thalestrader

Hard to believe its been almost 11 years since we had a great year in this thread. I think of you guys still. I wish we could have a reunion week here for any of you who are still trading ... or even if you're not. Maybe the first or second week of June 2020. If interested, drop a note here and perhaps an email address if you don't plan on checking back. No more forex for me - just stocks, ES, and NQ. As always, Best Wishes, Thales

This thread is nearly six years old. The nut of this approach is to enter the first higher high long or the first lower low short at a significant support or resistance level. If you are not seeing success, two areas of concern might be as follows: 1) You are taking entries all over the place, and not at price levels that have had prior and obvious significance. As price travels from significant support to significant resistance, it will make any number of "lower lows" along the way higher as normal pullbacks and consolidations take place. If you are going to trade in the middle of nowhere, trade for continuations rather than reversals. Ideally, you refrain from trading in the middle of nowhere completely. "Obvious" means even a nine year old looking at the chart can point to the last "Big High" or the last "Big Low." 2) You are cutting profits short. Most who try this approach have no problem with the corollary of cutting one's losses short, especially as the stop level is "built into" the "set-up." However, most also succumb to the too great temptation to cut profits short by moving the stop to breakeven before the re-test of the entry or a HH or LL in favor of the trade direction. The cure for (1) is to pick a sufficiently liquid market, do your homework before the market opens, identify those areas where you will be looking for a trade, and then only trade if and when price reaches one of those levels and only if price exhibits the behavior defined by the set-up. Trade one market until you get it. After you get it, most should probably still just stick with one instrument. The cure for (2), assuming you have entered based on the set-up conditions at an obvious S/R level of prior importance, is to set your stop loss, set a profit limit of at least 1 if not 2 times your risk, set an alert via text, email, sound, or what have you that will alert you to the trade being closed, leave the room, and do not come back until you've been stopped for a loss or limited out with your profit. Best Wishes, Thales

Hi there humbled, It has now been a month. What, if anything, has changed? What remains the same? What steps have you taken to align yourself with the elusive right track? Best Wishes, Thales

I'm going to be logging out for a few months, as I've had about as much TL and TL email notifications as I can take over a short period of time. I do not know what to say to you, other than that based on those two posts, I think you do not have the initial sense of what it is you are looking at or for when you yourself are viewing a price chart. I went looking and found that post of Db's which I referenced yesterday. It is in a post that I believe I referred you to read earlier in this thread, and it is entitled, simply, Trading By Price. It is a sticky post in the Wyckoff forum. What he actually says there is that one way to develop the ability to judge whether buying or selling pressures are dominant is to watch the time and sales window with the bid/ask turned off. He goes on to say that this wouldn't do you any good unless you spent several hours at it, and no one is going to do that. But I will say this, I have often traded from the DOM alone without bothering to open my charts at all. And a few years ago, a trader who goes or went by the handle "Marko" took up this challenge here on TL in the Reading Charts thread, and he reported back that found it to be a helpful and worthwhile experience. Perhaps, humbled, it has come to this. You have spent so much time developing poor habits and incorrect opinions, that you are now directed in your own behavior and views by such acquired misguiding prejudices with respect to price action, that you need to step away from charts entirely, at the very least for a week or two, but probably and better yet a month or two, and I mean away from the markets entirely - no CNBC or Bloomberg, no Wall Street Journal, Barron's or Investor's Business Daily, no TL, no books, no magazines, no websites, etc. Then, and it will be possible only if you heed my advice and take a radical sabbatical from the markets, come back at this afresh. You need to undo and "forget" whatever it is you have accumulated in your mind about what the markets are and how they work. This time, let your "first" experience be the time and sales window, with the bid/ask turned off. Note those price ranges where trading gets slow and dull, and then watch and note what price does when the trades occur fast and furious. Watch the pauses, learn to recognize when these pauses are coming to an end and then watch how price again begins moving with direction and with a quickened pace. It is up to you to take these initial steps. Without them, no one else can get you to where you need to be. The ability that you need to develop cannot be spelled out or spoken out loud in a set of instructions, and least not in a way that would be intelligible to you unless and until you develop the ability to feel the struggle for balance and power that is the market. Without that sense, there is nothing I can do to help you move any closer to your goal than you are now. You can take all of this in one of two ways, I suppose. You could get angry, or depressed, or both, and say "screw you, Thales ... I'll do this without your help." And that is fine, so long as you realize that the result you get will not differ in kind from the result you have gotten from all your many different approaches to this task, and any hope you may have of progress is likely false and misplaced. Or, you could realize that "yes, this is it, this is exactly what I need! A fresh start, with fresh eyes, after a well-deserved rest." This second response should produce in you a renewed (and deserved) hope that your success is yet possible (though not assured) and that a new and better path toward that end awaits you. I reiterate, again, that it is all, every bit of it, up to you and you alone. Your success is your responsibility. You asked me for my help. After this time with you, what I outline here in this post is what I recommend to you. It is truly the very best that I can do for you at this time. Best Wishes, Thales

