thalestrader

Come on, Dinero, that will cost you! Best Wishes, Thales

Sorry Forrest and Folks, that was Stock Market Wizards. Try the .pdf below. Mark Weinstein's interview starts on page 156, and and Tom Baldwin's starts on page 178. I also think Larry Hite's interview is very good as well. You will find that on page 87. Best Wishes, Thales Jack Schwager - Market Wizards.pdf

I received a PM relating to this issue. This question did not come from Forrest but from someone who lurks this thread (no problem, lurkers welcome!). But please, folks, if you read this thread and you do not post, that is fine. For years I was but a serial lurker. But if you have a question about the material in this thread, please ask it here in the thread, as you are probably not the only one with the question. Anyway, the question asked about ptting together a trading plan. This trader had decided to include in his plan a proposal to quit for the day after two losses. I do this as well. But I realize I may not have been as clear as a might. You see, I take a lot of losses and break even trades. Very, very small losses. When I say I quit after two losses, I mean I quit after two more or less full stop losses or their equivalent. I have tried to move the topic of money management here in this thread toward position sizing and the use of R-multiples, but the subject has not gained very much traction. Basically, if you are risking, for example, 2% of equity/trade, that is your R-unit size. If you take a trade with a 1R risk, and your profit target is three times as many ticks as you stop loss, then you have a 3R profit target. This means you are risking 2% on the trade, and if the trade runs to full stop, your loss is limited to 2%. If the trade proceeds to your profit target, then you will have made a 6% profit. My trades areall sized to the R-unit. So if you see me post a trade that has a 40 tick risk, and the result of the trade is I pull the rord for an 8 tick loss, my loss on that trade is not 1R, it is only 20%of my initial risk, or .2R. So, if I am trading, and I have three such small losses, I am not done for the day, as I am not down by even 1R. If, however, I take a full stop of -1R, and then three more losses of-.3, -.5, and -.4,, my losses for the day would be -2.2R, and I am done. Once I am down that much, I start to lose my discipline, so I discipline myself to stop trading to preserve whatever shred of it I have left. So, yes, I quit after two losses. But it is two losses construed as two risk units. I had assumed folks wouldn't think I'd quit for the day after two -7 or -5 tick losses, as my initial stops were, say, -20 ticks and -40 ticks on each trade respectively. If my total risk on the two trades was initially -60, but my actuakl loss was inly -12, I am still well below a -1R loss for the day, let alone a -2R loss which would trigger my "kill switch." And yes, -2R days happen. I hope that clears things up. Best Wishes, Thales

If you find yourself frequently being stopped out to the tick, you should have a re-entry plan. Also, if you find yourself frequently being stopped out by a tick, you might need to consider a 2 tick range chart, especially if volatility continues to expand. Best Wishes, Thales

Weekend Reading Hi Folks, I was thrown off my game a bit this week so I'm both late and light on this week's weekend reading edition. Here I have attached an interview with Linda Raschke entitled "The Rituals of Trading," from Active Trader Magazine's August 2000 issue. I would also recommend along with this interview, that you all dust off your copy of Market Wizards and read the Mark Weinstein and Tom Baldwin interviews in Market Wizards and Raschke's interview in New Market Wizards. If you do not have these two books, get them. You can find Linda Raschke's New Market Wizard interview on page 113 at this link: http://www.beursplaza.com/ebook7.pdf and you can access a download link to Market Wizards for the Wienstein and Baldwin interviews at this link: 4shared.com - free file sharing and storage - download Now, here is what you should be monitoring your reactions for: If you read these interviews and think to yourself, "No flippin' way! These folks are full of it! No way anyone can do that!" then hang it up. You're never going to eb a winner - not at this game, at any rate. You will never do as well at this game as you should. Howeevr, if instead your reaction is, "Yes! That's it! That's where I want to be!" then let's get to it! After all, if you do not believe others can do it, then on what basis do you believe that you can? Best Wishes, Thales Rituals of Trading.pdf

