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Soultrader

Market Wizard
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Everything posted by Soultrader

  1. Soultrader
    Here are some of my thoughts on scalping. I am sure other traders have different criteria regarding entries and exits. Scalping is extremely advanced form of trading in which one must be able to execute in a blink of an eye and be very good at "feeling" momentum of price action, reading order flow whether it be tape or Level 2. In my scalping, entries are purely made on momentum and as the ask or bid starts to get thin. If I am going long, I want to hit the ask before it disapears and becomes the bid. This 1 tick is critical to my profit target as I am only looking to get 2-3 ticks of a trade. (Nikkei tick is huge) The entry is the easiest part in my opinion. The exit is the hardest. This is because a scalper must exit based on his entry. In other words, a 3-5 tick stop for a 2-3 tick profit target does not make any sense. Which is why if Im scalping there are no hard stops in place. If momentum drops instantly I am out at break even or even -1 tick. This is why I want to get in on the ask as it thins out so if I sense that Im wrong, I can hit the bid (formerly the ask) and get out at break even. Now for those who are still new to trading, intraday position trading is a much easier technique. Of course, there is not guaranatee of a good intraday swing as the markets may just chop or reverse, etc... Most new traders will never be able to pull the trigger to cut their losses when scalping and will bigger losses compared to their scalp wins. So how do you know when youre wrong? The best I can describe this is experience in the market you trade. Understanding how fast price tends to move in momentum, what you would consider large lots, tape, etc...
  2. Soultrader
    Hi Jerry, How did you determine the breakout would be to the upside when the 4 bars back hit the high around 13230ish. I would usually consider that a flush and would have a hard time playing that particular breakout trade. Also, what timeframe are you using in your videos? Thanks
  3. Soultrader
    No problem. As more Forex traders join the forum, I will probably be adding specific forums for Forex traders. Any request is welcome.
  4. Soultrader
    Hi Jerry, First I wanted to say thank you for the great series of threads. I recently had a chance to go over them and has been quite enlightening. If you dont mind, I would like to ask a few questions. I understand I am a little late in replying and if some of the questions have been asked before, my apologies and please feel free to ignore them. I am seeing the tremendous advantage of your methodology for a discretionary trader like myself. This is because on top of reading the pulse of the market through auction theory, pattern recognition, volume, etc... your methodology adds further structure to my trading. Hence, I would like to really understand this technique as I understand I am unable to read further about this. First, regarding the VWAP, PVP, and SD do you use the previous day value for these? For example, at the open what values do you use and when do you adjust the values for todays trading in real time? Second, you mentioned to stay away from trading around the PVP as market indecision takes place. I have been using the POC as a potential support/resistance the entire time and found this concept quite interesting. Could you care to elaborate on this? Third, when the skew is negative but price is trading above the WVAP, do you not fade a retracement back to the VWAP to SD1? Or would you wait to fade the SD1 above the VWAP and a target back to the VWAP? Fourth, do you play the range between SD2 and SD3? Is any price movement extending beyond SD3 a fading opportunity? I have been using your concept to observe the Nikkei and have found price to break out of SD3 at times and never fall back. Thanks Jerry.
  5. Soultrader
    Due to request, I have added the following new extensions: .mq4 and .tpl. Im not familiar with MT4 but if members would like to see anything specific such as a forum dedicated for MT4, etc... please feel free to request it here.
  6. Soultrader
    Article is located here: http://www.cnn.com/2007/WORLD/asiapcf/09/12/abe.resign/index.html One of the problems with the stagnation of the Japanese markets is due to constant policital uncertainty. Prime minister Abe's resignation will add further pressure on the markets. Upon his announcement the Nikkei made a monster rally. :shrug: Lifting on enormous momentum. This was the first over reaction. The second wave of reaction pounded the Nikkei to new lows where it stabilized for the rest of the day. I found this quite interesting. It will be interesting to see what sort of effect it will have on the US markets. There is a possibility that foreign money will be withdrawn from the Japanese markets, hence could add fuel to other markets including the US.
  7. Soultrader
    Did he write the CBOT MP handbook? Or was that someone else?
  8. Soultrader
    Very interesting video Jerry. Thank you very much. I will be spending some time this week pouring and reviewing your threads so I can hopefully understand your methodology better and have some good questions for you.
  9. Soultrader
    Welcome aboard David. Looking forward to your contributions
  10. Soultrader
    Stable as in less jumpier intraday? If so, absolutely to a point where many stocks will bore you to death. Most stocks are not suitable for intraday trading because of this as well. Im currently prop trading Nikkei and a handful of stocks that actually move intraday. Regarding shorting, we still have the downtick rule but hopefully they will start to remove it now that the US has. With futures, its the same as the US.
