weiwei

Leroy, I agree with you on that. and whether to scale in or out, it depends on your style. For a trend catch trader, then scale in would be a better method. But if one is to catch market inbalance on supply and demend, (what most intraday trader try to do) then scale out method would be good to collect points. Basically, for intraday trader this rule works better: Do not let your winner turn into a loser. For swing trader or position trader: then this is a better rule: Let your profit run. weiwei

Milind_pol, set your goal and use proper tool depends on your style. For example: if you day-trade, then learn to use what I call "Now indicators". tape reading, volume price relationship, market internals. Indicators that give you the info of what is going on now with price. And this website has tons of info of this kind. Have a nice journey. weiwei

Traderxman, Being there, done that. But the progress for me has been slow. I have to work on myself a lot to not act that way. Including meditation 30minute to 1 hour a day, reading articles all the time, keep searching for good website for sound advice. Above all, meditation is the hardest one for me to do. It is against my go go go personal nature, but many time during meditation, during that moment of silence, things pop out at me. Then slowly I resolve many of my internal conflicts, I still have a lot work to do, but getting better at it. Another thing that helps a lot is more understanding of market mechanic, so now I act only when I see good clue, and I can get good risk/reward ratio. one more thing that helps me a lot is to know what kind of trader I am. Trend-following and intra-day trading take different mind set and talent, thus require different approach, know what type of trader that I am was a step up for me. weiwei

It took me 2 years to move away from Window 2000 Pro, and the only reason that I move is because XP boot up faster. I will do the same with Vista. wait till MS work out all their bug and hardware price come down further. weiwei

Soul, basically this indicator will paint the bar to the color of your choice, so you know this is the squat bar.

Thank you MrPaul for the link, these links wuld give move details to others who would like to find out more about this rule. Brownsfan091, thanks for that insightful input. You pretty much nail it. And I totally agree with you on that constantly monitoring and detailed documentation are key to utilize this rule fully. The basic idea behind this is to present an workable rule for people to focus on, and rest is up to each individual to carry it out. weiwei PS: I am willing to post some more example if there is interest on this topic. But for now, I will stop right here and leave the thinking upto each individual.

I believe every trader constantly asking that question on how he/she can take he/her the next level. I have found this rule very useful and universal, and yet not many people paying much attention on it. So I guess it could be an edge once you understand it and utiiize it fully. Rule of 80/20. Once understand it, you can apply it to many areas and knowing where to focus your energy to get the max output. Basically this rule states that 80/20 is the proper ratio for many things at final end. Example: 1. In US 80% of wealth is control in 20% of population. 2. 80% of your income will come from 20% of your skill set. 3. Freeway usage, 20% of the time will contain 80% of the traffic. (traffic jam) 4. 80% of the market volume came from 20% of the people.(Institutional involvement) But a lot of time the ratio could be 90/10, 70/30 or 60/40. Basically the idea is that things are not evenly distributed as 50/50, there is bias toward one side and the ratio of 80/20 usually can give very good approximation. so as an individual trader, how can we improve our end result base on this rule. Basically, once you got enough data, you can then find out which system fit under this rule, then improve on this system For example: you have 5 different systems. and one of them performs better then all other 4 systems, and produce the 80% of your profit. Then by increase position size on this system, you will be able to produce much bigger result. Come to think of it, the famous turtle trading system utilize this concept well. Turtle system will add to a position when the trend is on its side, then keep adding positions until the market go against it.(but it dose have a max size allow for each position). So in other word, when it catch a trend, it will capitalize on it. even with a 30%-40% winning ratio, turtle system was able to get an good annual return for its investors. How about Ed Seykota from Market Wizards, he dose the same thing as the turtle system on the position size up. (add more position to a winning positions to capitalize on a persist trend) These are some the best traders who max out this 20/80 rules. when that 20/80 ratio show out, capitalize on it will improve your trading result dramatally. weiwei PS: I do not recommend people to just using trend-following system, especially on intra-day bases. These are just meant to be an example. Basically trend-following system needs a lot of money and nerve of steel, and most people just do not have that combination.(my opinion on trend-following system)

