thalestrader

Hi Folks, Here is one that also got away from me, but it is a good example of why I am as agressive with my stops as I am - there is always another opportunity. The EJ short that I did take was stopped at break even (you can go back to today's earlier posts and see how that trade unfolded), While away, you can see that the break to new lows was an opportunity for a trade that resulted in 50% at 1R, with a +55-60 tick PT2 depending upon your bookie's spread, etc. Best Wishes, Thales

Gabe, You have my condolences. Our family will pray for your family. Best Wishes, Thales

Hi Folks, If the GU were to flip to short, this is how it would look. Price stalled at a reasonable resistance level, but the first PT on this little swing is less than the initial risk. So, I would have to be reasonably convinced that price was about to decline to lower lows on the day for me to take this short at this level. Best Wishes, Thales

Hi Folks, I did not trade this as I was away form my desk as it presented itself, but the ending diagonal on the GBPUSD did indeed auger an interuption of the immediate downtrend, and it was followed by a nice long that has hit PT1 and PT2 at 1.6450 is still outstanding. This is what I meant in the prior post when I said that I do not use the ending diagonal patern alone as a reason to trade. I will use it to take profits, and it puts me on notice that I shouldn't walk away from my desk for an extended period or time as an opporunity for profit may be ready to launch. Best Wishes, Thales

Two separate trades, Gabe, but each is the mirror image of the other Long entry = short stop, and vice versa. Best Wishes, Thales

Nice, Forrest! Great work! Best Wishes, Thales

And with the lower low from entry the stop loss goes to break even. Best Wishes, Thales

Not much there. Price declined to +13 and started a slow creep to about -6. At -7, we'll cut it looses and wait for a better opportunity. Best Wishes, Thales

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

Hi Folks, This should look familar to readers of this thread. I do not typically use this alone to enter a trade. I will use it to take profits. Best Wishes, Thales EDIT: And in this case, I would not be surprised if we do not see yet one more low before a decent bounce, i.e. a "third push."

Because I wanted 100 ticks and I felt that we'd get it. Sometimes I get burned for pushing it for a few extra ticks. Best Wishes, Thales

There was nothing wrong with your profit target. As I have said before, I use S/R zones to give me an idea of where price is heading for my profit targets, and then I use fib's to tighten where I want to place my order. If no significant fib levels exist (a rarity) I will simple place my PT just above the midpoint of what I see as a zone of S/R. My PT was only 6 ticks below yours. You cannot seriously be concerned over a 6 tick difference! Best Wishes, Thales

Hi Folks, Well, I was right in that the short side looked better. In fact, it was the long side that triggered and immediately reversed to take out a -40 but the short triggered and hit the +100 PT1. Took the second 50% off just now at 1.6377 as price has triggered a long ("dance with the one that brung ya', and go home with her to," as my old Texas trading buddy always told me). Final result for a night of sleep = -40 (100%) + 100(50%) + 91(50%) = -40 + (191/2) = -40 + 95.5 = +55.5 ticks. The potential long was enough to take me out, but I did not outright reverse. There will be other opportunities later today. I'll be back closer to the NY open. Best Wishes, Thales

Hi Folks, A slow, lazy night, with not much to interest me at the moment. Here is a look at the current GBPUSD. I'm turnng in for the night, but I'll be interested to see where this thing is trading come morning. Both long and short could be worth a shot. The short side looks like a better R/R with bigger targets and more room to run. Of course, that means the short will probably trigger, immediately price will reverse and go on a 400 point rally. Well, we'll see come morning. Best Wishes, Thales

I'm feeling much better, thank you. I have no idea what was wrong with me, and I'm waiting to hear back on the results of some tests. At any rate, business as usual this week for me, God willing. I do have other business on both Tuesday and Thursday that will keep me out for most of the NY session on those days. Otherwise I expect to be at it from Sydney Sunday to lunch in NY on Friday. Best Wishes, Thales

I'm using 6.5. What are they debating? Why not just enable the user to turn fixed scale on? Best Wishes, Thales

That's funny, Kiwi. I tried Sierra a year or two ago. I remember I did not like it, but I cannot remember why. Best Wishes, Thank you, Thales

I do not find too much to recommend FXCM's charts, but one feature that I do like that is lacking in every other package I use is that the vertical price scale will stay stable and can only be adjusted by the user. Ninjatrader, on the other hand, automatically adjusts the scale, which distorts price action. I do not know why these developers all think that there is a benefit to what I call "auto-scrunching" during price moves that are large relative to the immediatley preceding activity. If anyone knows how to stop Ninjatrader from autoscaling, please let me know here. Best Wishes, Thales

