thalestrader

Hi Forrst, In the first instance, I tend to agree with you. Crudetrader's (not his name, but that's what we'll call him until he shows up) entry meant that he was interpreting that range as a chop zone. I may have been tempted to take a long, and then a short where you place a possible short entry. In the second instance, however, I do not see a chop zone. Doesn't the low and the initial rally produce a L-H, and then the pullback a HL, with the HH trigger generated by the gap higher? It looks clean to me. Now, the real question this: Will Soldier Field be a chop zone tonight? Tonight's game may as well be a play off for both of our teams, because it is hard to see how either make the playoffs if each adds another loss to their season. Best Wishes, Thales

Where you say his LH shouldn't be there, I have to say, at the time it was happening, it looked good enough to me to trade. Best Wishes, Thales

Hi Brownie. Both shorts do look relatively easy, as you put it. If you go back and look on lower time frame charts, you will see that the "long wick" on the hourly saw the high print well before the short entry triggered (this is agood example of why it is always somewhat difficult in hindsight to say what one would have done, because the way price is acting is as important as where it is, and how it is acting is not easily seen on dead charts). I also agre with you on the long trade. Had I been in that trade, I see an opportunity to get at at -30 and then await either a re-entry at a new high or wait for a short entry to present itself. The trader who sent this to me said he used a 100 point initial stop from entry. I assume he was entered on the gap, and he would have had to sit through about a 79 point drawdown before price finally moved in his favor. I was hoping to draw him out by posting this chart, so maybe he will join us here and share with us the blow by blow on these trades. Just to be clear, I did no trade these. In fact, now that I look at the chart, he may been trading the Nov contract and not the Dec as shown here. Best Wishes, Thales

Hi Folks, Here is a 60 minute Crude from the last few weeks. One of our silent readers tells me that he has been using our little approach on the hourly crude. He didn't send me a chart, and as he has not responded to my request to post his chart here, I have reconstructed his trades based upon is identification of the times of the Highs, Lows, and triggers. He is using a simple 1.62% fib extension of the primary swing for his profit target. He has a $1 disaster stop, and adjusts it "quickly" to the high/low of the trigger bar. Any thoughts? Comments? Best Wishes, Thales

Hi Folks, Bed Stuy Campaign Against Hunger Best Wishes, Thales

I suggest that you focus your attention upon those areas that I marked off as tradable opportunities, and then consider the following from that post: I know it is tempting to hurry up and trade, but why not take a few weeks to learn how to trade first. I have not seen anyone post a chart here that atempts to mark the highs and lows, higher highs and higher lows, lower highs and lower lows, as I did in that chart. No one can make you do it. You can chose to do so or not. But if you are "seeing opportunities everywhere and getting killed on most of them," you need to stop getting killed and learn how to see. A little bit of patience now will pay off handsomely later (and not much later at that). Best Wishes, Thales

Hi ziebarf, Thanks for posting and thank you for the questions! What Forrest is pointing to is that in your chart, price has printed a HL and a LH, and thus it is in what we call the chop zone. Once in the chop zone, you should take your cues from the last real H and last real L. You might want to go back to this post: http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-84.html#post79635 and then read forward from there. The concept of the chop zone arises quickly after that post. To add a thought to what kiwi said about using a lower time frame, the important thing to keep in mind is that you will be trading off relatively small swings. Your profit targets wil be correspondingly small. For example, if you are trading short off of a 5 pip swing that retraced 4 pips to put in the LH, you are realistically looking at a first TP that is only 2-pips below entry. Thus, many of these trades would be theoretically profitable but in practice, given the cost of the spread, you have reduced your chances of success on any particular trade and over all to just that - chance. In other words, these patterns occur on all price charts, however you choose to bundle the price data, from the smallest increments to the largest. You should look for sufficently large bundles to allow for reasonably favorable profit targets. Best Wishes, Thales

