Dinerotrader

I still suck at this but I would pass on a breakout to the down side because of the one large down bar unless I was looking at a smaller time frame with a much smaller breakout profit target. My

Nope, you never said that. Those were my own ideas in trying to interpret price action. So many fail at trading breakouts that my hope would be to add some notions of "statistical advantage" in deciding whether to take a breakout or not. Somehow you have to filter through every breakout you see in order to just take the best ones. I am still on that journey. I will try not to over think it though. I really wish it were simple. Thanks.

Gabe is going to love your charts.

Quick look at the 6J. Looks like a reasonable breakout level given past price reactions to it. The quick move up that that level always worries me. If the move up to the S/R level is large and fast, it seems like a lot of the momentum is already used up by the time we get the breakout. I would rather have tight price action just below the breakout point and then have all the momentum stored up for when the breakout occurs. Thales, do you prefer a certain type of price action sequence just before a breakout?

Took another few trades on the ES that worked out.

Tried the ES a little today. Overtraded the ZS when my setups weren't there.

Turned out to be a nice breakout with a great reversal bounce off the breakout level. I looked closer on the 1 min chart to find 2 bounces off that support. Maybe setting up to really push upwards. A break above 133 looks interesting. Okay, decided to take this breakout with some real cash. I have actually never traded spot forex before with real money so this was very exciting. I wanted to make sure my first real forex trade was profitable so once price stalled a bit and started moving back, I got out. I will start a scaling out approach once I can figure out the order system better.

Here is how I am looking at it. This is point where you think, this looks like a good breakout but will it just chop around and only really make a good breakout after one or two more upswings.

Might be one to watch at the open on Sunday at 3:00.

Look at the bright pink breakout. I wonder if your odds of a good breakout increase if you wait until a breakout occurs as usual, then retraces and bounces of the level that it just broke through as it did on the pink breakout. You'd miss quite a few BO that didn't complete this pattern but if this gave you more winners you could bet more on the setup. Just another thought.

Thanks Tasker, I am hoping we get some more stories. I have been reading the market wizard books and a couple ideas related to this thread have really stuck in my head. 1. Almost all of these amazing traders made some larger risky bets when they began but eventually lost on one of them and had to really put their risk management as a priority in their trading. 2. One of the "wizards", who name alludes me, noted that you should make sure your position sizes are small while you are new at trading because that is your trading skills are at their very worst. That makes so much sense to me. When you are new, there is a huge temptation to make some bigger bets/trades because you really want more capital to trade with but such bets normally lead to large set backs instead of progress on the path to becoming a trader. If your skills prove to be reasonable while you are new, your small bets will keep your capital increasing and you will steadily be able to increase your size. A few thoughts from a new trader so get your salt shaker out.

I started marking up this chart to see what lower lows would have produced some false breakouts which of course depends on your money management. I noticed that if you had waited for price to breakout not only from the last low but also past the trendline formed from the prior lows made you would have only take the 2 larger breakouts. I wonder if you could combine trend lines with this L,HL,LL breakout approach to gleen out the best setups. I have no idea, I just thought I would show you what I saw in the chart.

There is always money to be made.... its a question of whether I can make it. If you would, leave some for me to make tomorrow instead of selfishly taking it all. I am so used to stocks and still relatively unfamiliar with the rollover process. How long should it affect the volume? When do you normally switch to the new contract?

Do any of you use the DOM bid and ask sizes above and below the current price at all? I use the DOM for order entry right now and sometimes I wonder if there is anything useful in watching the orders at various depths. Thanks.

Didn't take any stock trades today. I am finding it hard to be fully engaged in futures trading development and still get time for stocks so I am probably going to slow down significantly on trading stocks. I was watching the ZS again today but volume was crap again and it was just a chop storm. Thanks to Brownsfan, he pointed out that the contract rollover is near so the volume gets split and really slows things down compared to the norm.

Great to have your comments here James. Can you elaborate more on how you "focus primarily on risk and money management". Do spend time looking to see how trades would have turned out had you managed them differently? It sounds like you manage a trade similar to Thales in that you use "natural" stops and scale out. Thales posted some specifics about his management style. Is there anything you do differently? Being somewhat new to the daytrading world, it is easy to spend a LOT of time on strategy because gaining a statistical advantage at your entry point is very important. It is always helpful to see what risk and money management style traders have progressed to after lots of experience. Thanks.

