MidKnight

Totally agree with sicktrader. When I was first starting out I bought his software and his book and his daily reports. This was back in late 2003. His reports were extremely bearish and stayed that way for at least a year which is as long as I stayed subscribed. His software is nothing fancy, you can get the same tools in virtually any much cheaper software. We all know what the market started in late 2003, a massive massive rally. Stay away from him and his stuff. I'd be ultra surprised if that guy could trade his way out of a wet paper bag using the approach he recommends. With kind regards, MK

Put in a solid rally from an area I wasn't really watching a rally to occur. I can see why it might have rallied there, but that is in hindsight only. Attention Points 1.5190/240 pivotal S/R ++ 1.5093 -------------- 1.4980/520 pivotal S/R for entire corrective range (possible that yday muddied this area) 1.4850/900 last S before capitulation low 1.4783 capitulation low Longs Strictly obvious longs down in this pivotal S/R 1.4980/520 area as yesterdays trade may have muddied this zone, 1/4 off before PDH trades, another 1/4 before 1.5140 trades, 1/4 before 1.5160 trades and finally targeting 1.5200/20 area on the last 1/4. Shorts A rally up to pivotal S/R 1.5190/240 area would be great location for selling to at least test PDL. Can be fairly aggressive with this entry. Aim to take 1/4 off at 1.5120 area, another 1/4 in the 1.5020 area, 1/4 off at the 1.4940 area (PDL), holding the final 1/4 for a move down to the last S before capitulation low. Maybe we only get a small rally that doesn't go right up to the pivotal S/R of 1.5190/240 area and instead gets R in the 1.5130/50 area. This minor R level was made during the drop and is essentially the midpoint of the move. Not uncommon to test those points, however the entry must be very obvious. 1/4 off before 1.5020 trades, 1/4 off before 1.4960 trades, 1/4 off in the last S before capitulation low trailing the final 1/4 for a possible move to new lows.

Hiho Cory, Whatever you do - major method changes, sim vs real, market changes, work schedule changes - stick with it for at least 30 trades or 2 weeks, whichever is greatest in time. You are jumping around so fast you may miss the value of some of the things because you've already moved on. With kind regards, MK

Friday reversed the massive up day 3 days ago with its own massive down day. Looks a lot like a mirror and interesting to note that this has been common during March whenever there has been a large up move. This recent one is just of a larger degree than the other two were. With price back down at the pivotal S/R I am watching keenly as I start to feel that should the pivotal S/R break we may be in for a run to the lows. Keep my biases in check though and trade what the APs as appropriate, anything can happen. Asia has opened with some decent volatility and I anticipate that to continue through today for some decent swinging behaviour. Attention Points 1.5190/240 pivotal S/R ++ 1.5016 -------------- 1.4980/520 pivotal S/R for entire corrective range 1.4850/900 last S before capitulation low 1.4783 capitulation low Longs Obvious longs down in this pivotal S/R 1.4980/520 area, prefer to enter these with minor new lows from the Friday's drop. Longs here must be taking profits on the first 1/2 quite aggressively. 1/4 off before 1.5010 trades, another 1/4 before 1.5025 trades, 1/4 before 1.5060 trades and finally targeting 1.5120 area on the last 1/4. Should the market hold the pivotal S/R area and break higher I will look to buy a retest of the upper edge of the pivotal S/R around the 1.5020 area. Longs taken here will aim to take 1/4 off near today's HOD, 1/4 off in the 1.5060/80 area, 1/4 off before 1.5140 trades, targeting the last 1/4 in the 1.5180 area. Shorts Should the market rally up to pivotal S/R 1.5190/240 area I would be surprised. But rather than just sit here with my jaw on the floor in shock I will have a plan if this occurs. Can be fairly aggressive with this entry. Aim to take 1/4 off at the obvious current day S area from what would be a large rally, another 1/4 in the 1.5080 area, 1/4 in the pivotal S/R area of 1.4980/520, holding the final 1/4 for a move down to the last S before capitulation low. Maybe a rally doesn't go right up to the pivotal S/R of 1.5190/240 area and instead gets R in the 1.5130/50 area. This minor R level was made during the drop and is essentially the midpoint of the move. Not uncommon to test those points, however the entry must be obvious. 1/4 off before 1.5040 trades, 1/4 off before 1.4980 trades, 1/4 off in the last S before capitulation low trailing the final 1/4 for a possible move to new lows. Maybe the market just stays within this tight range all of Asia and is unable to punch much higher than 1.5035 area. Can enter with obvious shorts taking 1/4 off before 1.4990 trads, 1/4 off before 1.4940 trades, 1/4 off before 1.4880 trades, trailing the final 1/4 for a move to new lows. Or maybe the market just tanks in Asia and later comes back to test the pivotal S/R 1.4980/520 from below. I'll sell the flip taking 1/4 off near the LOD, 1/4 off before 1.4880 trades and trail the final 1/2 for a move to new lows taking 1/4 once it probes through it.

