DbPhoenix

Sorry, but no, and if I seem argumentative, it's only because I've been doing this for so many years and I've worked with an awful lot of beginners. A beginner cannot take trades outside his plan until he has developed a consistently profitable trading plan that he can trust. If during his trading he sees that certain modifications are necessary, he can make those modifications and try again the next day. But he cannot make a habit of changing horses in midstream. By following the former path, he may have a rigorous plan in a matter of weeks. By following the latter, he may never have one at all. Db

Good stuff. As for the volume and the buyers and the movement, the message here is that buyers are able to move price up without much resistance. Sellers, in other words, don't care. The rubber will meet the road, however, when price reaches R. What happens then? Do sellers re-enter to push price back down to S? What do buyers do? Are they aggressive enough to overcome this effort and push price higher? If so, volume will increase. Db

Nearly all adults forget what it's like to be children, much less teenagers. Nearly all traders who've been at this awhile forget what it's like to be beginners (though many are still beginners after several years). Beginners are not objective. Beginners cannot "read the market". Most beginners cannot even tell up from down. Beginners are not among the best traders; few can even adopt the habits of winning traders, choosing instead to adopt the habits of losing traders. At minimum, a beginning trader must have a plan. A beginning trader must then follow that plan without variation, at all times, under all circumstances. If he does not do so, there is no point in creating the plan in the first place. If the plan is insufficient and requires modification, the beginner must do that outside the time he spends trading, not off the cuff in the midst of his trading day. He must then repeat this cycle until he has something he can trust. If he cannot or refuses to do this, he will fail. A beginner who is fearful and abandons his plan in sim is in deep trouble. Unless he can develop a plan that will enable him to trade without fear, he ought to just hang it up, because he will never be able to trade enough size to provide anything more than lunch money, if that. Db

No pinbars in Wyckoff, but thanks for the chart:) Db

This was one of those days when you look at the trades you think you're supposed to be taking and you think that can't possibly be right. But price doesn't go sailing every day. And if it's squeezed in a narrow range all morning, take the opportunity to go do something else. You're trading, not doing penance. Db

Rather than address your concerns, I'll suggest that you look back at post 60. You're trying to do two things at once: (1) understand the price movement and (2) trade it. By doing so, you will likely, instead of accelerating the process, slow it down. You will lose nothing by taking a few days, if not a couple of weeks, and focus on the price action, exclusive of what you might or might not do about it. You may find that, after doing so, the trading phase makes much more sense and goes faster. It's difficult to be objective about the price action when you're worried about what it's doing to your trade. Consider also that 11:00 has come and gone by the time price breaks through 92. Do you really want to screw around with this for two more hours just for 8 more points? Feel free to come back to this later if you want to do so. Db

Back in the late 1960s I was a young commodity broker at E. F. Hutton and Company. Our office was a brand new high-tech office (for its time) which was considered the "flagship office" for E. F. Hutton. In this office about thirty brokers and as many clients shared one very large boardroom and there were no private offices. The brokers had elegant and expensive desks and the clients had a comfortable seating area in the front of the office where they could hang out and watch the tapes and monitor our state of the art commodity "clacker board". Sitting at my desk near the front of the boardroom I could read my Wall Street Journal and keep track of the commodity markets without looking at the board. By just listening to the rhythm and tempo of the mechanical clicks as the prices changed I could easily tell when anything important was going on because the tempo of the clicks would increase noticeably. Just in front of my desk were a half dozen comfortable sofas facing a high mahogany paneled wall with the tapes and the "clacker board". A gallery of traders, mostly retired "old timers" who were trading real commodities like grains and pork bellies, lounged around on the sofas plotting their charts and talking about life and the markets. They typically arrived early to get a good seat in their usual spot and then spent the day trading, exchanging commentaries and offering unsolicited advice to one another on any subject. For the most part they were a very sociable group who would take coffee breaks together and greeted each other on a first name basis. These traders enjoyed the elegant atmosphere and treated our well-appointed boardroom as their private men's club. (Were you aware that women were not allowed to trade commodities back in those days? My how times have changed!) However, one of these "old timers" kept to himself and was not interested in becoming a member of the friendly and often boisterous social circle. He usually sat quietly by himself intently watching the price changes on the commodity board and holding an old glass Coca-Cola bottle up near his ear. The vintage shaped Coke bottle had been emptied many years before and now contained only a 12-inch tube of bent and broken radio antennae which extended awkwardly out of the top of the bottle. Keep in mind that in the 1960s no one had yet heard of cell phones so the purpose of this Coke bottle was a real mystery to everyone. When the trader would talk to the bottle from time to time all the heads would turn and the traders nearby would try to listen to the conversation. But the trader spoke very softly and no one was able to eavesdrop on his conversations with the bottle. The traders knew that the fellow with the coke bottle was a client of mine and eventually a representative of the group came to me and explained that they were extremely puzzled about this guy and his Coke bottle and asked me if I knew what was going on. I didn't know the purpose or meaning of the Coke bottle but I was as curious as anyone was and I promised I would find out. The next time the client came back to my desk I promptly placed his order and then politely asked him about the Coke bottle. With a serious expression and no embarrassment he explained to me that the Coke bottle was an inter-planetary communication device that had been given to him by aliens. He said that the aliens were very interested in our commodity markets and they often gave him trading advice from their various observation points on other planets. He said that he had just had a message from Mars and they were buying soybeans so he had also purchased soybeans. After revealing his unique trading methodology he returned to his seat and resumed his whispered conversations with the Coke bottle. As soon as I revealed my discovery of the meaning of the Coke bottle to the other traders, all attention was immediately focused on the Coke bottle trader and the soybean market. The soybean market proceeded to go the wrong way and the trade from Mars was eventually closed out at a loss. The other traders were had no sympathy and were quick to begin ridiculing the the trader and poke fun at his beliefs. The next trade however turned out to be a big winner and the Coke bottle trader went from sofa to sofa telling his story and pointing to the clacker board while waiving his Coke bottle and bragging about the profitability of his most recent message from outer space. Because he was making money now his previous critics had to endure his bragging about his success on the current winning trade. As time went on and a few winning and losing trades later a clear pattern of behavior began to emerge. The Coke bottle trader was ridiculed unmercifully on his losing trades but was able to get his revenge and the last laugh during the winning trades. This trader might have been a little bit crazy but he wasn't stupid. He soon learned that his only defense against ridicule was to hold on to winning trades as long as possible and to quickly get out of his losses. As long as he was sitting on his sofa with a winning trade no one could tell him he was crazy and make cruel jokes about his messages from Mars. In fact while he was winning he was quick to wander around the room and ridicule the methods of the other traders who were not making as much money as he was. He displayed the profits in his trading account as hard evidence of the validity of his methods and offered copies of his statements as irrefutable proof that he was getting valuable advice from his alien contacts. Who could argue when his advice from other planets was obviously working? --Chuck Le Beau