  11. Soultrader
    Have you seen Loose Change? [GVIDEO]http://video.google.com/videoplay?docid=5651675924179685534&q=loose+change&total=3004&start=0&num=10&so=0&type=search&plindex=5[/GVIDEO]
  12. Soultrader
    Hi feb, The tick value of the big bank stocks in Japan are huge. This is why when the banks move up/down by 1-2ticks, it is a good warning signal for market direction including futures. What happens is that the banks tend to drag the rest of the stocks down especially the securities and electric. Hence, most of the big stocks are included in these 3 sectors. This gives it a heads up warning for the Nikkei. Many traders will observe the premarket bid/ask to determine morning strenght vs weakness and play it accordingly as well. In Japan, the futures do not lead the stocks as much as the US index futures do. This is something I had to unlearn when trading the Japanese markets. The only leading indicator I watch is the 10 year JGB bond futures. I watch the major sectors for confirmation on particular setups and strategies. One of the things I have noticed is that there are only a few speculative stocks. A majority of stocks only move through insitutional orders and a good amount of stocks have limited float as parent companies tend to hold a good portion of their "kogaisha" companies. Which is why the Nikkei weighting is supposed to change (or has been) taking into account the available float of each stock.
  13. Soultrader
    hehe.... yea shes already back from her vacation. I should close this thread.
  14. Soultrader
    Thank you for the reply Doctor Janice. I must say this is easier said than done. I have been trying to remain as humble as possible under these situations also. It seems like no matter what I do, I do happen to enter this euphoric stage whether it be a light or extreme version. I can sense this as my focus and emotional level becomes shifted into relaxation. I am usually pretty tense but extemely focused while trading due to my nature of short term trading/tape reading. Or my body posture will slightly change after a good trade or a series of wins. Would this method of controlling your own emotional state be classified as part of emotional intelligence? Although I am usually the person who can keep the coolest head in most situations, I have come to agree that trading will forever be emotional no matter how hard I try to control it. Emotional does not necessary mean wreckage. Im a past that stage of letting my emotions affect the way I view a position, or a trade. But it is still slightly affecting the way I view market direction. Which in turn leads to a trade execution on wrong analysis. I have discussed this issue with a fellow trader of mine and one of the points he mentioned was give it some time before executing a second trade. This makes sense as it gives me time to clear my head. Thank you for the input Janice. Im going to have to brainstorm a few techniques to avoid falling into this state of mind.
  15. Soultrader
    Being able to read the order book and tape is extremely powerful. The tape shows me clues on short term market direction, supply vs demand at key levels, what type of market participants are evolved, etc.... The order book shows me interest vs no interest, confidence, support and resistance, etc... at specific price levels. On smaller tick contracts I find this harder to see but on larger tick contracts I like to watch the strenght at each level combined with the orders that come across the tape. I dont quite follow what difference it would make on the YM for the CBOT, CME merger. How would the tape show information differently from the past?
  16. Soultrader
    James, We all make mistakes. My trading has been not about finding a system that guarantees 80% winning ratio.... 400% annual returns, etc.. BUT it has been about not repeating the same mistake twice, learning how to avoid it and what to do insteadnin the same situation, improving, finding your edge, understanding your strength vs weakness in trading, etc... Basically as Jesse Livermore pointed out, Once you learn what not to do, you start making money. Make sure to thoroughly analyze your trades and why you lost. Is there a conflict with the style of trading you are applying in that current market situation? Reassess the markets... volatility? volume? In what type of market does your edge lie in? Need to adjust your stops due to volatility? Need to refrain from taking setups that you are used to due to certain market conditions? Also, dont hesitate to post your losses and ask for feedback. Alot of helpful traders here that can offer you some insights that can help you improve. The journey is going to be lonely, frustrating at times, and even painful. But I see alot of determination in you through your posts. I am sure you will be able to overcome this.... good luck!