As long as one complies with the purpose and spirit of this thread, then go for it. I have no problem if you or anyone want to use this thread as an incubator for other ideas and approaches. If it gains sufficient currency, it ultimately may support its own thread here at TL. Best Wishes, Thales

Weekend Reading Hi Folks, Before I get to this edition of Weekend Reading, since I have your attention, I have something to say, and a couple of requests. This thread has become a real joy for me. I know we have many, many more traders and trader-hopefuls regularly viewing this thread than are actively posting. Day after day, week after week, I get PM after PM, each from someone different and yet each saying the same thing (and I will quote from one of the ones I received today): "I just want you to know that even though I'm not very active in the thread, your thread has made all the difference in the world to my trading. I've been trading for nearly a year ... but my returns were not even close the what your daughter was doing. If someone would have told me there were people that could make returns like that, I probably wouldn't have believed them ... I've been studying your approach ... and began sim trading on Monday, and I'm currently up 47% on the week (before commission/fees). Before, I would have been very happy with a 47% return on the month ... And what gets me, is that during the whole time that I was focused on systems, rules, indicators, etc., price was in front of my face the entire time! I'm now trading a chart with no indicators." You could change the number of years, and while some are still on sim others are trading real money, and you can change the % return results, but otherwise, the PM's all say the same thing - this thread has helped some real folks move their trading in a real positive direction. I couldn't be more pleased that real folks are finding real help here in this thread. I want to thank those who have taken it upon themselves to share their own experiences here in this thread (I'd name them but for fear of leaving someone out). I believe that their contributions help more than anything I can say, because it is their stories and their progress that inspire others, including me. For those out there who have found this thread useful or interesting I have two requests for help: First, if you are out there applying what we are discussing here, whether you are doing it exactly like I am or you have adapted it to suit you and your personality, please do not keep it to yourself. If you have benefited from what we have built here, then it is your responsibility to help to continue the work. If you are struggling to learn it, do not struggle alone. Speak up! Help is right here, and it won't cost you anything but to raise your hand and ask for it. Whether you need help or you can provide help to others, join in. Help us help others to learn. Second, if you have benefited from the work we have done here, and if you are in a position to do so, please, please (I'm begging here), take some small portion of the profits you have earned and give to an organization that helps to feed the hungry. No matter what city or town, state or country in which you live, there is a family, a war veteran, a child, who right now is feeling the constant pain of hunger. Give to the food bank, the rescue mission, the soup kitchen, the homeless shelter. If you do not know anyone local to you and you don't have the time to call a few churches to find where you might help, PM me and I will give you the address and phone number to the Allentown Rescue Mission or the Allentown Ecumenical Food Bank. People are suffering all over. If you have risk capital to trade, then you have a few dollars (and even a very few dollars can make a big difference) to give to help feed someone who is, at this very moment, in pain. Imagine a child who cannot even understand why she suffers these constant pangs. You can help that child. You can ease her pain. I pray that many reading this will give. I know that many won't. Trading is difficult. It requires an emotional discipline and psychological strength few are able to develop. Trading is hard. For some reason, for many of us, giving is hard. But, just as trading offers unimaginable financial rewards for those who do the hard work of learning to interpret price and the even harder work of developing the emotional discipline to apply one's price reading skills to the markets, so too does giving to help others offer unimaginable rewards of the soul to those who open their hearts to the suffering and struggles of others and do whatever it is within their ability to do to ease that suffering and help in those struggles. And with that, I will leave you this week's edition of Weekend Reading. Below you will find two links to a blog by a private trader named Rod Roth. I do not know him. I do not know how I came to find his blog. But find it I did, and I found these two of his essays particularly meaningful. I have each of these copied and pasted to a word doc and printed out and each holds a place in my trading notebooks. As these are his work, I will simply post the links. If you find them as interesting as I have, then I suggest that you too copy and paste them to a printable format and keep them in your trading notebook. Thank you all for listening, and remember - humans are wonderful creatures capable of wonderful things, among which is the wonderful act of helping a human in need. Do something wonderful this weekend. Best Wishes, Thales On Emotional Discipline The 80/20 Trade

