal in Equities - High Frequency Trading. MacDaddy is Strong Green During the move and it also portrays a resumption spike followed by Higher Highs. WIND continues to howl in at Strong Green.

06.06.16 2nd right shoulder

For a deeper dive into how to use Better Data trade the Right Shoulder of a Head & Shoulders pattern click here.

...sceeto

The supporting order flow data that is presented on this page was generated by ...sceeto.

If you find this type of information and trading approach, as interesting as we do, please feel free to take a free trial of ...sceeto.

If you are curious about incorporating Better Data into your trading, please feel free to set up a complimentary consulting call here.

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