thalestrader

Sold at 65, stopped at 68... Best Wishes, Thales

Ticked 84 (the low of the second push), buy stop is 85, and a new low will be sold by me. Best Wishes, Thales

A tempting long trade right here, but I am actually going to wait and enter on a stop at 1.3585 ... Best Wishes, Thales

If the 6E doesn't stop right there with this third push down, then my dollar down suspicions are probably mistaken ... Best Wishes, Thales

Dollar, Gold, Dow ... Best Wishes, Thales

You may want to explain to us how you are trading the ACD. Are you entering on a stop just above/below the range, or are you using a margin beyond the opening range to trigger entry? Do you have a plan that would reverse your position should price move across the opening range against you, or would you suggest simply exit and wait for the next session. I know you just started looking at this today, but those are some questions that might be useful going forward. Best Wishes, Thales

Well, let us take a look (allow me to speak boldly, as you need to hear this well): Hmmm ... you have the most serious of all problems. You are trading without a plan. As you do not have a plan, at least not with respect to the "pulling of the rip cord," I suggest that you stop yanking on it. I do not know what fool gave you the idea of the "rip cord," but surely I would have thought he'd have made mention that hand in hand with the rip cord should be a plan to re-enter in the original direction of the trade, right? The very next trade you take, after entry, and after making sure you have a stop loss and a reasonable profit target order in the market, take 60 minute walk, and when you come back, be happy with the trade results, whether a profit or a loss. Without a plan to govern when you pull the rip cord and how you re-enter, what you think is a rip cord is really a trigger pin, and you're throwing the pin but holding the grenade. For what it's worth, I've been trading now for a good long while, and I am planning on adding crude to my day trading in March. I have been demo trading for nearly a month. I just printed out what should be my final draft of my initial trading plan for Crude Oil. It has thirteen rules taking up 19 lines covering everything from trading hours, when to quit, when and how to enter long, when and how to enter short, etc. Seven of the eight cover trade management from initial stop loss to max PT. My rules will get me out without me having to decide whether or not a particular trade "feels right." On a somewhat tangential note, "Gut feel," is of two types. The first type, which you refer to above, is valuable. It is simply intuitive or sub-conscious pattern recognition that comes from years of reading charts or reading the tape. The second type of "Gut feel," which is based on one's opinions about what price should be doing, rather than what it is doing. For example, the market is heading higher, but your "gut feel" tells you that because you believe unemployment is rising, the market must come down. The first type of Gut Feel is a good thing. The second is ruinous. The first takes years to develop, and again, it is really just the benefit of using one's experience to recognize patterns of price action that have some type of "predictive" value, i.e. an edge in determining immediate probabilities. The second you already have - it is ego and the vanity of one's opinions. Learn to distinguish one from the other. Develop the first, avoid the second. And as you develop the first, you will find that you are able to compose rules that will elevate it from "Gut feeling" to tradable fact. You may then amend your written trading plan to include your "Gut Feeling." Assuming, of course, you have a written plan at all, right Cory? Best Wishes, Thales

I wasn't speaking to you, Marko, that was a general "anyone can post anything so long as he/she/ or it is not selling anything." I know you are not a salesman, and I am very familair with Fisher's ACD. Best WIshes, Thales

I consider 2 AM EST as the European "open" for the 6E and 6B. As MidK observed, moves that begin in and around financial center openings tend to be more tradable than moves that occur during less liquid hours. And the hours between 2:30 PM EST and 7 PM EST I try to avoid. That does not mean that significant moves do not occur during those hours, as clearly they sometimes do. But by and large those hours are dead and choppy and best to be avoided (by me, at least). Best Wishes, Thales

