thalestrader

J - E - T - S JETS! JETS! JETS! I'm long The Jets. Best Wishes, Thales

Hi Folks, Looking at some longer term charts this morning. Here is the weekly USDCHF, which like the USDJPY, tades inversely to its corresponding futures contract. Best Wishes, Thales

Yes, after the first bounce from the midpoint (and let's not forget that the midpoint is selected merely because it is the midpoint, but because price has acknowledged that level several times while in that range). I usually start each day with two "if ... then" type scenarios, one for long, one for short. Sometimes one is a break out scenario while the other is a reversal. Sometimes, as in the case of a chop zone, both are what I consider break outs (I know some would not agree). Somedays, price behaves in a manner that fails to provide an opportunity in either scenario. Many days it plays out as though it were scripted. I try always to have levels in mind at which I will be looking for a reversal or a break. By "levels", I mean zone or concentrated range of S/R. Also, remember that when I trade the ES I usually require price to have tested a break point twice before I am willing to believe in the break out. Best Wishes, Thales

That was a beautiful range, and when price falls from resistance back to the midpoint, it is either going up or down. It will not crawl sideways along the midpoint, right? Well, price tried up. That didn't work. So, let's try down. After all, noone makes money sideways. You can't trade sideways. Best Wishes, Thales

I thought maybe you'd take a stab at it. Anyhow, take a look at this 30 minute chart and see if you see what I saw. Best Wishes, Thales

You don't see it? Best Wishes, Thales

The es trade was posted in Real Time, Forrest. Do you think we've been posting after the fact? Best Wishes, Thales

I have often thought the name did more harm than good to the body of work. After all, we are really just talking about chart patterns that occur in a series as opposed to in isolation from everything else, are we not? Everyone accepts that occasionally a recognizable pattern know as a "Head and Shoulders top," occurs, so why should we dismiss out of hand accepting that the H&S top is part of a larger, yet easily recognizable pattern? All EW is is a comprehensive framework of chart patterns, nothing more. If channels and trend lines work, then so does EW. But just a broken trend line sometimes means a reversal, so too sometimes it just means a change of pace, i.e. the trend is still intact, but it is trending at a lesser rate of change. But those who use trend lines would not throw them away simply because they did not always correctly "forecast" a reversal. I have no idea, which is why I describe my approach to trading as waiting for the end of a possible wave 2 correction by playing the breakout of the wave 1 extreme, using the extremes of wave 3C and 5 as my profit targets. In other words, use the theory for where it offers tradable information. When nothing tradable appears, forget about it. It's up to you whether or not you rethink your opinion of EW, but I would encourage you to continue posting. I think you have put some very valuable efforts into this thread. So thank you. Keep sharing your experience with us. Best Wishes, Thales

I had never considered EW before Lane's seminar lecture. He said, "you'll see these little Elliot wave patterns all over the place if you know what to look for." He was right. For those who dismiss EW because of Prechter, you ought to recognize that EW pre-dates Prechter's involvment by 40 years. George Lane was teaching EW for Trading Educators Inc. as far back as the late 1940's or early 1950's. The fact that one individual has sought to profit by over selling the theory's ability to forecast does not undermine the body of evidence supporting the theory anymore than the existence of Fitness Infomercial profiteers somehow proves that physical exercise is not beneficial to one's well-being. Again, I am not a EW ideologue. But I do feel the theory is useful and I would hate to see folks fail even to consider the few simple aspects that can be a great help because they have pre-judged the theory. Best Wishes, Thales

Bernanke? Geithner? Best Wishes, Thales

You got to wonder about a guy who comes out asking for a grand in his very first post. Best Wishes, Thales

With respect to financial risk taking, I agree (I would not presume murderers and rapists could be expected to "police themselves," for example). I also would have let the banks fail. The real kick will come if these corporations which were saved only by government aid ultimately fail anyway. Capitalism is dead! Long live Capitalism! Best Wishes, Thales

That, of course, is one of the main criticisms of the theory. The criticism drops away, however, if one accepts that the only thing that one should rightfully expect from the theory is the ability to rank order potential directional price moves in terms of probability. There is not an indicator or an oscillator that I have seen that is as capable of that sort of rank ordering of probailities as EW theory is, and yet folks continue to churn out all manner of indicators and none are as villified as EW is. Even pure, unadulterated S/R is only capable of telling you that "if price gets to X, then either this or that, with this being somewhat more probable than that." No who has successfully learned to use S/R to help make trading decision criticizes S/R on the basis that it only offers the trader probabilities and not certainties, do they? Elliot critics fix upon the "forecasting" claims made by some of the theory's adherents, and then say "A ha! we got you now ... why do you need an alternate count if your theory is so special!?". This is taking an easy shot, because EW, like any other approach, cannot say with certainty that "Price is here and it is going there." All EW can say is "price is here, and it is more likely to go there than somewhere else." I at times like to take the shot as well - but at the practioners who make outlandish claims in the theory's name, and not the theory itself. There is a difference. Personally, I think that the flexibility of the theory to accommodate alternate counts is a strength and not a weakness. It is only a weakness if one insists that the theory only holds value if one can extract forecast with 100% certainty from the theory. I have had too much success using the theory to discern and rank probabilities for me to dismiss the theory, and I am quite pleased without any ambition to press the theory for certainties.. Best Wishes, Thales

