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Frequently Asked Questions  |
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 Do you trade full-time?
Yes. I trade 20 UK Stocks and 60 major US stocks using the Hawkeye Tool Kit. I also trade 15 futures - mainly currencies and bonds. However, stocks are my preference as they have defined trend runs, whereas futures have a far greater volatility profile and are more of a 3-5 day trend.
What is your favorite thing about trading?
The ability to travel. I spend approximately four months of the year in Australia, two in Spain and the rest in the UK and USA - and I trade all the time.
What methodology do you use to trade?
The main parameter that I look for in a chart is to be able to identify buying and selling volume in conjunction with the amount of price movement which I measure by standard deviation. After identifying price momentum and volume, I then go to a higher timeframe, ie daily-weekly, 30 minutes - 60 minutes, to identify weakness in the higher time frame. If I do not see weakness in the higher time frame, I do not initiate a trade, but wait until there is a sign of weakness. However, this has to be achieved within five time frames of the lower time period, otherwise I will consider that trade has been missed; and I will wait for the next opportunity.
What trading advice do you give people who want to trade full-time?
I spent many thousands of pounds (dollars) and hours attending seminars, buying third party software and newsletters. I am afraid there is no shortcut to successful trading. You have to develop your own trading style that you are happy with, and once that has been achieved, you must be consistent -- never have an opinion on where the market is going -- because just as sure as day follows night, your opinion will be wrong. Follow what you see on the chart and treat it very much like a pianist would sheet music. Very few of us can become concert pianists, but the majority should be able to learn to play a good tune. Consistency brings results. Once you start to cherry pick trades you are lost.
What markets and time frames can I trade with the Hawkeye Indicators?
The Hawkeye indicators work on all markets and time frames with only minor adjustments.
How should I setup the Hawkeye indicators on a TradeStation or eSignal chart?
When ordering, please indicate the markets you like to trade and the timeframe. We will send you our recommended charts and workspaces for that market and timeframe.
When should I take a new position?
We recommend that you always trade using at least two different time frames. When the Hawkeye Trend is green on the smaller time frame, check to make sure that your longer time frame is also showing strength. If so, and the close of the current bar is greater than the open, then you can enter the trade.
Please note that monthly charts are too slow to trade so you are only looking for strength, i.e. the Haweye Volume is white or green, the Hawkeye Trend is white or green, or a major low is in the background.
What stops should I use?
The Hawkeye Stops has two plots - a Far Stop and Near Stop. The Near Stop is set to exactly half the Far Stop value. When a trade begins, use the Far Stop value. If the Hawkeye Volume switches colors, from the color you entered on, use the Near Stop value. If the Hawkeye Volume returns to the original color, use the Far Stop value again.
For example, you enter a long position (Hawkeye Volume is green) -- begin using the Far Stop. Thirty minutes into your trade the Hawkeye Volume turns white -- begin using the Near Stop. Thirty minutes later, the Hawkeye Volume again turns green -- revert back to using the Far Stop.
Always remember to set the Hawkeye Trend, Far Stop input, to the same value as you are using in the Hawkeye Stops, Far Stop input
.Additionally, there are times when the Near Stop will flip above or below the market. This indicates a congestion period and you should still use the Far Stop value unless the Hawkeye Volume has changed colors from when you originally entered your trade.
How do I handle a Wide Ranging Bar?
Remember the Wide Ranging Bar tool signals a volatile trading period. Therefore, do not enter a new trade or add to an existing position if a wide bar occurs (the bar will be painted magenta). Wait until the next bar to enter or add to your position.
For a long trade: If the close of that bar is greater than the open, enter. If not, wait for a bar that has a close greater than the open. (The Hawkeye Trend will not go green until these conditions are met.)
For a short position: If the close of the bar is lower than the open, enter. If not, wait for a bar that has a close lower than the open. (The Hawkeye Trend will not go red until these conditions are met.)
When should I exit a trade?
You should be stopped out at one of the Near or Far Stop values 90% of the time. You may also decide to exit a trade owing to fundamental reasons - i.e., crop reports, interest rate announcements, etc.
When should I add to my position?
The Hawkeye Adds formula capitalizes on trend runs so that traders will only be exposed to a small loss (1 contract) at the commencement of a trade.
In TradeStation, insert the indicator Hawkeye Adds on your chart and enter the same value as the Hawkeye Trend Far Stop input. Next click View, Analysis Commentary (you may want to add this step to your icon bar), then click on the bar you entered the trade. This will activate the Adds indicator, which will mark the bars where you can add to your position, using the Futures formula below.
Futures Formula:
1 + 3 + 2 + 1 = 7 total contracts
Stock Formula:
1 + 1 + 1 = 3 total contracts
If you are stopped out during a trade and then the trend resumes, re-enter only using one contract and do not use the adding formula.
Exit all contracts simultaneously.
Should I use a money management stop?
If you find that the Hawkeye Stops are greater than your capital risk per trade, then use your money management stops.
What settings do I use for Hawkeye Stops?
The Hawkeye Stops has two inputs, Far Stop and Plots. The Near Stop is set to exactly half of the Far Stop input value, i.e. if you set the Far Stop input to 1.75, then the Near Stop value will be .875. The Plots input can be used to display only 1 stop value for the longer time frames. Although the Far Stop input is a matter of judgment, it is quite apparent when seen on your chart what value to use. Intraday traders might wish to use tighter stops -- i.e. Far Stop input is set to 1. Also, remember to set the Far Stop input in the Hawkeye Trend indicator to the same value as the Far Stop input in the Hawkeye Stops indicator.
How do I get rid of the highlighted numbers on the side of the chart (except for the current price)?
You just need to format the indicator. Left-click on Format, Analysis Technique, choose the indicator from the list by highlighting it (left-click once) and then left-click on Format. Left-click on the Style tab. Under Plots you will have a listing for each indicator plot. Highlight the plot by left-clicking once, then uncheck the Display Update Indication by left-clicking once on the checkmark. Do this for each Plot in the list. |
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