Thanks for the reply. Not entirely answered because it sounds like you are decreasing position size on each add, but in your post the position size in the example was a constant 1 lot per entry. Maybe that was just for simplicity sake. I understand what you are saying in general though about the pyramid vs the inverted pyramid. Would it be fair to say that each of your adds are based on breaks of some sort of market structure? I think they are, but I'm just checking With kind regards, MK

Arrgh matey - the panama canal is indeed a wondrous accomplishment. With kind regards, MK

And who says Fridays trading is often lackluster in direction. Huge drop on GU today and despite my long bias, I was glad to have a script to work the short side. Thales, I have a query about your Thursday trades on EU and GU where you added quickly to your winners. I'm having a we bit of a tedious time matching your actions with the spot market as the prices are a little bit different, but my question is about how you manage the risk once you are adding. Here is the excerpt from your post just in case a reminder is needed: Using your above EU management as an example, you got long about 5 ticks from that low with a 6 tick stop. Then you added at about say 15-17 ticks higher which left me wondering how was he managing the risk there. Still willing to lose no more than 3 ticks below the avg entry (3 ticks * 2 positions = 6 tick initial risk)? And then added again so same question Attached is a 1m chart of how you maybe did the entries. 2 days ago for me can feel like a lifetime ago so hopefully your recall is better than mine! With kind regards, MK

Sloppy down day testing the immediate S that so far has held. That significant R remains at the current high of the move up of which I am still awaiting resolution. I sorta expect at least one more probe into it before a decent drop occurs. Attention Points 1.5350/450 significant 240m pivot low ++ 1.5250 ---------------- 1.5210/45 immediate trend S 1.5160/200 pullback highs S 1.5020/60 recurring congestive S/R Longs The immediate trend S continues to be resolved and I should look for aggressive positions down here, preferably below 1.5240. I should take 1/4 off before 1.5320 trades, another 1/4 before 1.5360 trades, another 1/4 before 1.5400 trades and trail the rest for up to 1.5450 area maybe. A slightly more risky alternative is that the immediate trend S breaks and instead get a test into the old pullback highs S. I'll take trades within that area but I must scale a 1/4 earlier than I would like. So far it is looking like 1/4 off before 1.5240 trades, 1/4 off before 1.5320 trades, 1/4 off before 1.5360 trades and trail the rest for a move into 1.5400/450 area. Shorts I'm still happy to short on an obvious trigger above 1.5350 and preferably above the recent high of 1.5382, continuing to work shorts from this significant R zone. Scale outs TBD if the reaction comes below the recent high or above it. Another option is that we may drop below immediate trend S by a significant amount. If that should happen I'll be looking for a flip, selling in the 1.5210/45 area with targets of 1/4 near the current LOD, 1/4 at 1.5140 (assuming that is below the LOD at entry), 1/4 at 1.5060 and trail the rest for a push into the 1.4950 area.

Hiya UB, I have always liked your posts and thoughts in them but it just occurred to me. If you really want to turn peoples heads on this stuff and challenge their beliefs, why not actually present them as a quantitative case showing that it is actually an edge? You don't have to do it with your stuff, or anything you value. I am just getting at the actual exploration of an idea from a quantitative standpoint would be far far far more beneficial and thought provoking than posting your charts and describing what is plotted on it. You see what I'm saying? Your chart posts are really not much different than looking at any 'old school' indicator that fits the current data shown. No offense intended, MK

1000 times, Amen. Has been a recurring problem for me since day 1. With me, the degree varies from virtually no worries (usually when I start a new exploration) to life threatening fear. Anyone who knows my history will probably understand why the high level of fear at times I gotta say though, it does subdue over time! Great conversation today. Thanks folks. With kind regards, MK

Traderunner, I totally understand. For me, I was the only one at risk. No family at risk. Cory, what an envious position to be in! It sounds like you have time on your side. I believe a lack of time is a major reason why the mortality rate of traders is so bad. Keep it up. I think, success is inevitable with your continued hard work and low expenses - it'll just take an unknown amount of time... With kind regards, MK

