Avoid Orange E, this time using spreads

#1

Hi,

I’ve asked an orange E question in regards to binaries previously and got a great answer, mainly being risk management and a tip for how far away to buy the binary.

Today while trading spreads on TF I’ve noticed two trades that I took which were stopped out by the 5 ticks past P stop exit. My reason for posting is because they appear to be valid entries with valid exits, however I see that Stephen on his chart did not list or take them and I’m wondering why.

I believe I’ve got the rules right, and its probable that he just didn’t mark these as his hands are full with something else, but I can’t help but wonder.

On my screencast you’ll see my entries at around 13:32 and 14:08, I’ve drawn arrows from the blue dot of where my bid/ask breaks even and the tiny triangle at the 3 ticks past E mark. Big red arrow is just to help it stand out. Note Stephen’s screen bottom right with triangles around the orange E’s he did not take.

2013-10-22_1553 - Doppelrock’s library

As always any info would be much appreciated!

Thanks,

Rob

#2

This really has nothing to do with spread/binary/future

It is important to be watching all 4 indices, chop and BMI when trading US indices

ES was long YM was long NQ was long BMI was flat to up Also check out choppy market warning at that time as chop was firing off on TF

TF was the only one “short” so it was fighting the trend of all the indices…

Also if you have a question just ask :slight_smile: We are there in the room ready to help.

#3

Thanks DM - yes I noticed that the BMI and other indices contradicted my TF chart at the time, I always have up Darby’s awesome page and your style screen w/ chop and BMI.

I understand not taking a trade because of these differences is a style based call, not system based. Where do I draw the line in between style and system? If I am to take every trade on my chart and trust in the system, I don’t understand where to not take a trade on account of what other indices are doing.

Any insight would be awesome, and thanks in advance!

Rob

#4

Indices as a whole usually move together. This is style but its not “gut” style… Its consistent.

So i guess you could says there is “gut” style (ie something looks off, abnormal, hunch etc…)

and “consistent” style this is where you can repeat this day in and day out its “nearly” system meaning it is systematic but its not “programmable”

I always use BMI and the other indices to confirm trades where when they are in direct contradiction i know not to take trade. This is not me, opinions etc… its right on the chart and i and others can see it over and over and over again.

Sorry i know its not pretty but hopefully that makes more sense.

#5

Hi Darrell,

Beside the BMI, noise and chop indicator. Do you recommend to use the $tick and $UVOL-$DVOL the advance and decline in total volume?

#6

you can but i don’t