I picked. Thank you, Thales

Hi Traderunner, I like both of your entries. In hindsight (if the trolls allow) I would probably have taken your first entry as well, especially given where price was with respect to S/R. I think I would likely have worked that first entry for a break even exit (much would depend upon the pace of trade at the time). I would then have entered short at your second entry (1.4020) and 1/2 would have been at PT1 of 1.3998 for +22 ticks, and the second half would have been stopped where you were at 1.4009 for +11 ticks for a total of 16.5 ticks. Now, if I had not chosen a break even stop on entry 1, and instead held it, then I would not have moved my stop down to the 1.4036 level until after price broken the 1.4021 low. You are in a little chop zone there, and you do not want to be one of those who get chopped up by using those levels within the zone. As daedalus said in a post one time, there are layers and layers of stops in those zones - don't be one of them. So, had I held from the initial entry, the rest of the trade would have been the same managed the same as the second entry had been: PT1 at 1.3998 for +32 and stopped on the second half at 1.4009 for +21 for a +26.5 tick trade. Of course, all that is hindsight, so I better say no more. Good work. If the trolls were as dedicated and positive in their efforts to better themselves as you, there's be no need for them to troll. Best Wishes, Thales

Plenty of trolls everywhere. I knew from comments made in various posts here and there that there are those here at TL who are doubters and haters and self-loathers who, against all evidence to the contrary, believe that the charts posted here are somehow after the fact. They look at the posts in the PnL thread, and think that there is no way that there can be five or six folks out the nearly 40,000 registered TL users who can be, on average, net profitable. They think that if they can't make a profit, then no one can! At any rate, they can say whatever they like about me or about this thread so long as they do it outside of this thread. There is no need to bring it here. They can keep it in the TL live chat and in other threads. After all, Troll-in-Chief123123 started the "Hindsight Thread" as a thinlyveiled sarcastic attack on this thread as well as the PnL thread. So what? Let he and his fellow travelers post to their hearts are content over there. You know the saying, "those who can, do. Those who can't, teach." In trading, those who can, trade, those who can't, troll. Best Wishes, Thales Best Wishes, Thales

I just thought it would be a good idea for a thread. I am always interested in seeing how others make trading decisions on a live market, so why not try to induce some folks to share their chops. I have certainly learned a lot about what I do and how I do it through the interaction with the folks in this thread. In fact, I have discovered more than I would ever have anticipated. I have always been a disciple of the Socratic knowledge of ignorance that the first step in being able to learn is to acknowledge that you do not know. It turns out I did not know even more than I thought I did not know! Ego? I had and have nothing to prove. After all, who am I? There are only two folks here at TL who know who I really am, and I know they won't divulge my identity. So how would ego have anything to do with it? I've said from the very first I had nothing to sell. As you said, I could log off TL and never come back, and I would leave owing no one anything. My goodness! Could you imagine being on the hook to guys like you and MidK and Forrest if I had accepted a payment for what I share? No offense, but you guys can be rather demanding, don't you think? But that's ok, because I choose to continue. And someday, I will choose to disappear. I have no interest in being beholden to anyone other than my family and myself. If I couldn't do what I do, then I'd be happy to sell you $5000/month "coaching" or "mentoring" services - don't laugh - I've had pm's offering to pay me for "mentoring." Thankfully, I do not need to do enlist myself in such indentured servitude I do have one student now, and when her sister and brother are old enough, we will have a full enrollment of three students, and each are on full scholarship. Enrollment is therefore closed. We're already there, and better than ever! Best Wishes, Thales

