thalestrader

Duplicate post deleted

I almost always have two profit targets identified prior to placing my entry order. I set one at a nearby S/R level that offers a profit equal to or greater than my initial risk. The second target will be at the next S/R level. If my first profit target is greater than my initial risk, I will nonetheless move my stop loss on the whole position to break even if price moves in my favor by an amount equal to or greater than my initial risk. For example, if my first profit target is +40 ticks, and my initial stop loss is -25 ticks, then once the trade moves +25 in my favor, I will usually move my stop loss to break even, 50 ticks is usually my maximum first target. If price goes +50 ticks on a day trade, you can be almost be certain that I have taken some profits. 100 ticks is usually my maximum second profit target. If price moves +100 from my entry, you almost be certain that I have closed more of the position. You will see on some of my charts that have at times more than two targets (sometimes three, and usually no more than four). If you see more than two targets, that simply means that on that trade I am trading size sufficient to take profits at targets 1 & 2, and still have contracts enough to hold for targets 3 & possibly 4. Remember this: You are day trading, and price will not move in your favor forever. Price moves in waves, and you want to ride the wave until it crashes into shore, but you do not want to be pulled back in by the undertow when the wave retraces back to sea. It is, in my opinion, folly to trade for a tick or four or eight. But it is just as detrimental to let your +30 tick open profit turn into -30 tick closed loss because you were hoping for +50 ticks. Best Wishes, Thales

Hi Gabe, Your posts concerning these issues are always welcome here. Best Wishes, Thales

Hi Gabe, One of the best posts I've read anywhere. It is printed and now holds a permanent place in my loose leaf notebook. You did just about everything you could do to insure your failure and yet you caught yourself and made the changes necessary to put you back on a proper course. Your courage in posting this here shows that you really are closer than you think you are to breaking through in positive manner. The following point you made is most important: As I read that I felt that same relief wash over me that I have felt on many occasssions. I cannot stress the importance of just getting out, hit the flatten button, close everything and eliminate your risk when you are feeling the fear and the anguish of being locked into a bad trade. My father is fond of repeating a saying he heard years ago and that always echos in my head when I am in a trade that is making me uneasy: "I'd rather be out of the market wishing I was in rather than be in the market wishing I was out." He doesn't remember where or from whom he heard it, so I cannot credit it any further. But you did exactly the right thing, and I hope you remember that release and relief you felt when finally you were flat and your capital no longer in harm's way. When the pressure is too great, get out! You should print your post out also, or better yet, re-write it by hand and tape it, tack it, or other wise pin it near your trading station. Make it the first and last thing you read during your trading session. Thank you for sharing this with us. Best Wishes, Thales

From +34 after entry price declined to +2 and then rallied to +41. I'd have my stop at +25 now. Best Wishes, Thales

What I am saying is that I would have likely entered on a buy stop at 82quarter and not taken the more aggressive entry that you took. There is nothing wrong with your entry, so long as you are consistent. I try to enter at a point where I feel price has to go my way. Of course, price doesn't have to do anything of the sort. Best Wishes, Thales

Unless it is an overnight trade where it is open while I sleep, I will not allow a 50 +/- tick profit to turn into a loss. I'd probably put a stop on 1/2 at +15 or +20 or +30 or whatever and have a stop on the remainng position at BE. Best Wishes, Thales

This should be no worse than a break even trade at this point. Best Wishes, Thales

So do we call it the Forrest Range BO trade? Best Wishes, Thales

I am primarily interested in gaps that open above a prior high or below a prior low. I was not in this morning, but I may have been tempted to take that as a short (I presume that is what you are asking). However, I may have hesitated to go short there as we had a L-H-HL-HH in place for the day session, and price had ye to rally back to 1082 (Tuesday's low) which I would have anticipated (test previos support to see if it holds as resistance). I would have preferred to sell a break after price first rallied to a potentially significant resistance level. I presume you are looking at a possible long here. I like this much more than the short that you proposed, but I may have hesitated here as well to see how price acted at 1082. Your targets look fine, as do higher targets at 91quarter, 95quarter, and 98half. Best Wishes, Thales

1) Your charts are very difficult to see - it is almost as if they are invisible. 2) What is a "T.O."? Best Wishes, Thales

The importance of cutting losses short. I had anticipated a much larger move to the upside, but the market had other ideas. Best Wishes, Thales

