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Trading the XJO with CFDs

Discussion in 'Derivatives' started by Uncle Festivus, Jan 23, 2007.

  1. fiftyeight

    fiftyeight

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    I assumed possibly incorrectly that cfds made up only a small portion of total traders and anyone with size would be using futures. Add to this the you are only getting cfd data from one provider. I'm surprised there is any edge in knowing who is long and who is short. If there was an edge not sure they would give it away???
     
  2. Joules MM1

    Joules MM1 ....everything has an art

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    yes, for sure, there is no data structure that is not weak to some extent....so that means i have to intepret by size (as a %), when and where for what possible target that/those % are in place

    keep in mind the nature of cfd's and who they attract, the % refer are not restricted to cfd's as it reflects sentiment mostly driven by emotive logic

    a summation

    you might have a small sample size of cattle but still deduce general tendencies of a larger pac, it's fear, it's clumping, whuy its clumping, where it's going to feed or flee and where the cliff edge is, where the fulcrum is, does it fit previous same-place same-time same-size
    and levels are still levels but how are they dealt out of cash hours....
     
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  3. Joules MM1

    Joules MM1 ....everything has an art

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    use it as you see its use-ability not how you see it based on some metric that everyone else says must be applied
     
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  4. Joules MM1

    Joules MM1 ....everything has an art

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    @fiftyeight
    here is a series still running as i type
    i run a lot of these types of plays, uber small with 2-3 size lots (relative to the uber small lots)
    cfd's are in fractions or whole lots
    i find the sentiment, if it trending or cramping, smooth or volatile, am i in news pending mode (no i already ran that one!) is there likely to be a cliff face when the low or high gets retested (yes) if the HOD or LOD gets retested a 3 time (no such thing as a triple top/bottom) then its a reversal play, so who's trapped? look at the sentiment, bidders at the low buying a fake low bargain

    here you see a failed set-up, about 40% are wins, 60% fails no size contracts as the set-up was incomplete, i was not satisfied, i scrapped it a looked a for a better set-up, the range was clear, play for the range and one size to capture a break:

    ScreenShot209.jpg ScreenShot210.jpg ScreenShot211.jpg ScreenShot212.jpg ScreenShot213.jpg ScreenShot214.jpg ScreenShot215.jpg ScreenShot216.jpg ScreenShot217.jpg ScreenShot218.jpg
     
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  5. Joules MM1

    Joules MM1 ....everything has an art

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    while i'm at it, i forgot to mention about the 'orphan' looking contract sitting in the middle of the first chart....it's a size hangover from the previous downswing...as you see in the final screen i have one 'size' lot running ("size" is fitted the profile of that play and time/day/new/sentiment etc relative and in context)

    so that brings me to my point (!) about stops......stop placement is as arbitrary as knowing where a price will rotate....in other words because we cannot see into the future or know the future it is fair tosay that any stop placement is a measure of logic unto itself, so, i define a stop as the point i am less than satisfied the i understand the play, meaning, beyond this point i may not be wrong in context of one of the size plays but maybe wrong relative to the play i am running so not all stop placement ideas are linear, they are in context of the size and the play i expect to see happen relative to the size of the contracts at stake (while smaller size can mean wider range it can also mean more time wasted so that's a factor too but it's all within the cash hours...)

    in the first chart using the orthodox method as a part of my routines, i scored a 1 leg down (as in 1 down, 2 up, 3 down, 4 up, 5 down = completed leg) so we have a 1 down with 2 up that goes A up, B news flash down, C up to complete 2nd leg up and that means #3 to come, #3's are typically strongest of all index moves in terms or direct moves on heavy volume (the news flash south was strong but and obvious fake in the whole auction set-up, it's part of the 1,2,3,4,5 structure)

    if you didnt understand any of that, simply take the screen shots and see the context....."all-clients" and "top-clients" were very strong in the bullish bias.....but, interesting "top-clients" moves into a 55/45 bias with 45% saying no, we're the nearterm traders and we think we're headed south

    so if there's no edge in this read did i guess my game plan?
    is the read always correct - no
    does the read suggest my context maybe wrong - maybe
    does the read suggest i may be misinterpreting and trading with the crowd, an alert - oh yeah most def
     
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  6. Joules MM1

    Joules MM1 ....everything has an art

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    for the above post

    see how (post news) price retakes the issue level, normal fair, but it suddenly runs out of bids, not get inundated, simply loses moment, sudden overlap, choppy, struggles, complete a context that the previous swing south was a first (1) down
    the news sell after the struggling lift [A] completed by [C] an ABC... its the C move that says we're about to roll over....even tho i initially abandoned the sell group i began a new one soon as the set-up was clear

    dax 220.jpg
     
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  7. fiftyeight

    fiftyeight

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    I thought tracking sentiment of an index using the sample size of one CFD provider would be more like trying to figure out how sheep behave by tracking the sheep dog.

    But I guess it is a good way to get an 'idea' of retail investor sentiment.

    Nice setup there, one that sticks out well!!!
     