I hear you Marko. We just shall do the best we can, and if it isn't good enough for some, let them move on, hopefully keeping their mouth shut as they scroll on by. My grandmom used to say "the world is full of people to whom you give them all they could ask for on a silver platter, and still they b***ch that isn't gold." I think there are some who have no idea the Herculean effort it is to annotate a chart and post the pic all while trying to manage open positions and get orders off. I try to post the charts before the trade triggers. Often I get it posted well before the trade triggers. If it is a market I am actually trading, then I won't post the update until the initial skirmish at entry is over. Also, one of the benefits of using the line annotations (blue = entry, red = stop loss, green = profit targets) is that there is no obligation on my part to update the trade. Anyone who sees the very first pic - whether it was snapped before, at, or soon after entry, has all the information to follow along at home on his or her charts. As far as the "mental time scale," I know exactly what you mean, but I have never thought consciously of it, and thus I never have tried to quantify it. I would say you that you and I are in sync in that the current visble range of the average 15 M bar is the crux of what governs these judgments. But how to explain it? I honestly do not know. Linda Raschke used to say that there are somethings that just come from experience. I remember one interview or article where she gave the following example: Her husband was a baseball player, and when they would watch a game, he would often say things like "watch this ... he's going to throw the next pitch low and inside." And sure enough, that is what the pitcher did. Her husband could not put into words how he knew that that was the next pitch. He just had played and studied the game for so long and with such intensity, that he could recognize these "set ups." Is it not the same for us traders? she asked. And of course, the answer is yes. Recall also Tom Baldwin's interview in Market Wizards, where he basically says that if you last long enough on the Pit floor, you will pick it up. Its like any other job or skill. SOme may pick it up better than you, and others will not do it as well. But if you do it long enough, you will achieve whatever proficiency your particular ability will allow. So this mental timescale you mention is likely one of those things that you pick up through long observation. Of course, until you get the basics of the game, you will not get to the level at which you internalize your observations and unconsciouly convert those observations to judgements. It is an interesting concept, thanks for introducing it. Best Wishes, Thales

I thought your charts were both appropriate and instructive. You, Marko, and patrader have added a lot of value to this thread, and I hope each of you continue to participate no matter what anyone else has to say to or about us. Each of you post very few words, but your charts, in my opinion, speak loudly to any willing to listen. Best Wishes, Thales

I see no problem with this series of charts. I think it is quite apparent what is being communicated, don't you? Now, if someone were to post a random chart with no annotations and having nothing to do with the approach to trading price action we are pursuing here, then I could understand if you found fault with that poster. I have called a few posters out for just such a thing here since this thread began. But my opinion of the series of charts posted by Mr. Black is this: You could print those out, hang them in your office, and look at them everyday before you trade, and you would be better prepared to identify the price action for which you are looking. That should be the ultimate criteria: Is the posted chart helpful to those learning to trade this approach? I think, in the case of Mr. Black's charts, the answer is an unequivocal yes. Do you really think that he took the time to annotate his charts, snap a pic, log in to TL, find this thread, and post them to show off or to make others feel bad? Or does it make more sense to assume he was posting something that he thought represented a good example of how to apply this method and might therefore prove helpful to others? I do not understand this notion that folks are somehow "cherry picking" winning trades to post. First of all, I have posted my share of losing trades. But what would I care with respect to this forum if every trade I posted resulted in a loss? Should I feel embarassed? Should Mr. Black feel embarrassed if he posts a losing trade? Marko? patrader? Why would any of us care whether the TL community knows we made a losing effort? Do you know us? Are you going to call us at home and harass us? Tease our children because daddy posted a losing effort? I think many here would do him or herself a big favor if each would stop worrying about whether or not someone else posted a chart fast enough or whether or not someone else is demo trading, paper trading, and just taking notes, or trading live with real cash, and worry about where he or she wants to be and how he or she is going to get there. I suspect that hanging out in live trading chats with bitter naysayers is not conducive to getting to that place. I know where I am. I know how I got here. It sucked. It took too darn long. I lost too much money. I spent too much on gurus and systems and software. Now, you can do it like I did and struggle and spend, or you could settle down, study this thread, and be glad for what has been shared here. If someone had put together this type of information and effort for me when I was starting out, my journey to the place where I am now would have been much quicker, easier, pleasant, and cost a whole lot less. Let us not let our egos and the shriveled souls of the trolls ruin what is without a doubt the best trading thread in the best trading forum on the net. Best Wishes, Thales

I sent James a PM earlier today asking him do just that and give you Mod rights on the thread. I hope he does - then this stuff could be taken care of immediately. Thanks Brownie, Thales

The problem is that the guy who moderates this forum has not been to TL since 12-21-2009, and has a grand total of 89 posts. We need a moderator who has a bit more skin in the game. And Kiwi, stick around, friend. We need to stand up and push back, not turn our backs and walk away when these idiot trolls decide its time to flex their ego by launching anaonymous internet attacks. Best Wishes, Thales