Thanks for the comment there. My zones can be fairly wide making it hard to pick a tick. All that you wrote above is very sound thinking and I totally agree. 2Bs are a very common entry that I utilize. My precision so far is nowhere near as good as this was, but I continue to work on it! GL on your outside projects. I hope they are satisfying but end soon With kind regards, MK

That is what I would love to be able to do - seriously. Risks that small within contextual views would be awwweeeeesome~! Nice going, Thales. With kind regards, MK

Not ideal mate, but from frankfurt 8am to about noon EST is where the majority of the movement happens on a consistent basis. I know that is not ideal for you, it is not for me either...Find a balance that doesn't kill ya. I start at the Tokyo open but usually it is a case of only loosely monitoring things. You know, check the market, not near my APs or as per my planned script so go away and do some house/yard work. Check in again in an hour or so. From Frankfurt open I am here and attentive till about 8am EST. I'd like to be here until noon EST but that schedule kills me.... With kind regards, MK

Very tight congestion all of Asia showing urgency for the long side. Unfortunately, I can never notice this in real-time, but regardless, it sets the stage for the current climate. I tend to think of urgent situations occurring when there are many trapped traders trying to get out, not so much for new positions being initiated. The major trend has turned to up and is now in sync with the immediate trend. Coming back up into what I'd consider to be the first major R in the 1.5350/450 zone. Attention Points 1.5350/450 significant 240m pivot low ++ 1.5319 ---------------- 1.5210/45 immediate trend S 1.5160/200 pullback highs S Longs I would consider aggressive longs on a trigger after it probes below 1.5280. This was the top of yesterdays R zone and has already had a 'flip' reaction from late in the USA session. Any longs taken from here should be more aggressive exiting seeing as we are still within what I would call significant R. Aiming to be out of 1/2 before 1.5360 trades, another 1/4 before 1.5400 trades and trail the rest for up to 1.5450 area maybe. Another possibility is dropping down through 1.5280 to test the immediate trend S. Longs here will aim to exit 1/2 before 1.5360 trades, another 1/4 before 1.5400 trades and trail the rest for up to 1.5450 area maybe. Shorts I'm happy to short on an obvious trigger above PDH, continuing to work shorts from this significant R zone. Depending on how far beyond PDH the market goes will determine my scale-outs but it may be something like this should it go around the 1.5420 area. 1/4 before 1.5360 trades, 1/4 before 1.5300 trades and trail the rest for deeper pullback into the old pullback high S at 1.5160/200.

I dunno if you should pull it or not (I'm not gonna take the heat if I'm wrong ). I only know that I wouldn't worry about it unless I was trading JPY related pairs. Just me though.... With kind regards, MK

Nice one! I really really struggle with the stop and reverse style although logically it makes perfect sense, I so far am unable to switch gears that fast. Great result though. If I could be wrong like this, being wrong wouldn't be so bad at all With kind regards, MK

Incredibly strong rejection from the pivotal minor S/R to put in a very large rally pretty much all of Europe and the USA session and take out the previous pullback highs. The limits of the up move have occurred within the refined zone within upper R just prior to exhaust low. The major trend is still down, but just barely. The immediate trend continues to be up. Be very alert for possible support coming in at the 2 previous pullback highs. Attention Points 1.5350/450 significant 240m pivot low 1.5240/80 refined zone within upper R just prior to exhaust low ++ 1.5238 ---------------- 1.5160/200 pullback highs S 1.4980/5020 pivotal minor S Aggressive longs in the pullback highs S area but will scale out the first 1/2 rather quickly, 1/4 before taking out PDH, 1/4 before 1.5300, then trail the other half targeting the significant 240m pivot low. The refined zone within upper R just prior to exhaust low is still being resolved so I need to be mindful for shorts up here and not be too long biased like I was on Monday. However, if the market drops to test the pullback highs S and then rallies back into this refined zone within upper R just prior to exhaust low and shows signs of failing then I would be very keen to short. Target 1/4 out before 1.5200, 1/4 before 1.5140, 1/4 before 1.5080 and trail the last 1/4 for a move into the 1.4950 area. Alternatively, the market may just drop hard below the pullback high S. Should that happen then I will be looking to sell a flip as it tests that area from below. 1/4 off before 1.5080, 1/4 before 1.5020, 1/4 off before 1.4950 and trail the rest for a possible test of the bottom S area below 1.4900.

