thalestrader

I think, though, if you look at what price did immediately after stopping me in you'd agree that there was no doubt that the best course was to exit at market quickly. I did place a new buy stop at 1.3591 after I exited the trade I had entered at 1.3585. As I tried to explain to Cory last week - pulling te rip cord is fine, but it only works for me over time because I always have a plan to re-enter in the original position should price get in gear. The basic structure of a long sequence was still in place until price made a new low. If you are going to trade based upon those sequences, you have to take them, even if you already had entered once and cut it loose with a small loss. I have always made clear that I re-enter if called for even after pulling the rip cord. Re-entry makes the difference. Best Wishes, Thales

No small aspect, friend Midk, surely! Let me give an example from today: I've mentioned that I've been working with my currency trading friend on a trading plan for crude oil. We're doing basic S/R - sell resistance, buy support - type stuff. We worked up a plan where we enter using limit or market orders, and we have determined that we generally need a 15-20 tick initial disaster stop, though typically price will print a stopping point much closer, sometimes a mere tick or two from our entry, within minutes if not seconds of entry. Our plan also calls for a fixed tick take profit level on the first contract. Today, we did a live test run of our plan. We were not together during the trading day, and we did not communicate between 9AM and 2:30PM - no e-mail no phone, etc. At 2:30, he called to compare notes. We each had five trades. They were all the same. We had 3 wins and 2 losses. Our losses were identical - one for -2 ticks and one for -7 ticks. One winning trade we each made it to target (we were trading one contract and we agreed to exit at our predetermined profit target level. One two other trades, he made it to target, but on each I was stoped out on reactions that hit a trailing stop. The difference? I made close to 72 ticks in spite of myself. He made nearly 50 ticks more than I! Not bad on a day where there was only a 126 tick spread high to low during the pit session! That 50 ticks on 1 CL is $500. So my trade management cost me $500 in profit opportunity. No small amount if averaged over the course of 200 trading days or so. And that is per contract, so multiply that out if trading a 3 lot, a 5 lot, a 10 lot. No sir, friend Midk, trade management is no small matter at all - as my currency trading friend said to me this afternoon, "'tis the key to the kingdom, methinks," I think so too. Best Wishes, Thales

A little less than 1/4R to find out - sometimes it is very clear that it is time to pull the rip cord. I've been going back over the Linda Raschke seminar material again over the last few weeks, and one line that must have resonated with me at the time is this: "The trade must move in your favor right away. Sideways is not an acceptable response." Well, if I'm long, and if sideways is not acceptable, then down is an absolute no-no! I did call Linda's office, and it seems that she has no plans at this time to offer her seminar again. Too bad - it is a wonderful, wonderful learning experience. I have always said I am a most unoriginal trader - everything I do that works I learned from someone else. Going through her seminar materials again, I would say that while the few books and authors whom I have mentioned here in this thread were important, they were but the game pieces. LBR provided the the playing board and the rules. I've been very busy with some other projects, most notably a study of the character CL's intraday price action, but perhaps this weekend I'll have some time to share a few real gems from LBR's seminar. Best Wishes, Thales

My long from 1.3607 proceeded to both profit targets. The atached chart shows that long from yesterday. It also shows a short sequence that occurred for the benefit of our European friends. I was asleep at the time, hece I denoted that trade in dotted lines to indicate that for me it "twas but a dream ..." A t the right hand edge, there is a long sequence with a buy point of 1.3585 for which I was just filled (a quick look at the DOM shows 85/87 bid-offer as I hit the submit button). Not entirely enthralled with this one. That was quite a plummit from the highs, and it looks like price needs at least a re-test of the low, if not a new session low altogether in order to clear this thing for a decent rally, but, if I were to sit this out on that basis, I may miss a +4R trade. It's only going to cost me -1R to find out, so I'm in. Best Wishes, Thales

I saw the short sequence, but I did not trade it, as the immediately preceding rally looked impulsive, the short sequence corrective. It would have been PT1 and holding for PT2 with a BE stop. Ahhh ... hindsight ... At any rate, had the short sequence offered itself from levels closer to the HOD, I'd have taken it. Even with that decline off of that sequence, I am viewing this choppy decline off the HOD as a corrective phase, so my preference goes to longs Best Wishes, Thales

Current view of the EURUSD/6E shows a long sequence in the making as price probed below the level line and rallied. The proposed stop loss may change based upon the depth of this pullback... Best Wishes, Thales