But wave C is often 1.38-1.68 of A, so the wave 3 is always a wave 3C for me until confirmed a 3 by a new low (or high in the case of a rally). Best Wishes, Thales

Weekend Reading Hi Folks, This week I have a three part series entitled "Does Elliot Wave Subsume All Valid Technical "Chart Patterns." I only have the first part in a .pdf (I for the life of me cannot find parts two and three in .pdf but I have them printed out). I have included links to a Prechter website where you can sign up for FREE and view parts two and three in .html. Not ideal, but it is what it is; and if I do find the .pdf's of parts 2 and 3, I will post them here in the thread. This series of article is from almost five years ago, and I have the three parts printed out and in my main Trading Notebook. Much has been made here in the thread about context and the role it plays in my trading. Well, much of the manner in which I view price action is through the lens of Elliot Wave. Again, I do not use EW to predict or forecast. I use it to sort out various probabilities. I know many have a built in distrust, dislike, or disgust with the theory. That is too bad. There is much of practical value in this theory if you do not expect certainty from it. I know it helps me daily. Let me give a recent example of how a very simple use of EW saved me from taking a larger loss than I did, and if I had heeded my own inclination, I would have avoided the trade completely. Yesterday, I took a long on the 6B (GBPUSD futures). Now, when I took this trade, I saw we had thre waves down (an initial wave down, a second wave correcting the initial first wave, and a larger thrid wave down). I had thought that we were in a wave four correcting the third wave down. But, I also saw price had printed a low, followed by a high, and then a higher low that retraced a suitable proportion of the bounce. I bought a break of that high. At that point, however, price had formed an small, upward drifting, overlapping structure, aka "a bear flag." That price action, coupled with the well-formed impulse down consisting of what can be viewed as Elliot Waves 1 down 2 up 3 down and the "bear flag" being a potenital 4 up, the expectation for a further push down for a final wave 5 down became quite high. In fact, here is what I posted before price broke to new lows: So rather than let the trade run for my -20 initial stop loss, I used what I recognized as a high probability EW pattern to decide to cut the loss by 80%, Nothing special, nothing magical, but these patterns occur, they recur, over and over and over. Use them or not, but I have found EW to be extremely helpful to me. Again, I do not bother subdiving waves ad infinitum. I just isolate the recognizable patterns and trade accordingly. If nothing clear presents itself, then no problem - I stand down. Here are the links to parts 2 and three: Socionomics Institute - Please Login Socionomics Institute - Please Login I've attached part 1 as a .pdf Best Wishes, Thales Subsume Part 1.pdf

Hi Dug Dug, Many futures brokers allow special "day trade"margin for the e-mini's, with $500/contract having become fairly common. Funny that the CFTC is coming after FX margin, but no one seems to mind the e-mini futures margin. That is why I suspect this has everything to do with Obama & Chicago and nothing to do with a saving retail traders and there $500 bucket shop accounts. The motive is not consumer protection - it is to move more trade flow to the CME. If the government were smart, they'd treat bucket shop bets like table gaming bets, and collect a 1/10th of a pip "tax" on every bucket shop bet. As far as I know, there is no limit on how much someone can bet at a casino. Why is the governent worried I might lose some chicken scratch with a bucket shop but allows me to ose my house to the Sands? Why else would the government suddenly become interested in the "well being" of three figure accounts? It is hard for me to see how this is not related to directing trade flows to the exchanges. Best Wishes, Thales Best Wishes, Thales

