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. Chapter 15 More Market Examples 271Why did I choose the OP? Well, the COP was just below the low of the day and that'swhere all the sell stops were.If we hit that point there was no way the COP would hold.The XOP at 51826 was a mile away and I reasoned that before reaching it there was likelyto be a throw back rally.The OP was most likely to be hit by the simple process ofelimination.Let's look at the way the trade worked out.The Confluence area, where my initial sellorder was placed was hit to the tick at 52465.What's more interesting, however; is thesecond entry at 52350.)CHART 15-17ADVANCED COMMENTS:Notice the time and sales2 Chart 15-17 and the way the market fell.From 52390 at 15:06to 52335 at 15:07 there wasn't an up tick.Exchange rules say you aren't due a fill untilyou get an up tick (on a sell).That happened at 15:08 at 52340.That's where my secondorder was tilled, at 35.Now look at the action several minutes later.Note 15:12.We gofrom 52300 to 52190 in one tick! We continue with the glide ratio of an anvil to the52100 area.It's no accident support finally came in 30 points above the OP! Let's takeanother look at the five minute Chart 15-16.You'll see the test of the 52100 low was at2Time and sales in Chart 15-17 is what my data service provider, my computer, and my software,displayed.It was what I was using to trade.Appendix H shows time and sales, gathered after the heat ofbattle, from a different "more reliable" source.It's interesting to note the difference. 272 DiNapoli Levels52075, just one tick above the OP! What happened was that the 52100 test, down to52075, was just enough to wash out the stops below 52100 and reach solid support at theOP.So how did I handle it?When I saw the tick from 300 to 190, it was Pampers time! Hundred point ticksweren't all that common at the time.I called the floor to see if the tick was correct.Theirvoices were hoarse and shaky.The order clerks told me there was a trade or two betweenthose two numbers, but that a panic was occurring."We're not 'arbing' orders, it's socrazy," was what the clerk said.The noise level was extreme.The clerks were concernedwith errors, and rightfully so.Before I got off the phone we were at 52100 and since thatwas just a few ticks above my closing profit objective, and since there was a panic goingon, I "canceled replaced" and closed at market.Many of my students and my tradingfriends would have been delighted to see a 110 point tick in their favor.For me it was theticket out.That old saying about Fools and Angels ought to hang on your trading roomwall.When I know I'm trading really well and in tune with the market, this is the way things go.Hit the market on an extreme in a throw back rally, never suffer pain, and take profit injust a few bars.If you think that this sounds just too good to be true, use these strategiesfor a while and see for yourself just how close you can get to the "perfect trade." It mightsurprise you.A QUESTION:This sounds fantastic.Do you always trade like this?Sure.I always sell highs, I always buy lows, my stops are never hit, I own Chicago andNew York.My bid is in for Singapore and I'm looking for a retracement! EPILOGUEFor those of you who are wondering about what became of Hank, Dan, and Carl, I'll fillyou in on what I know.Hank's still hard at it.He's a broker now and has an advisory service.His clients lastlonger than most who trade futures, but they sure seem to trade a lot.Carl gave up futures trading and runs a nursery specializing in petunias.He managed tomake some money trading, but it was too stressful and considering the amount of workand worry it entailed it just wasn't worthwhile.His strawberry petunia display won ablue ribbon at the county fair.What about Dan?We'll, he kept slipping through the rain drops and made a lot of money in Futures.Forthose jealous ones among you, take heart.After one of his frequent trips to Bangkok, hiswife filed for divorce and the settlement was a doozie.Problem was however, she's beenunable to collect.Something about offshore banks.He sure is a tough guy to tag.He's still trading but nobody knows for sure where he is. Appendix 275APPENDIX ACALCULATIONS AND CHART LOCATION FOR THE 3X3 DISPLACEDMOVING AVERAGEDEFINITION:The 3X3 Displaced Moving Average is a number which is derived by computing the threeday simple Moving Average of the close, and displacing it forward in time three days.Aseries of these numbers, connected together, form a Trend Indicator, as well as a tool fordetermining certain directional signals.EXAMPLE:If we start with 95/06/12, we can calculate the 3X3 for the Sept.S&P on 95/06/19.We simply add the closing price on 6/12 to the closing price on 6/13.To that sum we addthe closing price on 6/14.We then divide that total by three.This is what is commonlyknown as the simple 3 day Moving Average of the close.Conventional wisdom wouldplace that number on the chart on 95/06/14.We "displace" it forward 3 (market) days.Therefore the number calculated represents the 3X3 DMA for 95/06/19. 276 DiNapoli LevelsAPPENDIX BRUNNING FibNodes"! AND TradeStation AT THE SAME TIMEPerform the following steps to run FibNodes and TradeStation at the same time,after the programs have been installed using each program's installation instructions:Windows 3.1 Users:1.After TradeStation is running, hold down the CTRL key while pressing the ESC keyon your keyboard to display the Windows task list.2.Select Program Manager from the list by clicking on it and click the Switch Tobutton to display the Windows Program Manager.3.Click the Window menu.4.Select Main from the list that is displayed to open the Main program group.5.Double-click the MS-DOS Prompt icon to access DOS.6.Follow the normal procedures to load the FibNodes program.7.After FibNodes is loaded, hold down the ALT key while pressing Enter on yourkeyboard to open a DOS shell.8.To view TradeStation and the DOS window simultaneously, arrange the windowshorizontally on your screen so that both applications are visible.9.If you need to shut your computer down at any time, go back into DOS and exit theFibNodes program, and then type exit at the DOS prompt.Windows 95 Users:1.After TradeStation is running, hold down the CTRL key while pressing the ESC keyon your keyboard to display the Windows Start Menu.2.Select MS-DOS Prompt from the menu to access DOS.3.Follow the normal procedures to load the FibNodes program.4.After FibNodes is loaded, arrange the DOS window so that both TradeStation andFibNodes are visible on your screen.5.If you need to shut your computer down at any time, go back into the DOS windowand exit the FibNodes program, and then type Exit at the DOS prompt. APPENDIX CFibNodesTM setup for ASPEN GRAPHICS"!USERSWindows 3.1These instructions are designed to help users of FibNodes and ASPEN GRAPHICSrun the two programs side-by-side on a Windows 3.1 operating system.1) Install FibNodes and ASPEN GRAPHICS using each program's installationinstructions [ Pobierz całość w formacie PDF ]