Sledge

It is even MORE important if 2-4 weeks ago you had a level with a lot of play, and it is approaching that area again for a re-visit!

Trading candlestick "patterns" without knowing what those bars mean (hint: the imbalance of supply and demand) is fairly worthless. Take it one step beyond and dig into: Why does a Harami form or What is the supply and demand dynamic of why a Doji forms? If you can dig into the MEANING of the bars, instead of just blindly following patterns, you will be further ahead than most. FYI: What I am telling you is the hard road. If you are willing to do the work, the rewards are great!

Eiger: One question I would like to see if you may clarify for me? On Buying or selling climaxes: Would these bars be considered "rare" and occour at MAJOR support or resistance? I'm looking at the material more in-depth and it appears that we may have bars that provide turns such as an upthrust, top/bottom reversal or hidden upthrust at more minor support and resistance. But a Selling or Buying Climax tend to seem to occour at Major S/R (i.e S/R you would see on a Weekly or Monthly chart) Any clarification from your experiences would be appreciated. Regards, Aaron

I found this post on "CouldaWouldaShoulda (The Wyckoff Forum)" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

I did say I had not taken the course. I have learned more from people on this very board, by being humble, courteous and willing to learn.. and it didn't cost me $4K! Sledge

I don't trade the micro's but my broker had said that, right now, liquidity is thin. Maybe if they morph into things later, they would be viable for a newer trader as an alternative to the spot market for sure!

Bf- Thanks for the tips man. I appreciate that! I think I'm hunting what you are- I'm not looking to trade every tick, just some nice "Grade-A" set-ups per day would be great! Aaron

Bf- Thanks, I too am focusing on the 6B and 6E, but starting with the 6B, until I really get a firm grasp on it. I have had a couple days where I have had some losses, this puppy moves in a very choppy style, sort of like trading Tokyo. But I'm working to get acclimated! I WISH I would have taken JJ's advice a LONG time ago! That was one of the main reasons I wanted to post the experience. I wasted a couple years of my trading life inside the bucket. I feel like I'm starting over, having to learn new ebb and flow, new platform, new charting packages etc. If I would have just started here- I'd be further ahead. Aaron

I could not have said it better myself! Trading is hard enough. When saddled with the extra challenge of running uphill to profit with an unlevel playing field makes it even tougher. Not only are you utilizing your own skill in a tough market jungle, but to have to dodge your broker trying to shoot poison laced darts at you in the process is an uncomfortable feeling. This indeed was the best decision for the long run. And I hate to keep gushing on my broker- but he made me feel comfortable, I eased into it like a comfy chair. I see it like this: My Forex broker felt, inhuman, cold, and sterile. They took my money and funded the account. When I had questions I felt like I was all alone. Many times I was given No response to questions or had emails returned to me from no one in particular-no standard contact. When problems arose-- NO ONE would sign their name to an email, no one would have the stones to give me their name. I called them after I put in my complaint and had not heard a thing, when someone answered the phone.. he never gave me his name. When I kindly asked the status on my complaint he barked back "How long ago did you send the email?" I said "Two days ago" He retorted "Well its being looked at- expect to hear something within 24-48 hours" I got a generic, B.S., unsigned, email 3 days later. Now lets look at my futures broker. I asked him question after question almost daily (How does this work? How do I do that? I'm having trouble with this.. can you help?) etc. And do you know that this guy would respond to an email at all hours of the day or night. I remember sending an email thinking that I hope to get a response the next day. At 10:29 PM EST via Blackberry he answered the question. I told him I was impressed. Time after time, responsive, helpful and courteous. Hmm imagine that! When I finally felt comfortable to trade live again via utilizing their demo platform.. I never hesitated for a second to wire the funds. I feel like I found a trading partner, so to speak, and someone who is looking out for my best interest. Feels great. I'm 1000% happier in 1+ month, than I was in years at the other place! Aaron

Thank you 'email,' I appreciate it. I have been lucky in life to have people who saw potential in me and urged me to better myself, not just in trading, but in life- and once I take their advice, I am generally happier, for it takes me a while to realize that they are trying to help me. Good luck to you in your transition as well! Blowfish- Thank you sir, it really is tough to maintain focus and still profit when you have so many issues on your plate. The entire month of April was spent fighting with the bucketshop broker- and getting no where, and demoing new futures platforms. I made a whopping $10 bucks for the entire month of April on my last trade at the bucketshop. So for an entire month- no trades really, but as one of my closest friends told me.. "Maybe this was the best thing that could have happened to you" And he is right. Inconvenient, but necessary! Aaron

