Tradewinds

I wanted to manage my own retirement account. I signed up for the Motley Fool newsletters and got onto their website. I learned that there were retail brokers and trading platforms that I never even knew existed. I transferred my retirement account from one broker to another, looking for a better trading platform. I started reading about candlestick patterns, and all the other stuff that is easily found on the internet. I searched the internet for what seems like hundreds of hours, trying to find out information about trading. All of seemed like garbage. I probably spent at least a year of full time work just finding out very basic information about trading. I spent months learning how to operate a trading platform, and going through indicator after indicator. Nothing seemed to really give me what I wanted. It all seemed like a very confused and convoluted mess that had no real basis in telling me why the market does what it does. I had spent a lot of time trying to figure out how I could gain an advantage trading stocks. I looked into news services, and tried reading earnings reports. I even broke down all the parts of an earnings report into it's accounting categories, and wrote a program that would calculate what the relative impact of all the different variables would be. But monitoring many different stocks, reading earnings reports, monitoring news and trying to make sense of why the market was doing what it was doing seemed like a game that just could not be won. (At least for short term trading, which is what I wanted to do) I figured out that trading penny stocks was a highly leveraged way to make a lot of money very fast. I bought a penny stock, made some money very quickly, and what seemed like very easily, and thought it was going to be easy. I decided that I could trade for a living, having absolutely no idea what it really took to make money trading. I didn't know the failure rate, or anything about the market. I wouldn't learn that until well after I was deep into wanting to trade for a living. After going down quite a few paths, I decided that I couldn't really trust anyone else to give me a trading edge and that I'd have to figure it out myself. I had a little bit of programing experience, so thought I'd customize some studies. I joined a programing group, and was disappointed with the group and the lack of good answers. I found an answer myself, and posted it. As I learned things I posted what I had learned. I started answering questions if I knew the answer. As it turned out, I became one of the biggest contributors to that programing group. Through that group I met a couple of people. They gave me some very basic information about trading, and told me about the futures market. I felt like there had to be something that other people knew that I just didn't know. I thought, "Somebody is making money, so there must be a way to know what the market was going to do." I tried looking at correlations between what volume was doing, and what price was doing. I programed studies and looked for trends and patterns. Nothing seemed to give me an "edge". There were patterns that worked, but they only seemed to work 50% of the time. Nothing seemed to give me more than a flip of the coin would give me. Every once in a while, I'd watch a free webinar or seminar, trying to pick up something, anything that would give me some valuable information. Then I somehow found out about market internals. I noticed that the SP emini seemed to follow the NYSE Advancers minus the NYSE Decliners very closely. So I started analyzing that data every way I could. Right now I use the NYSE TICK, NYSE Advancers, and the NYSE Decliners as the basis for my trading strategy. I've spent a lot of time documenting all my observations. I have word documents and even a database of all my observations. Today I spent time saving screen shots of different trading "set-ups" that I need to print out, and put into my trading notebook. Then I'll go through them, study them and memorize all the trade set-ups.

I think it's difficult to find someone to work with. Trading is very individualistic. A trader who is already established, probably wouldn't gain much from mentoring someone. Two traders who are learning trading will almost certainly have different trading styles, abilities and commitments. I'd like to find people to cooperate with myself, but I already have a trading style, and fairly well defined and documented trading strategy. I don't feel like I have a lot to gain from someone who doesn't have much experience, or something special to offer. There have been two people who I emailed back and forth with for quite a while, sharing ideas, but at the point where I felt that I was contributing a lot more than the other person, I started refraining from telling them what i had discovered. I guess that I've decided that I'd rather have someone either invest with me, or somehow learn to trade my system. But that puts the other person in a kind of subordinate role. But anyone who is pursuing trading probably wants to be very much be in charge of their own trading. So what are we left with? A bunch of people posting their views on Traders Laboratory. :rofl:

Looks impressive, and very accurate. I'm interested in the fact that the charts show pre-market hours. So I'm assuming that the data being used is not dependent upon regular market hours.