Did I miss something? I don't see where anyone said that your work ethic was the source of your difficulty. Best Wishes, Thales

Hi there 40draws, I remember having read a post by Db where suggested that if a trader really wants to learn to read price, he or she should just sit and watch a line chart all day long "to develop a sensitivity to buying and selling pressure." However, I believe he also said "but the trader won't do it." Best Wishes, Thales

I see 46, 52, 54, 74, 87 and no need for fibs. You have everything you need. Prior highs and prior lows, the immediately prior session's high and low, and the overall trend for context - is it up, down, or sideways. If it is in a trend, has it been consolidating for a day or two? Then look for a potential trend day where the market closes on the extreme in favor of the trend. Has the market been forming a line? Then where is it relative to the high and low of that range? Is it moving toward a test of the high or low (even is a trading range, there are swings from one extreme of the range to the other that can last a few sessions). If the market gaps up and trades down, look for a potential long somewhere between the prior day's high and it's close, vice versa for a market hat gaps down and trades up. If it gaps up or down and trends in the direction of the gap, then buy/sell an opening range break or a pullback (assuming you are at all times aware of potential S/R that could foil the trade). Stop looking for the non-existent missing piece. You need to work on yourself. Plan your day ahead of time. What are you going to do if price gaps down below yesterday's low? What will you be looking for? What if price gaps open higher? What will get you short? What would get you long? You have every tool you need. You need no more trips to Trader's Depot. You need to watch and learn how price behaves as it makes its way from S to R and back again. You will make mistakes. You will have losses. But you can do this, but only if you focus on price itself, and how it acts at S/R in the context of its overall trend. Plan your day ahead of time. It will relax you and reduce the stress you feel from the uncertainty of not having planned your day. See you Monday after the bell. Best Wishes, Thales

I use IE. Best Wishes, Thales

2B reversal pattern Victor "Trader Vic" Sperandeo has been referenced several times in this thread. The "123" trend change and the "2B" are his terms for two price behaviors that can signals to make a trade. Best Wishes, Thales

No need to throw "candlestick analysis" here too. This is about highs and lows, higher highs and higher lows or lower highs and lower lows. It is about what price does when it revisits those levels where demand and supply swapped upper hands in the past. If you go to the Reading Charts thread, and look at my post #1462, you will see a chart. http://www.traderslaboratory.com/forums/trading-markets/6151-reading-charts-real-time-183.html#post81324 I direct your attention to the last paragraph of my comments on that chart. Someone had asked me about trading a "pin bar." My answer was it would depend upon the order in which that bar's high and low printed relative to its close. This is because price is not "bars" or "candlesticks" or whatever discreet graphical technique you use to visualize trading activity. Price exists only as the activity of folks buying and selling to one another. As Db would say, "price is continuous," i.e. it is a flow of activity and not a batch of discreet bundles of transactions separated into "bars" or "candlesticks." As such, what matters is using that information to determine who has the upper hand, and how can I join them? Best Wishes, Thales

For the past day or two or three, every time I load a new page on TL, it takes forever, and I often get the message "TL.com has stopped working due to a long running script." Seriously, are you trying to keep people away from your forum? It is a TL thing - all else is fine, all other websites load quickly, etc. and so on. I'll be back if and when it gets fixed. Best Wishes, Thales