You could on a few ECN's yes. I also explored that route as well. In the end, it was best for me to be playing ball on the CME. Just personal choice I suppose. To me though it was a fairly simple transition. I mainly deal in the GBP, and the futures contract price is very close to spot price, it moves pretty much the same.. so the switch has not been overly difficult. Aaron

I have been away from the forum for quite a while but I had a story I wanted to share. I hope that my story helps just one aspiring new trader.. for that will be worth it. I started trading 4 years ago and was introduced to this wonderful world by my brother-in-law. He traded currency futures on the Globex, I had taken a slightly different route and learned to trade with a Spot Cash (Forex) broker. The MT4 platform was simple, all my feeds, my charts- all rolled into one. No external data sources, no "external feeds" it was "easy" and nice to have it all in one package... I'll show you how that saying "if its too easy, it may not be worth having" statement may have come to light! After 20 months of demo's, learning, honing, building my edge in spot forex. I decided it was time. I took the money I had set-aside to build the dream of taking that money and making a living eventually by trading. I was confident because I had proven results, I had a solid edge, I was well disciplined, and I had my money management down as well. I learned all of this using a demo- and took it VERY seriously! I opened an account with a Spot FX broker and began to trade live. The "live" environment and platform was much more touchy and unresponsive than the demo. Fills were no longer "instantaneous" and they had pretty much "prick teased" anyone who wanted to scalp a bit by learning on their demo. When it came to live- you never had a prayer of getting filled live. So on we re-adjust and find a way to work the trades, knowing that scalping on market was out of the question on even the slightest amount of volume. At the start of 2009, they tighted it up even more and made it near impossible even on low volume. After that re-adjustment period of utilizing pending orders instead of trying to scalp at market (when desired) things went fine.. until my profit started coming in. I had made a decent profit on my account when the platform started to slow down, or lose connections, fills became bad, and manual closes started to take up to 2 minutes! You see ladies and gents. The spot broker is taking the other side of your trade because they are obilgated to do so. But I had no idea that it really was more like a casino and gambling than I believed. The analogy that you will see perpetuated on the internet about Bucket shops, or market makers, is true, and I am living proof. I started to take the house and became a liability to them. I was not one of the 95% that would end up burning through my account and leave cursing the trading world, never to return again. Or having some mindset that the entire trading world is dirty and impossible to conquer. No.. my revelation came that once you realize that their are smart places to trade and their are back alley crapholes, the smarter trader you become. Google Jesse Livermore.. his story holds true today- it is timeless! Over the course of probably 2 years a trusted trading friend- Mr. JJ himself, kept saying to me. "Man why are you still screwing around with Spot?" "The fees in comparison to futures is night and day." Example- Spot FX: Open 1.00 lot Spot FX GBP/USD and instantly down -$30.00 on a 3 pip bid/ask. Futures: Open a 1.00 lot and start at $0.00. But always know you have a commission either way (generally between $5 and $8 per contract- but boy that is a lot nicer than $30 for the same priviledge in Spot) But I was comfortable I suppose, I was doing well and as they say "why fix something that isn't broken?" But then it became broken. I began to lose sleep at night- wondering "what if this broker goes belly up?" "If they do, my funds aren't segregated like they are on futures- all of my hard work for years my just disappear in the bink of an eye- and I have no recourse!" After the last straw of the buckeshop broker not honoring 3 trades and hosing me out of over $4,200, I finally made the decision that NOW is the time to transition to the real trading world. Trading with real interbank spreads, on the CME. After a month of talking with, and working with, a few different Futures brokers.. I found a home. The broker actually calls me, is responsive, answers any question I have and all but held my hand through the spot to futures transition. I sleep better at night now knowing: 1. My funds are safe (segregated) 2. My playing field is LEVEL 3. My broker actually cares and is reachable 4. My broker WANTS me to make money. The more I trade, the more money he makes in the longrun. He wants me to succeed, so that I continue to be an active trader and make him money. If I disappear, my commissions disappear too. 5. My broker is not dependant for survival on trying to screw me out of my money in my account, giving me bad feeds, or not honoring trades, if I'm not happy, the broker is not happy- Simple as that! I took my first Live Futures trades on Friday's London session and snagged 40 ticks. I ended up talking with my broker on that Friday afternoon for another purpose, and he was just as excited about my "wins" as I was. Call a spot broker and see if he/she gets excited when you say "I just snagged 40 pips" (Hint: they won't because you just took 40 pips out of THEIR bank account) The reason for this post was fairly simple. It took me longer to learn the CORRECT place to trade than it did to actually learn how to trade. Their is a lot of conflicting information out there about "what is right" and "where to trade." Spot brokers are VERY GOOD MARKETERS! I know, I have a degree in Marketing, and they are slick, they know what to say, they know how to bait you and suck you in. Please keep this in mind if you decide to step into that world. As for me.. I have finally graduated. Aaron