Here is one of the so-called "hindsight trades" mentioned in a PM to me tonight. Now, stay with me on this one: Mr Black posted that at 1:35 EST. His chart shows an entry at 10012 if I am reading it correctly, and at the time he snapped his pic, price was 5 ticks lower, at 10007. Now here is a 1 minute YM: As you can see, after Mr. Black posted his trade, price retraced, making a MAE of -10 before then making an orderly progression to his profit target 112 ticks away. It sure looks like a real time chart, real time trade to me. Now, was it live money or demo? I don't know. I believe that Mr. Black is the real deal. But, does it matter? If he was paper trading or demo trading this, does it take away in anyway from the timeliness of his call? Absolutely not! The difference between Mr. Black and those who find fault with this thread is simple: Mr. Black (and all the fine folks who share their charts here in real time) has the stones to put himself out there and say "Here is what I think price is going to do next and I don't care a ounce what you all think of me if I'm wrong." Those who find fault with this thread and who suggest this is all hindsight are likely phonies and frauds. Why would I say this? Because if you lack the courage to make a public call in real time but you do have the gall to chide those who do, I doubt you have courage enough to pull the trigger on a trade. Now, I do not mean that if you do not post in real time you're a coward. Far from it ... this isn't for everyone. And each of us if free to post or not, read or not, etc. But don't come here with your BS and accusations if you don't first have the stones to pony up and play. So for the doubters, go back and look at the charts posted in this thread, look at the time stamps on the posts, and then when you're ready to share a real time call, you know where to find us. Best Wishes, Thales

Now this one is for those folks who know Ninjatrader so well that they do not know it at all. I have made no secret that I have played with a bit of demo trading on crude this week. I've made no claims that I am trading crude in either of my trading accounts. I also said I was using Ninjatrader to demo trade it, rather than my IB or my TA demo accounts. But how could this be? When I post my crude charts, there are no executions, and yet I claim to be demo trading crude. Well, for the idiot who thought he had "got me," here is a little Ninjatrader lesson for you. When you have chart trader open, you can right click on chart properties, and lo and behold - you can choose either to have your trade executions plotted or not plotted. See charts below (and note the pretty colors - colors mean I am not trading that market): Ninjatrader: Trade executions not plotted Ninjatrader: Trade executions plotted (you will see two trades, i.e. demo trades, plotted on the left hand side of the chart). Yet another free contribution from me to you. Now, why not spend your time studying how to trade? If this thread is not for you, then move on. It is not required reading. Best Wishes, Thales

It is not a matter of extent, so much as how is price acting as it tests entry. I do not know that I can translate it into a mechanical rule, but certainly if price trades through my entry making a favorable move, then retraces back to my entry, and then makes a lower low or "double tops," I'd probably slip my stop to BE or there abouts. Best Wishes, Thales

Here is a chart I posted here earlier in the month (around the 8th of January, showing two little trend lines that I was looking for the DXYO to clear). Here is a series of charts showing the US Dollar Index over the last few weeks. Each of these charts was posted here in this thread. Today the dollar rallied right to the resistance level noted in the chart posted here on January 21, 2010. I know that probably still qualifies as "hindsight" for this afternoon's cranky visitor, but that's his problem, not mine. He can search the thread if he wants to check time/date stamps on the posts. Of course, I really did muck up this "call," (though it was hardly meant as a call), as you can see by this post from 1/21/2010: Well, it took a day or two more than a week to get there, but get there it did. But again, from the tone our visitor brought here this afternoon and the low rating he saw fit to grant this thread, this is all still hindsight. In my opinion, I was wrong only in that the DXYO took a bit longer to exhibit the strength that I thought the chart was showing was immanent. Best Wishes, Thales

If I were trading these as I usually trade, I would have made money on both. To be honest with you, I thought the odds were good for what did happen to happen, as Livy often says of Caesar, "Fearing that what did happen would happen ..." The difference between Caesar and I is that Caesar acted upon what he feared would happen, and took measures to guard against it, whereas I disregarded it, and walked straight into it. I got what I deserved. Most of the time, I can honestly say, "win or lose, this is an excellent trade." Meaning that price may ultimately prove to have hoodwinked me, but based upon what it is doing, I have to act, and the course of action is clear. In fact, I have posted that exact phrase more than once here at TL - win or lose, and excellent trade. In this case, that first trade was, based upon what I wanted to get out of it, a dumb trade. And if you read my post at the time, you will probably gather that I thought as much. It absolutely works. But I must match patience and judgement of like degree to selecting the trades. Thus far I have used a day trader's degree of judgement and patience and tried to turn daytrade's into swing trades. That will not work. I guess yours just slipped by me. Sorry about that, MidK. Best Wishes, Thales

