DbPhoenix

If one minimizes the times and places where focus is mostly likely to be needed, then it's easier to maintain focus at those times and in those places rather than squander the effort at those times and in those places where focus is least likely to be needed. Though perhaps Neg had something else in mind. Db

But getting back to the subject of the thread, trading gets to be pretty routine after a while. There are ways of jazzing it up, but whether or not one does so depends on what he wants out of trading. I begin the day by waking up, which becomes increasingly more difficult as the night lasts longer and longer (I pity the traders in California, much less Hawaii). Once my eyes are able to focus, I bring up the chart and see what's happened overnight. If as today I find that we're back in the same trading range we were in the day before, my hopes are not high. Be that as it may, I find the boundaries of the range and do nothing until we reach one or the other, having worked out in advance what I will do if and when price reaches one of those boundaries and either reverses or breaks out. Inbetweentimes, I read. Db

At least you can GET Mars bars.... Db

At least you're honest with yourself. I love these guys that post losing trade after losing trade then at the end of the day post something like Well, I met my profit target for the day so I guess I'll wrap it up and go dust the Bentley. Or whatever. I guess they met their profit target in some other timeframe. In some other market. In some parallel universe. Not to go off-topic or anything. Db

You sunshine optimist, you Db

Due to a variety of factors, volume has become an indicator, particularly over the past ten years. Thus few people truly understand it and virtually everybody misinterprets it. As for the indices and futures, volume has become so corrupted over the past 30 years with all the hedging and arbitrage and fund buying and so forth that the used-to-be-useful variations have over time disappeared, making volume essentially irrelevant. One may find useful variations on a weekly chart when looking back over cataclysmic events, but that's about it. And how many cataclysmic events are there? And since so much nonsense about volume has been perpetrated and perpetuated by vendors, I've elected to leave it off futures charts since the more important goal is to illustrate S&R and trend and TRs. If one is focused on whether or not volume is "big", the primary goal gets lost. Stocks, of course, are another matter. Volume still matters, but only under those circumstances I've detailed in this thread. So it really depends on what you decide to trade. If it's futures, skip it. If it's stocks, take it out for a test drive. If it's ETFs, it'll depend on the ETF and how much useable variation you find, i.e., if the ETF is so popular and so big and so heavily traded that there's little useful variation in the volume over time, why plot it? Db

That depends on the "plan". Or what one is calling ''the plan". If the plan is to go long if price is going "up", or short if price is going "down", it is not likely that one is going to be placing that down payment on that Jag at any point in the foreseeable future. Given the number of threads that have addressed this plan business just over the past few weeks, I can't help but feel that we're beating a dead horse. Just about everyone seems to acknowledge the fact that a plan is (a) necessary and (b) desirable, but few (i.e., practically nobody) wants to actually develop one, or at least one which goes beyond wishful thinking. But how does A persuade B to develop a plan when B doesn't really want to? Does A wait for B to run out of money and turn to the development of a plan out of desperation? Or does A wait for B to come to the realization on his own, eventually, that a plan is necessary? (Given the fact that traders can go on for 15 years or more without making any money, this could be a long wait.) And why should A care one way or the other? A student will learn what he needs to learn when he reaches a point where he sees the need to learn it, whether it's the formula for determining the area of a circle (like when he has to lay down a pad for a hot tub) or how to drive a stick shift or how to mix concrete or how to develop a trading plan. I find it supremely ironic that people begin trading to make money yet do those very things which will prevent them from making the money that they allegedly began trading to make. One cannot save people from themselves. But this doesn't stop the good-hearted from trying. Db