Heh, I'm having a flashback. Do you keep a trade journal? I can tell you this from my experience- if I trade my rules- I make profit If I defy my rules- I lose money. It was right there in black and white for me to see. This is where the discipline comes in that is absolutely necessary to succeed in this. Work to completely lose the "I gotta trade, I gotta trade" mentality over time. Look for "Grade A" set-ups. As they say "You don't have to swing at every pitch"

Thank you. I have to say then- kudos- you are doing this properly and that is very rare. I demo traded for 20 months before I spent a cent live on this- I did it the hard way, and it appears you are as well- but hone your craft, as you appear to be! I applaud you- seriously! Your edge can be any number of things- I guess it is how you make money- maybe it is a set-up, or some type of "trigger" but it also is your rules. Defining rules that you set- for "no trigger- no trade" will work wonders for anyone trading. I have a set of rules that "if X happens, pending trade set at Y and "Z" must happen for me to stay in the trade" So step one is my identifying, Step two is the execution and Step 3 is the maint. of the trade. Hopefully this helps. You sound like you really are in this for the long haul! Aaron

Jugador- If I may ask a question or two. I say with all sincerity the questions I ask and the observations I make. I was once a very new trader, I have learned a lot from folks here and elsewhere who took the time to answer my questions and ground me from time to time (as if the market can't hand you your own ass- and no one on a message board is needed to "rub it in") On this Demo account: 1. Are you starting the account with THE ACTUAL AMOUNT that you intend to go live with? Meaning- if you are planning to start with say $10,000 when you get the funds- is your demo starting out at $10,000? The reason I ask is that if you plug in say "$100,000" and you get used to trading 2.00 lots or 3.00 lots, you will be highly disappointed when you start a real account with our example of $10,000 and your account cannot handle the margin of taking 2 and 3 or beyond lots to trade with. 2. Are you calculating this margin? Taking into account breathing room to let trades run etc.? And are you working within your 2% or 3% risk rule on your account? Meaning: If you are willing to risk $200 on a trade as it is 2% of a $10,000 account- how many ticks or pips are you able to handle before the $200 is hit? Obviously, if you trade smaller lot sizes- it allows you more "breathing room" if you are trading a 2.00 lot of forex- you are able to withstand a 10 pip move against you and the 2% is gone. If you move that to a .10 lot you have 200 pips that it could move against you before your stop was hit. Hopefully this makes sense. 3. Are you actively putting Stop Losses on EVERY Trade? Believe me when I demo traded- I never put stop losses on trades- until I had my ass handed to me over and over again when I was wrong. Finally, it sunk in- thank goodness they were Demo Dollars- I had some real bad losses- when I thought I was "untouchable." 4. Are you treating this as if it is REAL? Are you taking only trades you would take with REAL money? Are you just as pissed when you lose $50 Demo dollars as you are thrilled when you make $50 demo dollars? Treat this as if it is real and you will gain more benefit than anything else. Only take trades you would as real- only take trades that follow your set-up and edge (you do have your edge defined don't you?) 5. You MUST be patient, disciplined, and focused- 100% of the time when you trade. One of the BEST pieces of advice I have ever read is this: Great traders don't get over-excited about winning trades, and don't get depressed about losing trades- they know that the market is what it is, and that it does what it does. I wish you well in your quest- but remember to be humble and continue to learn- if this advice is not heeded- the market will surely provide you with all the humbling you will ever need- when you least expect it! Aaron

JESUS- $10K Really man? I think I would have put a bullet in my head on a $10K loss... seriously. The question though is- WHAT DID YOU LEARN? I have had my share of losses- I LEARNED something from every single one of them- without the lesson- the monetary loss is second stage to the knowledge gained and the idea that once that mistake was made- to never repeat it. Figure it cost you $10,000- I'd sure as hell be certain to be sure I learned something from that. Hope you figured it out. Aaron

I can tell you they are a pain in the ass- not sure how I ever even got on their mailing list- but I have gotten their DVD twice. I won't say I know so much about their "system" but the folks on the DVD seem happy. As has been said- if it works, it does. But I think the cost on that thing was out of this world- like $5K or something. I have plenty of better uses of $5K than some trading companies idea of "the grail" Want to save some $: 1. Learn to read Price Action 2. Learn everything you can about Support and Resistance. 3. Take your time and endure the pain- no one succeeds in this industry without sheer grit and perseverence. I just saved you $5,000 bucks! Aaron