I'll be out today, but here are my EURJPY targets if the decline continues/ Best Wishes, Thales

That's what I have been saying since I got here. Also, I'm not one for calling tops and bottoms and what not, but for the first time since the rally started in March, price action on the US equity markets is looking like it is considering taking a real breather. If so, we might soon get back to having some of those big swinging days again. Best Wishes, Thales

Well, I go to BE according to how I plan my trades. So I do from time to time get taken out at BE only to watch price continue in the anticipated direction. It is nowhere near 66% of the time, and I doubt it is more than 10%. I have a friend who manages his trades very similar to the way manage mine, and he trades currencies only, When I am going to break even he is going to -5. I think he goes to -10 once the trade prints a +10, and then after a reaction that goes lower he'd to to -5 or just above the reaction high, whichever is more favorable. He goes to break even after a reaction followed by a lower low (and vice versa for a long). The key is not that you have manage your trades exactly like me, or exactly like Kiwi, or exactly like Don, or anyone else. The key is to develop a routine that allows you to habituate yourself to keeping losses small, capturing profits, and not allowing profitable trades to turn into losses, especially not devastating losses. Most important will be to keep taking your swings. Best Wishes, Thales

No, MidK, my stop goes to BE with a print at a certain level. In this case, my level would have been a bit lower than yours, but my level was nonetheless hit, and had I been in this trade, I too would have been stopped at break even. It happens. Right now, when this happens, it will be more frustrating to you. But over time, once you get hundreds and then thousands of trades under your belt, it won't bother you at all, at least not much. Best Wishes, Thales

Took half off here (a bit early) and will hold the second half for PT2 or break even. Time for bed here. Best Wishes, Thales

Sorry for the late post, but I thought I had snaaped and posted this before it triggered. Apparently I did neither. Short EURJPY at 132.49, no slippage tonight. Best Wishes, Thales

Perhaps the entire NY session was counter trend - Looks like Yen buyers are hungry. Best Wishes, Thales

Hit PT1, so stop would go to the dotted magenta line on the second half. Best Wishes, Thales

Stop loss would now be to break even. Best Wishes, Thales

EURJPY looks a little long, though the nearness of the first PT makes this one hardly worth the risk. Best Wishes, Thales

Heading into Asia and seeing the EURUSD, I should have taken a look at the EURJPY. Similar pattern to the EURUSD, but in this case it declined to the first PT quickly, whereas if I had traded the EURUSD, I'd still be waiting see price decline to my BE point. Best Wishes, Thales

Hi Folks, I cannot think of a time of day less interesting to trade than this period between the NY close and the Tokyo open. At any rate, here is the current look of the EURUSD. Price is showing that the rally out of this morning's low is losing momentum, and is again presenting that now familiar ending diagonal pattern. Remember, this does not assure a a break down out of this patternl. It simply indicates a loss of momentum at the moment. A break up out of this pattern can be fierce, fast, and trending. Now, I got a message from someone taking issue with my referring to some of these as "true" ending diagonals. Apparently a couple of my examples did not have the "required" internal wave count." As I have said, this is not about EW. It is about a pattern that price often traces out as momentum wanes in the latter stages of an impulse move. I really could not care any less than I already do as far as "internal wave counts" are concerned. As I said before, I am not an EW ideologue. Best Wishes, Thales

I cannot view them either.

Well, stopped at entry. It looks as though the theoretical break even stop loss (1.4894) would have been safe for now. This is starting to feel like a wouldashouldacoulda. Best Wishes, Thales

Price has now trade at/through my predetermined BE level, so I placing the stop at the actual rather than the intended entry. Best Wishes, Thales

With that stop loss goes to theoretical break even at 1.4894. If I am stopped there, it will actually be a -2.6 pip loss because my fill was 1.4896. Given the way FXCM is filling stops today, if this goes back to 1.4894, my fill will probably be 1.4891 for -5.6 pip loss. Best Wishes, Thales