There are many people discuss about VSA, and I found this indicator in TS forum. I hope it is useful to someone. ATSSQUATEND.ELD

Trader JG, Market internal do have its value in day trading. One I use most is $tick, and I know Soul and many other people in this forum use it. Correlate its action with price, it could be a good tool to make a better decision. weiwei

Traderxman, It would help if your friend ask the right questions, thus get the right answers to end his struggle. because what ever you focus on will expains. Base on that, focus on wrong thing or wrong mind set set you off to wrong direction, and you could be riding on a train that will take you to a destination that you are not planning to go. I am willing to pass on some of my experiences, if you would like to find out more. Or search for my post to find my view on this. I hope that help. Weiwei.

Walter, Any idea how to track Smart Money? now I use T&S, Volume and $tick. and chart pattern to guess what are they doing. and now I can only guess. weiwei

this will be the 2nd part of 3M. Methods. Depends on your style of trading, one will need to chose his tool accordingly. ( Since i daytrade, so my focus will be more on day trading) swing trade, position trade: 1. TA is OK, but need more money to hold position, and mental toughness to withstand market's gyration and account drawdowns. 2. Dose not need to make constant decision, but do need to have the discipline to take signals. Day trading: so far those price derived indicators have not been working for me on day trading. I will list what has work for me, and one can judge for himself. And I only trade YM. Preparation 1. forward thinking from higher time frame, mainly daily and 135M chart. 2. stats on different conditions, gaps, range. During trading hour: 1. various SR line on 5M chart 2. Volume delta on the same 5M chart 3. $tick, time & sales, 4. 5M Point and figure chart on YM 5. 5M ES, NQ, and ER2 charts. what I am looking at is the relationships on all these charts. These are what I call NOW indicators. Indicators that do not lag or lag very little. They give you the info for what is happening now, then I base on my setup from here. Again this is approach that focuses on "the cause" that produce the result(price). Even with daytrading, there are many styles and many approaches. One would have to use a method that fits the market that he/she trades and fits his//her personality. there are so many systems and trading rules out there, I would suggest a beginner stick to one setup and very few rules. Once you master it, then move on to the next one. Important thing is to know exactly what to do with the system in all different market condition. so one can act accordingly. weiwei

I would like to add more to the Money part: I think the valid question for a new trader is to know how much money dose he/she needs until he turn profitable? even if one turn profitable, can that sustain his/her live style. Because prople usually progress up. Usually, a new trader will pay tuition to learn, and after that, he slowly become consistant. You see, even being consistant might not generate enough for your life style. But being able to achieve that consistancy level is a big achievement in any trader's view. can you see now, that even you win you still end up lose. Of course one can figure out a way to deal with it, every good business man dose. But be prepare for it. weiwei

1st part of 3M - Money. In this post, I would not discuss how much money you need to start trading, rather I will give you my view and opinion on it. If you ask this question with the intention to learn, and not to make money, then you do not need a lot. Since you are here alreay at TL, you can look at all different articles, learn how other trades, pick up a method that suits you, and join the chat room here or else where to see how people trade. But if you ask the question with intention to make money, then I said you need a lot, and you will have a very tough time ahead of you. Any you would not make much money with trading. Why? Because you focus your attentions and energy on the wrong area that would not produce for you. Money is the end result or product of one's efforts. You would have to put your efforts on the cause that will trun into the result or product. In this case money. Now do you see why if you are new and have the intention to make money in trading will be fruitless. All because your energy will be spend on the area not would not produce. So what wil produce. processes.. Image if you are a farmer, to get your crops, what do you have to do? you will have to do all the things necessary for it to grow, and if you miss one step, then you might not have that crops. Missing 2 steps, that crops might never make it. It is when you master all the steps, knowing what to do at each stage, you will then have the chance to turn that crops into food. (I said chance because there might be external factors that whip out the crops, like storms and others). So how much money do you need to trade, in my opinion is all relative. If you take the farmer's approach you will reach a stage that you know exactly how much you need to produce.

