thalestrader

I hadn't decided on the stop loss at that point. I was waiting to see if we had another HL before long entry. I needed a stop at that line or above to make a 1:1 first target, so without a pullback to a higher low that held above that point, no trade for me. Best Wishes, Thales

GBPUSD looks something like that ... Best Wishes, Thales

I think a little "back story" here would have gone a long way. Seems like it could have been an interesting thread, but I can't even be sure what it's about. Best Wishes, Thales

Couldawouldashoulda ... Best Wishes, Thales

See what happens when I don't play for two targets? That's when the ES decides to run a bit. I was just telling Forrest a week or so ago that I had not hit the ES for a 10 point trade since November. I guess I let my recent experience finally persuade me to stop trying for the big play and just take it all off at PT1. Nothing says this has to go to PT2, but if it does go there, it is doing it without me. Best Wishes, Thales

You can significantly outperform the SP if you do three things: 1) Use the IBD 100 as your watchlist, 2) follow the IBD Big Picture, i.e. only initiate new longs during confrimed market uptrends (though they got a bit screwy lately calling a confirmed uptrend a few weeks ago on new highs with shrinking volume - usually IBD is more strict with its rules), and 3) Use a trailing stop loss so you do not ride your winners into the ground. Best Wishes, Thales

Borderline? Cory, my nine year old daughter thinks you are over the top! Last night she read your post about how bad you were feeling, and she said, "You should tell him it's only money." Best Wishes, Thales

Not for nothing, MM, but from your posts someone might surmise that your plan does not include winning. You need to smile once in a while. Best Wishes, Thales

ES Redux ... Best Wishes, Thales

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

I thought it was quite a good idea. Best Wishes, Thales

Temporary indeed ... lasted about an hour. I'm still inclined to favor the GBP for longs and the EUR for shorts, though I reserve the right to do otherwise. Best Wishes, Thales

Having missed the break at the Tokyo open last night, this is starting to look like a day of staring at the futures charts for me. The problem with selling new lows right here is that there have already been two break lows since the breakdown out of the last large consolidation, and unless I am already carrying a short line from higher levels, In general, I do not like to initiate on a third break. At this point in a run down like that, I'm more inclined either to look for a long sequence, and if I feel that the trend has changed to overall bearish, I'm usually content to wait for a bounce that resolves itself into a short sequence. For example, a rally that carries the EURUSD up to 1.4200 +/- 20 ticks or so that ends in a short sequence to get me short. Best Wishes, Thales

The one that did work out for me last night was the ES short ... Best Wishes, Thales

Hi Folks, EURUSD has dropped through nearby support and has fallen back into the range that contained price from May 2009 through most of September 2009. The small support area which had been denoted by a blue rectangle on my chart yesterday is now red as it is anticipated resistance, and next major support should be in the zone defining the bottom of the Summer range. Best Wishes, Thales

Not a terribly attractive R/R profile, but a long sequence on the GBPUSD nonetheless. Best Wishes, Thales

Current look at the ES ... Best Wishes, Thales

Don't you just hate when that happens? Great journal, Jon. Would you have gone short the ES on the retest of today's high for a test of the prior break out level? (I hope you don;t mind me asking you here) Best Wishes, Thales

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

In spite of that drop by the EUR, it looks like the EUR is starting to show a bit of strength as compared to the GBP. May just be a temporary shift, but something to keep our eyes on over the coming hours. Best Wishes, Thales

Anytime within an hour of the Tokyo open coupled with a good indication from price has always been a go in my book. I just know I'll often take a 2-3 tick slip on the way in (Globex fututes, especially the 6J). I missed this move. Nice trade, BT! I'm very happy for you! Best Wishes, Thales

High percentage profitable, but I have never tracked how often it produces a runner. Good question, though. I agree. You certainly can see the tradable break lows more easily on the 1 minute. You can usually see them on the 15 minute, however, if you catch these little interbar retracements during news breakouts. It may be the one time that I find "bars" seem almost to take on a life of their own. Best Wishes, Thales

Excellent! Too bad we don't know ahead of time which trades are going to be runners and which trades are just range travels, right? Great job, TradeRunner! Best Wishes, Thales