Hi Folks, This thread is called Reading Charts in Real Time. When I started the thread, here is how I conceived of its purpose: That's it - let us learn from one another how to recognize opportunities in real time. Why? Well, that is how you make book in this business - reading price at the hard right edge of the chart, so to speak. Furthermore, these charts can represent actual trades, demo trades, or just plain old passing time watching the market go by ... so long as they are posted before, at, or very soon after the moment of decision. I do not care who is trading what, who is on demo, who is trading 2M BP for a hedge fund, or who is whacking out a few hundred a day on a 5K trading account, and who is posting from within the walls of the State Mental Hospital. And neither should any of you. The purpose is to learn. That is all. Again, from the very first post of this thread: I have kept nothing in secret. I do not believe I have done anything that could be called "showing off," and I have not, do not, and will not sell anything to anyone. I have been running this thread since June. I have not once done anything to direct anyone off the TL site. When folks have PM's me, I PM them back asking them to repeat their question in the thread. I have not taken advantage of anyone. Kiwi said recently in another thread that the reason the vendors leave so quickly from TL is because they cannot stay too long before they run out of stuff they can give away for free. Well, if I have ulterior motives, I must be the dumbest flippin' snakeoil salesman the trading world has ever seen as I have given away everything and I have nothing left to sell! I have posted hundreds, and I mean hundreds of charts in this thread clearly showing entry, stop loss, and profit target before the moment of truth. I have posted hundreds more charts within ticks and moments of entry having been made. I have posted other charts, in hindsight, with the intention of making points or answering questions. If you do not believe I have done so, then you have not been reading this thread in real time. I cannot help how others feel. Their issues are their own. But let me tell you this - I would bet you dollars to donuts that most of the people who find fault with our thread, and who would argue that the trades are not real, are themselves net losers. I say this because I maybe would have felt the same way back when I was not having such a good time with the markets as they themselves do today when they see these posts. Another PM I received questioned why my trades do not show up when I post my Ninjatrader charts. For what its worth, I do not trade off of Ninjatrader. I use IB's TWS bracket trader and I use Transact's YesTrader. The fund I trade for has me on a version of Genesis Laser. I trade off the DOM associated with the platform I am trading on at the time. The only thing I use Ninjatrader for is charting and demo trading. My black and white charts are of markets I trade or at least follow. If you see colors on one of my charts, then I am probably demo trading that market or following it out of a temporary interest. I try to very clear whether or not I am taking a trade. And I have certainly posted my share of losers in plenty of time for you to play along and lose right beside me. There is no way to screen my trades ahead of time. If there were, I would stop posting the losing trades and only post the winners. This thread had an almost a perfect rating going into this afternoon. It is now down to a 4.62, no doubt because of a recent visitor who feels himself qualified to rate a thread he has not taken the time to follow. Well, that is too bad, because this thread is not for him and those like him, and that rating can help new visitors determine what may be worth a look from what is not worth a dime. If you haven't rated this thread, now would be a good time for you to do so - Give it a 1 or give it a 5, but be honest with your rating, and rate it only if you feel you have followed it enough to do it justice. If this is your first time, or if you have just been passing through, then be fair to us and yourself, and skip rating it until you feel you know it well enough to do so. If you do not believe what you see and read in this thread, that is fine. That just means that this thread is not for you. There is a thread out there for you, I promise you. So don't waste your time polluting ours. Get on with your search. I hope you find what it is you are looking for. Best Wishes, Thales

Crude finishes between the lows of the previous two day sessions. Best Wishes, Thales

I'm not your "bro", and you can stop posting in this thread. Thank you, Thales

I cannot even fathom your motives for posting in this thread then, other than to pad your ego in a way that is apparently only possible through an anonymous internet forum. Why not take this thread off of your subscription list and move on. There is no one making you click on it other than yourself. You are free not to click as well. Thank you, Thales

Really? Well, that explains it. -Thales

Crude finally worked its way to yesterday's low, and rather than giving a long sequence it broke that level and gave a nice short opportunity with a brisk 50+ penny drop. Best Wishes, Thales