firewalker

I should probably contribute a bit more here. It's been a while since I made my daily analysis. But last Friday was one of those days where the signals were very clear. Too bad these kind continuation setups don't appear more often. I've deliberately chosen not to use trend, support or resistance in this example. Just to show that just observing price action (and volume) you can get a very good clue of what the market's intentions are. This is from last Friday, August 08, DOW e-mini, 5-minute candles: (1) If price caught you off guard at the open (moving up 200 points in a good 30-minutes, there was at least one possibility to get aboard later on. Keeping in mind that price has already traveled the average daily range, I think it's important to keep expectations in check and not expect the market to move another 100 points just because we want it to. Then again, price can move further than what seems rational. (2) Unless you are paying attention to volume, you would've entered long at 'A', on what looks like a breakout of the converging triangle. And somebody with a wide enough stop would have gotten away with it. But not me, because I wanted to see continuation straight away. If price doesn't move, I'm out. I prefer to take a small loss than sit tight and hope. (3) 'B' was the definite entry, confirmed by volume. Notice how the attempt to move higher at 'A' gets rejected immediately. Not so at 'B', volume takes off completely and price makes another push higher about one hour later. All of this requires patience obviously. And lots of it. (4) After that price makes Higher Highs and Higher Lows, but momentum seems to take off. Given that it's a Friday and price has already made a run for almost 350 points, we realize that the first sign of trouble should make us run for the exit. (5) 'G' is still a higher low, but selling pressure comes in near 'H'. Look at where the candles close and look at the volume. We fail to make a high above 'F'. With less than one hour till the close, I'd definitely scale out here. If we break below 'G' the last swing will be broken and if you didn't take some profits at 'H', you'll want to do so at 'I' (giving back 50 points though)...

I doubt any of the big players are waiting for a candle to close... let alone a complete hour...

If I'm correct your trading consists of periods where you follow the markets intensively (you are never longer than 4 hours away from the charts), followed by periods where you don't trade? I'm wondering how it feels to get back "in the zone" after such a long time away from the charts. Even after just a couple of weeks without screen-time, I feel the need to get accustomed to the markets by following price. Even if it's just for two days. I obviously haven't forgotten what it is to trade, and what kind of setups I'm looking for, but if you take a break that lasts several months then the market (volatility is just one factor) might have changed a bit. Don't you have any trouble when you come back after a prolonged period of no-trading? If you have no plan to write down (well you must have an edge otherwise you wouldn't be making money consistently), does that mean you think you wouldn't be able to teach someone else your methods?

Excellent trade by the looks of it! Well done smbtnt!

Everyone is free to do as they wish, but no one is obliged to post here each and every day. We all take breaks, trading can be an intense and stressful performance. Next to that, it's summertime, a lot of people are taking breaks or are on holiday. I'm sure things will become more active once more people come aboard. For the record, I count 6 different people who posted this week. Indeed, Phil and yourself are pretty much above everybody else in terms of post count... but not everybody makes that much trades per day. I used to make one or two each day, but since this summer the number of highly probability trades have dropped a bit and I've been trading more cautiously, taking two or three trades per week. If one wants more company, there's always the chat room where one can post your live trades in the company of others. And how many of them are actually traders? Btw, there has only been one post in the private trading board since I left T2W in April. Afaik, everybody moved over to here. And I remember vividly that a lot of members of the live trading community over at T2W preferred to have a smaller group of contributors than a huge number of lurkers. This doesn't mean that everybody keeps posting live trades, it's logical to assume that not everybody has the same degree of success in trading as you guys perhaps do. For sure if one does not feel comfortable posting his live trades then I'm in no position to force him to do so. A lot of people have been contributing and a lot of people have been posting live trades, some are more active then others. That's the nature of trading. We can't all be scalpers Good trading to everybody. PS: There has also been decent activity in the thread 'Live FX Trades' and 'Trade Discussion and Analysis".

