thalestrader

Hi there, Define scalp. Best Wishes, Thales

All I do is scroll through the SP 500. Now that freestockcharts has screening capabilities, I filter out stocks trading for less than $20. I use Telecharts only to scan EOD daily and higher timeframes. I trade IBD 100 stocks for longer pulls, not for intraday swings. I also keep a watchlist of stocks that have been trading inlong, flat bases and I scan those for breakouts. These too are for longer swings, not day trades. Best Wishes, Thales

In ninjatrader, go to the indicators list, scroll down to prior OHLC, and click on that indicator. Then, you can format it so that it only prints the prior H and prior Low, and I took a screen shot of the settings you would need to make it look like the picture you attached. Then, right click on the chart, fo down to "properties" In properties, set the start time to 9:30 AM (adjust to your own time, of course) and end time set to 4:15 PM (again adjusting for time zone). If you want the session break lines, then you need to set those from the properties window as well. Best Wishes, Thales

Hi folks, Looks like everyone has fallen off from here ... perhaps the p/l thread should go on hiatus for the summer. At any rate, I three trades on two stocks, NOC + 63 pennies (two long trades) and WHR +98 pennies for +1.61/share traded. I also had a 6B (Pound futures) trade that I closed at +2 ticks after watching the pound meander all morning long. My daughter fared better than I. She traded the EURJPY and the GBPUSD, 2 wins out four trades, and finished the day +$22.06. And she did it all between breakfast and lunch while engrossed in the last book of the Harry Potter series. She goes to bed tonight with a closed equity in the microlot account of $211.20, up from last night's $189.14 close. Best Wishes, Thales

Yes, often times the greatest % of the extent of the day's move is completed with the first 90-120 +/- minutes of the open. Also, I usually leave the lower priced stocks alone except for when the overall market is in the middle of a rip roaring rally off of an important low. Since mid-Mayor so, it has been better to limit yourself to stocks at least $20/share. I actually prefer $50+. Also, liquidity has been getting harder and harder to come by - if you're trading a few hundred shares it will not matter much. But if you are trading thousands of shares, it will atter a great deal. It has been tough finding decent candidates offering the type of opportunity I like: 1) A strong gap open above resistance or below support with a lot of "middle of nowhere" between where it opens and the next R/S and that 2) extends in the direction of the gap, immediatley or soon after a brief pullback. Sometimes, you have to wait all morning and into the afternoon for the move to extend, as the stock "bases" throughout the morning. It is not uncommon to find what is typically known as a "cup" or "cup with handle" base forming on these 5 minute stock charts, either after the inital gap, or after the rally extends above the gap. The breakout above the proper buy point in the base often occurs after 1:30-2:00 pm, and it can result in quite a gain in a short period of time. Here is the chart of NOC, an imperfect, yet profitable example from today. First buy point was approx. 44.65, second buy point approx. 45.10, for +$0.54 and +$0.09. The consolidation that took place as price more or less rode the 20 ema higher is, as I said, an imperfect example. The real take away though, is that higher priced issues tend to move more than lower priced issues. I have done well on occassion with lower priced issues (a trade in Office Depot comes to mind), but the 50-300 penny moves will ussually be in the $50+ stocks. Best Wishes, Thales

Forrest, you certainly lok as though you are on your way. Also, I highly recommend the posts from yesterday by cowseathay, atto, and DbPhoneix located in this post: http://www.traderslaboratory.com/forums/131/trading-wyckoff-way-5097-11.html Best Wishes, Thales

Hi folks, I have noticed a fair number o fhtose who participate here in the Wyckoff forum seem to favor the NQ as their trading vehicle; and I am just wondering if that is because the NQ lends itself more readily to Wyckovian analysis than the other index futures? Or is there some other reason? Or is it just coincidence? Best Wishes, Thales

That is quite a long time to spend learning a trading method only to feel that you still have not yet mastered it. Have you considered a time "stop loss" after which you would, in spite of the considerable effort and time you have invested in the approach, cut your losses and move on to examine a different approach to determining "what the market is telling us"? I doubt that it is your understanding that is flawed, as from your posts you strike me as an intelligent fellow. At any rate, I wish you my best. Best Wishes, Thales

She bought the GBPUSD ... and I convinced her to keep buying it until it her target. She had a good day, Best Wishes, Thales PS No trades for me today, I was a bit knocked down this morning by a migraine.