  17. Soultrader
    It is very interesting how all of us seem to have a different way of viewing trading. As a purely discretionary trader, my trading is 100% an art off. Whether I enter purely through tape, "tests" of LOD/HOD, "test of previous day high/low, retracements, trendlines, breakouts, etc... all entry criteria boils down to my understanding of short term market direction at that moment in time. I dont follow a mechanical discretionary system. This keeps me flexible in taking a variety of trades based on market condition. Nor am I restricted to just a few setups. But the key here is to really understand the profile of the markets, momentum, relative strength vs weakness, internals, etc... This is why trading is more of an art form for me. Almost every trade is a "feel"... whether it be through understanding of the tape or through concept trading. Which is why I do not think my style of trading can become automatic like TRex pointed out in applying proven methodologies over and over again without the "feel". Of course I know exactly why I placed the trade and why I would pass on particular trade. I really think trading success is not dependant on what setup you take. (well... having a basic understanding of trading is enough) What matters the most is your own pyschological and emotional control.
  18. Soultrader
    Guys, forget torrents. Too much viruses. What sort of stuff are you all looking for? Check out http://quicksilverscreen.com/ Or check out video and music forums hosted in Iran where there is no copyright laws. Tons of free stuff in them.
  19. Soultrader
    I strongly agree. Careful attention must also be applied when learning another traders setups. This is because there are so many filters a trader can apply in deciding whether to take the setup or stand aside while the one following these setups have no clue. Intuition, market analysis, tape, volume, etc... Alot of information that gets processed inside a day traders mind can not be explained in full out words at times. I think educational programs and mentorships are great for developing traders because they can receive exposure on how a professional trader thinks, sees, and trades. Ive taken a few mentorships myself but most importantly is the traders ability to learn, absorb, adjust, and create his own style of trading and understanding of the market. Regarding scalping, I think this is a necessary skill in certain market conditions. While intraday position trading is my priority, I do try to scalp the market using a smaller position size by reading tape and the price ladder. Im definitely not an expert in scalping techniques so am very interested in hearing more about this technique from good scalpers. What determines your entry? Exit? When do you cut your losses? etc...
  20. Soultrader
    Hi Janice and fellow traders, I wanted to dedicate a thread to euphoria after a string of winning trades or perhaps a big trade. One of the things I have noticed is that whenever I get into this euphoric stage, I tend to trade extremely sloppy. I have overcome this by adjusting my position size to 1/4 of the typical size whenever I realize I am in this mode. Dr. Janice, have you encountered traders that go through a similar state of mind? If so, what sort of recommendations do you offer traders? Not trading is one of the obvious reasons but under my current situation, this is not an option. Therefore, after reaching this euphoric state of mind I resort to small sized scalp trades so I can minimize my losses. I think our big fat ego's take a hold of us until the market slaps us back to reality again. Today, it took me 3 out of 4 scalp losses to wake me back up and refrain from sloppyness after a string of 4 good trades. Any thoughts are appreciated in what traders can do to overcome these moments, yet still focus on trading in the right mind.
  21. Soultrader
    Oh yes, I watch all the major sectors. Trading the Nikkei is a whole lot of fun as there are correlations in alot of areas of stocks, sectors, and bonds. Feb, by sector screen... are you referring to something like a matrix spreadsheet or simple charts?
  22. Soultrader
    I use a 5min and 30min chart for the Nikkei, 5 min chart for the 10 year JGB (bonds), 10 min chart for stocks I trade, and just pull up a dozen or so Level 2 screens for heavy weight stocks. The JGB bonds here tend to give heads up on the futures direction so is a fairly handy way of viewing the markets.
  23. Soultrader
    I read across a couple of interesting threads on candles and VSA. One of the things that popped into my mind was filtering out trades and reading market direction one step ahead of futures. Here in Japan, the banking, securities, and electronic sectors are considered the heavy weight. Banking especially because a stock like Mitsubishi is priced at over $15k which is ridiculous. Therefore each tick is BIG. One of the techniques I recently picked up was to watch some of these BIG tick stocks. Mitsubishi's asking price changing to a bid is considered weakness and I have seen the futures fall plenty of times because of this. This information has been quite mind blowing for me. For US traders, do any traders here rely on stocks to trade index futures? Do you pay attention to heavily weighted stocks for the S&P or Dow to determine strength vs weakness?
  24. Soultrader
    Interesting... its pretty much the same technique I use on these setups. But in quiet markets is times I tend to get burnt. I recall MrPaul mentioning a WHILE back that his edge lies in liquid markets. How true this is... low volume markets tend to be unpredictable when applying VSA strategies here on the Nikkei. Im going to need to study this price behavior closer to filter out some of times when price tends to drift lower. Top of my head tells me to look at tape and the thinning of bid/ask but perhaps some type of momentum indicator or perhaps a correlation with a few heavy weight stocks / sectors might do the trick.
  25. Soultrader
    Very nice, is this available for international users? I cant believe I used to trade this stock some years back.
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