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  8. Joules MM1

    Joules MM1 ....everything has an art

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    there's a couple of quirks both $xjo and $xao share

    when completing a retracement structure either index has a propensity to display this simple trigger structure:

    on the first leg down (first downswing) that leg will be symmetric* to the final down swing completing the whole larger retrace

    that implies you have reached a conclusion of the retrace structure and you should see accompanying anecdotal evidence to support your conclusion that that structure is complete, the selling is now subsumed by the buying, liquidity is now to the buy-side, a larger rotation is at hand

    ....do not confuse this is a trend rotation even tho it is a common occurence within the larger uptrend (weekly/monthly basis) because it can be equal to an ongoing corrective phase and be within the context of that larger size side zone

    such measures as a double (or preferred triple) divergence of a simple RSI or macd should precede that final set-up, in the minimum you should observe momo drag and probably Twiggs money flow divergent where the retail money sells but the institutional money is flat or diverging

    in the chart i point this out; the actual move and when you know you need to readjust to find that move

    remember the tenet; when a move is over it's over! even so, levels are levels and risk is risk, so rather than thinking this is a tool for aggression think of it in terms of useful as a sit-back-and-wait even if it does not serve any other purpose for you

    how to:
    xjo cake 090219.png
    how not to:
    xjo cake the trousers gromit 090219.png






    * (usually 100% as i have never observed other price lengths)
     
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  9. Joules MM1

    Joules MM1 ....everything has an art

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    edit for the above remark
    i have observed same structures, but, upwards, that extend to 127.2%
    although rare make for good markers within a consolidation phase where that outreach is within an ABC where the B outreaches and concludes on a 127.2% in the same way you see in the first chart (only upwards not downwards)
     
  10. Joules MM1

    Joules MM1 ....everything has an art

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    keeping in mind this "quirk" that i use when it prints in the cash needs to be translated to the cfd and it often prints in the cfd while not printing in the cash
    so you may find that a solid print in the cash might mean overnight futures jockies now see a rotation too but they want their position or they need to get out at best price (where the guy on the other side of the trade is weak) so they jack the price, cause a gap, soak all available contracts in their favour when a reset comes, and youre singing its the wrong trousers gromit, so, you know, wise up

    to get around the "yeah but futures lead so why bother with this thing if its in the cash"

    if you ride a bike with no hands on the handle-bars will you still reach the same destination as someone who does have their hands on the handle-bars?
    yes, probably
    is the risk different?
    yes, probably
    can you reduce the differential and increase the upside?
    yes, i have (opening paragraph in this post)

    liquidity does not adhere to "futures only lead the way" .... liquidity is just a dynamic beast like water finding its own level so saying only futures lead the way is arbitrary as liquidity is not a single defining thing it is an expression of supply and demand so there cannot be an absolute about the make-up of that supply and demand as there are two vehicles within which it can be expressed by different players at different times (not inc options/etf's alike) there is a frame work within which we can access that liquidity, the auction process, yes, that's rigid, but the expression of liquidity is not limited to one single instrument within the context and relative sizes therefor it is fair to say there is no limit thru which lens liquidity is focused, not as an absolute

    ...it's the totality, the markets psyche as a whole that defines and in that respect either vehicle will uncover the what the auction is trying to achieve even though, yes, futures mostly lead the way as an indicator of expression it also leads the way in overnight BS so being naive to that game does not mean you can say all measures and observations in either cash or the futures contract are less than valid when there is a validation process

    for some reason, recently, trader experience and observation have been lampooned

    observation and experience maybe and sometimes are as valid, on an equal footing, as mere mechanical ques ....because something something, ques are not always clues, something something
     
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  11. Joules MM1

    Joules MM1 ....everything has an art

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    the crowd correct again :roflmao:
    xjo sentiment 110219.png
     
  12. Joules MM1

    Joules MM1 ....everything has an art

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    got trapped cuppla times and had to STO when looking for a ratio.....several occurred, taking the cash xjo cash 127.2 rotation cluster.png signal in a bull
     
  13. Joules MM1

    Joules MM1 ....everything has an art

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    thanks @peter2

    quick close-up of the above post look now honkers in the 3-4 cuppa time
    cash now printing 6052's without retesting the intra low

    xjo cash 127.2 rotation cluster  ii closeup.png
     
  14. Joules MM1

    Joules MM1 ....everything has an art

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    most of today retail cfd's remained at or above 80%STO's

    old charts daily from the 2003 period are on a machine i am trying to rescue off the frozen disc ..grrr
    the daily generic cash charts, since the december low, look similar compared to the price action in that big 2003 leg up so there is reason to think we have a renewed uptrend in major local indexes..using the cash construct as a template for entries/exits xjo cash 127.2 rotation cluster  iv closeup.png
     
  15. Joules MM1

    Joules MM1 ....everything has an art

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    [​IMG]
    in context and relative size, bias is a killer:
    so that survey's a big warning sign
    a good one
    sure
    problem is, how on earth do you time that, how does it fit what price is doing versus the vagaries of not just exiting a long but setting up a short....it's clearly out of sync with pricing:

    [​IMG]
    data: gallup
    overlay: SentimentTrader
     
  16. Joules MM1

    Joules MM1 ....everything has an art

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    you are here...in the present .....or in the ether
    xjo all clients 120219.png
     
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  17. Joules MM1

    Joules MM1 ....everything has an art

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    #parallel
    Gordon Banks, fine sports person, ambassador and generous individual, RIP

    gordon banks 120219.jpg
     
  18. Joules MM1

    Joules MM1 ....everything has an art

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    rotation #honkers $hsi correcting upleg honkers finds 127 rotation 130219.png
     
  19. Joules MM1

    Joules MM1 ....everything has an art

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    $hsi, scratched plan .....blew thru that ....bully az
     
  20. Joules MM1

    Joules MM1 ....everything has an art

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    the cash remains clear, impulse legs and lack of sellers

    the first question is always; how is the make-up of the auction transacting, are there more sellers than buyers or vice versa
    next question, if in the present, there are no sellers in an impulsive uptrend, even tho other instruments, inter market liquidity maybe negative, does the STO carry more risk than the BTO or vice versa ?
    if yes how do you know, if no does the BTO carry less risk by default?
     
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