However, I would say that the concept of Opening Range Breakout does apply to currencies in and around financial enter openings, e.g. a low printed between the Frankfurt open and within an hour of the the London open from which the market develops a persistent trend away tends to continue at least until the NY open. Same with Tokyo's open and the US open. It is a very powerful tendency in Crude oil. As it is in any market with a clearly defined pit session that experiences significantly higher liquidity than at other times of the day. Of course, many advocate ignoring pit hours altogether, read price gaps out of charts, and then wonder why they miss every trend day, or worse, why they persistently get flattened as they try four, five, six entries against the trend day's price direction. Gaps exist folks, despite what you read on the internet. I have spoken of the Trader Vic Gap Rule (TVGR). I subscribe to richbois's TTT service, and he is very cognizant in his commentary of the TVGR. My currency trading friend, who first brought this rule to my attention, or, I should say, brought its power and importance to my attention, calls the following passage a piece of information "as close to the Holy Grail as he has found." I have another friend who only trades on days where there is a significant gap, and he bases his approach to that Gap based upon the passage cited below. One of the first technical pieces of information that Linda Raschke teaches in her seminar is to respect gaps, as gaps are a form of impulse that indicates an imbalance. Gaps are real. My entire approach to day trading stocks is predicated and based upon the simple observation that gaps are real, gaps are a form of impulse caused by a supply/demand imbalance, and when not immediately filled, tend to produce trend days in the direction of the gap. Gaps are real. And I am going to tell you all how you can be certain to have more money in your account at the end of the year than you would other wise have by following one little piece of advice about gaps: When the market gaps open and trends in the direction of the gap, and then price goes flat, DO NOT FADE THE TREND. It is the pros sucking in us pikers to feed and fuel the afternoon leg in the direction of the trend. Yesterday the market gapped open, trended higher, and went flat for several hours. The pros are buying during that sideways movement. How many tried to sell into that "weakness"? How many were stomped on as the trend "unexpectedly" resumed. Of course, there was no real weakness, and everyone in the pit knew the market was going higher by day's end, so there was nothing "unexpected" about that late rally leg. For every one time you successfully sell such a rally or buy such a decline, there will be nine times that you get your head handed to you as you hand your equity over to the pros. Best Wishes, Thales

I agree with MidK. Charts is charts and price is price - I would love to see folks posting Dax charts, Pork Belly charts, Credit spread charts, etc. and so on. My primary futures are the 6B, 6E, and 6J, all currency futures. I am also not opposed to swing or position trades being posted here, so long as the poster commits to following up on the the trade throughout its duration. While I do post an occasional ES day trade, sarting in March, I plan to drop the ES for day trading and use it for swing trading only. For example, I'm currently long ES and ZG as swing trades, and I have been showing the daily charts of the Dow and GLD as proxies for these two markets for the last week. And I update them each night that there is significant movements one way or the other. I do plan on adding crude oil to my real trades in March (I have been paper trading this month, and I do not like to change too much once my month gets started. I like to have a non-currency future to day trade, and the ES and I have not gotten on well over the last three months. So, I will post some crude oil (CL) trades here as well. And that brings up another area concerning what might be on or off topic. My approach to crude is, for the most part, different from the 123 approach I use for currencies. I tend to enter on limit orders at S/R, or market orders at S/R depending upon what I see in the DOM. For demo purposes I have allowed myself to take trades outside of Pit session hours, but my plan, as it is now, is to trade oil only at or after 9AM EST, and not to enter any new positions at or after 2PMEST (pit session ends at 2:30PM). Will I trade a nice 123 on the 15 minute crude chart? Absolutely, and there have been a couple of real nice runners off of them this month. But, that is not my sole, nor even my primary approach to crude futures. I never intended this thread to be about a particular approach to the exclusion of all others. I welcome anyone who is willing to post a Real Time chart with entry, stop loss, and profit targets (or a stated trailing stop) to do so, so long as they explain the basis of the trade, e.g. "double top at resistance with 3/10 oscillator showing divergence at the highs with extreme tick readings." What I do not want is people showing up ere with magical secret indicators trolling for customers to whom to sell said indicators for $$$. I also do not want to see people posting questions like "where can I get a Daarvas box indicator?" There are threads and forums for that, and this is not it. On the other hand, if you day trade futures/stocks/bnonds using a Darvas Box indicator, you are more than welcome to post your trades here in Real Time. This thread should be about folks showing others how they go about identifying opportunities in real time by showing the chart at the moment of anticipation, and where necessary or where asked, to supply an explanation of the basis for the trade. So Marko, and everyone, do not hold back because you think a market or a method is off-topic." As long as you are not selling anything, and so long so long as you are respectful to the thread and the other participants, then post away. Best Wishes, Thales

With Friday's slightly higher high, C now falls a mere 7 ticks short of a A; and that, folks, is close enough for horseshoes, hand grenades, and multi-hundred tick measured moves. So, with three waves up from the low, the dollar is entitled to a pullback, even a substantial one, without threatening the nascent uptrend. But, with every dollar bear seemingly having become raging dollar bulls in just a few short months, I suspect that the odds favor a test of the low, if not lower lows. A week ago, I held opposite views on each, but since last Monday, the charts seem to speaking differently to me. I see no reason to alter my expectations, though of course, the market will have the final word. Best Wishes, Thales