The clock is ticking. The debt can't get paid off unless tax revenues increase and spending goes down. Tax revenues can't increase unless the economy gets better. How's the economy going to get better? The economy will get better from more business and more jobs. Were are the jobs going to come from? From businesses selling goods and services to people who have jobs. But the people don't have jobs, or don't have any extra money. The business depend on the consumers and the consumers depend on the businesses for jobs. It looks like a "no win" situation. What's the solution? The U.S. should import old and sick people from all over the world with enough money to pay for health care. That's the solution. The U.S. needs an economy based on old and sick people. That will ensure our economic future. Base the economy on health care. But to base the economy on health care, the U.S. needs old and sick people. Health care won't do very well when people are healthy. I'm a genius! I've figured out how to fix the economy. We need more old and sick people to help stimulate growth in the health care sector. The U.S. war effort doesn't seem to be helping the economy. If wars did help the economy, then let's have world war III. That should solve all our economic problems. The U.S. could try to do more manufacturing at home. Well, I guess that only works if foreign companies do manufacturing in the U.S. If a U.S. based company tries to manufacture at home, they can't figure out how to make it work. So obviously, the solution is to have all foreign owned companies doing manufacturing here in the U.S. It's just common sense. Maybe the U.S. could be the "financial capital" of the world. I don't know how many jobs that will create though. Plus China is acting as the world's banker. I'm not sure if the financial sector of the U.S. is going to be able to do much. The U.S. could be at the creative and intellectual forefront of technology and innovation. But as the saying goes, "Pioneers get slaughter, and settlers thrive." I'm not sure how new creative ventures are going to help unless the knowledge and manufacturing stays in the U.S. Actually, I read an excellent comment somewhere that suggested that the U.S. should trade one gallon of water for one gallon of oil. Now there's an idea!

I did watch all 8 parts of the video. I'm not fully in agreement that traders can't compete in a market full of automated trading and computer algorithms. Fear and greed will be a part of human nature unless science figures out how to genetically program that out. Support and resistance still happens. Volume still effects price. News still moves the markets. Speculation continues to go on. Volatility, consolidation, cycles and momentum seem to be happening on a constant basis.

Wow! I didn't know that. Where is that quote from? I'd like to show it to some people.

There is a good side to this. The very best thing that any trader could ever have, is to know what the price is going to do in the future. You always get in too early. That implies that you correctly anticipated what the price was going to do before hand. That's not a bad thing. If you are correctly anticipating what price is going to do, then you actually have a huge advantage, because you have time to react. You are just reacting to early. In practice trading, intentionally wait until after the turn in price. Develop a habit of waiting. Actually wait until you think it's too late. Notice how it feels to be patient and wait. You have a hard time dealing with the anticipation. You want the uncomfortable feeling to be over with so you react on your feelings. Being patient and waiting causes tension, and you want the tension gone, so you enter the order. Or you may have fear that you are going to miss the entry. But if you are getting in way to early, then it doesn't make any sense to be afraid of missing out on the entry. My opinion is, that this issue is primarily an issue of letting emotions control you. Do you want something controlling you that is doing bad things to you? That's the way I think of it. I think of it in terms of a computer program running in my emotions that is simply making me do what I shouldn't be doing. If that is true, then you have no "free will"; you are just a robot doing whatever the program tells you to do, even if it makes you trade badly. Do you want to be a mindless robot, allowing your mind to make you do what you shouldn't be doing? Most people are mindless robots, and they have absolutely no idea what they are doing or why they are doing it. We must reprogram ourselves. That's why I'm telling you to practice waiting until the point where you think it's too late. Then make a mental note about whether you actually were to late or not, then adjust. I made myself wait until I thought it was actually past the optimum point to exit a trade, and it made a huge difference. I was constantly exiting the trade too early.

Every wannabe trader should watch this to see the side of trading where people fail, or get "washed up" after years of successful trading. The movie shows the human drama that is involved in trading, the mentality, the personalities, the risk, and the harshness. It's a tough game. Even though the movie is based on the transition from the pit to computerized trading, I see all the same basic issues that go along with trading. There are different personality types, there are people who succeed for a while then blow up their account, there people who get marginally better but then never really become extremely proficient, there are people who get in way over their head right from the start, there are people who can't adapt to the changes, those are all the same stories that have been told a million times.

