Soultrader

I want to dedicate this thread to any discussions based on intuition in trading. (especially day trading) Intuition in trading, just like any other sport, game, or profession take years to develop. It's the gut feeling you get when you know you're right but can't explain it in words. The definition of intuition is open to further discussion. I would like to discuss when intuition comes into play in your trading. Perhaps its getting that feeling you are wrong before youre stop is taken out. Or sensing weakness and a possible reversal through price observation and tape. How many of you here are able to identify when intuition kicks in? Are there times when you take trades based purely on intuition? (different from impulsive) Do you sense market strength or weakness based on intuition? These are a few questions that interests me. I recently went over my trades on the YM. Approx 90-95% of my trades are based on my setups. However, I noticed that the remaining 5-10% are trades taken based on intuition. One common trade was buying/selling inside a tight consolidation because I "felt" the market was going to break. And suprisingly, the majority of these trades have been successful. I do want to clarify that the trade wasn't an impulse trade. The most common times when I identified my intuition kicking in is on losing trades. A good amount of times, I tend to exit early on losing trades before the markets stop me out. I find it very hard to explain why I decided to exit early besides "I felt I was wrong". 90% of the time, exiting early was the right choice. I would like to hear some of your thoughts or experiences with intuition and trading. Thanks

Short video on explaining some of the things I watch for to determine market strength and weakness. Anytime I see a gap, I like to check premarket volume on the SSF's. For shifts in market sentiment I look at market internals such as TICK. CLICK HERE TO VIEW VIDEO Charts created by Tradestation Presented by Traders Laboratory

Its one of those posts where you know what not to do.

Tingull, its a screen play. I thought it was a decent flick. Of course nothing can ever top Rounders

Thanks for the comments Walter, Texxas, and Torero. Some very interesting points. Im very new to this system world... which is why I am still very skeptical with trading systems. I have been taught by discretionary traders only and seeing how successful they are, I always believed discretionary traders make the best traders. Very good point on the funding part Texxas. Deep pockets is definitely a consideration especially with some of the drawdowns I keep hearing with system based traders. One of the biggest concern I have as a discretionary trader is that more and more traders are creating systems and being automated. Will the edge of a pure discretionary trader ever fade away? The market needs to be full of emotion for traders like myself to survive.... without emotions, I wouldnt know what to exploit. (of course I dont believe this will ever happen but could affect price movement?)

Very interesting. I do not come from a comp, engineering background and I have absolutely zero knowledge when it comes to coding. I find Easy Language extremely hard. How would one go about learning coding? Is this something that will take years to become skilled at? Is learning Easy Language enough? Thanks

Thank you Ant. I have yet to go on a mission to designing a pure mechanical system. The methods I have learned and apply in trading are far too complicated to program. How would one go about programming tape reading? Pretty impossible I'de say. At the same time discretionary traders need to approach the markets in a very systematic way: Trading off setups, controlling losses, target points, etc...

I recently watched "We Are Marshall" too. Great movie. I also enjoyed "Blood Diamond" as I grew up hearing alot about the diamond cartel.

Divergence simple? Can you elaborate on that. I dont use any indicators to trade off like looking for price and indicator divergence, MACD crosses, etc... I use market internals but I like to consider them more of a tool than an indicator. They just help me decide whether to short, long, or stay flat. All my trades are done at S&R levels using price and tape.

Several books I recommend. "Tape Reading and Market Tactics" and "Techniques of Tape Reading". The only problem is... tape reading cant be really taught through books. It has to be taught visually. The best way to learn is to just stare at it and observe.

Just wanted to send my regards to everyone on the forum. Thanks for supporting us this year and have a great new year's! Thank you for 2006, and will look forward to a great 2007.

Hi Matdog, I'll try to make more tape reading videos. I'm just having difficulties recording live and trading at the same time... may need to upgrade my computer. Some tape readers may be able to tell the market direction within the first 10 minutes of tape reading. I can not... what I like to do though is at the open, I will focus on a closest line of pivot price opens at and read tape. If I see enough sellers or buyers at the pivot, I can determine the short term direction. This is usually my opening setup... but its a quick trade and I dont intend to stay in it for long. It usually takes me the first 60-90 minutes of trading to really figure out what the market might do in the afternoon. Of course the moment sentiment changes, my bias will change also. Its very hard to explain in words what I see... I'll try to make a video on it.

Nice one Walter. I use two approaches in trading. I am mainly a anticipated trader because I rely heavily on key price levels that I identify. So my order goes in as soon as tape tells me to. To me I consider this an aggressive approach. On the other hand, I am a confirmation trader when I use a countertrend trading strategy. I like to play safe instead of trying to catch a falling knife. Thus, I wait for additional confirmation like higher lows or new TICK high's. This is a more conservative approach. In my trading, entry is everything to me. I scale out on all my positions: half positions at either +10 or +20 (depending on tape). Exiting is the easier part of my trading because I usually exit at pivots or known S&R levels. The only drawback behind my style is... I'm a Ichiro. I can hit singles and doubles across the board, but its rare when Im in a homerun trade.

I draw horizontal lines on my candlestick charts for visual purposes as well. You can simply obtain the MP data at: Daily Notes for Day Traders | Pivot Points for Index Futures and more

Hey Doc, I dont use any indicators for my trading. I use a MP chart, tape, and a bunch of market internal tools: TICK, TRIN, PC ratio, and premium. I'm a simple S&R trader that identifies key levels using market profile, pivot points, and pivot clusters. I then use the market internal tools to judge if price is going to hold or fold and use the tape to time my entries. Nothing fancy here... I prefer to keep it simple.

Weryfalloffdown, Do you truly think this is the right way to go about your trading career? You are basically looking for forecasts... pay me a few bucks and I'll let you know what the market is going to do tomorrow. Afterall, it can only do 3 things. Up, down, or flat. Heck, I'll be right 33% of the time. No seriously, if you are planning to trade for a living you are walking a dangerous path. You need to learn on your own instead of following someone elses forecast. And if you are not prepared to learn why not have someone else manage your money? There are plenty of ways to invest... dump it in mutual funds or hedge funds for example. I have no idea who IDT is but I know one thing for sure. I would never ever follow his forecasts. Youre being con'ed....and you're openly being an easy prey.

Yep, Im a big fan of his work. Great guy too. Was kind enough to contribute an article to the forums.

hahaha my mistake. I just needed to set my charts to bar charts instead of candlesticks. Oops

Hi Nick, I meant the TTM Trend. Im getting a mixed green bar with the blue and red bars. Is this the case for you? I attached a pic.

Thanks nick. Is it just me or do you find the coloring a little weird? Im getting a mixture of green, blue, and red. Is this normal?

What indicators are the ELD file? Is it the TTM Indicator?

The concept is simple. Balance vs imbalance. If you prefer not to incorporate a MP chart, you should be aware of the value high, value low, POC, and any naked POC's.

You can feel it for sure but to fully understand it you need a MP chart. You cant possibly visualize a MP chart for lets say the past 10 days.

Here's an interesting indicator I picked off at the TS forum. It's a slightly modifed version of the heikin ashii indicator. So What Does It Do? If the 5th bar of the last 5 bars closes above the 50% line of the previous 5 bar average, it stays the same color. If the 5th bar closes below the the 50% average it changes color. 50% range = Average True Range It really depends on how you want to use it. This can be applied on multiple timeframes. Its a great way to visually see the trend of the market. Screenshot is attached. 20050523033558TTMTREND.ELD

A TRIN that is usually caught in a range can offer powerful trading signals on a breakout. I usually like to see TRIN in a range for a minimum of 2 hours.