That explains a lot. I was watching the ZS yesterday and today wondering why the large moves weren't happening. I really appreciate the post about this.

Is there a way to set up a chart on OEC so that the entry and exit point are displayed on the chart in some fashion like they are in Ninja. I get done trading and have no record of where my trades were entered and exited. Thanks.

Let me start this off with a big "In My Opinion"..... I am considering this idea also. It seems like the best traders learn to trade their prime setups, learn to wait for them, and get out when the subsequent price action demonstates that the entry does not meet their "prime trade" requirements. If you find you only need a few of those large fast breakouts to make your money stick with that. I see the following Advantages - You can add more contracts and keep your stops tighter if you are only looking for a breakout in which there is a real "change" happening which forces price to really move. If you try to stay in all breakouts that waffle around, your stop has to be larger, and consequently your position size can't be as large because you now are risking much more with a wider stop. - Another advantage I see is that you can put your stop entry a few more ticks out from the breakout level. Since you are looking for that large/quick move, you don't need as much perfection to your entry. Consequently, you also don't get sucked into as many false breakouts this way since your stop order is a little farther away than "stop poachers" can reach with false breakouts. Disadvantages - You do have to be willing to get out of more trades that don't start moving when they breakout. However, you can exit many of those with minimal losses or small gains. After playing a lot of breakouts, you should start to get a feel for how much "waffling" is okay to stick around for and when to just cut the trade loose and watch for another setup. It also appears to me that if price is at a larger scale S/R like on daily/weekly chart you can expect more of those big moves. Those are a few thoughts from someone more novice than yourself but I have been thinking a lot about this also so I thought trying to write it out would help me crystalize my thoughts.

Real YRCW -0.05/share or -1.2% SIM I decided today to just trade everything that looked interesting instead of filtering for the best setups. I got worked but I expected it. Ended up down about $400. I wasn't seeing very many of the setups I like most on the ZS either so that didn't help much. As it turns out the volume was much lower today than past days. It was just wasn't moving like usual. The thing I liked about trying to take lots of trades was that I was constantly trying to interpret price action and make a trade based on what I sawand then exit based on what I saw. Right now I do best when I wait for the moves like the "V"move below. I have always thought trading would be easy if you could just find something that didn't chop around so much and I finally did with the grains. You can cut your losses quickly and watch the winners run. If I can become consistant on trading these, I will definitely owe Brownfan for introducing them on his posts. Now I need to find some more sources for info on the grains. http://www.traderslaboratory.com/forums/attachment.php?attachmentid=14671&stc=1&d=1256761964

How hard was it to set up an account in the UK? Does that complicate the tax situation? Any other consideration you went through before setting it up? Your daughter can tell her friends she trades forex on an offshore account. That sounds cool to me but probably not to her friends.

Thales, Have you found a spot forex platform that you like enough to stay with? I know FXCM was changing things and oanda had some problems. Just curious if you settled down with one yet or if you are still test driving. Thanks.

Real Money trade for today. YRCW +0.11/share or +3.9% SIM trading for the day. Took more trades than I usually would but I am still trying to get comfortable with my order strategy and build my skills in exiting when my entry appears flawed.

Well, here was that end to the upward trend and a beautiful reversal drop. I had all the levels noted on the chart before it happened but I wasn't watching the chart much today so I missed it. Look how predictably price found support at that last retracement in the uptrend. That was about as simple as price action gets using S/R. Maybe you just get good at some of these once a week/month set ups and make all your money on 12 trades a year!

Right now I am working with several strategies, all intraday. Everything I work with is based on S/R so I am mostly in the mode right now of watching price action at S/R on daily charts as well as tick and VBC charts. Besides just taking a guess at a breakout or reversal at S/R I am hoping to identify something to give some statistical advantage to that guess. I guess this where some introduce moving averages, various indicators, candles, and price action patterns. I have been trying to spend some time looking at how price reacts to very small scale S/R on a 1 tick charts to see if I can find some clues that take place before a breakout or reversal. Anyway, I am working a lot on this stuff. We'll see if I can get to workable plan in 2009. Thanks for your comments.