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The Writing Was On The Wall

The Writing Was On The Wall

by The MoleAugust 23, 2013

It’s been a fun week for us rats and as I’ve got little to add to this morning’s update I’ll make this one quick and painless. At this point – and barring any late session surprises – it looks like we’re going to rack up a daily buy signal on the E-Mini:

I think the writing was on the wall this morning and despite today’s sideways churn (and lousy new home sales numbers) we are probably going to close above the NLBL at ES 1656.75. And that’s good enough for me  – I am currently long with a stop below today’s lows. I usually use a major low for my stop but that’s a mile away so the next best candidate is today’s low. Yes, sometimes you just have to pick something exotic – that’s fine as long as you use proper position sizing and then stick with it throughout your campaign.

By the way – I’m taking this trade knowing that we may easily see an RTV-L setup here next week – which would mean that we’re dropping early in the week and then run back up. The odds of that happening actually are pretty good – thus my position sizing was reduced to 0.5R and I’ll be adding contracts on the way up.

Before I crack open a bottle of Hefeweizen I’ve got two goodies on the futures front. Here’s copper which is now painting an inside day setup. I liked this one yesterday already as it was pinned between two opposing Net-Lines but the NLSL was about to expire so I skipped it. But this puts us into an IP-L, and IP-S and a RTV-S as well (didn’t see that one coming, did ya?).

And then there’s cocoa – gracing us with a double inside period. Very nice and I like the small range here as well – could turn into a runner after all that sideways churn.

And that’s where I check out for the weekend. Now go, have fun, and keep it frosty (both your nerves and your favorite bottle of brew of course). My poison for the evening: Franziskaner – on your shores you may be able to pick up one of those bad boys at your local Whole Foods (and in L.A. perhaps some cute aspiring actress as well).

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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 the usual social media waterholes.
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  • Darth_Gerb
  • Darth_Gerb
  • Skynard

    Traffic jam:)

  • Darth_Gerb
  • Skynard

    Those buyers will get the ax:) Still short unless stopped out, if not holding through the w/e. ZL still above the signal line which is bullish, not buying it. Think that bear flag plays out EOD or next week.

  • amokta

    IBM – where do you want to go today?
    post-bull, pre-bear?

  • SS_JJ

    Well, since every rat is gone or drunk already, let me be Mr. Obvious this time:
    We have a confirmed VIX Buy Signal!$VIX&p=D&b=5&g=0&id=p57431805117
    Now go back to your favorite poison and have a great week-end.

  • BobbyLow

    I think you had a decent week and back at ya JJ.

    Life in the slow lane wasn’t too shabby. 🙂

    This week’s Score: Bobby Low 2 Closed Wins. Mr. Nasty Market 0

  • SS_JJ

    Hehehe. Yes, it was a good end to the week. All indicators are well in the green. To be honest I was not feeling too sharp holding PM and oil after FED minutes release on Wednesday night, but in the end, it turned out all good. Congrats to you for kicking Mr. Nasty’s arse.

  • Pervergence

    I’m still sitting l GC…..

  • Darth_Gerb

    Ha! I stick with Milkshakes.


    it doesn’t forecast the future. but it’s worthy of note.
    either Sky is right, and this is just a blip (more down to come)
    or it’s yet another turn up.

  • SS_JJ

    Same here, but I’m not married to my positions if I see a good scalp to the other side next week

  • convictscott

    I had a week of 100% mistake free trading in difficult tape for the timeframes I trade. Actual results after slippage was .51R total, individual results below.

    R actual

  • convictscott

    An absolutely spectacular day at my place. Have a great weekend everyone 🙂

  • DollarChaser

    Hey scott, looking much the same out my window bar the water. Just a
    quick question about crazy.ivan. the ‘risk’ in the alerts you send us is
    nothing to do with the position size right? its the profit target/limit in pips from our entry yeah? so if the risk is say 50 pips, we take profits 50 pips above (or below in a short position) our entry price?

  • convictscott

    Hell no mate 🙂 The risk is 50 pips, you plug 50 pips into the RCalc calculator (link at the top of the page) to work out your position size. What it means is that your stop loss is 50 pips away, and the difference from your entry price to the stop if the trade loses is 50 pips.

