Thursday, February 26, 2009

More BB-Floor Trader Hybrid Examples and Comments on Instinct

I see so many examples of the BB extension to the Floor Trader Method. It really helps get me in spots where the 18EMA is never touched. However, I wonder if it is as effective overall as the Level I setup. There certainly are more trades, but there may be more losers as well.

A loser.

A breakeven trade.
A winner.
Another winner.

Also, I would like to touch on another topic: instinct. I swear I find myself in the crappiest examples of these trades and I think it is because I have not fully developed a winning instinct, i.e. the instinct to know which stocks to play and which ones are most likely duds. This may be because I am use to losing and identify as a "loser." I am most comfortable losing, so I lose and lose with great dramatic flourish. From now on, I am going to consciously try to gravitate towards stocks that would seem to offer the most reward. Perhaps, this will help shift my self-perception from "loser" to "winner" and I can eliminate the intra-day drama of "Oh, amazing, ANOTHER LOSER!"

Peace to y'all.

Wednesday, February 25, 2009

Hail zee Bollinger Band! And sundry.

After checking out NQoos' Jimmer BB entries for the Floor Trader Method, as opposed to pure price action entries, I wanted to see if I could include Bollinger Bands in my style as well, particularly because I felt I was still missing out on some great moves where there were no Level 1 entries along the way.

After some preliminary testing, the best setup so far seems to be:

  • 3-min charts. They seem to offer a good tradeoff between risk and false entries;
  • Bollinger Band parameters per Jimmer's setup, i.e. 1.8STDEV and 8-pd MA;
  • Trending 9EMA and 18EMA, whose periods are based on 5-MIN CHART (so roughly 15EMA and 30EMA on 3-min chart); and
  • A candle that has pierced the Lower BB, if EMAs are uptrending, or Upper BB if EMAs downtrending.
Entry is on the break of the high of candle that has broken Lower BB or low of candle that has pierced Upper BB.

Here is a great example of this setup working splendidly in NEM, but this just may be the creme de la creme. There will probably need to be some tweaking.


Also, I offer some other trades based on my Level 1 entry off the 5-min chart.


A loser. Don't really know except 18EMA barely up and pullback was really hard.


A winner. Looked good to begin with. Decreasing volatility with "rounding off" effect.


Breakeven. Hit 2x the setup so moved my stop to breakeven.


A winner. First test of 18EMA usually the most reliable. 9EMA pointing upward in this case. The losing OSK trade above was the next pullback to the 18EMA.

A loser. Don't really know why, except that I have been noticing that when you have a bar or two with shrunken ranges in an otherwise constant volatility pullback, the odds of winning seem to decrease.

Peazout bruthaz.

Friday, February 20, 2009

And now for the failures (mostly)

Still trying to sort out what makes a winner and what makes a loser when trading the Floor Trader Method. Here are some losers for comparison to yesterday's winners.

This SPY loser grazed the 18ema which I am finding exceedingly important for minimizing losers. However, upon inspection as SPY pulled back it did so on increasing volatility, demonstrating that the pullback had more force in it than can simply be generated by "profit-taking" or a short break in the buying. I checked the ranges of the bars on the pullback and in order they were: 41 cents, 50 cents, 42 cents, and 39 cents. I interpreted these ranges to be constant, but from just a glance at the chart, that down move on the 2nd bar (which had a 50 cent range), just LOOKS like an increase in volatility. Sometimes what's called for is not specificity, but just a quick impression.


The other loser I want to highlight was in AEM. This trade occurred with 10 min to spare in the session. Sometimes I have seen institutions complete their orders in just the nick of time, so I feel this was not a major factor contributing to this trade as a loser. Instead, I question the number of bars in the pullback, i.e. two. I don't know how valuable these spikes are in comparison to a gradual 3 -5 bar pullback that leads to a continued trend. More Experience Required.

And now, so as to be TOO one-sided, voila!, some winners!



Both 3 - 5 bar pullbacks on decreasing volatility with a pierced 18ema. Niiiiiice.

Have a great weekend!

Thursday, February 19, 2009

Some Floor Trader Trades and Trader X madness!

Picked up the Floor Trader Method recently and have been paper trading. Wanted to share some observations:

Seems most reliable setup is Level 1 setup that pierces the 18ema with pullback on a decreasing or consistent level of volatility. Here are some highlights:





Also, shout out to Trader X for his contribution to the public domain.
Sweet top-out trade in SHPGY today. Missed the last 50 cents completely.


Now for sleep. Was programming an indicator for eSignal late last night that compares present volume to relative volume, cf. Dr. Brett Steenbarger at TraderFeed.