No matter how you managed this trade, there is no reason to have remained long to this point. If a bull move is going to continue, the market will provide another opportunity to participate. Best Wishes, Thales

Again, anything can happen ... USDCAD has moved up as high as +50. A +20 stop loss on at least part of the position would be justified, with a stop on the remaining position either at break even or at 1.0522 (-8) which was the last reaction low after the entry was triggered. The point is to let your profits run to target, but do not let what is currently a nice profit run into a losing trade. Best Wishes, Thales EDIT: PS +20 would put it right at the mid-figure, so perhaps +15 for now might be more prudent. EDIT II: As I was typing the first edit, I see, according to FXCM, that the low of this pullback as of now was 1.05493, so a +20 stop on a partial would have been triggered.

Hi Folks, Current look at USDCAD shows that a buy stop at 1.0530 would have been triggered. Best Wishes, Thales

Hi Folks, This USDCAD could, of course, go either way. But right now price action is leading me to anticipate higher prices. New buy point would be approx 1.0530, with targets at +100, +190, and +325 ticks. Best Wishes, Thales

Absolutely! Best Wishes, Thales

I think Dinero answered this very well, and I especially like the manner in which he identified the relevant swings. In addition to his comments, I would add that I was actually expecting one further push lower before the reversal, and as such, I would not have been looking to enter long at the level you noted. That may very well have been a good long opportunity on the 15 minute (or not), though I did not look at that time frame. I've taken another shot showing what I saw as a potential resistance zone (red) and a support zone (blue). You can see how price behaved between the two to create distinct and proportionate swings that define the long entry. Best Wishes, Thales

Hi Folks, Current view of the USDCAD. Best Wishes, Thales

The down side for me is that every night when we sit down to dinner she asks me "So, you shorted the ES at 1018 - how's that working out for you?" Nine year olds! Best Wishes, Thales

Do you really need a new thread for each day, rather than one thread that is updated daily? Best Wishes, Thales

If I were to train a new trader, I would do it very much as I taught my daughter. While it wasn't formalized before we started, this is more or less the path we took: I. Psychology & Emotions No Trading. No Charts. We read and discussed Nicolas Darvas's How I made 2,000,000 in the Stock Market & Edwin LeFevre's Reminiscences of a Stock Operator (I had her read excerpts, but I would recommend the entire book). II. Reading Price - Theory No Trading We read and discussed Stikky Stock Charts, and How Charts Can Help You in the Stock Market by WIlliam Jiler. We read, studied, and discussed the price action/chart reading section(s) of William J O'Neil's How to Make Money in Stocks Identifying Support & Resistance: I printed out select charts of various markets and time frames where I had drawn S/R for her to study. I also printed out charts with no markings, trend lines, annotations, and she learned to draw in S/R using a pencil and a ruler. III Reading Price Live No Trading She sat with me and watched my charts live and observed as I took trades, and explained why and how I placed my entry, initial stop, and profit targets IV Live Trading She traded along side me, but now it was she who would explain her entry, initial stop loss, and profit targets. V Psychology and Emotions (on-going throughout Steps II-IV) I had her read various articles, writings, blog entries, etc. that I have found useful over the years (including a lengthy post from Leonardo from another forum years ago). I'd rather teach someone an approach that I know is sound, while emphasizing the need for emotional discipline the whole time, rather than having some learn to trade a flawed system simply to force them to accept losses. She managed to run her first live account from $25 to just under $1K in about three months. She and I are trading a second live account together. We started it with less that $200 about a month ago, and as of today we are sitting on $1210 closed trade equity. It took me a long time to learn to do this right and a long time to unlearn bad habits. I thought it better that she skipped all the Holy Grail chasing and emotional melt downs and just learn to do it right from the beginning. I started her trading education in May, and she took her first trade in June. She has accomplished in six months what it took me the better part of a decade to accomplish. While I will likely formalize the training a bit more for her sister and brother when they are ready, it will basically follow the course I outlined above. After all, I cannot argue with the result. Best Wishes, Thales

Now wasn't this a fun little run? Now that is how a forum should work. Best Wishes, Thales

I could, but where would the fun be in that? See if you or someone else can post a chart demonstrating what I mean first. Best Wishes, Thales

If you focus your attention upon properly identifying support and resistance, then you will ultimately find that your current struggle is over a false choice, and here is why: While not every breakout is a reversal, every reversal can be traded as a breakout. Best Wishes, Thales