Current view of the ES ... Best Wishes, Thales

Here is the 1440 minute CL showing the prior day's high&low. Price is for the second time today trading above the prior day's high (the orange and blue candles are due to my currency trading friend - he and I have been working together on this CL project, and he uses these colors on his charts, so I have adopted them for my CL chart). Best Wishes, Thales

Current look at the ES (15 minute and 240 minute) has me tempted to add a few longs on a break up and hold ... on the 15 minute, the red rectangle represents a small area of nearby minor resistance, where a break up could find itself stopped cold, for now. Again, while a pullback, even one of some extent, could occur at any time, I beleive PA favors at lest a test of the prior break down zone (around 1024 or so) prior to resuming the down trend, if the down trend is indeed in tact. For what its worth, I had been expecting a retest of the March 2009 low, or even a break to lower lows, after the rally off that low finished. PA over the last few weeks has me much less certain that such a retest will occur, and I tend to think that I need to keep my mind open to the possibility that the Big Bad Bear it truly over, and that we are in fact in the early stages of an ere where buy, hold, and forget about it may actually prove a profitable strategy. Of course, that will become most clear at the end of such an era. But right now, I had been expecting to see the reawakening of a full grown hibernating bear. But when I blink, I sometimes think I am seeing the birth of a baby bull. Anything can happen, of course. I am open to all possibilities. Best Wishes, Thales PS I thought I had taken a pic of the 15 minute prior to the breakout, but I hadn't.

Hi Folks, EURUSD/6E is at a level within a zone of some signficance and I would expect a trade that trends away from that level at some point today ... Best Wishes, Thales

Embrace life ... [ame=http://www.youtube.com/watch?v=h-8PBx7isoM]YouTube - Embrace Life - always wear your seat belt[/ame] Best WIshes, Thales

I had a rough first week of February, during which I had a nearly -4R draw down, and for a while, my average loss was stuck above -.70R. After last week, I am now up +23.76R MTD, and my average loss is down to -.52R. During a more typical month, my results are fairly close to BT's, if I were to count BE trades as losses. That has always been my point - I keep taking my swings, cutting my losers, and letting my profits run to target(s). So, while my average win is currently +1.56R, it is actually +3R as measured by by average actual loss for the month. Again, during a typical month (it is unusual for me to have a -4R draw down, but it happens a couple of times each year) my average profit is around 1.5R as measured against my initial risk point. But measured against my average actual loss point, my average profit is about +6R. For what its worth, I believe I could win a very high rate % of my trades, probably close to 90% or better, as almost every one of my trades foes into a small profit at some point soon after entry. However, I'd likely be exchanging profits for the sake of not losing as often. I really cannot imagine doing this day in and day out for +2 or +3 ticks/trade, especially when the inevitable full stop loss takes out the profits of 5 or more "winning" efforts. Best Wishes, Thales

I've been long the ES and Gold, and see no reason to change my view. While a pulback at some point is to be expected, I am never one to argue with one way prices so long as I am driving the right way on that one way street. I am looking to take a position in the dollar index, but in spite of the push to new highs on Friday, I am still looking at the dollar as a coin spinning on its edge, and I do not yet know which way it shall fall. C now exceeds A, but still falls within a proportion that allows for a terminal movement to the upside, while still, of course, allowing for a continued rally. Best Wishes, Thales

Here is a 1440 minute (daily) crude chart showing the prior day's high (green hash) and low (red hash) on each bar. I use 9AM EST as the daily open (pit session open). Ceratinly one can see that it can pay, and pay handsomely, to pay attention to price when it arrives that the prior day's high/low. Best Wishes, Thales

Would you please describe wherein this chart you see a "megaphone"? I do not see it myself, and I'd appreciate your help. My sense of this chart has always been that we are not being shown the whole story, i.e. relevant points are hidden in history beyond the left edge, in that instance. I thank you. I am not saying you are wrong, only that I myself do not se what you are seeing. For what it's worth, though I never took the course as Blowfish has, I did have a very long conversation with Mr. Wolfe about six years ago, and I certainly came away with the understanding that, as Blowfish has stated, Wolfe Waves must wedge, i.e. the trendline described by points 1 & 3 and the trendline described by points 2 & 4 must converge. I believe that Blowfish quoted directly from Wolfe's manual in making this point. I am no expert in Wolfe waves, and I do not pretend to know their traits nor to possess the ability to recognize them as Wolfe himself would define them. Best Wishes, Thales