Hi Zan-shin, Always a tough trying to pick the end of a trend day. When a low (or high, for that matter) prints early (within the first 5-30 minutes of the open) and the market trends away from that low, I usually assume that price will close at the other or near the high of the day, and try to avoid trying to fade the day's trend. Easier said than done, of course, and I've nbeen known to get run over multiple times on strong trending days. Thanks for sharing your trades, and keep them coming! Best Wishes, Thales

Gold (etf symbol GLD) 2010-02-10: Gold (etf symbolGLD) 2010-02-16: I see no reason to change my expectations for higher gold prices over the coming days and weeks. Of course, and as always, the market will have the final say. Best Wishes, Thales

Dow Jones Industrial Average 2010-02-09: Dow Jones Industrial Average 2010-02-16: I see no reason to change my expectations for higher equity prices over the coming days and weeks. Of course, and as always, the market will have the final say. Best Wishes, Thales

No problem, MidK, I'm glad to know that someone took the time to listen. Linda Raschke is a real gem in an industry littered with fool's gold (and the fools who follow them). I have wondered lately if I'd ever to have arrived where I am had it not been for her instruction. That webinar is recent, but much of it is word for word from part of her seminar from twelve years ago. More than any technical skill, what she instilled was the proper attitude and the proper approach to the daily work of learning and becoming a trader, without which no matter how rigorous and robust your work ethic, your efforts will likely go for naught. Best Wishes, Thales

Taken out at +2R on the whole trade. The reason is two-fold: First, price came back to within a tick of my 2R stop, rallied, but failed to make a higher high, and secondly, my son wants to go sledding. Best Wishes, Thales

Stop is now 50% at +2R (red line) and 50% +1R (not shown): Worst case is now +1.5R. Best Wishes, Thales

Another shallow pullback with a thrust to new highs means the shorts are trapped (and more are starting to feel it with each passing tick). Stop is now at +1R. Best Wishes, Thales

We now have the break, and with the pullback to test the BO tickling 1.3715 and then attaining a new high, we have the hold. Risk is now -4 ticks, which is approximately .2R (2/10ths of 1R). So the risk is now 4 ticks for a 100 tick profit target. Best Wishes, Thales

We have the break, but we also need the hold. At any rate, here is how it looks - long with a 1R risk and a 5R profit target. It does not matter what happens, as the worst case is a 1R loss, which is always my worst case scenario. If this trade is a loss, I simply wai for thre next one and keep taking my swings. Best Wishes, Thales

Hi Folks, First, I want to thank patrader for the great charts showing how he tracks price action using trendlines and channels. I hope he doesn't mind if I add a my own take on the current 6E. It is not, I think, in any conflict with his approach. I have shown an example like this in the past where I draw a trend line along two or more lows of a rally after a sharp decline. I then cop and paste that trend line to the chart, anchoring it at the first high off the extreme low of the decline. This produces a very good target to exit any longs, a short entry point with a very, very tight stop, and it also helps one interpret the current and subsequent character of price action. As Marko had mentioned here in the past, a good rule of thumb is that "if it channels, it is corrective," i.e. price action that is bounded by a channel tends to be either counter-trend or a consolidation prior to a continuation. In this case, price rallied and just within the past few minutes touched that upper trend line. What price does next should be telling. If price falls from here, then I would expect the decline to carry to the lower trendline, and if the lower trend line breaks, I would be looking for at least a test of the most recent extreme low. However, should price rest up here a bit and then break and hold above the trendline, then this is likely not merely a minor correction, but we should see a larger rally, which may in the end simply be a larger correction of the down trend, or it could be a resumption of the prior up trend that ended a few months ago. So, below that upper trend line, I would favor lower prices, above that trend line, I would favor longs. The fact that that is how I am looking at it currently does not mean that I am not completely wrong. But I have a buy stop at 1.3718, as I have been looking for lower US Dollar/higher Euro based upon my read of the daily price action. Best Wishes, Thales

Hi Beeker, The custom we follow in this thread when posting a potential trade opportunity is to include a chart, and on that chart, we use a dark blue line to denote the proposed entry, a red line for the initial stop loss, and green lines for profit target(s), if targets are used. Without a chart, this may as well be twitter. Best Wishes, Thales

Hi Folks, I just want to reiterate a point made earlier in this thread that any questions about the approach to trading discussed here ought to be addressed to me here in the thread rather than through PM. Thank You, Thales

NLP is one thing for which I never fell ... I guess after he published his book he had to sell something. As for the spreadsheet, etc., Kiwi, I think the Kelly RoR %'s should be fine for our purposes. Best Wishes, Thales