Dinerotrader

Hello all, I am currently stuck in the corporate world all the while wishing I was just trading stocks full time. I provided a small list of pros and cons related to changing my career to daytrading and I thought it would be interesting to see what you all could add that I hadn't considered. I am not considering the pros and cons of being a daytrader who is not successful at making reasonably consistent profits. I will not quit my full time job until I can prove I have a consitently profitable method/strategy that will exceed my current income so, part time, unprofitable, daytrading is not what I am considering for this list. Ultimately this would be a dream job to most people if money was consistently made but of course this very hard to do. I am sure TL has contributed a lot to the success of many daytraders. Advantages No Boss Can trade from anywhere with internet connection if workstaton is portable Works hours can be shorter than the corporate world Large market moves are no longer a risk with short term positions All days the market is closed are holidays Good excuse to buy sweet computer system No/low commuting time Compared to owning business - no legal liability, no employees, no inventory Disadvantages No Paid time off Possible stress and money shortage issues if trading methods stops producing profits Capital is required to make money No company benefits: health insurance, etc. Can be lonely The market sets its own hours that you have to work with Tax filing is more of a hassle than for W-2 wage earner Thanks in advance for your time adding to this list based on your own thoughts and experiences. Cheers.

Thales- I think that makes like 4 people who are ready to be adopted! Did you ever read the book Ender's Game. The main character wins a war for planet earth by playing a video game which in reality is controling all the armies in the war. Stay with me here. Here is what we should do. We should all put all of our trading money into an account that she controls with her trades but we won't tell her she is actually trading with millions of dollars so her calm trading style will continue. We can start the first fund managed by a 9 year old. I come up with my best ideas when I am extremely tired. Cheers.

Awesome post Thales. I would be very curious to see what rules people use in determining which way they are going to trade a breakout. For example: If breakout occurs at S/R which has held up twice before and is around prior day's high - FADE IMO, improving your statistics on correctly guessing if a breakout is going to continue or reverse back translates very quickly to increased profitability in S/R trading. Cheers.

Thales, You really need to get her to post a couple charts of her trades and have her explain her entry and exit points. We're all getting curious and I always enjoy being taught by younger folks with a fresh outlook. She must feel like trading is the proverbial money tree with how much success she has had. I remember my first stock trade when I was 16 years old. I bought stock in Sweet Tomates because I was an employee there and they seemed to be a growing company. The stock doubled after a month and I sold for ~100% gain. My dad got worried that I would think that is the way it always works. Looking at my stock portfolio today is a good reminder that making money is sometimes very hard. I think it is probably best for her to have some great gains in the beginning so she is more encouraged to keep learning. Cheers.

Thalestrader- Could you please elaborate on what you mean exactly by "telegraphs". Chart mark up of your ES trade would be even better if you could show how you see/interpret the movement. Thanks.

My wife works the P90X into her weekly change up. I really prefer to go lift at the gym and I do the exercise bike after lifting for cardio. There is something that feels so good about pushing your own limits and seeing your strength progress. After you have leveled off in your progression with P90X you should really try some old fashioned lifting. Most of my male friends all agree after getting into the habit of lifting it becomes obvious that lifting is just necessary for guys to feel their best. Keep up the P90X long enough and you will have built a great habit into your life.

If we could just get more traders in an educational forum like this to post a real time trade with strategy and comments the educational value to all those reading would increase 10 fold. Thalestrader, I applaud you for taking the time to truly demonstrate your method bar by bar without the enormous problems that hindsight analysis provides to all trade analysis. Blowfish, thanks for the suggested reading. Cheers.

Thanks for your perspective. I see chart patterns mentioned around the forum but I don't read my posts where people are using them in their trading strategy. They are probably more rare than is preferred for a day trader style but maybe I am wrong.

How much weight do you give to chart patterns in your analysis? I noted on this chart what looks like a pretty good set up to go short on but I don't have a good feel for chart patterns yet.

It is definitely nice when people post as instructed in this thread so you can see the picture in a normal size with the text.

Did you end up shorting LM? I took a guess where I might have shorted it and annotated the chart a little.