I only monitor one market, the SP emini. For me personally, I just can't monitor multiple chart tickers. That's why I decided to trade the ES, and not stocks. I monitor 6 lower indicators, and price support and resistance on one screen. I have two computers, each with two screens. So I have 4 screens. One screen is nothing but a price chart and the trading ladder. I think it's good to have one chart with nothing but price on it, and keep the overall picture for the time frame you are trading in context. So 98% of what I monitor is on one screen in front of me. I has taken a long time, years, to refine what I want to monitor and what I feel is valuable to monitor. All my indicators are custom programed by myself. My other two screens have the NYSE UpVolume-Down Volume and the NYSE Advancers - Decliners. I glance at those to see if newer highs and lows have been made, or it there was an unusually big move. Sometimes volume will have a big move right before the price moves. For example, there could be a lot of down volume and price doesn't move that much, but price will catch up to the volume. It happens very quickly, so there is not a lot of warning or time to react, but every little piece of information can help.

Try to figure out why price goes up for a good reason, and why price goes up when there is no good reason. If price goes up, and there isn't any good reason for it to go up, then short. A trend line won't tell you the reason price is going up or going down. There are hundreds of indicators. Do they tell you the reason why price is doing what it is doing? My point is this, simply be aware of the limitations of indicators. You need to think about market behavior and have a strategy to react to market behavior. Either draw your own support and resistance lines, or find a program that will do it for you. Know when major news releases are coming out, and watch how the market reacts to the news release. I have a question for you: What if you and all your friends loose money? What happens then?

Ninjatrader will give you all that info. You can download Ninjatrader for free, and get a free historical data feed. In otherwords, it's not live sim trading, but at the end of the day, (EOD) you can download that days data and replay it. Get a live data feed trial and sim trade, and you'll have all the trading statistics. The trial will only last a month, but it will give you an idea of how you are doing, and how that broker's data feed is.

I'm guessing that Tradestation and Ninjatrader are two of the most popular trading platforms. But I have no real information to back that up. Ninjatrader can connect to many datafeeds and brokers, and they have a way to compile and distribute custom indicators. But you could translate your code into multiple languages. If you want to keep the code a secret, then you need to make sure it can't be decompiled.

Are you asking what trading platform might be good for developing your custom indicator? Do you plan on distributing or selling your custom indicator? Do you want the indicator to be protected, so that no one can see the source code? Some platforms are more widely used than others. Some platforms have better capabilities for distributing indicators. Traders Laboratory has a forum for posting indicators, if you want to share.

You might be better off getting a mentor. I have never had a mentor, so I don't know how to go about finding someone willing to do that, but I know there have been discussions about that here at TL. There are people here on the site who have shared their experiences and what they have learned on the way to becoming profitable. But maybe you are looking for more personal guidance than a book, or reading a blog or thread?

If a person has the skills needed to keep something alive and doing well, that may translate into other areas of their life. It's about paying attention, noticing what needs to be done, and attending to things in a timely fashion. It might not be a bad thing to look at an investment account like a plant or a garden that needs to be tended to in order for it to grow. There is a point of view that goes along with keeping something alive and thriving. You wouldn't want your plants or your garden to die, (or worse, your pet) so what's it going to take to make sure they are doing well and healthy? There is the aspect of being "in tune" and paying attention to possible subtle changes before it's too late.

I rely on the NYSE TICK, NYSE Advancers/Decliners and NYSE Up Volume/Down Volume as the foundation to my strategy. Those 3 are 99% of my decision making. Without the information from those inputs, I probably would just give up on trading. I apologize for not giving an explanation for how I use those inputs, but I'm paranoid about sharing the details of my "hard earned" knowledge. I'm just seeing how "close to the edge" I can get without actually divulging my "secrets". :rofl:

Here is a blog post that I find very interesting: For Daytraders Only: the TICKQ - Traders Laboratory Forums