No coding, no algorithms, no computerized backtesting at all. It's all done manually. Depends on how long it takes for you to get it. If you have a lot of experience with coding and indicators, it will likely take you far longer to get it than it would someone who's starting fresh for you are more likely to view price as something independent of the efforts made by buyers and sellers to arrive at that price. Take support, for example. A lot of traders view support as a mathematically determined level or point that one reaches by calculating Fib or Pivots or plotting MAs or whatever. But support is none of that. Support is that level or zone where buyers decide for whatever reason that they are going to stop the decline of price and turn it around. This entails a different way of looking at price and price movement. Price is the product of an activity. To trade by price, at least according to Wyckoff, one must understand the nature of that activity and not define price solely as prints on a page or tape. You may, therefore, be able to distinguish between trend and trading range by looking at only a handful of charts. Or it may take dozens. Or more. Or you may never be able to do it (and don't feel bad; there are plenty of vendor/pundits who can't tell up from down and consequently make one losing countertrend trade after another). When you backtest, you're surveying or scanning from some point backward, right to left. You see the result and you want to figure out how that result was obtained. For example, if you find a trend day, where and how did the trend start? How was the activity different before and at the turning point from what it was during the preceding downturn/upturn or trading range? Once you've found what you think are the key elements that determined or at least affected the turnaround, you choose charts at random, and you either replay them in simulated real time or you cover them up and disclose the price points only one at a time, reading from left to right. Look for those elements which are part of your hypothesis. When you find them, see if they offer the desired result. If they do, keep going until you find another of your patterns. If they don't, determine where you went wrong in your hypothesis and try again. Once you have this, you'll be able to determine support and resistance and trend and trading ranges in real time. You will then be at a point where you can look at how to take advantage of this knowledge with minimum risk and make some money. The most common error traders make when learning this approach is to try to determine where they should enter and where they should exit in order to make the most money with the least risk rather than determine what's going on with the traders involved in the trading activity that's occurring in front of them. Since they don't understand what's happening in front of them, i.e., they don't know what they're looking at, they don't know what to look for. So they guess.But whether the guess works out or not is irrelevant to their ultimate success -- or failure -- because there is no structure to their trading, no thoroughly-tested underpinning (e.g., they think price is in an uptrend, so they go long). However, they figure that as long as they keep making these guesses in more or less the same way, they are being "disciplined" and will eventually meet their objectives. Of course, it's always possible. Monkeys at typewriters. But it will take years, and they will more likely go broke before the light ever dawns. How much more efficient , and profitable, to do the testing in the first place. If you can anticipate where price is most likely to break trend and move sideways or reverse and what it will do thereafter, you will be far more likely to profit from that anticipation than if you have no idea why traders are doing what they're doing and view all of this as a random sequence of events. For instance, one of the more important things you'll learn as a result of testing is that entering trades inside a trading range is riskier and less profitable than entering trades at the limits of that trading range. But this is something that you have to prove to yourself through testing, which is both risk-free and at-your-own-pace. If you decide instead to skip the testing and treat it as some sort of principle, you won't internalize it, and you'll violate it repeatedly, involving yourself in losing trades again and again. Explaining all of this to someone who's in a hurry is much like talking to a post. If you yourself are in a hurry, the best I can do is to urge you to hurry as slowly as possible. Read the course (or at least the abbreviated form I've suggested), read the stickies, read the threads, study the charts and efforts and experiences of those who've come before you. Then open up some old charts and see how much sense they make to you without guidance. If you're used to using bars and candles as indicators, convert the display to a line chart. Once you're able to understand the continuous flow of and interaction between trading activity and price movement, your chances of success will be much greater. Db

Back in the day, particularly at a time when more and more stocks were being listed on the exchange, some means of dialing back the noise and bringing up the signal was a more than worthwhile pursuit, particularly when so much was done by hand. Under those circumstances, determining the five leading stocks and following them was infinitely preferable to following all the listed stocks. Today, however, and while I don't want to discourage you, I haven't found much use to the wave charts, primarily because there are so many market averages, so many sector and group charts, so many specialty indices, all of which have instantly obtainable charts. I don't know if you have as many sector and group charts available as we do, but a quick looksee shows that you have quite a few under at least the FTSE 350. If the FTSE looks good, and the sector/group chart for your stock also looks good, you may find that you can just skip the whole wave chart thing. As to the position chart, I suggest you skip that as well. Given that you can scroll through as many charts as you like to determine which stocks are basing, which have broken out, which are forming springboards or are retracing, etc., there's no reason why you can't settle for a nightly review of all that, and if you've limited your universe of stocks to, say, twenty, or even ten, then the need for position charts becomes even less. If you've been lurking "for a long time", you may not have noticed that I've suggested an abbreviated form of the course. This may be more to your liking and may better suit your needs. Certainly if you monitor the major UK indices and sectors, you won't be able to go too far wrong. And the whole review process needn't take more than ten minutes. Db

Traders -- beginning and otherwise -- are flexible in their rules because they have no trading plans hence, no rules, or at least no rules that mean much. But it goes deeper than that: they have no plans because they believe that they are better traders than they really are, and since their record-keeping is spotty at best, they are perfectly capable of going on for years without much improvement (or none). In fact, their belief in their trading ability is so unshakeable that they don't hesitate to depart from their "plans" -- if any -- when they believe the occasion demands because they believe that they are smarter than their own plans (though one could argue that under these circumstances the plan can hardly be classified as such). But it all works out in the end. This type of trader brings money to the market that traders with thoroughly tested and sound plans -- and rules -- can take from them, much like the kid in elementary school who gets beaten up on the playground for his lunch money. Db

