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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (5572)	11/21/1999 7:55:00 PM
From: Matthew L. Jones	Respond to of 18137

Bob, What I look for is a 3:1 reward/risk ratio. I look to exit at the congestion points (resistance) before the crowd is heading for the doors. When I take (for example) a buy signal, it is because I see the upward potential is at least 3 points and the initial stop is one point. I then use a trailing stop once the trade moves in my direction. As far as the difference between a trending market versus a ranging market, I would trade them differently. For a trending market, I would attempt to enter when price crosses my moving average and exit at resistance. Slope of the moving average must be in the direction of the trade (whether long or short). For a ranging market, I would attempt to enter at penetration of bollinger band and exit at the other band (giving me a 3-4 point potential range on the e-mini). Elder says range trading should be done with tighter stops and larger positions where as trending should be traded with larger stops and smaller positions. At the present, I use one lots on the e-mini and one point initial stops on both. The biggest problem for me is coming up with a good way of identifying (before the day is nearly over) which kind of market I'm trading. I am looking for some kind of leading indicator to help me spot range trading earlier. Matt