brownsfan019

Just one observation as a non-vsa guy - the thread was rather simple 'is this a short'. It quickly turned into a 3 page discussion w/ all sorts of opinions. What appears to an outsider as a simple question has needed 3 pages so far and there are still questions. Don't take this the wrong way, but does this stuff work in real-time? If so, can any of the VSA'ers join us in the p/l thread and show that it does? I've seen this kind of stuff discussed here for a while, yet have never seen any definitive proof of this working in real-time. I ask b/c if no one is making this work in real-time, then these questions are just the blind leading the blind.

I think what you've illustrated here and what works on momentum type stock plays is a great way to trade them. And you've proven it works for you. IMO it's not quite as clean in the futures markets. Part of the reason is that I am not entering always at new HOD/LOD or playing markets with huge % gains/losses on the day. I think that's a massive advantage to trading stocks over futures. In futures, I am in the thick of it sometimes (what you might easily see as chop) and getting in and out is advantageous many times. If one were to only enter on new HOD/LOD or momentum type plays on the futures, I think the same idea can hold but the problem there is that the trader might be waiting for days to get a signal like you do daily on stocks. I have to admit - after you've started posting here, I've been watching stocks closer via freestockcharts and there's days where I sit there & think - this is so much easier than trading futures. I've just seen quite a few days where doing what I do now on the big % gainers/losers works like a charm (and what appears to be easier). Separate question - do you ever use options on your plays? Just curious what your thoughts are in regards to using options to daytrade.

diablo - great question - I take 'em where I see 'em. Regardless of the implied correlation. Few reasons why... My main markets being traded are Bonds (ZB), Indexes (ES/NQ), Gold (GG), Oil (QM) and Currencies (6E). Of that list you can argue that there is some correlation in some shape or form, but that does not stop me from taking simultaneous trades. And even if you assume there is correlation (inverse or direct), that doesn't always hold true. I read somewhere that bonds and indexes have a 60%-70% inverse correlation - meaning 30%-40% of the time, they don't always move hand-in-hand. And I can attest to that. While I prefer to be long bonds, short indexes (or vice versa), it's not necessary. As for gold, oil and currencies, some days those are correlated together, other days not; some days correlated to bond movements, other days not... You get what I am saying. This is also a reason why most trades are 1 contract - b/c I need to leave margin available should another trade appear. If I load up on the first trade I see, I have to pass on others and I cannot do that. Going in to each day, I know my edge lies in taking all the trades I see, on all the markets b/c I have no idea which market(s) will be moving that day. If I interfere and pick and choose what market(s) to trade, I'm just asking for trouble. My luck, I will load up on the losers and pass on the winners. To avoid that mental knightmare, I take all trades that I see on all markets being monitored. If I could filter the winning markets from the losing markets each day, then I'd be bringing in considerable more gains. I have not found a way to do this (yet). Also - I take every trade I see b/c many of these trades occur during the 8am-11am EST timeframe. While it's nice when I can enter trade #1, exit trade #1 and immediately enter trade #2, etc. the market doesn't always work out that nicely. What's more common is overlap and you just have to manage it. B/c I have a relatively small window to work my trades, I have to be ready to pounce when the trades appear.

You & me both thales. There are trades where having a fixed profit target is ideal and other times where it's like - shoulda held on for a long time (sometimes all day)... That's my holy grail - if I could figure out when to hold vs. getting out. Which basically comes down to defining when it will be a huge trending move vs. a range-bound market.

This thread shows the best way to attach pics to the forum.

6-2-09 Pretty good day here all around. Missed a few trades again, but better.

Looks good bath! What changed - just increased size? Not a bad morning!

BF - I got it, but haven't opened it yet. Was planning to until I got hit w/ some bug that just shut me down for a good part of the week.

If you can assume an 80% win rate, then this has very strong potential. Cutting losses is key.

Here's a thread that discusses trading bond futures, which I would highly recommend taking a look at.

Robert - Good question and observation. Something I meant to discuss... Basically the premise on these scratch trades (taking out for +1 tick to cover commissions on the trade) are when price reaches 50% of my profit target, stop is moved to be+1. The goal is to minimize the impact of losses, although it can (and does) tick me out of trades that move in my favor in hindsight. After reviewing some past trades, I wanted to see if I could keep losses to a minimum and catch the nice moves on the trades that work. Today was a good example where the ZB (which is a bond future btw) had a nice setup and the others didn't quite get to where I was shooting for.

6-1-09 New Month! A decent start to the new month and a Monday. Here's the real bitch of it though - missed some really nice setups on the ZB. Today was a day where I could have cleaned house on the ZB if I was ready and paying attention. :doh:

5-29-09 Nothing special from Friday.

How this post was found and dug up is beyond me... Some people really, really dig around here to find something to post in. It's rather amusing.

BF - thanks for sharing that as haven't read anything this week w/ some illness I'm fighting. If you can expand more, please do. Curious to hear what he has to say on gaps.

