torero

Hi walterw, Can you elaborate on that a little bit more? Here's my example of what I was talking about using patterns with price action: Like I said before, patterns need to be confirmed by price action, in this case, lower higher and that turned the support area into resistance area (this is what I call confirmation of a breakout). My stop would have been the last higher low pivot (just below 796), and entry just below the confirmation area, then target is around 791. The R:R is not even 2:1 so I'd either take a small position or find a bigger pattern in higher timeframe that might be at play to find a bigger target to confirm the direction and possibly lower target. In this rectangle target, the target is near the low of the day, which is quite a safe exit.

Hi Steve, nice to have met you in the chat room. Now you are a member of the CBOT (have a seat there?) or just working for a trading company at CBOT? Just curious. Very nice blog, see you cover virtually all the majors! I'm only with GBPUSD for now, more than I can chew, I'm afraid. But baby steps for me for now.

I will have to disagree with him and YOU, soultrader! (jk). I think patterns are extremely important, especially for me to find targets. Most people think it's useless but it's my guide to understand and calculate risk and reward. Simple as that. True that the patterns become less and less reliable as the lower the timeframe you are, but so is every other indicator on the market, including price action. No TA method is immune to this fact. Lower you get, more noise you get, straight up. But there is a caveat for using patterns and trendlines, etc. and that it is must accompany price action. Yes, no indicator can be used properly without reading that dang price action, no matter how accurate the indicator is, price is king, simple as that. High or low timeframe, price action rules. So, when seeing the break of the trendline, or break of whatever pattern like triangle, price action must confirm that break, that is, if breaking down, I want to see lower high/low forming, if thrusting up, i want to see higher high/low forming. That's all I need to know to make my entry. So I got direction when a pattern or trendline breaks, the R:R calculated using patterns, and my setup ready with price action. 3 pieces of info to make my entry. I don't use candlesticks but only for higher frames (60min and up) and candlestick patterns. I use only highs and lows of each bar as my main point of reading price action.

I went for this one after the big push up, saw ascending triangle and took a chance. Worked out ok. But don't plan to do anymore (hee hee).

Thanks for the insight. I eventually took one trade (bad me!) and came out ok. But I'll keep that in mind for future reference.

This is one of the most beautiful rules I've read in a long time. Pure poetry! Great stuff, mrP.

I gotta get one of these! Oh Santa please, I gotta have this new toy! LOL

It seems I can't get quotes for GBPYEN pair. But great analysis as usual, tex!

Nearing resistance. Interesting to see what happens next, consolidate then drop? Curiouser and curiouser.

Saw this morning ascending triangle forming, but before heading out to drop off the kids to school I forgot to place a buy stop. I came back with a runaway market. :mad: . In a way, I wasn't expecting to place any more trades until January. So it's my subconscious discipline not to take the trade? No harm done, my discipline did its part and no use spilling on cried milk (get it? HA! LOL).

At support here, but a descending triangle is at play. I want to see a higher low from 60min before going long. Else I'll wait for the break down from this level and short at first rally.

I still trade with emotions but I keep them in check constantly with self-talk and stay focused on charts and price action. It was the biggest hurdle but it's working. I try not to let the emotion to blind me from my objectives. Stops do a big part of that job, once it's set, the battle is half-done. Targets are a bit trickier because it depends on the price action as it develops.

Excellent analysis, tex. I'll keep an eye for Cable until volume picks up again. Thanks for your help.

I read from another forum that there's a trader doing really well doing European style writing options for FTSE. I understand it's much safer than the American style option writing.

I think I'll turn my attention back to futures (still as bustling as ever) for now until the major S/Rs are reached. Until then, thanks tex and cowpip for your input and insight!

Tried to take a small intraday play this morning but got stopped out quickly. No follow-through. You think I should sit out until January?

Excellent post, kiwi! It cannot be any clearer than that. I think positive and negative reinforcement is a MAJOR factor in shaping trading behavior and many traders are not aware of it. Mixed signals with mixed rewards can produce a child with confused and insecure upbringing, he'll wander aimlessly not knowing what is the correct behavior to merge in with society. But a child with discipline has a clearly defined role and duties that secure his actions to do the right thing and possibly successful things in the long run. In the end, with mixed rewards the trader doesn't know if it's him or it's his trading system that's the problem. Creating a trading plan and rating it help identify and root out the cause of the problem. It's the only way to move forward.

Maybe after trading with the dealing desk due to their wide spreads for a while, I was brainwashed to trade higher timeframes than scalping from smaller timeframes. I think it's possible, but the noise is quite loud in the smaller timeframes. Plus there are alot of areas of doldrums that it takes a long time to get moving in one place or another. Just my opinion though.

kiwi, that's a very effective way of keeping tracking of your trades! I like very much. I might just use that, simple but great way to rate execution and discinpline. deefman, I usually write my notes of the trade on my chart then after the trades are done, i note elsewhere, that way I do it without taking my eyes off my charts. I usually write my plans/setups before the day started so I'm already prepared with notes. Doing this after a while, the note-taking goes very quickly without missing setups. Since you don't have a particular strategy or setup just yet, might want to number them like kiwi says, each strategy with a numbering system so you can quickly note them without losing too much focus on trading. kiwi is absolutely right about dollar counting, I have removed all P/Ls columns from my platform. Measuring this will affect your performance tremendously, especially when you increase size. I don't even look at it until the end of the day sometimes. Only when I do weekly reviews I open them up. Using points is more effective. I used to use Rs, which is similar to setting targets but realized the market doesn't know where your Rs are. I usually measure my stop loss and target and quickly calcuate the R:R (Reward:Risk) if it's high enough to take the trade. Then it's really up to the market to take me to my target. If you can calcuate R:R before every trade, your stats usually stay constant since you'll eventually know how much you'll use and how much you're expecting to gain, if it goes your way. Doing this percentage will reveal your performance fairly quickly.

My sentiments are the same about longer swing trades. Doesn't seem to look appetizing for these types of trades. I usually don't like to intraday trades for forex (don't know why), I may just sit out until major levels break, up or down.

I think feb wanted everyone to observe and paper trade it to really understand the strategy before committing real money. Personally, I haven't done much observation with it due to the fact that I don't scalp, at least for now. There are others who've been using it?

99% technical and 1% not-so-mental!!! LOL:D

I'm currently using Tradestation and for writing and backtesting strategies, it's a very good platform to do it in. Been with them almost 2 years and still test my ideas whenever I can. Yes, there is a brokerage side, but if you trade with them 10 round trips for more, the platform fee ($99) is waived. If you're already trading, might as well as get it free and test your ideas with them. Good luck.

Gonna exit here, before the news this afternoon hits. Double-bottom target hit and at 50% retracement from the low. We'll see after the news how things go.

Seeing my cue for long entry here.