Do you use any kind of support and resistance analysis? Also, do you notice places where the price is "consolidating"? I base my decisions on what I would call momentum. I'm looking for momentum to slow down at peaks and bottoms. But then there needs to be confirmation of the reversal. If that doesn't happen, I assume another cycle of the same direction is going to happen. But it gets more complicated than that. There are trends within trends, and so sometimes you get "faked out". Why does a trend seem like it's going to end, and then keep going? I believe that the market has a tendency to exhaust the current cycle before it turns. But here is the problem, is the market exhausting a short, medium, or long term cycle? That's what catches people "off guard". What I find interesting, is that the theme of "Trends within Trends" seems to be common among different trading strategies. I see these trends within trends as overlapping market cycles. I don't know of any indicator that can Identify "Trends within Trends". That's why people watch different time frame charts, or identify small, medium and large trends on the same time frame chart. People trading all kinds of different indicators have that in common. So if you have found a few indicators that you like, and work for you, but you feel like you need something more, stop searching for the ultimate indicator, and start looking at other pieces to the puzzle. If you look at the thread that Tams suggested, you see that it breaks things down into: Fastest Medium Fast - Traverse Slowest - Channel Other people will talk about: Daily - support and resistance levels Weekly - support and resistance levels Monthly - support and resistance levels Other people will talk about: 50 period MA 80 period MA 120 period MA Other people will talk about: 15 Minute Chart 4 hour chart Daily Chart It's all the same basic concept. You can search for the perfect indicator forever, but until you have a method for understanding market behavior, chances are you won't get any better at trading.

Okay, I guess the owner of a blog can delete comments. duh! I guess I should have looked at the situation more closely. A lot of the focus is on the threads, and even though I have made blog posts, I didn't really pay much attention to what was available. Then after seeing this: Making High Probability Trades - Traders Laboratory Forums a couple of times, I started wondering if DbPhoenix had some special "rights" to create what he did. But I guess anyone can structure a blog the way he did. The Blog options allow comments to be moderated before displaying. Okay, I learned something new.

