Symbols and Patterns

Charts, Commentary, News, Stocks, The Opening Print


The S&P futures (ESZ19:CME) closed at 2995.99 yesterday, about fifteen points below its opening print of 3010.75, and below 3000 at the lower end of its trading range (2995.04 – 3014.57). Holding the 2993 level was important, but an expansion of the trading range after testing highs and being rejected leaves something to be desired. 

The following chart from AMS is what we use. We shorted the ES when buying came in late in the day above the upper end of the Bollinger Bands and then failed to rally. We held the position overnight, as there was little to no resistance at the level of the VWAP.

Feel free to email me at david@amstradinggroup.com if you have any questions.  It works for us and will work for you as well once you take the time and effort to learn.

Colors, Not Numbers

It’s kind of an off topic ramble today, but one that’s become commonplace within how we structured the AMS tools, and how we teach. In recently posted blogs it’s been titled “Symbols & Patterns & Logic – Oh My”.  Forty years after its first publication, it’s pretty much remained the same. 

There’s nothing better than a liberal arts college that requires taking classes outside of your major that buttress overall thinking. One class I’ll always remember taking was “Symbol Logic”.  There was one text that had no vowels or letters, and no numeric connotations to be found. It was 137 pages of symbols and hieroglyphics. They had to be converted into letters, ones we use every day, then by replacing the hieroglyphics with these letters a story unfolded. I started at the back of the book finishing the project, cover to cover, in about a week. 

The reality of the exercise exposed that vowels, consonants and numbers are nothing more than symbols. When these symbols are arranged in patterns, i.e. words, they have meaning to us. We know what they mean and stand for on their own. It’s not until multiple symbols, displayed to us in patterns, that we recognize their meaning. This is how and why we developed our AMS platform, but we took it a step further by integrating colors; reds, blues, greys, purple lines, even gold cells into the display. 

Numbers used by some traders still come into play, but for someone closer to retirement age, like me, there is no way I can take in all of those numbers then calculate and regurgitate an expected outcome. I can, however, do that with ease using colors.

How we structured and display these colors can not only be taught, but most traders we work with can utilize it. That’s why I say, once you’ve identified the symbols and how they fit together into patterns, then logically realize that patterns repeat, you can make money trading.  All you need to know is what you are looking for. That takes time and practice, but once you have identified repetitious patterns, you are well on your way.

Nat Gas Update

The “widow maker” is playing with you today. We remain on the sidelines until at least after storage numbers are released on Thursday morning.  I would love to see one more test of the lows, then perhaps storage numbers lower than expectations, coupled with a cold front. I’m here to help you learn, just email me at david@amstradinggroup.com.


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As always, please use protective buy and sell stops when trading futures and options.

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Danny Riley (3249 Posts)

Danny Riley has worked in the futures and options industry for 38 years, including the CBOT’s bond room, where he worked for several of the Market Wizards. He went on to build the largest volume desk in the S&P 500 Index Futures, serving some of the largest banks and hedge funds, the UBS program trading business, and some of the world's top individual traders. As a leader and co-creator of the MrTopStep IM-Pro Trading Room, he shares trading ideas and breaking market news live from the floor with our other professional traders and new traders eager to experience the power of collective intelligence. Join us today and get the edge only social trading can give you.


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