Don't move your stop (see my earlier post). If you believe an exit is necessary, then exit. Stay in control. But also be willing to give price room. Drill down to a smaller bar interval if you can so that you can see the wave lengths. You may see the recovery earlier. But, in any case, unless price is literally plunging, give buyers a chance. Doesn't matter. What's important is not whether or not it's a shakeout but that you recognize the possibility. By doing so, you can be prepared to get out and take the opposite side of the trade. So, take it, and if it is a shakeout, get out immediately. Nothing lost exc maybe a tick or two. Then re-assess. Again, not enough room. The more you are into profit, the more room you can give, unless you just abdicate responsibility for the trade entirely and stop managing it. Don't freak when price seems to move against you. Assess it. How intent is the move? Is it desperate? Or is there real power behind it? Ditto. Not a bad idea. You can't think clearly with all these thoughts swimming around in your head. If you're not in top form, don't trade. If anything, just watch. This is far better than you think it is. Again, don't move your stops. If you believe you need to exit, then exit. But don't just move your stops and give everything up to fate. Remain in charge. Second, give the trade room. If necessary, drill down to a smaller bar interval to get a clearer idea of what exactly is going on in the trading. Third, whenever price starts going "against" you, LOOK TO THE LEFT. In fact, you ought to print this on a Post-It and stick it to your monitor. In nearly every case, you'll find the price is finding support ( or resistance) somewhere. Seeing this will give you the confidence to stay in the trade. And if that support (or resistance) is broken, THEN you can exit the trade and re-assess. Demand and Supply Lines do not provide support or resistance; they only provide indications of changes in the stride, which may end up being temporary and irrelevant to the overall trend. Don't freak simply because one is broken. Those breaks should only elicit a "hmm" and prompt you to LOOK TO THE LEFT. Db

And the ES, for those who continue to struggle with it. Just as easy, if not easier because of the multiple entries. One entry, one exit, 6pts, or at worst, 5. Db

Indeed. See the post I just made to the 90m thread. Db

A very interesting day, one of those that nobody expects, so they get dragged into it inch by inch. Just look at the angle of ascent. Tupapa, in the Foresight thread, correctly pegged 57 (or 58) as the primary R level. Problem was that it was broken half an hour before the open. Not only that, but price retraced to that level twenty minutes later. But now what? We opened well above that level, then retraced well below it. The cool, calm, and collected trader might have noticed that price found S at that little congestion that formed 45m before the open, at 54. First RET, however, doesn't occur until 59, 5m later. Then 64-65, a few minutes after that.The DL is broken shortly after 10:00, but price consolidates rather than drop. There is then a straight shot to 76, another break of the DL a few minutes later, then price goes nowhere until 11:00. Not a difficult day if one could stay calm, and worth up to 14pts, which isn't awful for 90m. Db

Hey, stranger. How's it goin'?

