torero

Simple! I love it! I told you your method had the style I wanted, simple with price action. We're going to be good friends, you and I. I'll have to reread your post a few more time and see if I can set this up myself on my charts. Hope you won't mind the questions.

Holy crap, batman! I always thought no 2 strategies or traders are ever alike but this is uncanny. Maybe Moneda and Raul's had the same grandmother (it's joke not blasting anyone so please don't take it as so). Very nice, moneda! I got 2 votes on this strategy. Getting warmer.

I started keeping a journal with my entries, exits, reasons and emotions that accompanied the trade. Reviewed them and questioned why it wasn't successful or was successful. Beliefs was the main factor, all the lies we were fed from the industries (gurus, shamans etc). I'll give you one. "Mondays are worst days to trade." It could be true it could not be true but from who's point of view? That is the question? For a swinger, he's already not in so good for him. For a scalper might be dead because of the low volume. Plus, most of us don't trade the entire Monday so it's too generalized. Perspective is everything but it had me question everything everyone says. This is what he did to wake me up. He even said to question him and his strategies and find the answers for myself. Best advice ever given. From there I only seek the truth from charts, not from people and their advice. Basically keep a healthy dose of skepticism to get to the truth and realism of the markets.

I think I'm going to set my bracket tomorrow and see how it goes. Trading mini-forex 1 lot to start. Can't get more conservative than that.

My mentor taught me price action, money management, strategy and tactics. I was clueless for years until he came around. He taught me everything he knew but there are stuff he taught but I'm still learning from him on my own. But the biggest part was the psycholical preparation, changing all the biases and beliefs I had to seeing things in a different light. This was what opened my eyes. We all trade our beliefs, and not from the perspective of the markets; this is where losing comes from, not seeing from the eyes of the market. He helped me reinforced good habits I have and guided me to get rid of the bad ones. He helped me see bad things I wasn't aware I was doing. This was very important-- self-observation if you don't have another person to help you. This is where a diary or journal is an absolute must. Having a mentor shaves years off your losing periods to move to the next stage. Anyone can pick a strategy and trade but it's the biases that keep a trader from being consistent. I consider myself very lucky to have had a mentor. Without him, I'd probably be a street bum by now.

I usually wait to let the first push go, then when it reverses I watch to see which direction it'll go. I think the first push (Feb is in this one with his scalp) is reaction leftover from pre-market or overnight or previous day action. After that, then 2nd push (either direction) indicates the short term bias until 10am. This is just my observation as my successful entries have been the 2nd push and bad ones on the first.

I say you have to find out how consistent you and your system are before taking the plunge. I paper traded for 1 full year before taking real trades then I went semi-fulltime. But consistency is a very tricky state, because you really don´t know how consistent you are until you feel it´s not about the money you´re raking in but it's the fact you know you can come back, you know your system so well when and where its success and failure lies and how confident you are in exploiting it to the limit when necessary. When it's not about the money is when you might be ready. I say give it more time just to make sure the system you have is one that can deal with different conditions and still stay ahead. Good luck, Jay.

I'll not be there on Monday, got other obligations. Next day, no problem.

Having sit through morning after morning, I've come to understand it better than the closing or in between. After a while, one can see the rhythm more or less. Although there are days where the action is wild and unpredictable, mostly due to news, once it's out of the way, the action is tradable.

As Bruce Lee (now mutilated in context by BMW) once said, "Be water, my friend," so I say "Be the wave, my friend";)

mrpaul, when using the tick charts, you have to monitor the time it takes to complete a bar. This is crucial. For example, on 100 tick, the bars should finished within 1 min or even quicker. Backtesting it I read the timeline below for clues to the pace of the action. But as I said, best way is to observe it live until you get an idea what pace is acceptable to get in.

Excellent charts, tex. I'm a newbie in forex so I have never made a big deal with different openings in London, Tokyo and New York. Wanted to get your insight on how they relate to each other in influencing prices. Do these openings counter-act each other as new opening begin?

agreed. recognizing a changing is tough even for veterans sometimes. And once recognized, you have to have the ability to do a 180 degree turn on a dime when it's time. that's difficult too. That requires a lot of mental preparation.

If you ask some of the older and successful trading veterans, most used to hand-drawn chart patterns before modern technology. They never used anything else since the advent of the personal computer, except it has quicken their analysis. My mentor used it for 15 yrs, still making money today. Patterns are the meat of my trading. Not complaining so far.