If you were to ask me, I'd have to say this is a pretty special thread, as far as internet forums go. I know that just the act of posting a potential trade causes some folks to experience the same "fear of loss" due to having made their judgment public as they experience form actually being in the trade itself. Best Wishes, Thales

Weekend Reading Hi Folks, This weekend I offer an old Ed Seykota interview from an old issue of S&C magazine, and a link to an old Time Magazine interview with Nicolas Darvas. Business: Nicolas Darvas Pas de Dough - TIME A favorite of mine form Ed Seykota is when he tells us that "I have many rules and some higher laws. Some of the rules are: Trade with the long-term trend. Cut your losses. Let your profits ride. Bet as much as you can handle and no more." And from Darvas, "I have no ego in the stock market," he says. "If I make a mistake I admit it immediately and get out fast." Listen to Kiwi: Follow your rules! Have a wonderful weekend! Best Wishes, Thales ed-seykota-of-technical-tools.pdf

And it is well that you should. I wouldn't want to see you trade any other way. Best Wishes, Thales

I also would not wish to change your mind, Jon, or anyone's for that matter. I would simply offer that someone viewing your trade management of this particular trade might wonder at the fact that you risked and lost 50 ticks open profit in the hope of gaining only an additional 15 ticks. Knowing that you do not enter a trade unless you feel that your analysis allows for a reasoable expection of a 1:1 risk/reward, then some might wonder if it might be prudent, rather than "giving into your mind," if one were to adjust one's stop from time to time to a point commensurate with the hoped for additional gain. Again, I am not criticizing your trade management. I'm just offering another perspective. While I do believe there are certain aspects of trading, and life itself, for that matter, that do yield to right and wrong distinctions, this is not one of them. Thank you for sharing this trade with us. Best Wishes, Thales

Interesting questions. I would say that I have certainly become more conscious of how I have incoprated various ideas and concepts from certain sources into my trading (for example, my above post on William O'Neil and the wedge examples). My interchange with MidK has been especially helpful in that regard. There are certain things that I have come to take into account while making my trading decisions that, while not "subconscious," are nontheless habitual and not necessarily at the level of a "checklist". In other words, I note, for example, price consolidating, the shape of the consolidation, the nature of the rally or decline that preceded that consolidation. Based on that information, I decide whether I am getting ready for a short, a long, or possibly getting ready to trade whichever way the next break comes. I know I am looking at these things, but whereas at one time I would be consciously going through a "mental checklist," I no longer do so. I look out of habit for what I feel is important. That being said, I am still of the mind that says that what I do is very easy to learn. What is dificult is the emotional control and intellectual discipline both to sit and learn it and then to apply it. My participation in this thread has made more plain to me than ever the central role that emotions play in the success or failure of a trader. For example, I get many PM's from folks who are struggling. Here is a quote from one I received today (I am removing the Poster's ID out of respect for his/her privacy): "Hey there, i just read a post you sent up in Dec 08 about the emotional side of trading. Something im struggling with massively. I've been through a few mentors and educators and they've given me a great deal of ideas - prob too many - and helped with analysis but i cant seem to get out of a destructive over trading habit amongst other things. I was wondering if you knew of anyone that i might be able to trade with / along side of / chat with while im trading? Ive looked at FX and ES.. and had a horrible time of it.. Would really appreciate any help you might be able to give." And here is my response, which, after having sent it, I thought should be shared here in the thread for all: I guess you might say, Forrest, that the more I learn about and from the good folks I have met through this thread, the more I learn about myself, both as a trader and as a human being. Best Wishes, Thales

Absolutely! Excellent post, Daedalus. I wish I could trade with the cool emotionless calm that others apparently are able to muster (most notably here at TL the example of DbPhoenix, who strikes me as the Dr. Spock of the trading world - and I mean that in a most complimentary way). If I lose twice consecutively, I stop trading. I will still watch the markets, but the trading platform is put away until the next day. I have lost more money "trying to get it back" than the money I initially lost in the first place. Discipline easily goes out the window. I am no longer waiting for my trades. I over trade. I switch down to tick charts and try to finesse a few ticks, doubling and tripling my usual size just "to get back to even." Even never comes. Ever. I finally learned that I have a two loss limit. Best Wishes, Thales

I cannot tell you how much of the "contextual cues" I use comes from two sources: William O'Neil's How to Make Money in Stocks and the technical chapters of Frost and Prechter's Elliot Wave Theory. Nothing I can say or post will be able to replace the benefit you will get from reading and studying the material and then following along here to see how and where I may be applying it. One thing I have said here and elsewhere at TL in the past is that S/R is not all that matters. What is as important is 1) how does price get there, and 2) what does it do once it arrives. Let me give you an example of how I use something I learned from studying O'Neil. You can read the notes on the charts. Each basically has the same information, presented somewhat differently. Best Wishes, Thales