I have discussed about Internal and external factors regarding with trading. this one will be on the exernal factors that traders have to deal with. To make it sample, it all come down to this. One must be in good harmoney with his/her surrounding. Reason is sample, you do not want those external factors to distrub you to a point that you subconsciosly take it out on the market or lost your focus during trading. But some time, things do happen. then knowing how to deal with it is the key to maintain that peace of mind. my next post will start with the fun thing on the 3M, money, method and mind. weiwei.

lol, Torero, You are one step ahead of me. that is why I said there is more on this post. But, I have to said, understand in here means understand one's current status totally, then one can make a better choice. for example: one might not have a problem, but do have limitation on an area. Or the problem can not get rid of, but can be contained. As one dig deeper, all of suddent, there are many many options. In college, if one do not do well in math, he/she usually will not try to be an engineer or any major that requires a lot math courses. But he/she can still get an degree in other area. I believe one who has better understanding of the complete picture, and know the necessary steps to take to get there is the one who will have better chance to be successful in life, not just trading. The way I look at it is that trading is like getting a college degree. there are many courses that one have to learn and many exams one have to pass to move on to next class. Then when all is completed. You will be awarded with a degree. But unless you get all completed, you will get none. What makes hard in trading is that there is really no clear way to do it. No one is laying a course outline for you. You are pretty much on your own, and have to figure out every thing out yourself. And that is what makes hard in trading. So many options and one can easily get lost with all those choices. I will discuss more in next post.

From my personal experience, any one new to trading will need to look at trading with a complete approach. In other word conditions that will effect your of trading. Anything what would have a effect to your bottom line should be included. And after you start to list out all the conditons, it can get really complicted. But this is reality, any one who want to get into trading will need to iron out all these condition before you can be a consistant trader. Let me present a model on this. Internal factor: the famous 3M from Dr. Elder 1. Mind 2. Money 3. Method How about External factor, things that is not directly related to trading, but will have an impact on you. 1.Family issue. Spouse, children and other relatives. 2.Supporting - emotional and finacial 3.others- health, car issue or any another issue that needs your immediate attention. One live example: One moning phone ring, my wife's friend colleage got into an accident at 7:30 AM Eastern Time, and she wanted my wife to take her to work. But my wife has already left, so out of good well, I offered to help her. I thought this will be fast and easy, and I would have time to get back to my desk before 9:30. But it turned out to be a lot works. Not only I have to help her deal with police, took her to work, I also have to take her to car rental company to get a rental car. By the time I got back to my desk it is 9:40, ER2 gap up and run up for 6 points. Plus other things from daily chart, condition of this kind do not happen a lot, but when it did it is very good bet that gap will be closed. Meaning $600 in profit per contract. But since I rushed back, I was not prepared to take this one, so I had to let it get by. Worst yet, got mad at this, I start to took trade that dose not have good bases, and end up losing big that day. Then at end of month when I look back, that day was the deterministic day for the month. Had I been able to take that setup, I would have a good month. and it end up to be an none-performaning month. things like this will have big effects on your psychology. I know it had on me. I resent the fact that her call was so perfect, right at day and time the setup happened. Had it been another other day or time, I would have known how to deal with it. And how about all the good trades that I missed during the time that I have this emotion issue. Worst yet, I can't even talk about this, because I know people would think that you should help her, so what are you complain about. But the frustration is there, I will have to channel it out in some way. It took me long time to recover from this incident. And guess what, this is just one of those many "unexpected" external conditions that happened. If you are an individual who would like to get into this trading business, then you must take all these factors into consideration. Slowly you will progress with better emotion, and with persistance, eventually you will finish all your courses, and graduate from the trading university. I will talk more about trading in the Internal factors in my next post. Have a nice Journey. weiwei PS: notice that i said progress, because as for me, controling emotion never work for me, but understanding myself and progress out of it has.

Tingill, I have coded Squat bar in VSA, but I must have missed some thing. Can you make all the condition available. such as we need the following 3 condition to happen then plot or alert. 1. blah. 2.da 3. dadada. I am learning this myself. so I will try to code this when I have better understanding of the concept. once we can get all the conditions out, then we can go forward with this. Weiwei