Looks like an excellent trade to me, Forrest. I do not know what size you trade, but, if you trade, say three lots, you might consider something like this: Take Profit on 1 contract at first support/resistance. Continue to trail stop on 2nd contract, with a take profit limit order at the next support/resistance. Let 3rd contract run with a BE stop, MOC, or if price gives you an opportunty to stop and reverse. Just suggestions, of course, and there is no right or wrong. I just thought I'd throw it out there. I thought your posts and the trade well done. Thank you for sharing with us. Best Wishes, Thales

Excellent, excellent post, Db. It took me longer than it should have, but I eventually learned that if someone has to invent an entire new vocabulary or lexicon to explain their interpretation of price action, rather than use the tried and true concepts that carried the earliest market practitioners to success, then they are not explaining price action. Thank you for this wonderful example, Thales

Excellent post, and I share your opinion. Isn't it interesting that what traders want to know is "what is price likely to do next?" And yet the majority of traders allow their gaze to be diverted from the price pane to the indicator pane, which is alot like trying to drive forward while staring at the rear-view mirror. Price is its own leading indicator. Price leads price. Always. And without exception. Best Wishes, Thales

Hi Forrest, Thank you for sharing with us. If I may ask a small favor of you, perhaps you could post each chart individually, rather than tiles on a one pane. As you have them here, it is a bit difficult for me to really focus on each individual chart. Best Wishes, Thales

I am not sure answering either of these questions provides any real value to someone else learning to trade. One's ability to turn a profit at this activity will depend far more on his or her own mental, emotional, and psychological characteristics rather than either the time or even the effort expended to achieve success. For what's it worth (and again, I suspect very little) I did well from the very beginning with respect to swing trading stocks for longer pulls. As far day trading, it took me far longer than it should have to do it well. I primarily day trade stocks, but that isn't my own money, so that capital would not figure into any "allocation". As far as day trading my own capital, I keep a very, very small futures account for day trading. The only index future I day trade with any regularity is the ES. I also day trade the 6B and 6E CME currency futures. When I open ninjatrader, my workspace only has three charts, the 5 minute ES, the 15 minute 6E, and the 15 minute 6B. I am always ready and willing, but I do not day trade futures every day. I am fairly particular as to the trades I am willing to make. Again, I do not think any of the above is particularly useful. So let me try to add something to this post that someone may find helpful: If you are just starting out (or if you've been day trading for a while), do not worry about how long it took someone else to do well, especially not someone you found on an internet forum. Study yourself, not me, nor anyone else. You need to study yourself, to "know thyself," because you need to figure out what kind of trader you are: are you a nervous nellie who feels best scalping for a few ticks and getting flat as quickly as possible, or are you able to sit through the small reactions and play for a bigger swing? Once you figure that out, then pick one instrument and learn to trade by trading a one or two lot of that one instrument, whether it is the ES, the NQ, the YM, ZN, ZB, 6E or something else. One or two contracts is more than enough to win or lose real money. I don't care who thinks I'm a piker, but I typically trade no more than 5-6 contracts at a time, and often I trade smaller. I made my best progress as a day trader during a two or three year period when I decided to trade only the old ER2 contract. I used a 3 minute chart, and I admit, I relied heavily on a 5,3,3 stochastic to identify divergence (not a recommendation, just an admission of guilt). At some point, I moved to the ES, and I added Taylor's Book Method. Taylor focused me on S/R, and soon after that, I gave up indicators entirely (except for a 20ema on 5 minute stock charts - it is my one "vice"). Most of the day traders whom I either know to be successful or reasonably believe to be successful trade just one instrument. Too many would-be speculators fall into the trap of thinking they should be trading the ES, NQ, YM, and TF, as well notes and bonds, crude and the euro. Not so! Pick one and learn to trade. If you decide you wish to trade forex, don't try to trade the 20 or 30 or however many currency pairs your dealer makes available. Pick one to start, maybe two, certainly no more than three. Once you know how to trade, then you will be able to trade anything. But you will not need to trade everything. Best Wishes, Thales

Target making a profit. You will never make an income from trading. You will either net a profit or net a loss. If you net a profit, by all means, draw some of those profits to meet you a portion or even all of your living expenses. But if you are looking for income, you will likely never even attain marginal profitability. Best Wishes, Thales

Barbara Rockefeller's Technical Analysis for Dummies is actually quite good, but then again, she has the experience and the intelligence to pull it off. As for XXX for Dummies, I think that work ought to be discussed in another "type" of forum entirely. Best Wishes, Thales

No better cause than feeding hungry children ... don't fantasize, just do. Even the smallest towns likely have a food bank where even a box of pasta or a bag of rice would be appreciated. During these tough times, small favors matter greatly.

Good questions, and I'll contribute a few comments later but right now I'm short on time. But I think this thread by Db is an excellent place to start re-orienting yourself to identifying S/R: http://www.traderslaboratory.com/forums/f131/support-resistance-trading-foresight-6274.html#post69836 I'd also recommend a look at the chart Db posted here on post #134, page 17 of the following thread: http://www.traderslaboratory.com/forums/34/all-you-need-chart-3843-17.html Best Wishes, Thales

I would recommend the following post by Db: http://www.traderslaboratory.com/forums/f131/couldawouldashoulda-wyckoff-forum-6129.html#post67331 If I were starting out at this game, I'd print that post out, put it in the front of a three ring binder, and make it part of my daily prep. Unlike Db, however, I do not think one needs to put in a certain amount time or study before reading Reminiscences or O'Neil's How to Make Money in Stocks. In my opinion, what one is able to take from either of these books has more to do with his or her intelligence and emotional maturity than one's level of market experience. However, I always recommend that the would-be trader, seduced by visions of sugarplums and wealth dancing about his or her head, first read Nicolas Darvas's How I MAde 2,000,000 in the Stock Market. It is an excellent story that covers Darvas's journey through the stages of development outlined in DB's excellent above referenced post. O'Neil has admitted to various inteviewers that it was Darvas's book that inspired his trading and the formulation of his famous CANSLIM approach. Many "serious" traders found in internet forums ridicule Darvas's book. They would be surprised to learn how many actual traders keep dog-eared and tattered copies of Darvas not in, but on thier desks. Best Wishes, Thales

My experience has been that it is much easier and profitable to "buy high and sell higher" or to "sell low and buy lower." Now back to Brooks ...