Btw, I thought YOU were the big money

I meant diversify... not switching... just playing them at the same time. I know a pattern trader who basically does all the popular pairs. He doesn't even look at which pair it is, if the setup is there (purely technical) he takes it. I wish I had more to choose from with the e-minis...

just be honest 'bout it, you're not following your plan

I'd consider that an advantage! If one doesn't work, pick the other. As the indices markets are greatly correlated (I made a post somewhere with the percentages), I have less choice :\

That's one of my issues too. When my lines are incorrect, or the market does some funny price action around it, I can reverse my position and build up losses quickly. It's important to realize each line is only 'potential', but in the mess of choppy days you can think there is support somewhere because of some congestion area creating a swing point, but in the end it might turn out to be nothing more than traders not knowing what to do in summertime

I agree. The things you enumerate, are also the things I read about first. Things like you can make it even when you only win 1 out of 3 trades. Theoretically you can, when faced with the markets and real money it's a different ballgame. The same goes for those other things. No argument from me there. Unfortunately when, after all the hard work and after all the time you put in, you finally come up with something that gives you a decent profit on a consistent basis, without risking too much that you feel uncomfortable about putting a trade on, you are still not disciplined enough to follow your plan to the letter, then what should the trader do? It might be mumbo-jumbo for some, and at first I figured that's true. You don't need psychology to tell you how to define a strategy. But you might need it to help you understand why you aren't following your plan, why you are overtrading when you shouldn't, why you are having trouble pulling the trigger, why you have abnormal 'days' where you lose self-control, etc, etc,...

For sure it can take a long time. I'm not questioning that. But I've talked to some people who, despite having a very decent profitable strategy, are unable to perform when it's with real money (just to give an example). Developing an identifying an edge can definitely take hundreds or thousands of hours. Not to mention throwing it all away and starting again from scratch for several times. Overcoming those psychological difficulties are often not a matter of "time", but more of something more fundamental that needs changing. That on the other hand is something that perhaps cannot be 'learned' in the literal sense.

The first one is the easiest one(*). I've seen people have a lot more trouble with the fourth, even if they have a consistently profitable strategy: "I act on my edges without reservation or hesitation." I'm not talking about myself here, but I'm not afraid to admit I have troubles in certain areas as well (but pulling the trigger isn't one of them). (*) In case someone needs their memory refreshed, here are all 7: http://www.traderslaboratory.com/forums/blogs/firewalker/170-the-seven-principles-of-consistency-douglas.html

not if your nickname is wasp :o

I know your question was directed at ztrader, but this might be an example: It's from someone I knew at another trading site. Trading Plan Template.pdf

Let's hope so. It looks like the dip lower occurred on the news about crude though. So it would've been a re-entry. Still a shame.

only when he's too drunk :rofl:

No mate, I had to leave. My stop was set at 525 so -20. I couldn't watch as the day unfolded as I had other things to attend to. I came back to watch the chart last night and to be honest... bit gutted... had target limit orders set at 633 and would've all been triggered.

DOW long at 11545!

Ha, but I'll still have more thankyou's on this site :haha:

Here's a good description (imo) of someone looking to take a reversal trade: http://traderfeed.blogspot.com/2008/08/risk-management-in-trading-where-to.html The concept of his trade is also very much Wyckoff (price action combined with volume). What I like most about his analysis, is his approach to exiting the trade if it doesn't work out. It's not fixed, it's not a stop of x points or x%, it's based on the action of the market: "...I stop the trade when my idea is not supported: when the unfolding evidence of the market is not meeting the expectations of my hypothesis."

This excellent post was made in the premium section, so I thought I'd copy it over here so everybody can read it. Thanks to cowpip.

No worries jason. Don't stay away for too long, I'm sure you'll make the progress you want to. We'll see you around

Yes that's probably one reason. But I'd say be careful when looking at the big picture and trading intraday. I was so focused on the short side in the beginning of this year, that I let a lot of long trades slip through my fingers. I remember somewhere somebody saying that there are more up days then down days in a bear... Most of the time there are opportunities for shorts & longs, even in bear market mode You're right, beware of having too much bullish bias...

Exactly! Never head about the DBYH or DBYL The problem with specific targets, is that they are static while the market is dynamic. You can do a whole lot of backtesting to determine what the maximum favourable excursion (MFE) is, after you enter a trade. You could then determine in what % of the cases price runs 70-80% of that MFE or in what % of cases it goes twice as far (for example). Depending on your strategy, you could then use these reference points as scaling out points. The backtesting might show superior results to real-time, if you try to determine those in absolute values. I think it's better to use values that are a function of the volatility. That way you have a better way of gauging the potential of a move. But most importantly, you need to exit when the market tells you to. Trendlines can help there, volume might also give clues...