Mastering the Trade.

This seems a very good book for me. Focus on setups and market internals. Tangental with my ideas of learning patterns and market psychology, rather than the "Holy Grail" indicator. Excelent ideas on trading psychology. Current takeaways; I need to formalize some of my setups so that I can see which ones are working, and which ones do not. This may lead to trading less, as currently I have a need to be in the market "all the time". That is a pretty bad habit. Perhaps a move to the 5-minute chart would facilitate a bit more patience?

Relative Volume

Being able to identify whether volume for a given period in the E-Minis futures contract is higher or lower than the average volume for that period is a valuable trading tool. Traditional moving averages do not do a good job here as volume is highly correlated to time of day. Specifics on the usefulness of relative volume have been covered in detail by others; I will limit this post to providing some thinkScript code for ThinkOrSwim that plots relative volume on a volume chart. This code does a lookback over the previous 10 trading days, and provides a line graph of average volume for the current trading session, overlayed on the volume chart.

# JBAKER RelativeVolume in ThinkScript
# Inputs; set period to the chart period
# Default for period is 30 minutes
# Do not include data for AH/premarket; this will skew the RelativeVolume plot
# This study is an overlay on the volume chart; you must show volume for this study to be visible.

declare upper;
declare zerobase;
declare on_volume;
declare real_size;

input period = 30;
Def multi = (390/period); # minutes per trading day

# Relative Volume code

plot VolRelativeAverage = (volume[multi] + volume[2*multi] + volume[3*multi] + volume[4*multi] + volume[5*multi] + volume[6*multi] + volume[7*multi] + volume[8*multi] + volume[9*multi] + volume[10*multi]) / 10;

VolRelativeAverage.SetDefaultColor(Color.YELLOW);

To Trend or Not To Trend

As I wrote in an earlier post, I am looking for ways to identify "Trend Days" and take advantage of the direction to make a single trade with the trend and capture significant price action. The issue here is, that in the current market, with it's high degree of volatility, capturing these trend day's involves significant downside risk. Additionally, at this stage in my development as a trader, I feel more comfortable with shorter timeframes, albeit with more modest profits.
Taking a look at my trading today; I started very poorly, with -500 after 3 trades; this was mainly attributable to trying to follow the big trend, and getting chopped up in the early action. Once I went back to scalping, I was able to recoup the losses of the day; winding up a modest -50 after commisions were factored in.

The /ES trade from 4 to 4:15PM

I am observing some interesting trends in the post-close E-mini action. Specifically, if we trade sideways into the close, there is opportunity to trade the rangebound price movement by buying the bid and selling the ask at the extremeties. Today I made three 1 point trades in this timeframe; with little risk.

2-contract trading idea

Setup: we have a trend day, as identified by the ADX on the 10m SPX chart.
Plan:
part1: enter a 1-contract position on a pullback to the 20MA, with profit target at R1/S1, and stop at 4 points.
part2: trade an additional contract in the primary direction on pullbacks, and sell it at interim tops, using my BetterVolume / RSI / trendline signals for entry and exit calls.

Weekend Update

Importance of testing trading strategies. First; I need a strategy! I am still just trading on trendlines and volume indicators. Is it time to add more rigor to my setups? Perhaps this it still the time for learning and experimenting; or perhaps it is time to add some TOS "strategies" to my trading, and see how those work out for me.
If I did have a home-grown strategy that I felt strongly about; or perhaps a modification of an existing strategy; having it expressed in code, and having the ability to back-test it against historical market data is invaluable. This is standard QA! Right in line with my core competencies.

Trend Day rules

1. Determine if we're trending (this is the hard part). This is probably best done by viewing the early action, and checking the TICK and MA's, and the ADV line by 10AM

2. If we are trending; buy on 5 min stochastic bottoms, sell on stochastic turns through the Zero line.

3. Wait for pullbacks; but also wait for them to turn. I was early today, and got stopped out for a 4pt loss.

4. RSI will also give sell signals.

5. Touches on the 20SMA on the 5min chart can give buyable pullback signals.