You're welcome Cory. I was hoping to inspire you somewhat because you can see that it took me 4 years to get to some level of positive consistency. My first year was a disaster. You seem to be doing a helluva lot better than I was in my first year and then there is the great resource here at TL that you can leverage to inspire your own creations. I was hoping to show you that you're doing great and it could be a lot worse I even left out the health issues that my journey caused in the 2nd year due to stress. Traderunner, who said I didn't need an income . I cut all non-essential expenses and got creative with finance (savings and extra debt). People say this is a big no no. Maybe it is and maybe it isn't as that is probably dependent on the individual. I hated my job, not the programming part, but more the working as a programmer part. There just wasn't enough energy left in me to work a full-time job programming and then pursue trading. I had to fully commit or it felt like I would never accomplish at trading. Of course, I didn't think it would take me 4 years to turn a profit - in all honesty I assumed 6 months to develop an auto trade system. Boy, was I wrong! With kind regards, MK

Heavy down day that seemed to come out of nowhere as Europe was starting to awaken. I planned yesterday very poorly. Giving up on the R at HOD being useful was a mistake. A better idea would have been to have a plan if that R was to hold. My long bias was too dominant, so much so that I neglected the R still in the process of being resolved. Shame on me. Moving on then, price is back to the pivotal minor S/R and would prefer this to hold for a solid case to the long side. Keep that long bias in check today and have short scenarios should this S break. Attention Points 1.5240/80 refined zone within upper R just prior to exhaust low 1.5140/200 rally high R zone ++ 1.5048 ---------------- 1.4980/5020 pivotal minor S 1.4940/60 minor S 1.4850/900 last S before capitulation low 1.4783 capitulation low At this pivotal minor S is a good spot to look for longs, although this S/R has been used more a flip spot than a rejection spot so keep that in mind. I will take 1/4 off before 1.5060 trades, another 1/4 before 1.5090 trades, another 1/4 before 1.5140 trades and trail the rest for a move into 1.5240/80. It's easy to look at the chart and see lower prices because of yesterdays heavy selling. That puts the obvious play for me to sell the flip of the pivotal minor S/R. If able to sell the upper edge (1.5020 area) then target 1/4 at the lower edge (1.4980 area), another 1/4 before 1.4940 trades, another 1/4 before the last low of 1.4873 and trail the rest for a possible move to new lows. Alternatively, we may rally up and test the 2 recent pivot highs in the rally high R zone. Shorts there will target 1/2 before 1.5080 trades, another 1/4 before 1.5020 trades, another 1/4 before 1.4960 trades, trail the rest for a test of last S before capitulation low.