Not off topic at all. Hell, it's mainly me talking to myself here so I welcome all company. In regards to your question - at point #2 on the referenced chart, I see 3 very bearish/indecisive candles (spinning top, spinning top, bearish inverted hammer thing). The names of the candles are irrelevant in my eyes. What I see is 2 candles of indecisiveness and then a very bearish candle, ALL OCCURRING AT A RESISTANCE LEVEL. That's the only reason I would be interested in shorting here - we are testing the previous high which was also where a gap short (that worked) occurred. I would be willing to short there w/ a stop just above that HOD and see what happens. The risk/reward there is great.

This is more of a price action / plotting support/resistance type chart, but we are in the candlestick corner and it's my area. Here is May 28th chart after I marked it all up. The basic premise is old resistance becomes new support and vice versa.

Looking at the charts, if you trailed your profit on the candles once the gap was filled, the previous charts could look like: On trades w/ decent moves (like first one), this could provide some additional profits vs. covering at the gap. In the 2nd example, it yields more than covering at the gap level, just not as much as the 1st chart. So there's an idea for exits for anyone doing some work on this idea.

Great question Robert. The trade setup was rather simple in play: 1) Bought immediately on a momentum play. Momentum did not enter as I expected. 2) Price pulled back but did not violate my stop, so I bought on the pull back; which I probably would have done if the momentum filter did not fill. With that said, you won't find me doing this very often. It could have been that I did not get to the screens till about 2pm or so and felt like the need to trade.

BR - focusing on breakouts (when to go with the move and when to fade it) can be extremely lucrative if you can find the right method. Personally, I will trade breakouts (with or against) if my other parameters are met. As I see it, focusing on breakouts gives you a few options: 1) You can focus on when to go w/ the move and only w/ the move. 2) You can focus on when to fade it and only fade it. 3) You can try to do both. I know that part seems straight forward, but I think sometimes people either try to do too much or not enough. It really depends on the risk you are willing to take and how much research you want to put into this. Initially, I think it would be easier to focus on 1 method - fading or riding - breakouts and become really, really good at those. Once you figure out how to ride or fade it, then you might have also figured out the other way as well. As you know there's so much that goes into building a trading strategy that you are really going to have to dig deep to make this work. For example, if you are looking to profit 1 ES pt, then I would think you could do either (fade or ride it). If you are looking for a monster move, then you'll need to work it hard. Here's some ideas to consider: 1) Candle patterns can lend some aid here. Keep in mind that the lower the timeframe, the lower the reliability but I would at least be aware of what you are seeing. 2) You'll need some other filter - volume, indicators, S/R, oscillators, bands, etc. etc. Something else will need to help confirm the breakout or fade trade. One disadvantage to only watching 1 market is that if you are playing breakouts, it might not be breaking out. So if you do find something that has your attention, I would take a look at bonds, currencies and oil to see how the idea works there as well. In other words, if the ES is between your breakout areas, could you be profiting elsewhere? That is one advantage guys like Thales have over us futures traders is that his universe is so much larger. If you were working a breakout system on stocks, you would just need to set your screener and then react. One observation on your ES chart, that I also posted here, is that we had an immediate gap fill today. Maybe that's something...

A couple examples from this week: 2 perfect, super easy trades. 1 trade and done. In the first chart, you'd want to hold most of the day. In the 2nd chart, exiting near the gap fill is ideal. So there's a possible entry system here (with the biggest question being how many bullets to fire), which then leads to the next part of the equation - where/how/when to take profits.

Check this post and find any posts by thales that you can find.

I got a little catching up to do on the thread. I have been fighting some sort of upper respiratory bug this week. Not a ton of trading, but here's where I am at... 5-26-09 5-27-09 5-28-09 Been an ok week so far. Fighting this bug has not helped things but hopefully I can shake it completely this weekend.

I agree hlm - most get into the biz thinking it will happen overnight. And for some they apparently think it can... Give me a break DB. 'A couple months'? Right. Let me guess - the guy who has never shown ANY evidence of trading for real mastered the market in a just a few short months, right? And that is why people enter this business thinking it can be done in MONTHS rather than YEARS. You get people who think it can be done or pretend it can be done, but those who ACTUALLY do it know what it takes. If I am wrong DB, please prove it. Join the p/l thread and show us how you have mastered the markets daily. Show all those noobs following your work and buying your e-book how it's done. You don't have to worry about calling out trades in real-time (since you reused to do that in the chat room). You can post a blotter at the end of the day. Once again we are back to the theme of - be careful whose advice you listen to when they refuse to show you that they can actually do this job. While you may typically associate that w/ a vendor selling a $5000 course, it's just as useful to those giving out 'free' information.

5-22-09 Nuttin to report. Woke up not feeling good and just took the day off. Have a great, long weekend everyone! Don't forget that Mon is a US holiday.