Just a note here. It appears that all of you are trying to prove that you can trade. This is understandable. However, be very cautious about putting the cart before the horse. Proving to yourselves that you understand price action is vastly more important than jumping into the swamp without your waders. One may think he's taking a shortcut, but he's only prolonging the process. I strongly suggest that those who are interested in this particular thread forget about the trading and start focusing on the price action. You may find yourselves pleasantly surprised at how much easier it is to see what's going on when you're relieved of the pressure of making trading decisions. When you're ready to go on, consider the Trading in Foresight thread. Db

I was wondering when you were going to take the plunge Now about the others...... Db

I suggest you consider 50 as potential R with a midpoint of 40. Db

As I said, using support as the risk level was an example. One can determine the risk however one chooses. But the risk level in the market is more pertinent than a risk level manufactured in one's head. Db

What do all the arrows and "entry" notations refer to? Perhaps you could narrate what you did and where and why you did it. Db

That price drops more than a few ticks on the retest doesn't mean that you have to allow it to fall, in this case, 6pts. If the test bar doesn't hold and buyers don't come in, get out. If one focuses on price movement and the reasons for it and causes of it, the fear disappears after awhile. Fear stems in part from a belief that the market is irrational, but if one understands demand and supply and can detect the fear and greed of others, then he has much less trouble keeping himself pulled together. Focusing on indicators, on the other hand, has the effect of creating an environment in which the trader feels as though he's blindfolded and being pricked and prodded and stuck while he's trying to walk on a trampoline. Clearly this is not the preferred route if one has any intention of making a living at trading. Not understanding what one is looking at and perceiving a fundamental irrationality to it all is the chief determinant of fear. It's also why so many beginners turn to scalping, particularly Forex. After all, if it makes no sense anyway, why not just take whatever profits one is lucky enough to get and be content? But I've never known anyone to make a success of that for any length of time, much less make a living at it (whatever anyone says about their trades on a message board, including me, unless they post those trades in advance, can be taken with a grain of salt). If one can remove these filters and keep his feet planted firmly on the ground, he ought to be able to get over all this in a few months. Otherwise, it can take years, if ever. If he doesn't go broke first. If the trader finds, after giving it everything he has, that he cannot dissipate the fear, he ought to quit. Db

Note that I said "The risk is inherent in the trade (e.g., below support) and has nothing to do with how much risk one is willing to take", "e.g." meaning "for example". Risk is not of course always anywhere. The point is that the risk and the reward are determined by the market not the trader, and certainly not by how much the trader is willing to lose. The market couldn't care less how much the trader is willing to lose. As to the trader with an R:R of .67, sure, if his hit rate is high enough. But unless you've seen him trade over an extended number of trades in real time and/or you have an audited brokerage statement, don't believe everything (anything) you read. Db

Understand, however, that the risk need not have anything to do with stops, and whether the stop is "large" or "small" is not pertinent. One need not use stops at all. The risk is inherent in the trade (e.g., below support) and has nothing to do with how much risk one is willing to take. It's there whether or not the trader is willing to take any at all. Likewise, the reward is inherent in the price movement, and pegging a particular price level as reward just to complete the calculation is pointless. The market couldn't care less. If there's no reasonable expectation that the reward level will actually be reached, the trader is just deluding himself. Db

I don't use any, consciously, but I've been doing this a very long time. Wyckoff (who is not necessarily pertinent to this thread), however, suggested that the R:R be at least 3:1. And traders have generally adhered to this for over a hundred years. Otherwise, unless you have a very high hit rate, you will over time lose. It's simple math. The R:R, however, is irrelevant unless the risk is appropriately determined and the reward is realistic. In this case, the risk was below support, not above it. By entering so late, your "reward" would have to be at 65-66, minimum. If that is not realistic, don't take the trade. While some pooh-pooh the R:R, it can help beginners avoid doing stupid things. For that alone, the calculation is worth doing. Db

Actually your risk was 2.5 and your expected reward 4.5 ("long 1353.50, stop at 1351; target is 1358"). That's less than 2:1. Db

Do you know what a reward:risk ratio is? Db

Yes, but you wouldn't be able to since you have no connection. This may become clearer to you if you ever live somewhere that loses power regularly and frequently. But aside from all that, I wouldn't even use the term "mental stop". You're exiting the trade because the criteria for the trade no longer exist. To do otherwise is to invoke hope, and once that's done, fear is waiting behind the door. For example, look at the ES this morning. This is what I call a "duh long", much clearer than the NQ long and visible to at least the 1m and 5m people. If this had been taken and the trader used 62 as his "mental stop", would he then exit the trade at the test at 10:04? Or would he wait to see how buyers reacted to that test? If his ego weren't involved, I hope he'd focus on the activity rather than on whether he was right or wrong in taking the trade in the first place. If so, he'd stay in and have an easy 6pt ride to the top (somewhat shy of the 35pt ride in the NQ). IOW, are traders behaving as anticipated or are they not? If they're not, why stay in the trade? Db

IOW, get rid of all the filters: the MAs, the slosto, the VWAP, the channels, the bands, the MACD, the RSI and whatever the hell else is between the trader and the transactions. Even candles and volume. If all these "helps" were resulting in successful trades, I'd say great. But they aren't. Quite the opposite, in fact. So what's to lose by getting rid of all that and watching traders trade? Granted this may feel as though one is being stripped and tossed out into the snow, but at least he'll be dealing directly with the cold rather than focusing exclusively on the thermometer. Db