Live Trades With New Buy Sell Indicator
Here are a couple of live trades that I made today using the new Buy Sell Pressure indicator. This article only represents my opinion and is not a guarantee that your results will be similar. For the full risk disclosure, please read this.
In order to be have confidence in making live trades I needed a trading plan and for the past week I have been developing and testing a plan. Based on the plan that I created, I created a Ninja workspace which had 3 instances of the new indicator and the accumulation distribution indicator. I placed 3 instances of the indicator so I could look at 3 different ratio levels. I wanted to look at the 5, 6, and 7 ratio levels. A ratio level is the number of prices levels that are looked at. Additionally, in my testing I used values of 45/55 as the extremes. A value of 55 means that the line will turn dark green and you will see an arrow of the buying volume is 55% or more. A dark red line will appear at 45% or more of buying volume.
Trades from 4/21/17
Today I made two short trades for a total profit of 5.25 points. The 1st trade was trend trade and when the trade was entered it was 2 ticks above the bottom of the zone and the indicators were all within my parameters to enter a trade. However just as I entered there was a push up which resulted in 3 ticks of adverse excursion. My stop was 5 ticks and my original target was 2348.50, which I moved ended up moving up 1 tick and exactly called the bottom. I considered pulling the trade as it traded into an exhaustion pattern, however when you look at the 7 ratio level (top indicator) it was a declining sloping line. When the 6 ratio line spiked it formed a deep V shape.
Normally I would take profit at the blue countertrend zone, because approximately 50% of the time, there will be a 6 tick retracement. However look at the 6 ratio level (2nd indicator) which is dark red, but with a slightly positive slope. I really did not like the slope of that line and moved my stop to a 1 tick profit so the trade would be paid for or at worst a scratch, since I use a simulated stop.
What caused me to move my target 1 tick up? I am also a tool called Bookmap. Bookmap is a visual aid in showing where resting orders are sitting. Where you see a solid white area, that represents orders that have been resting. You also can see if orders are pulled as price approaches, which is spoofing. If those orders are not pulled, you know those are probably not spoofing orders.
In this image you can see the resistance building at 2353.00, but was briefly pulled as price approached the second time, but this was after my entry. This was not a good sign and caused me to consider exiting. Fortunately as I was thinking, price fell pretty rapidly.
Now look at the solid white line at the price where I had placed my target. I then looked at where the strong trend support zone had printed at 2349.00 and decided moving up my target by 1 tick would be a good idea. Obviously a good call. You can also see the ZoneTraderPro Accumulation Distribution indicator is solid green. This indicator is reflecting numbers in the Super Dom similar to information in the Bookmap.
The second trade was a trend short trade. The Bookmap showed resistance developing at 2351.50 and I took the trade after price touched and dropped two ticks. I was filled with a limit order at 2351.25 and price immediately dropped from there.
Again my stop was 5 ticks but my target was 8 ticks at 2349.25. I probably would have also moved the stop 1 tick based on the orders sitting at 2353.00 if price had gone against me. Normally I would have liked to have the 2:1 ratio but there already was support at 2348.75 and additional support had formed at 2349.00. You can see that form in the 1st Bookmap picture above. I interpreted this as a second big buyer who wanted to get long stepping in front of the contracts still sitting at 2348.50. Also, the ZoneTraderPro intermediate support zone formed at 2349.00 and if this was going to be a test of the low, it seamed a reasonable exit and it was. When price traded at the exit, there were 1300 more buy orders that you can see on the Bookmap.
The indicator formed a deep V shape, however I was already out of the trade at this point. What I saw in my testing of the indicator was that a zone is not going to hold when the indicator is dark red / dark green (setting at 45/45) and the line is mostly horizontal. You can see this in the 6 ratio level on the 1st trade.
Neither of these live trades were trade of the day material, but I had to leave the house in less than an hour. Both trades were within my plan and the only tough decision was during the 1st trade when it went against me the second time in the exhaustion pattern. I then had to move the stop which wasn’t a hard decision, but I was uncomfortable and did not like my odds for this trade. I was extremely lucky to have properly read the indicators and exited at the optimum exit prices.