Technology has changed and continues to change the financial world in so many positive ways-- from helping the little guy with small account to access any exchange to buy and sell stocks, futures and commodities anywhere in the world at a steep discount commissions to giving us the all the tools everyone needs to trade like the pros with instant access to news, charts, indicators, charting tools. Information overload is the norm for the average trader where every piece of knowledge is paramount. However, there is one consequence that has left traders crippled without essential ingredient for success: price action. This is the modern day equivalent of tape reading. In the former times when charts were only available to the professionals and the only source of information were the prices being printed from the ticker tape machine. Those individual investors who were serious about trading had to painstakingly hand drawn their own charts. By doing manually drawing these charts, they became to understand what patterns look like, how prices move, where the support and resistance are located. Today, with the charts available at the touch of a button, reading charts became a lost art. Why? With the computer, a trader a bring up numerous charts with the latest and greatest indicators... many indicators. Traders were fixing their eyes on the indicators more than the price itself (curious enough, most indicators are derived from prices so traders are focused on the secondary indicator and not the absolute indicator: price). Many older and experienced traders have been successful not from reading indicators but through price action. Many indicators come and go and new ones will come along but price action will always be around. Learning to read price action will only strengthen trading skills in any market and any condition. What is price action? Price action is the movement of the prices in one bar showing the High, Low, Open and Close in relation to price movements in previous bar(s), whether it is in 1-minute, 60-minute, or daily charts. The main area to pay attention to is how it's High and Low is related to the previous bar(s) High and Lowâ€â€HIGHER HIGH and HIGHER LOW concept (LOWER HIGHS and LOWER LOWS for downtrends). This principle helps identify the state of the market, whether it is motionless or in a direction of a trend or possible trend (up or down). This is the basic foundation of price action. The example above shows the bars and where it’s headedâ€â€in an uptrend by making Higher High and Lower High. Take a look at example below. From the chart above, the direction of the market is clearly showing a downtrend by making Lower High and Lower Low than the previous bar. Once this basic concept is studied, understood and practiced in real time, the next step is more challenging. From reading price action from bar to bar, the step is to group number of bars and compare it with another group of bars. Below is an example. In the chart, the bars is be grouped to reduce and noise by highlighting the pivots (shaded squares). These are the areas to determine where the market is going judging by its HIGHER HIGHS and HIGHER LOWS principle. The price action comes in waves... rising and falling, rising and falling. By marking these pivots, the eyes will simplify market structure into a simple question: is the market going up, is it going down or is it going sideways? Here’s the view of the weekly chart from the same areas as the above chart. The market has been in an uptrend so the daily chart action has reinforced the uptrend with HIGHER LOWS and HIGHER HIGHS. Here are the advantages to using price action: · It is a leading indicator, not a lagging indicator (many indicators are based on price so it lags by a few bars if not more). · Any timeframe, any market, price action doesn't change (wave-like actions) except the frequency and the width (personalities of each symbol). · Helps quickly identify the market’s bias (up, down, or sideways). · Helps identify entry and exit points. Not many traders understand or use price action as their choice of weapons to trade, choosing indicators alone to make their decisions, leaving them to know the indicator but not the market. They may only see the price charts when they're about to make the entry or exit. But having a grasp of this concept gives a trader a major advantage… the trader understands the market structure better than the other traders. Use it with an indicator or two along with volume and support and resistance, with time the P/L will prove that price action is an indispensable tool. ---------- This article was first submitted and posted at MrSwing.com. More trading articles. Charts provided SwingTracker

I guess I don't have to tell you what you're missing LOL! Excellent!

my strategy is if 100 tick bars complete quickly than there seems to be pace and momentum toward a particular direction. But this is just my way of doing it and I'm comfortable with it. I'll let you know how it goes.

I'll be in the chat room late today so if someone can save the transcript of the opening for me, I'd appreciate it. Thanks.

My intention was not to promote or demote anyone, but keep the truth about brokers and how they operate. This is a controversial topic I know, but it needs to be addressed. The closest term to the way some of these brokers operate are similar to "bucket shops" mentioned in "Reminiscences of a Stock Operator". We're here to protect traders, not slandering anyone else. So I suggest keeping a close watch on the posts is all, possibly by not mentioning brokers by name.

Kyle, check out this site if you're still researching for forex brokers and about brokers: The NDD Forum - Savvy Traders Want to Know - Powered by vBulletin I got my dose of reality reading this stuff. We should open a thread on this one as well for people who are interested in trading forex.

I liked the book. It covered good section about Dow Theory and economics in general. What I liked best was the quiz and advice on changing the mindset to reach a trader's mentality and attitude. It's not the best, but it leads you to think about the profile to become a better overall trader.

Thanks for sharing, Raul. The advice is worth as much gold as the system itself. (what can I say, I'm sucker for inspirational stories). I find the only way to determine momentum since it's so important is using 2 charts: one 15min and a 100 tick chart, and synch them to see how fast the breakout take place. This is for backtesting historical data. But I'm going to watch for a while in real time to determine what is acceptable pace of momentum before making an entry. Raul, hope you can talk us through in chat room. Thanks again.

great job, raul! One question, I see you have 60min chart mapping the high and low of one bar. I thought you said to draw lines on daily chart. I'm confused.

As I mentioned previously, this indicator works best in the early opening hours, especially within 30 minutes to 1 hour of opening. Why? More volume. When you have more volume, there is more this indicator shines in detecting divergence.

Got a question for you: how does black-scholes model fit into trading options? Or is it useful anymore? Which type of options are you trading: index? stock? Thanks.