Here is a study that I created. It's all original. I think it helps give some perspective to what the price is doing. If someone wants to translate it into another language, please feel free to do so. If anyone has any suggestions, or wants some modifications, let me know. If anyone wants to modify the study, feel free to do so. If anyone has observations or suggestions about how to trade this study, feel free to post a follow up. The basis of this study is very simple, it's the highest high or lowest low of the last 10 bars, BUT starting from 3 bars back. It's very simple. That is the foundation of the study. Everything else is just accessories. The code comments explain the signals shown on the chart and what they mean, and how they were derived. A core principle of how I trade is to take profit whenever a good opportunity presents itself. Personally, I find this practice suits me, and works well for me. It often means that I miss out on some profit, but it also means that I'm constantly locking in profit, and often am able to get back in at a fairly good, if not better price. I think this study has aspects of that perspective. I call it a price channel, because that is how it looks. The study also keeps track of recent PRIOR highs and lows. So it shows not only the current high and low, but the prior high and low. This differentiates it from something like Bollinger bands. #Created by tradescripter #Last Update May 20, 2011 #Green arrows pointing down are price highs. #Red arrows pointing up are price lows #Price highs and lows are determined by a few different methods. #One method is to assume a price high or low if the length of the bar is greater than the average #bar length, plus one standard deviation. In other words, if there is an unusually big price #move on one bar, a price high or low is assumed. #A price high and a price low may not be a trend peak or bottom. #Many of the price high and low signals are one bar early. Take that into account. #As soon as you get an signal, you must decide whether it's trend peak/bottom or not #If you think it's not the end of a trend place an exit order to take profit just over the current high #or under the current low. If you don't get a fill almost immediately on the next bar, you must #adjust your exit to a smaller profit within seconds, or use a market order to take profit. #If the price high or low is a trend peak or bottom, the price probably won't go higher for a peak #or lower for the bottom. So you must decide on a strategy for taking profits. #Whether you take profit immediately on a signal, or wait for the next bar, either way you will loose out on some #profit. You must decide when it's better to take profit, at the signal, or just after the signal. #There is often a price high when the price first hits a prior high after being under the high #for a while. That potential price high is shown by a magenta arrow down over the high of the bar. #A potential price low, bowncing off support of a prior low, is a blue arrow. #Stop losses are shown by squares. The stop losses turn out to also be points of price highs #and lows. A long stop loss is show by a red square. The long stop loss is often a price low however. #You must use your discretion on how to trade it. #A price high signal, and a stop loss signal often occur on the same bar. That may be a double #confirmation that the price is at a high. You must use your discretion. #Prior highs and low are also shown The prior highs and lows are the "Stepped" horizontal lines. #So you can keep track of recent prior highs and lows. #I have not back-tested this study. I have no idea if it is any good or not. input length=10; def o=open; def c=close; def h=high; def l=low; def hh=h>h[1]; def ll=l<l[1]; def ClsUp=c>o; def ClsDwn=c<o; def BarLngth=h-l; def AvgBarLngth=average(BarLngth,20); def Threshhold=AvgBarLngth+StDev(BarLngth,20); def ClsHigher=c>c[1]; def ClsLower=c<c[1]; def HiestHi=highest(close[3],length); def LwestLw=lowest(close[3],length); rec LastHi=if HiestHi>HiestHi[1] then HiestHi[1] else LastHi[1]; rec LastLw=if LwestLw<LwestLw[1] then LwestLw[1] else LastLw[1]; def ClsOvrHi=close>HiestHi; def ClsUndrLw=close<LwestLw; def ClsUndrLastHi=close<LastHi; def ClsOvrLastLw=close>LastLw; def Hi1 = !ClsOvrHi[2] and ClsOvrHi[1] and ClsOvrHi and ClsHigher; def Hi2 = BarLngth>Threshhold and ClsUp; def Lw1 = !ClsUndrLw[2] and ClsUndrLw[1] and ClsUndrLw and ClsLower; def Lw2 = BarLngth>Threshhold and ClsDwn; def HiSig=Hi1 or Hi2; def LwSig=Lw1 or Lw2; def LwOvrSupport=l>LwestLw; def HiUndrSupport=h<HiestHi; plot PriceHigh = if HiSig then high else double.nan; PriceHigh.SetPaintingStrategy(PaintingStrategy.boolean_arrow_down); PriceHigh.SetDefaultColor(color.uptick); plot PriceLow = if LwSig then low else double.nan; PriceLow.SetPaintingStrategy(PaintingStrategy.boolean_arrow_up); PriceLow.SetDefaultColor(color.red); def BreaksSpprt=LwOvrSupport[3] and LwOvrSupport[2] and LwOvrSupport[1] and l<=LwestLw; def BreaksRzist=HiUndrSupport[3] and HiUndrSupport[2] and HiUndrSupport[1] and h>HiestHi; plot FirstSupportBreak=if BreaksSpprt then l else double.nan; FirstSupportBreak.SetPaintingStrategy(PaintingStrategy.boolean_arrow_up); FirstSupportBreak.SetDefaultColor(color.blue); plot FirstResistanceBreak=if BreaksRzist then h else double.nan; FirstResistanceBreak.SetPaintingStrategy(PaintingStrategy.boolean_arrow_down); FirstResistanceBreak.SetDefaultColor(color.magenta); plot HighestHigh=HiestHi; HighestHigh.SetLineWeight(2); HighestHigh.SetDefaultColor(color.light_red); plot LowestLow=LwestLw; LowestLow.SetLineWeight(2); LowestLow.SetDefaultColor(color.light_green); plot LastHigh=LastHi; LastHigh.SetPaintingStrategy(PaintingStrategy.Horizontal); plot LastLow=LastLw; LastLow.SetPaintingStrategy(PaintingStrategy.Horizontal); plot LongStopLossHit=if !ClsUndrLastHi[1] and ClsUndrLastHi then l else double.nan; LongStopLossHit.SetPaintingStrategy(PaintingStrategy.LINE_VS_SQUARES); LongStopLossHit.SetDefaultColor(color.red); plot ShortStopLossHit=if !ClsOvrLastLw[1] and ClsOvrLastLw then h else double.nan;; ShortStopLossHit.SetPaintingStrategy(PaintingStrategy.LINE_VS_SQUARES); ShortStopLossHit.SetDefaultColor(color.green);