I simply have other business interests that I have worked to develop over the years, and I am happy with my life. There is no activity in which I am currently engaged that I wish to shed. I would only caution that one really ought to pay attention to one's position size relative to equity relative to risk. Focus on learning to trade and on risk:reward, and the profits will take care of themselves. Yes, more money can be made by simply adding contracts, but more money can be lost as well. If you knew the number of hours of work, sweat, tears, frustration, emotional and psychological pain as well as financial loss that I had endured to get my trading to where it is today, you might not find it so appealing an endeavor. I was not a natural born trader. As I said, learn to trade, focus on risk:reward, understand position sizing, and the money will take care of itself. Ed Seykota is famous for saying everyone gets whatever it is he wants from the markets. This implies that folks trade for many reasons other than the money. Money is just the way we keep our own score. Would you be in a hurry to retire from an activity the performance of which gives you great pleasure and happiness? If you are in it for the money only, I suspect your chances for success are greatly diminished. It allows you to share. And, if I may borrow a phrase, "sharing is caring." If you succeed, it will give you the means to help folks. We, my family, give an anonymous, weekly donation to a local ecumencial food bank. I'd encourage anyone here who has more than they need to find it in their hearts to give just a small portion of their excess to help those less fortunate. Best Wishes, Thales

She seems to have intuited the concept that "if you don't bet, you can't win, but if you lose all your money, you can't bet." While I still think that the reason she has done so well is because the money is not important to her; yet that does not explain the fact that she has been far more reserved and cautious than I would have expected. For example, I have been trying to coax her into adding to her positions as price moves in her favor, but thus far, she has resisted. I am apparently far more curious than she is to see the power of pyramiding in such a highly levered instrument. I figure that so long as she waits until price moves so as to allow for the stop on her initial position to be moved to breakeven, adding to her winners ought to produce some stunning profits. All in due time, I suppose. Best Wishes, Thales

Thank you. I hope you find it useful. Best Wishes, Thales

Well, I actually wanted her to trade 1 microlot/$25 in equity, so, according to my original plan, she should be trading 4-5 microlots. She wanted to wait until she got close to $100 to add a second microlot. So right now she is trading two microlots, which makes a position move at $0.20/tick. If this were her life savings grub stake, then I would say yes, she is overlevered even at 1 microlot. Her usual inital stop is about 50 ticks, so at 20 pennies/tick, she is looking at a max risk/trade of about $10. I think she only had one trade where she was stopped in and price immediately turned and ran through her stop for the full loss. Of the losses she has had, price usually moves in her favor, reacts against her position, resumes its favorable move (so she moves her stop to the reaction point) and then turns again and stops her out for a loss much smaller than the initial stop. Her average loss is 20 ticks, which is $4.00 on a 2 microlot position. Also, as this is a very small amount of money, and, since this is a bucket shop account, and she cannot go into deficit, I am not at all concerned. Best Wishes, Thales

Disadvantage: There may be no pursuit so contrary to the natural inclination of our emotions as is trading. By day trading, you are subjecting your psyche several times each day this stress. Discipline is largely the ability to withstand the urge to act so as to relieve this emotional pressure, and instead control the pressure so that you can execute and manage your trades. Daily I recall the passage in Reminiscences where Livermore describes how most folks will allow a loss to run and grow larger and larger as they "hope" the loss will come back and and get smaller, maybe even let them out at breakeven, while at the same time, they cut short a profit as they "fear" that the profit (which they did not have when they woke up that morning) will get smaller or evaporate completely; when what a trader needs to do is cut the loss short out of fear the loss will get larger, and let the profit run in the hope that it will get larger. In the end, one might conclude that it is not fear and greed but fear and hope which fuel the markets, and fear and hope of the wrong things no less. If you can control your emotions, profits come easily. If not, then at best you will find yourself overtrading trying to scalp for a few ticks here and there, or perhaps not trading at all, afraid "to pull the trigger," fearing any loss whatsoever. I have spent time in both places over the years. It has been years since I have had any problem pulling the trigger. If anything, I usually find myself having to talk myself into waiting for my entry rather than jumping the gun. But I still have days where once I'm in a trade, I find myself needing to get up, go outside, and walk around the block as a way of forcing me to "sit on my hands," and keep me from moving my stop too close and cutting my profit short. Trading is the hardest thing I have ever done. Good Luck to you, Thales