PT1's are frequently hit, and PT2's far less often, and when I do use a PT3, it is nonetheless rarely achieved during the lifetime of the swings I tend to trade. Let's take a look at scale of swings and degree of trend. Consider this week+ long rally in the Pound: As I say in the chart text, depending upon the size of swings you wish to trade, there are many, many sequences, long and short, presented by price during the course of this overall uptrend. You need to select the scale of swing you wish to trade, and then stick to it. I tend to trade what I think of as three different scales of swing. You do not want to mix them. If you look at the two long entries I had earlier, each was managed according to the swing that created the opportunity. If you are going to mix degrees, you want to use the larger to govern the smaller, rather than what many traders do - which is manage the larger using the smaller. That usually leads to unsatisfactory results. Let me use a friend of mine as an example. My friend Mark is a generation older than I, and he therefore has lived long enough to have sense enough to value his time more than I value mine; or perhaps I need a level of activity that he finds ridiculous. At any rate, he trades far less often than I. He trades the 6B, 6E, 6J, and as well as Notes and Bonds. He trades identically to me - S/R, watching for long and short sequences, etc. The only difference is that he trades for much larger swings than I. He does not trade with fixed targets. He uses a trailing stop that he keeps 10 ticks below the 61.8% retracement of the last swing low to current rally high for longs, and vice versa for shorts. Last week, he was stopped out of a short 6B for a profit. I do not know what his profit was but I think it was between 100-150 ticks and he was in it for a couple of days or so. A day or so later, he initiated a long right around (probably just below) 1.6100. He has been trailing his stop ever since. So while I have had many trades on the 6B over the last 7-10 days, mostly longs, but some shorts as well, he has simply been moving his stop every 12-24 hours. Where I see a short, he doesn't see anything about which to get alarmed. Here is what his trailing stops look like (I am somewhat guessing here, but I think I am pretty close to how he manages his positions). You see, if Mark calls me when he is in a long trade and I say I'm short, he wishes me well and hopes I get to my target. Why? Because he knows he is trading a degree of movement so much larger than I, that I can make an 80 tick profit on a short without the stop on his long ever getting threatened. If he were to adjust his stop based upon my short opportunity, he's have been stopped out of his trade less than a day after entry. However, if I were to get long now based upon my own scale of swing/degree if trend, I might be well served to take heed of his stop in planning my trade. Once you decide what scale you are trading,then you need to become proficient at identifying changes in the trend related to that scale. This seems to be the most difficult aspect of this approach. I would suggest that you use fib's to help you initially. If a swing up off a low retraces 1/3-2/3 and then resumes the rally, those two swings are of like scale, and can be counted as two separate swings. If, on the other hand, a swing up off a low retraces less than a third, then that retracement should be considered part of the swing off the low, and not a separate swing. This is so even if the swing up is one "bar" and the retracement a new "bar" Price moves as a flow, and not as discreet packages called bars. The key value to fibs is not that they are some "magical" or "mystical" system of numbers that price "obeys." What they do do is that they provide you with a sense of proportion with respect to price movements, and how the various wiggles of all sizes fit in with one another. And that really is all. S/R is still the paramount consideration. But S/R is rarely so nice as to "pick a tick" for us to key off of, but instead presents us with zones. Fibs help us to choose a proportionately appropriate level within that zone for us to watch. After a while, you will not need a fib tool at all. I rarely use it myself except to annotate charts to illustrate what I am doing for others. Otherwise, I can basically look at a swing, and by free hand draw in the 1/3, 1/2, ans 2/3's retracement levels and the 1, 1.27, 1.618. 2.618, and 4.23 expansion levels. Now, I am not always right to the tick, but I very often am. That comes from watching a lot of charts over a long period of time. I think the main source of confusion here with this approach is that it really does come down to being able to recognize degrees of price movement while not confusing or, as our thread friend Marko says, "mixing" them. As Blowfish said, it would have been nice if this discussion had been introduced earlier in the thread. My assumption was that this is the easy part. Apparently I was wrong. I hope that helps. Best Wishes, Thales

Late post as I got caught on the phone, but I gave up on 6B for -7. Looks like it would have been a decent short. Who knew? Anyone? Not me. Best Wishes, Thales