Hi Traderunner, A couple of quick comments. First, the first buy seemed both very late and a wee bit premature. It was late in that if you were looking to get long on that size of swing, the proper entry would have been the first long sequence following the correction off the earlier spike high. You can go back on your chart and find where I mean. It was early in that since you missed the first long sequence, the next opportunity to go long would have been a break above the spike high. Your first entry was a tick or two early. No problem there, really, at least not in this case, as you would have eben stopped in no matter what. I also do not see a problem with you cutting your loss quickly. I had one two nights earlier on the 6B where price poked above the chop zone to get me long, and then three minutes later I cut it loose for few ticks loss, and it proved to be the absolute right thing to do, as the 6B has not traded close to that level since. Sometimes we get lucky and do the right thing. I do not know what to say about your second entry. I have cut trades loose and re-entered at new highs myself. However, if I was quick to cut the first one, I'm usually quicker to cut the second one. And if you look where you entered, there was a short sequence immediately following that should have been a clue to cut it for a small loss or even break even, if not outright stop and reverse. Another thing you might do is zoom out a little bit from time to time to see where price is in a larger context. I'll direct you to a series of three posts between patrader and myself where patrader identifies a pattern on his chart that, should you train yourself to see it, will save you and make you money (when posting, patrader does not say too much in words, but patrader's charts speak looud and clear to anyone willing to listen). Here are the posts, to make it easy for you to see the pattern to which I am referring: And here is the 6E with a few notes repeated from my above comments: And if stopping for the day after 2 losses is part of your trade plan, congrats on sticking to your plan. I am not exaggerating when I say I have had more than one -40 tick day trun into a -200 tick day when I fail to just walk away and come back the next session. Some get better when they are down, but not me. I think you are doing well. I hope you feel you are making progress and your efforts are well spent. Best Wishes, Thales

AON offers no such guarantee. Maybe I'm just old (and I'm really not that old), but that made me laugh - imagine, a 3 cent premium! I still remember sitting in the bull pen and having the manager come in shouting, "We have 100k shares of xyz to go at 15quarter with 5/8ths gross!" 5/8th gross to the broker (that's 62.5 cents to you folks who think shares always traded in penny increments). Now that, my friend, is a premium! Best Wishes, Thales

Sorry, I had to run out today and was not able to follow up sooner. Looks like a lot of good chart reading was shared here this afternoon! Yes, exactly like that ... here it is, albeit long cold, dead, and after the fact, on the 6B. Best Wishes, Thales

I cannot post a chart right now, but if you were to look at the GBPUSD 15M I think you will see that we did get a fifth and possibly final wave down and it has the form of a diagonal. Best Wishes, Thales

Welcome, elitejets! I think we would all benefit from seeing your 60M/240M analysis. I hope this is the first of many posts here in our little corner of the internet! Best Wishes, Thales

I'm not trading this, and its not pretty (not by a long shot), but that does not mean it may not be good for at least PT1 ... the EURJPY ... (this also has the look of being a sideways consolidation before next move down. At best, either way, its a 50/50 trade and I am not interested in it for myself or for my daughter's account). Also, unless I state otherwise, it is likely that any charts I post during the remainder of the day are not representing actual trades. I am quite pleased with the week, and especially this last day, and unless somethng spectacular happens that seduces me to trade, I am finished until Tokyo opens for business again. Best Wishes, Thales

I would hope so! I think I could probably answer for you, as I tend to agree with you concerning the shorter time frames, but you go ahead. No worries. My own two cents is this: The only time I need to see anything smaller than a 15 minute chart is if I was absent from the screen and I need to see which came first - the high of a swing or the low of a swing - anyone who wishes to see an actual example of what I mean can use the "search this thread" function, and look for the pinbar discussion between Blowfish, kiwi, and myself. Otherwise, anything you can see on a small time frame chart I can see on a 15 minute chart. I think it would be a prudent use of one's time to use the 15 minute chart and learn to follow price as flow, rather than price as bars. Price moves in waves, not discreet scratches upon a chart. You can look at smaller bars, but you are no more likely to see the true character of price action in those bars than a scientist can apprehend the beauty and rhythm of the ocean by examining sea water molecules beneath a microscope. But that is my own opinion, and while I consider it correct, I know I fail to persuade. I mean no disrespect to those whose opinion differs from my own. Best Wishes, Thales

Once you start getting close to you PT, you have to start thinking in terms of how much are you willing to risk to get that extra 15, then 10, then 2 ticks? On another note, EURGBP looks to be giving a second chance to get long on the hourly. I had been following this for weeks, and earlier this week it started to show signs of a bottom (perhaps not the bottom, but a bottom nonetheless). I cannot believe I did not get an order in to go long this above the sideways movement along those lows! As it is, I will likely wait for a retracement and then breakout to new highs to get long of the EUR against the Pound. I'm not interested in this as a day trade pair. I think this is better as a swing position trade. Best Wishes, Thales

I think Beachtrader has spent a lot of time on the 5 minute chart and he may feel more comfortable working from that level. Like you, Marko, I find the 15 minute seems easiest on my eyes. Daedalus prefers 89 tick charts. As long as time matches degree matches trades, and each is responsible for his or her trades, the good the bad, and the ugly, then to each his or her own ... Best Wishes, Thales