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Setups Deluxe

by The MoleMarch 2, 2015

Not a very interesting day on the equities side unless you enjoy playing the swings, in which case the sideways range on the E-Mini for instance offered quite some opportunity for jumping in and out. It’s the sort of day when the Zero really shines and not surprisingly it painted a pretty juicy Mole reversal signal during the mid day stab lower – plus note a very distinct signal divergence during the highs:

2015-03-01_zero

However what really caught my attention is the repeating pattern that its presenting itself on the hourly Zero panel (the lower panel). It’s starting to look like a heart beat and since it represents participation to the up/down side my conclusion is that buy/sell programs are bouncing the ball back/forth here. I looked around for signs of distribution or divergences on the momo side but still see very little.

2015-03-02_UVOL_DVOL

My UVOL/DVOL panel seems to support that notion as both lines are almost in perfect sync and are steadily rising – easy as she goes. Again, great day for swing traders, everyone else be nimble and be long near today’s lows and short near the highs (unless we breach above ES 2015 – see charts below).

2015-03-02_spoos_volume_hole

The E-Mini volume profile shows us a pretty deep volume hole at 2010 which now has been touched 2 1/2 times (the first one missed it by a tick or two). So that should serve as an inflection point moving forward – on the upside we have a ceiling near 2015.

2015-03-02_spoos_update

Which also is represented by a NLBL at 2014.75 – a breach above that by a tick or two and we are probably off to the races for another stab higher.

2015-03-02_USDCAD_triangle_setup

But I promised setups and am happy to deliver as we’ve got a ton today, especially on the futures side. But first Forex – here’s the USD/CAD which is painting a descending triangle formation. Now the odds for a breach higher is pretty low – I think we are talking like 15% or so. Which affects your position sizing – your odds of success are low but accordingly your pay off is high as many traditional chartists will expect a break down lower here – perhaps after a fake out spike higher. Sure, may happen, but every once in a while it just keeps running higher and burns the shorts in the process. Therefore my plan is to add 1/4R on a breach of 125.5 and another 1/4R on a breach above 1.266 – give/take a few ticks. 1/2R total with a stop below the 25-day SMA.

2015-03-02_cocoa_setup

Cocoa – very nice formation here and I’ll be long above today’s hammer with a stop below the NLSL (you can also use today’s low as usual).

Quite a bit more below the fold – please join me in the lair:

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About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • wandering196

    RBA rate decision later today

  • http://evilspeculator.com molecool

    Isn’t there always something….

  • wandering196

    yes

  • mugabe

    same applies to life:)

  • BobbyLow

    In recent weeks, I’ve back tested my Forex Stable again. The funny thing is that every time I’ve back tested anything in Forex, it has been a real pain to look back and see which Central Banker Blabbed on any given day over a long period of time. Therefore, I’ve never taken “Blabber Days” into consideration on any of my Back Tests regarding wins, losses and APE etc.

    I’ve finally gotten to the point of when a Rate Decision or Major Announcement is coming within the next couple of hours or so, I’ll hold off on any new entry. However, if I already have an open position prior to Blabber Time, I’m going to hold it through the announcement. It seems like there is some kind a major announcement almost every day effecting the currencies within my stable. I’ve found that the few stop losses that occur from an occasional Blabber are much less in number than the benefit of holding through the noise on a financially and psychologically basis over time.

  • http://evilspeculator.com molecool

    Question: what is your trading window? Are you looking at hourly or daily charts, or anything in between? Or is it purely statistical?

  • BobbyLow

    I’m back to using 4 Hour Charts for Forex. My Stops and Targets are based on ATR Multiples. (My multiples are different for various pairs.) If I understand your question correctly, my trading window can range from as little as the next candle on a quick hit or quick loss or as long as 2 or 3 days on a slower meandering move.

    Regarding statistics, ever since I began back testing Forex Pairs 2 or 3 years ago, I never took Announcement Days into the consideration in any compilation. But when it came to live trading I got in the habit watching these things like a hawk. For me, it just became one more distraction and screwed me up more than it helped me.

    Don’t get me wrong. If I see a setup that appears on a US Fed Day at 9:00 AM EDT, I’m going to sit it out. But If a position was put on at anytime on the day prior or before, it’s staying.

  • squirrelsome

    “Please, God, don’t let anything happen to my child”
    … And nothing ever did…

    (same with risk – replace “child” with “account”)

  • squirrelsome

    CAD has some announcements this week. Had a really bad one today, but in itself has little impact. Just a harbinger.

  • http://evilspeculator.com molecool

    There’s nothing wrong with clamping down a little ahead of announcement. I recommend you run some statistic on how often the announcement would have benefited vs. harmed you.

  • BobbyLow

    At 7:30 PM there was a AUD Major Announcement that preceded the 10:30 PM RBA Rate Statement to come in at 10:30 PM. I was within 7 Pips of my Target at 7:26 PM so I took Profit on my Short AUD/USD..

    I’m kind of talking out of both sides of my ass here, but if I’m very close to target just prior to a scheduled higher risk event, I’m not going to hold out for the last few Pips of a target price. Within my rules, there’s room for a “little discretion” for this type of situation.

    OTOH, if I was down or only up a little, I would have held. The worst that could happen is that I would have got stopped out. Of course there’s the possibility for a large gap that’s worse than my stop but I understand the risk.

    As you know, another factor is how wide a stop is on any given trade. If there is too tight a stop, there’s probably going to be an excess of stop outs on announcements.

    My stops are usually wide enough to weather through a lot of fuckery. :)

  • http://evilspeculator.com molecool

    Que es lo que pensaba todo el invierno…

  • http://www.ProfitFromPatterns.com/ Ivan K

    B’Low … another idea … as opposed to ‘within 7 pips’ is … x% of R … away from Target … this is not an uncommon challenge … and it all gets back to ‘belief’ and ‘detachment’ … whatever the outcome may be … it is not a deal-breaker in terms of YOUR RBT !

  • mugabe

    pues nada, ya pasó!

  • http://evilspeculator.com molecool

    ______ ______ _______ _ _ _______ _ _______
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    ____) )____) )_____ / | | / / _____ / _
    | __ (_____ (| ___) / / | |< < | ___) / | |
    | |__) ) | | |_____| |__| | | | | | |__| |_____) ) |_____
    |______/ |_|_______)______|_| _)_| |______(______/ ______)