The double top 2B was the trade. Nothing wrong with your long, and you did well by getting out when you did. Unfortunately, you exited not because of what price was telling you, but because you felt uncertain and unsure and the losses are starting to sting too much. When that happens, I find it best to stop trading, take the money pressure off, and paper trade, at least for a few days. Re-set yourself and get back to watching price without the added pressure of a diminishing equity. Best Wishes, Thales

If I had had a chance to pick someone from whom I might learn how read price and my choice had been between me and Db, I'd have picked Db. The man is head and shoulders above nearly everyone who has ever participated in the anonymous world of internet trading forums. He is, without a doubt, my superior. Best Wishes, Thales

Good work. Keep doing what you are doing, and keep posting your charts and your trades. I'm taking the week off. I'm not sure if I'll be able to post much, but I will be able to read your posts. I also see the Db has started a new journal over at ET that looks like it will be devoted largely to trendlines and channels. I suggest you follow along. Here is the link: Forums - If You Can Draw A Straight Line . . . Also, keep studying the material you have from Db, and don't forget the Wyckoff forum here at TL. Best Wishes, Thales

Now, whether you publish it here it keep all to yourself, you need to write up a week ending review. How did you do this week? How is your plan developing? Have you managed to stick toyour plan more than deviating from it? How do you compare to last week? How many points are you up/down? What percent of your results are commissions/fees (most folks who've been at this for a while will tell yoou that a sure sign of over trading is that your broker is doing better than you)? What are you going to do, if anything, this week end to move yourself forward? How are you going to be approaching the upcoming week? You started this journal three full trading weeks ago: How would you rate your progress thus far. Think of a numberline, and zero (0) is where you were starting from, ten(10) is where you are completely relaxed and happy, you have a plan and you nearly never deviate from it; and negative 10 (-10) is craps - you blew it, you are broke, you give up, and you are ending this scheme to become a day trader. Do you feel you have moved forward, backward, or do you still feel you are at zero? Again, you do not need to publish this here. You have no one to impress or encourage other than yourself. But you should be thinking along these lines, and doing the hard wpork of putting your self-assessment to paper.. Best Wishes, Thales

Hey humbled, Keep doing what you have been doing. Mark your levels before the open, but don't get so attached to those levels that you miss new levels of importance as they develop. Don't stop trading, but do try to see if you can find ways to see entries closer to those levels. If a level is at 10, and the next level is 17, and you think the market is going to head higher, you want to get long as close to 10 as you can. If you wait until 13.5 to enter, not only are you risking more to make less, but you are entering right where you do not want to be entering - the middle of nowhere. Post your charts, and I'll see you after the close tomorrow. Best Wishes, Thales

That makes two of us. Best Wishes, Thales

Here is your chart with a few notes and markings of my own. I placed white stars near my comments/annotations so that you could find them. Here some things to consider as you study today's chart: I see no problem with your first long. I myself got long at the first test of 1598. This test was to be expected, and that is why I posted soon after the open not to be in a hurry to take a 123 short. The market gapped open above resistance, and a two legged pullback to test it as support is common. However, it was a short-lived trade for me, and I took it off at when price was turned back when it traded 1600, the level where the first leg of the pullback found support - you should be able to make out a little 123 down right there. I did not take your second long. I could make a case for it, however, so I do not have a problem with it per se. I did not take it, because at this point, we had seen a series of lower highs and lower lows. Price had tapped under 1598, and at that point, I was watching to see if I should get short on a test of 1598. I did get short as price again found resistance at 1600, and for the second time, visible on tick charts as well as your one minute chart, a 123 down. I covered that short just about where you were getting short (there was a stage 2 trendline break as well as a prior 5 minute ES double bottom pattern - a common aptter I p[ointed out in your journal on another day - you should make a note of it ) , and I got long not too long afterward, probably a few minutes later than when Enigmatics was buying, as I bought after price broke back above 1598 and tested that level - a tick chart would show you the way between 12:11 - 12:13. Price finally started establishing a series of higher highs and higher lows, and I stayed long most of the day, with a stop at 1597. Today's price action was similar to yesterdays' - gap open, back and fill to test resistance as support, and then a choppy series of higher highs and higher lows. This is a common daily pattern on both the SP-500 & the Dow-30. You should make a note of it.