    We do NOT use profit targets in crazy.ivan

  • DollarChaser

    yeah ok, that makes a lot more sense. the whole Rcalc thing was throwing me off cos no matter what figure i put in for the pips the money amount at the bottom would stay the same (i understand how that is just a percentage of my account size) The Units and Standard Lots i’m not familiar with – im still using fxcm and we just buy/sell $5 lots of a currency. but yep that clears it up Thanks mate!

  • molecool


  • molecool

    Actually, you have to press the calculate button every time. I guess I could have it update on a field change but I barely get a day off as it is!! 😉

    Yes, the money amount ALWAyS remains the same. But the unit size changes. If that doesn’t make sense then you need to familiarize yourself with the concept of position sizing. If you always play 5 lots then you are constantly taking on different risk amounts.


    Account: $100k
    Risk: 1%
    Pips: 10

    Risk in money: $1000
    Risk in units: 10 lots

    10 lots represents $1000 in your account currency (USD). If you would play 20 lots you would risk $2000 and that is 2%. By always playing the same amount of lots you will constantly vary your risk UNLESS you always use the same stop size (which I seriously doubt).

  • molecool

    To hear that is very rewarding to me – it seems we have reached a reasonable level of stability. A little bug fix here and there but apparently we are over the hump.

  • molecool

    Scott wasn’t playing for profits. He was simply monitoring the system without volatility filters to make sure everything works as expected.

  • newbfxtrader

    Yeah yeah. Rub it in…..

  • DollarChaser

    ok so we calculate our risk (and from there our position size) based on the amount of money we can potentially lose (determined by where the stop is) not by the amount of money put on the trade? so with the Rcalc the money amount is the money we may lose, not the dollar amount to put on the trade?

  • molecool

    EXACTLY. Also the system’s ProtectR logic is designed to evaluate your ongoing campaign in R increments. If you don’t earn 1R by the third candle for instance the system has you exit. If the system pushes above 1R and then closes below 1R the system will have you exit as well. So the risk unit is EVERYTHING. Without proper position sizing it won’t work – you may actually lose money taking every trade in a winning year.

  • Darkthirty

    3 billion POMO Friday, 1.5 or so Monday. 5.5 Tuesday, turnaround Tuesday would mean Monday down, Tuesday up? abstract thinking at its best

  • convictscott

    The idea is simple. On each losing trade you want to lose the same percentage of your account. Otherwise you have have losers bigger than your winners.

  • convictscott

    With the crazy ivan volatility filters on it would have taken 2 trades, a -.4R loss and a 1.95R win.

    The volatility filters automatically keep us out of whipsaw tape, and when the tape is very strong in one direction stop us taking counter trend trades.

  • convictscott

    More importantly the slippage per trade measured in R came out at .03346R per trade. It is DIFFICULT TO OVERESTIMATE how cool this is.

  • DollarChaser

    ahhh yes ok now i get it. i had been looking at risk all wrong. pretty sure ive got my head around it now tho. thanks for the help on this one guys, much appreciated.

  • catracho

    Is P&F target 1605 in “I smell roast beef” dead and gone?

  • molecool

    On IB – obviously you wouldn’t get that on TOS based on the numbers I’ve seen in a pertinent review (and the b/a spreads I’ve seen myself).

  • newbfxtrader

    If you are not willing to change your mind you wont have any change left…

  • catracho

    Thanks a very useful reply. I am flat but seem to remember that p&f targets tended to be pretty accurate and usually took a while to achieve, hence my question as I am not an expert in p&f. Also I thought that targets remained unless there was a key reversal, which in the post seems to have been 1676 cheers!!!

  • newbfxtrader

    I think it depends on the daily or weekly setups. Weekly is still short (inside week broke to the downside was entry) unless next week take out last week to the upside. I am pretty sure that PnF target will be taken out. Just not in a straight line.

  • mothwhoflysbackwards

    Back from a long vacation and glad to see ES still going strong. Longest time I have went without looking at the market for a while, yep it’s still here. It will take some time for me to get back in the swing of things.

    Hey Crazy Ivan! I guess Mole never rests ….. and did I see polar bear?

  • Darth_Gerb

    you saw nothing, go back to sleep (Jedi Hand wave)

  • convictscott


  • Skynard

    /ES, could be nothing. AUD, pinned blow the 100.

  • law6


    love it