Howdee do Cory, Skip to the last line if you want the short version At the risk of exposing myself, maybe this will give you inspiration. I'm currently in my 6th year of full-time trading. The first year was the ultimate frustration and at the same time maybe the best thing that ever happened to me because it humbled me in a HUGE way. I was trying to scalp using price action on very small tick charts and trading with the price action trends. I don't think I ever had a single winning day and I estimate I was losing on at least 90% of my trades (I didn't keep records back then). I was definitely over trading and taking the mantras of price action too literal as there was no context wrapped around my trades. I was doing this on many products ranging from the bund, to the ER2, to the euro futures. I can vividly recall having little breakdowns where I would literally collapse in the hallway depleted from energy and just sob. It was a terrible terrible time, but I needed it. Most of this year was spent in simulator with only a handful of real trades. The real trades had my account up just a tad, but I felt that I really did not know what I was doing so mostly stayed in the sim. The next year got a little better, with focusing more on contextual factors. Due to my timezone, trading Europe and USA hours was hurting me in the prior year as I was massively sleep deprived. I think that accentuated my mood swings and the volatility in my mini breakdowns. So I started to explore futures in my timezone. Most of the year was on the Nikkei 225 futures trading out of Singapore with a little bit of ES in the winter. Things were getting better in my second year, I was starting to get winning days but still losing overall, my trade freq was lower and I was off those small tick charts trying to trade pullbacks. I was still in the simulator virtually all year and by the end of it I was glad I did this because it was another down year on my simulated account. Now we get to my third year, 2007. More of the same as year 2. For the most part I focused on contextual things. Explored much larger time frames and notice that I'm doing better but overall another year of poor results below my simulated balance. Year 4, we are now in 2008. This year tends to focus heavily on market breadths and just trading the Osaka Nikkei 225 futures. Heightened volatility make this year feel easy as I am starting to feel the market. Is it the new tools? Is it the heightened volatility? Is it just my experience? No idea. But this turns out to be my first profitable year and I can remember the massive relief felt as I feel that maybe I'm finally over the hump. Most of the year was in sim, but late in SEP I go live and make some decent gains only to start giving them back in late NOV. Late in the year volatility starts to decline and so does my performance. Hmmmmm, maybe it was the volatility. I feel a little bit panicked and frustrated. Year 5 here we come, keen to build on last years profitability, I move to the Hang Seng futures because it is well known for its high volatility. Things are good for the most part. I'm using the same tools I was in 2008 and basically fading high emotion for scalps. Good things don't last forever and volatility gets erratic in the last 1/2 of the year and I finally see that I can't keep trading like this if the volatility is not consistently high. Next thing you know, I'm over in the real-time thread - LOL. Some frustration there (as is logged in the thread) but overall a good result. I knuckle down with study over the Xmas holidays and find what seems to be a reliable way to marry my contextual views with very small JR 123s to give a low risk, high reward entry. That research takes me to where I am today. It's worth noting the following as it applies to each of the years: I should mention that without exception, I have worked very hard every day of my trading life. 8-14 hour days are the norm and there is always another 8-10 hours during the weekend for review. I have had forays into auto trading and research and so far to date have not found anything that has been consistently profitable. I'm not saying it can't be done (I know several people that do trade profitably like this), but I'm just saying that I have tried very hard a few times and so far have come up empty. I'm sure to try again at some point in my trading career. I stayed in sim very solidly for nearly 4 years because I knew that my trading was not ready for a live account. I didn't have back up funds to re-fund another account so I had to make sure my real account did not get blown. My friends and family all were encouraging me to get a job and stop struggling and living in such poverty. Needless to say my list of friends has declined.... I sacrificed 4-5 years of comfortable living (I was a professional programmer earning a decent whack) for 4-5 years of working harder than ever in my life for no immediate and measurable reward. The whole journey is entirely built on faith in myself. There were several times when my belief in myself wavered. I am quite a stubborn but highly motivated person so these moments where I was feeling like a failure and the end of the world had just happened only lasted a day or two at most. Bottom line. It takes time, it takes patience, it takes faith, it takes absolute dedication and commitment. Good luck Cory, but luck really has very little to do with it if you are committed but also patient to your own development curve. With kind regards, MK

Large up day on Friday taking out the pullback high in the USA session. I'm continuing to work with the capitulation theory from 2 weeks ago but there is not a lot to get long off from up here unless we trade to the upper R marked on the 60m chart and then back down to the previous pullback high in the 1.5140/200 area, that would be a possible long. Somehow I can't see that happening though. I feel that if this break higher is legit, it will rally hard not giving a favourable position to get long. Should really already be long rather than trying to initiate new longs at the current picture. Attention Points 1.5240/80 refined zone within upper R just prior to exhaust low 1.5140/200 rally high R zone ++ 1.5178 ---------------- 1.4980/5020 pivotal minor S 1.4850/900 last S before capitulation low 1.4783 capitulation low Just obvious scalps unless we rally into the refined upper R and then pullback to test 1.5140/200 with an obvious entry trigger. Longs taken there will be out of 1/2 before 1.5260, another 1/4 shortly after a new HOD and trailing the rest for a target around 1.5300 area. Ideally opportunity knocks at the refined upper R with a first target for 1/2 before the previous pullback high in the 1.5200 area, another 1/4 before 1.5120 trades and trail the rest for the pivotal minor S/R 1.4980/5020 area. I'm not so interested in selling within this current R zone just because we have rejected off it last week, rallied up into it again on Friday and so far have held so I feel it is going to break. If it does not break higher and instead starts to plummet solidly through 1.5140 then I will look to sell a pullback testing that 1.5140 area. First target would be the 1.5060 area for 1/2, 1/4 more at the pivotal minor S/R area and trail the final 1/4 for the 1.4940 area.

Howdee Cory, IMHO, you would be better served not having the opinions of others while you are in trades. After the trades are done, a postmortem can be useful if it is a recurring problem that keeps appearing. I just think you'll learn quicker if you are relying on yourself when you are in a trade. Get used to the feelings, the self-talk - overtime you will start to notice the consistency of your feelings and self-talk in certain situations and it can become a highly useful indicator! The influence of others when you in a trade detracts from all that. Said with good intentions, MK

Cheers for the 'mega post' above Thales. It is clear to me now. No, I don't think there is anything really arbitrary in what you are doing there, a small buffer beyond your S/R limits is always good I think, markets are imperfect. My thanks again for the detailed reply. With kind regards, MK