I found out about this a few days ago, I urge all of you to email any trading friends you have and inform them. I sent a personal message to my 3 reps here in the state, asking them to consider that the "small business owner" i.e. retail traders- are the ones who will be hurt. Like any other "small business" when you have 90% of your tax revenue coming from the small business sector- it is absurd to try and drive them out of business. We are the wrong target to tax. I also informed them that this tax would push many people beyond their "risk:reward ratio" and not trade at all. Without any of us trading- they are losing all of the tax revenue on the income we currently make. Additionally, this is not just forex or futures trading- this would effect- 401K's mutual funds etc. It is a step backwards- people are already NOT putting their money into 401K's to watch the market evaporate them right now- this would put the nail in the coffin of many LARGE firms, with larger firms dying off- more layoffs, more unemployment- vicious cycle. I'm really uncertain what Congressman Peter DeFazio's pure hatred for the free market is- but I'm too small of a fish to take the risk on certain trades if this somehow passed! Aaron

Thank you sir, once again you are pushing the envelope of education on VSA and showing the world, how really very simple VSA can be. Wonderfully written and illustrated. Keep em coming! Aaron

I saw a few threads below that was asking about "Your Biggest Loser" seemed appropriate as I just had to come and admit I had my first losing month in 6 months. I lost a mere $15 bucks on the month- but the hardest part isn't that I was "down" this month- It was the fact that I had made money and I gave the money back. Notice I did not say something like "The market stole it from me" or "The market took it" No I personally planned out every trade, I made informed decisions and for some reasons the technicals just did not seem to want to play ball here in January in the Forex Market. I have been in this market for about 3 years, and this month left me scratching my head. Of course your mind runs wild with- well what if it is the new president, what if it is the fact that the US economy is in such shambles. But of course we can't lay blame there. This month though- was like nothing I had ever seen, nor experienced. Any up moves were choppy, almost improbable at times. You would see a small drift down on say an hourly chart, Support didn't hold, but didn't plow through either. There were no breakouts of any significance, in fact it appeared to sort of wander aimlessly. The proof of the indecision is in the monthly bar that just finished forming today at EOD. High: 1.5374 Low 1.3502 Open: 1.4599 Close: 1.4538 A Down bar with by the time it was all said and done- closed down a mere 61 pips from its open 30 days ago. An average of 2 pips down a day. Tough trading. On an Hourly chart you saw tons of "wicks and tails" on both sides. Down moves were frought with tails all the way down the move, and you never quite knew when the turn would come. It was base hits and protecting capital central. Or you would witness wonderous things like this. Up move is exhausted, you wait for the turn, garnish confirmation, get in the trade and one bar and it was over- only to move sideways again or get into chop. I know there are people here with 20+ years in the market. I remember that last January was not this "scared" and scared is the correct term- you could see people "taking what they could get" and closing fast in either direction. And if you thought the GBP was rough- Look at the EUR- it would make your head explode on a 1 Hr chart. I learned quite a bit this month. But I know for certain that I am missing something on the bigger picture. Any veterans out there who regularly play in this market have any insight as to why this month was the way that it was? Aaron

I found this post on "Re: Thoughts from a Professional Trader" interesting and have nominated it accordingly for "Topic Of The Month January, 2009"

Bobby- Thanks for passing along. I appreciate it. Yes 2009 starting off well- hope you are able to say the same! Aaron

"God gives every bird his worm, but he does not throw it into the nest" - P.D. James "It is observed that successful people get ahead in the time that other people waste" - Henry Ford "I don't measure a man's success by how high he climbs but by how high he bounces when he hits bottom" - George Patton "The greatest pleasure in life is doing what people say you cannot do" - Walter Bagehot "Formal education will make you a living; self-education will make you a fortune!" - Jim Rohn "Success is when you don't know if you're working or you're playing" - Warren Beatty "Do just once what others say you can't do, and you will never pay attention to their limitations again" - James R. Cook "If you aren't living on the edge, you're taking up too much space" - Unknown wise person "Good enough", is never good enough - Aaron M. Root

A Nice article. Thanks Bf.

Not a problem, I dropped Todd an email a yesterday as well. He really is a guy who has passion for teaching, showing folks the ropes and wanting people to succeed (imo) Best wishes for a happy and Prosperous 2009! Aaron