I see your point. Let me explain more of what I am thinking so you can help me out. In my mind having a correct trendline would mean you have an advantage in using the trendline to bet on a trend. If a trendline was incorrect, your odds would be the same as betting at any random point on the chart. There probably is a case to be made about using random entries and having an amazing trade management strategy to be profitable (the TheRumpledOne's somewhat simple method is the closest I have seen to randome entry method) but I think you would agree that drawing appropriate trendlines should give you an advantage over random entry selection. If this is the case and appropriate trendlines do give you an advantage, I would seem to me that inappropriate trendlines would not give you an advantage. My guess as to your response to this would be that drawing appropriate trendlines is so easy that you have to be ignorant if you cannot draw horizantal lines at highs and lows. Your charts you posted shows a declining trendline that I haven't seen used very much and can be more of a grey area for how it needs to be drawn. After going through Al Brooks work I hope that I can get a good handle on those. Those are a few of my thoughts.

Thanks everyone for all the useful posting. It is threads like this that make TL so valuable for the beginning traders who are looking to get started in the right direction. I read postings from this forum for about 6 hours a day right now (day-job is slow) because I consistently find pockets of great information that help me to build a wide base of wisdom from those that have been on this path for a while. Thanks and keep up the great posts. All the best.

I found this post on "Re: How Do You Start Trading?" interesting and have nominated it accordingly for "Topic Of The Month June, 2009"

Thalestrader- I appreciate the information. The path to getting better at using S/R seems very unclear. At first glance, drawing S/R lines is pretty easy. Getting to the point where you have high confidence levels in those S/R lines probably just comes with lots of screen time in drawing them and determining if you were correct. Is there any book or concept that took your S/R line identification to the next level besides just practising the simple S/R 101 principles? If your daughter wants to switch places with me for a week so I can learn from you and she can watch over my wife and 4 sons (all under the age of 5) I would be okay with that. All the best.

Thalestrader I am always ready to here suggestions from you on systems you feel are workable. I am currently trying to decide what system to start using in simulated trading. A couple strategies on my list would be: Candlesticks with S/R lines Bounces off the 20EMA It seems that the most respected people on this forum do not use indicators much but struggle more with fine tuning exit strategy and money management. All suggestions you can provide would be appreciated by many of us novices. Thanks.

brownsfan019- Do you still use volume candles at all? I was reading some posts from back in 2007 in which you seemed very positive on using candles based on volume instead of the passage of time. I really value your opinion on candle reading and you normally mention 5minutes candles currently so did you decide after time that volume candles just didn't add value to your setups? Thanks.

Everything has turned to the downside over the past hour so short positions would be what I am giving more attention to. Would you agree?

Thought I would give ths a shot. I am not trading this with real money. My green line show where a new high broke out and would have been my buy point. The red lines shows where my stop would be and the blue lines shows where I think upper resistence might come based on prior days resistence. I would set a sell at the blue line in order to just take profits and move onto the next trade. Hopefully my attachment worked.

I am new to candlesticks so may be a silly question but they seem very much intended to be used on a daily chart with real open and close prices. How does arbitrary open and close prices used in candles on a 5 minute chart of the ES mean anything? The actual close of the market really does affect the way millions of investor's trading strategies since being out or in the market during close hours bears risks so it makes sense to me that daily candles would visualize price action/sentiment/etc. appropriately. I just don't get candles on smaller time frames yet. I would greatly appreciate your thoughts.

Does slippage become an issue for many of your trades. Since you are essentially scapling small profits from these stock moves, you must be trading quite a few shares to make it worth while. Where do you think someone trading like you starts to run into slippage problems - trading $20,000 per trade, $30,000, $40,000? I am still trying to get a hold of Don Bright's writing on the trading for profit and not percentage stuff but I did find your post about it. Also, what setups do you look for on the ES? Your stock trading method with highs and lows doesn't seem to transfer over to the ES in my mind.

Thalestrader - I am trying to understand and learn your methods and I wondered what different things you do when reviewing trades from the day or go through all the charts you mentioned above. Do you simply go through charts that have patterns you would have traded had you seen them and determine if it would have turned out profitable? Just curious what review process you use and think is useful in increasing your win to loss ratio. Thanks.

Putting all your recent explanations together - you prefer watching the gainers of the day that have gaped up, fill that gap, and make a new higher high for the day above previous resistence from prior days. Correct?

NDAQ - Now that is one tight stop! Why didn't you buy the 2nd and 3rd new high of the day at 21.97 or 21.98?

Are you looking at MOS because of an ascending triangle formation or is there some other pattern you are seeing?