Take heed, young Cory. Wise words, indeed. Funnily enough (love that word, Blowfish), I've done so twice myself (three times if you consider trading a business). I do not have a business plan nearly so comprehensive as that which both Sevensa and Blowfish advocate. For what its worth, Linda Raschke is a strong proponent of having, maintaining, reviewing, and revising a comprehensive business plan. I'm just not that guy. But, that is not to say that you aren't that guy, and there is no reason to avoid putting such a plan to paper, especially as you are young, inexperienced, and far too emotional to hope for success while winging it. I have a trade plan for each market I trade. I consider each to be extremely comprehensive. Anyone could read, for example, my day trade plan for trading stocks (it is a very simple plan that can be quickly and easily pieced together in a few of my earliest posts here at TL), and, if that person wanted, he or she could sit down the next day, and start trading stocks exactly as I do. I know this to be true, because two folks with whom I have been in contact from TL do so, and both are now, after coming to terms with their own emotions, doing quite well,if they are to be believed. And as each is but a lurker, I have no reason to doubt them. As to your plan, I think it is a good start. But, the fact that Sevensa was able to come up with a list of questions, each valid, indicates that your plan is not where it needs to be, yet. But it is a good start, and it is far more than most who try this ever come up with to guide their development. And, if I were you, I would heed Sevensa's above noted danger, and Blowfish's admonition. I know you said that you know what you mean, even if it isn't clear. Well, then, make it clear. You may find you do not know all that you think you know. And that will be a good thing. I did not make any real progress in any area of life, and certainly not in trading, until I was willing and able to admit how very little of what I thought I knew could correctly be considered "knowledge." And this is an ongoing process. I cannot begin to tell you how much more clear my own activity has become to me as a result of participating here at TL. Putting yourself and your actions in writing with the goal to be understood by another human being has a wonderful side effect - you come to understand yourself in the process. Best Wishes, Thales

Hi Marko, Good stuff! Thank you for keeping things going here in the thread. My son's birthday is tomorrow, and the party is Sunday, and I am responsible, per my wife's "request," for coming up with a suitably carnivorous menu for a dinosaur themed party. It has been far more difficult than I had anticipated, and of course, being a guy, I let it go until today. I'm likely not going to be able to trade at all today, other than two demo orders I have in on CL. As I am typing this, a short has just been filled at 79.71 ... I have a buy order down below where I'll stop and reverse. I now have to go on a search for Brontosaurus legs right now (though my son tells me they are no longer called "Brontosaurus," but have been renamed "Appatosaurus." I am not responsible for the spelling of either. Best Wishes, Thales

That was a week ago, and we've had higher prices for equities and gold, while the dolar has gone sideways in a choppy consolidation at its highs. This would typically indicate that the dollar would continue higher, eventually. A lesson I learned from Linda Raschke, however, it that the longer a sideways line extends, the more likely it is you are seeing a reversal and not a conitnuation. Right now, the dollar is like a coin, set spinning on its edge, and it is still very unclear, to me, at any rate, whther it will land Bull or Bear. Best Wishes, Thales

+1R it is (actually a bit better that 1R as there was a 1 tick positive slipage on the exit, but I'm sure that only happens in demo land... Best Wishes, Thales

Stop is moved to +1R ... Best Wishes, Thales

Here's a little demo trade on CL short at 78.82, stop loss 15 ticks, take profit at +50 ticks ... Best Wishes, Thales

Nice to see you back, Mr. Black ... [ame=http://www.youtube.com/watch?v=k816dPQyPAM]YouTube - AC/DC - Back In Black (Live At Donnington) High Quality!!![/ame] Music to trade by ... Best Wishes, Thales

Hi Folks, I had quite a hectic morning and just now I'm ready to get down to it ... The only thing that immediately jumps to my attention is the EURJPY, which would be a short if it doesn't make a new rally high first ... Best Wishes, Thales

Absolutely, Marko. This is why it is important to choose an approach or system in which one has confidence, and then to apply that one approach consistently. I have seen so many fail as traders precisely because they could never really figure out what method they were trading. For example, for myself, I use fibs, EW, various chart patterns, etc. and so on, but all of those are merely tools. My trades are always based upon a long/short sequence at, in or near an anticipated zone of S/R. I do believe the ACD system does have positive expectancy (though, like any system, its actual results will depend more upon the particular trader rather than the system). I am interested in following your tests here. For the entry threshold, the 14 and then 16 ticks, are you testing these numbers arbitrarily, or are you pegging them to some benchmark, such as a % of ATR? Best Wishes, Thales

A rare instance of four drives to a bottom ...? We'll see. I'm long at 75 and going to bed. Best Wishes, Thales