Db says it so much better than I can ... http://www.traderslaboratory.com/forums/wyckoff-forum/15386-trading-price.html And this is a link to another Db post at another forum ... read not only what he says, but look at that date. Forums - Trend riding Db's posts are invaluable. You may think I'm good, but I'll tell you this: I have a folder of Db's posts from various places bookmarked in my favorites going back a dozen years or more - how many of mine do you think he has? If he has even one, then that is more than I think he has. Best Wishes, Thales

Great contributions, Enigmatics. As a matter of fact, I reminded humbled in a PM this morning that he ought to renew his efforts to study DB's book, which I am sure covers exactly what you are sharing in your examples. And this wasn't the first time this was brought up here in his journal: So, Enigmatics, if you have the time, and if humbled doesn't object (it is his journal, after all) I think it could only help him going forward if you could share some of your volume studies here. humbled, I understand you feel overwhelmed and that you feel you have so much to learn, but what you are trying to do is learn how to judge strength of supply and demand in the market. S/R and price action patterns, e.g. 123's, 2B's tell you where to look for this battle (S/R) and how to determine which side is currently dominant (price action). But yesterday and today you yourself admitted to uncertainty and confusion - and there is nothing wrong with that - we've all been there. Don't immediately try to incorporate volume analysis into your trading decisions. But do observe volume for a time. Don't dismiss it out of hand simply because I tend not to use it. And for what its worth, I do use volume on daily and weekly charts. I guarantee you that it provides useful information with respect to supply and demand - and supply and demand is just as operative on intraday price action as it is interday. Best Wishes, Thales

Price has had yet another gap open. This time, it gapped above 1598 resist and has been stuck between there and 1608. I would not be too quick to jump on a 123 short in the middle of nowhere. Be patient. Trade only at levels where you have reason to believe the market will "tip its hand." Best Wishes, Thales

Like all who came to this game before you, you are your own worst enemy. It is good that you realize these are your battles, and your adversary is your own limit. Keep this in mind: You will not win every bet. You will not finish every day positive. But so long as you are diligent in identifying S/R, and trade at those levels, either against them or through them depending upon price action, you have a fair chance of trading with a positive expectation over the long run. Once you acheive this, then you increase your size. One request: Could you reduce the size of the charts you post? It is difficult for me to see where some of your levels are coming from. Best Wishes, Thales

SPX traded to 1577, which was last Friday's low. This is a good place to take some profit if shortand trading a scalable position. I suspect we test some lower levels todaya, but I will nonetheless be watchful for signs that it would be prudent to close all shorts and flip to net long. See you after the close. Best Wishes, Thales

I'm short - 2B with yesterday's high. You should re-read Trader Vic on gaps as well as what has been said here in your own thread. Gaps are important, and gaps are tradable. However, your decision as to how you trade a particular gap must be based on price action subsequent to the gap, and not the mere fact that the market has gapped open. This is similar to your pre-market trade yesterday. You recognized a pattern and traded it. However, you were missing an important piece - those patterns only matter when they are occuring at a meaningful price level. At this stage, you need the cash market to be your guide, and if it is closed, you have no idea, truly, whether the market is at S or R or somewhere out in the middle of no where. This is where a trading journal with trading plan will be invaluable: It will say things such as "I will trade gaps. If the market gaps open an an important level and reverses (2B) I will fade the gap with a stop above/beloe the high/low of the openig 5/10/15 minute range." Or, "If the market gaps open and establishes a trend in the direction of the gap, I will enter on a pullback, preferably to an S/R level, and look to trade in the direction of the gap." Best Wishes, Thales

http://www.traderslaboratory.com/forums/wyckoff-forum/15535-developing-plan-trading-journal.html It would benefit you greatly to read and put into action the material in the above referenced post. Best Wishes, Thales