Another free ride, this time from 38 to 64 (see TIF post from this morning). Db

Today is straightforward. The conditions for the rally on the 6th and the decline on the 10th were still in place yesterday for the rally back to R, though there is now more activity in this particular zone. Thus there were multiple ops for entries for anyone who was in place at lunchtime, and no resistance along the way. See previous post for the TRs. Db Add pre-open charts:

Pretty good for somebody who's "never found volume to be very useful" . The key is to view it as trader behavior, not as an indicator (e.g., VSA). As for the S/R, I posted that this morning. Db

Part 1 of the course focuses on trading and investing. Part 2 focuses on daytrading. See "Getting Started". Db

Follow-up to this post from pre-market. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread.

First, go to the Pristine site. Then click the "Free Trading Education" tab at the top, then select "Free Weekly Lessons" from the drop-down menu, then either "Chart of the Week" or "Trading Lesson of the Week". If you find something you like, copy it out. These don't last forever. Note that you will have to register now. If you don't want to go through all that, perhaps someone who does will be willing to copy and paste the article here. OTOH, he may be referring to the "Bringing Common Sense to Trading" article. Db

Add pre-open:

As a follow-on to previous comments, you'll benefit more from your reading and from your chart study if you have a clear idea of what you're looking for. Otherwise, it's just words on a page and chicken scratches on a graph. This link may be of help. As to understanding what you've read or observed, try explaining it to somebody, even if it's only on a message board. You will quickly determine what it was you learned and where the biggest holes are. As to lurking in the VSA stuff, it's not likely your fault if you're having trouble getting it. Db

It's up to you. What matters is how easily and clearly you're conveying the information. You must like your display or you wouldn't use it, but I find it difficult to read. On the other hand, I'm not trading it, so use what is best for you. As to the candles, they are a means of illustrating price movement and, at bottom, are no different from bars or lines or dots. My issue with them is that they quickly become an indicator; thus, the trader starts focusing on the candle and the candle pattern -- both of which disappear as soon as one changes the interval -- instead of the price movement. If you're profiting from them, I can't very well tell you not to use them, but the longer you use them, the longer it will take for you to perceive and understand the price movement. As to your chart, your first "LH" ought to be an "HL". You should also adjust your DL so that it more closely follows price after price changes its trajectory. This would prompt you to exit the long faster and be in a better position to take the earlier short. The DLs and SLs should be an aid, not a straitjacket. Db

Follow-up to this post from pre-market. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread. Note that price spent most of the morning within the confines of the previous hinge and that the best trades were AWAY from the midpoint. .

In a word, yes. The hinge is, after all, a reversion to a mean. As such, the midpoint represents equilibrium, or, as the MP people would put it, "value". That price drops below this, returns to it, rises above it, and returns to it again confirms that value, so all of these feints from one side to another are just circling that mean. Trying to trade this before price exits this morass would be "challenging". Db

Edit: Add 1m

If it pulls your emotional triggers, leave it alone. Eventually you'll be come desensitized to it. And if you don't, so what? It doesn't last long. I posted the longer-term TL to show where price was resting, which increased the probability of a long trade. Compared to that, an itty-bitty TL from overnite is pretty trivial. What is more troubling is that the selling waves are longer than the buying waves at and just after the open. However, price rejects the effort to push it lower pretty decisively, and there was potential support there, and the longer TL supported a long, so a long entry would not be irresponsible. But even without it, you've still got a good short and a good long off the next test. Hard to lose. And I notice the pundits were still quiet about all of this. Except in hindsight. So you're entitled to feel pleased with yourself. Db

Your homework? Well, since you made 10pts, I'm not in a position to tell you not to trade until you have a plan and you've tested it until you're confident in your trades. But, I don't know you or what you've been doing or how consistent you are, so I'll just caution you about moving too fast. As for your first DL, you needn't be so rigid. You're using it as a trend line and it isn't. It should hug the price line, even if you have to draw a new one. That way, it can do its job. As for your second DL, you were right to exit, but why didn't you re-enter? You didn't draw it too tight, but you could have re-entered on the RET and drawn a new one. And of course there's the short at 1000. But, all told, good job. You don't need the color-coded price bars, tho. And thank you for using EST. Makes things clearer to everybody. Db P.S. As for seeing your posts and charts, they have to be approved since you just started posting. So be patient. I'll approve them when I see them. Db

Follow-up to this post from pre-market. See also this post from yesterday. Those who don't know what's going on should consult the Trading in Foresight thread, the Trading Ranges thread, and the Support and Resistance thread.