I'm wondering if you are not really happy with the returns. You stated: "Don't misunderstand me, I am not going to break the bank, but it gives some decent returns in most scenarios." It seems like there is still some lingering doubt. All people do not like the discomfort caused by uncertainty. Some are able to deal with it better than others. How are you going to decrease the discomfort caused by the lingering uncertainty? We can say that we believe in things, but don't really believe. You stated: "I am convinced the strategy is sound." My gut feeling is, that you need to admit to yourself, that you really are not 100% convinced that the strategy is sound. I believe this is your starting point. As long as you are telling yourself the the strategy is sound, but not trusting it, there is a conflict that is causing discomfort. Please don't misunderstand me. I'm not trying to convince you that your strategy is not sound. I'm saying that it's difficult to fix something when you are working in the dark. Imagine trying to accomplish a task in pure darkness, when you can't see anything. Until you admit that you really don't trust your strategy 100%, then you are in the darkness, fumbling around. Again, admitting you don't trust your strategy DOES NOT mean that it's a bad strategy. The distinction needs to be made between those two things. Once you admit that you are, in a sense, not being totally honest with yourself about your trust in your strategy, you can then feel good about facing reality. Then, "The light goes on". You go from denial, into a clearer definition of the problem. Something is keeping you from trusting your strategy. I'm a person who needs a lot of certainty, and a really, really well tested system before I'm going to have any trust in it. That's just the way it is. I'm probably not going to make major changes in my personality at this point. I just have to face the reality of it, and once I've accepted the way I am, don't fight it, work within the abilities that I do have. It may take me longer to "get there", but chances are, that when I "get there", my level of competence is going to be better than average. So, first of all, I think you are in denial about how much you really trust your strategy. After you get past that point, it's time to get honest with yourself about how much certainty you personally need to feel comfortable trading the way you want to trade. Don't fight it, don't try to swim upstream, figure out how to work within the boundaries.

From the article, it seems to me, that what is happening, is that when trust is put into God, it has a psychologically calming affect on the trader. This in turn may make a big difference in their ability to trade well. In effect, the trader may be detaching themselves from any concern. So I think it is possible that a person could trade better from having a Bible study. But I would like to point out some serious concerns. When people attribute success in anything to God, there is always extremely dangerous dynamics that get set up. An implication can be made that God's favor is on certain people, and not on others. This can turn into a situation where some people become self-righteous, believing that God is on their side, and the other people are somehow inferior. The outcome of dynamics like this can be catastrophic under the right circumstances. People do all kinds of bad things in the name of God. Let's say that 10 million people pray to win the lottery every week. Sooner or later, one of the people who prayed wins the lottery. So, did God favor the person who won the lottery? Does God have something against all the others who didn't win the lottery? Was it simply a statistical probability that if enough people pray to win the lottery, one of them will eventually win? If two sports teams who are playing each other both pray before the game, did God favor the winning team? What if both teams were of the same religion? What if they were both from different religions? What if two sports teams with two different religions played each other every year for 50 years. And at the end of 50 years, each team had won 25 times? Whose God was greater? It might be that all those people praying to win the lottery, win their sports game, and make money trading have absolutely no idea what they should be praying, or the character of God or what God wants from people. I'm not writing this to discount God, or give people an excuse to ignore God.

Not a bad idea. You could use this thread, or a blog as a way to refine and edit the text. Make posts, then copy them out to your book, and edit it as needed. If you develop a following here, that would help launch the book.

You could try posting to your own blog here at TL. Also, there is a forum named, TRADER's LOG. Traders Log - Traders Laboratory Forums You could post your actual trades and explain them.

Did well PRACTICE trading today. I've been through a bad patch of extremely frustrating PRACTICE trading, where I have been doing very poorly. I think what happens is that as my strategy gets refined, I go through stages where I'm looking for new insight and a better understanding, and I get into an experimentation phase. Today, I was just trading like a robot. I took every signal. I didn't do a whole lot of creative thinking. Just follow the rules. When I get into the "zone", the equity curve just goes up, up, up. When I'm in that experimentation phase, looking for answers, and trying to refine my strategy, I just let trades keep going to see what will happen. If I take profit when the opportunity is there, then re-evaluate the market, things seems to go much, much better. Actually, I was trading very strict profit taking rules today, and I believe that is what makes the difference. When I get my profit signal, if I act decisively, things go well. If the trade starts going against me, I go into an indecision state of mind, and can't figure out what to do.