electroniclocal

There are not many tools that are so misunderstood as Market Profile. Pete Steidlmayer, its inventor, left us to work out how to use it for each of our own styles of trading. Yes, actual volume is more acurate than TPOs but the two are pretty close. The big advantage of TPOs is that the trader can more granularly manipulate the graphic in order to discover the various distributions. Once I've done that, I can clearly see the more hidden support and resistance areas that can be uncovered by that process. I'l have a video on my blog on Monday for anyone interested in seeing how the process of uncovering what "they" are doing is done on the MarketProfile. Market Profile is not a timing tool, IMO. That's why I advocate using the Profile for context and a range bar chart for timing. EL

Wrongly placed stops are one of the main causes of traders' losses. A drop dead stop is a must and I calculate mine by backtesting. However, a back tested stop is not appropriate for every trade as every trade is different eg context and volatility. So my drop dead stop means that this is where I exit come what may. In practice, I stop myself out when market activity tells me I am wrong. When i enter a trade, I have my generic stop and targets triggered by my software. I then manage each trade, moving both stops and targets to where they belong in that specific trade.

The quoted post is right on. Bots are great in recognising entries that meet the parameters of a trading plan. What they find it difficult to do is to manage the trade as well as a discretionary trader as it is very difficult tp program the context. Additionally, in different volatility contexts, stops and targets vary. That is why Hybrid Trading as I call it is the best of all worlds. Use the bot to enter and have your drop dead stop and some targets but manage the trade manaually within those parameters.

I break the 24 hour day into 480 minute Profiles roughly aligning with the 3 time zones of Europe, Asia and U.S. I then do splits and merges between them as appropriate. EL

I do this now, manually. There are so many permutations and combinations that I have found no way to automate the selection of the "best" context. What I do do, however, is let my Flobot trade some markets completely automatically with incomplete context and I also trade in what I call Hybrid Trading mode where I turn Flo on and let her make the entries and then I manage the trade either manually or by turning on another algo that I decide, again by eyeballing, is appropriate to the context and the trade. The advantage of this methodology for me is that i can trade a number of markets simultaneously and not miss trades. The fully automatic algos are profitable monthly but have larger drawdowns and a lower win rate than the Hybrid Trading algos that I turn on and off. EL

Hi TradeRunner, read the blog tonight for your answer.

I've posted a couple of videos on my blog on how I trade using MP structure as S&R, here and here. The idea is to utilise these areas and identify changes in order flow and momentum to create a hi gh probability trade and so you know when you are wrong.

The solution is not to use two timeframes but to use an extra version of your indicators in the main timeframe that proxy what the indicator would show in the secondary timeframe. For example, I use 33 EMA as a central part of my methodology and I also use a 99 EMA that provides, by proxy, the infor of a higher TF.

I want to move my infrastructure to hosted virtual desktop in the U.S. for better availability and reduced latency. Couldn't find anything searching this forum. Does anyone have experience they can share with particular suppliers. I need 64-bit multi core with availability of plenty of RAM, T line connectivity all backed by a proper SLA. I run a number of trading applications simultaneously and two data feeds. TIA EL

jackb, the fact that JL later lost the plot (was it bipolar disorder) really takes nothing away from what the book teaches and the insight it gives. Like anything else I am taught, I take from it what I find useful and discard or ignore what I don't. I do not believe until I can prove it for myself. The book is one that every trader in training should read. That and probably Edwards and Magee. EL

There is one thing you are ignoring. There can be both buyers and sellers in control. On, say, the 1 minute timeframe buyers can be in control and on the 10 minutes time frame the sellers can be in control. It's important to trade the trend of the chart you are trading from. That is THE trend.

I'm looking for a front end that can place two simultaneous orders as a spread in Stocks, ETFs, options. The only one that I have found so far is Think or Swim. Are there any others with this functionality? TIA EL

Doubling down is an integral part of my trading when the entries are outside in trades. I buy bottoms and sell tops against a context that tells me clearly when I'm wrong. Sometimes the entry is a little early and I double down and exit the doubled down portion at the original entry price. Unless the trade is clearly wrong, stopping yourself out because of price shaking the tree makes it hard to make money. Those unnecessary stop outs are expensive. The medicine for too early an entry in a good trade is to double down.

I just came across a new (to me) autotrading application that has what appears to be great features. Has anyone used it? It's here. The money management functionality looks quite interesting. Feedback would be appreciated.

Troy, the level of stress is directly related to 2 things: 1. How undercapitalised you are 2. How proficient you are. If you are both well capitalized and proficient = no stress. EL

NONE!!!!!!!! (unless you are not profitable, of course).

Trading is Math. The whole process has to stack up. It's win rate, average trade, stop loss average loss. These numbers need to be consistent and need to stack up for anyone to make money out of day trading. There are some people who believe that you can make your money on a small percentage of your trades - outliers. I don't thinks so. If I have to sit through 7 losers to find 3 winners and on those 4 make up the losses on the other 7 AND still make a profit, I'm not there. Yes, Math is important by it's simple and if you can balance a cheque (check) book you can do the Math for trading.

Trading live before you have a meusrable, backtested and forward walk methodology will not give you the results you want. It would be less painful to just give the money to a good charity. You need proven measured performance providing consistent profitability in SIM before you risk real money. Your methodology as described has no structure, no repeateable measurable methodology and you have no idea of the math of your traders profile. IMO, witout these things you cannot make money. Two months of hit and miss and no learning cannot alow you to compete against all the smart hard working people who have spent years learning.

Stop losses must be out of the way as drop dead stops. Exiting on a mechanical stop is the road to losses. Stops should be dynamic and be related to your trade location and you should exit when the market tells you that the outcome of the trade you entered is no longer has a high enough probabiility. To do this you must have a trade structure within which you trade.

MarketDelta is a class act and has all the tools that any trader could need. Their support is excellent. I'm a happy user and must disclose my interest in that I am also doing a seminar for them in Chicago later this month.

In the U.K. I would recommend Cancer care and support charity - Macmillan Cancer Support as they make a difference to last period of peoples' lives as well as helping their families cope. There are various equivalents in other countries.

Fulcrum, in addition to tracking the order flow, I use 2 CCIs to track trends and changes in Momentum. Using a 45 and a 6 or 9 period CCI, I use both the interplay between these two CCIs as well as identifying turns in Momentum. Examples of a number of these trades are here.

For me, keeping my drop dead stop out of the way is most important. I exit when the market tells me to. As far as Risk v Reward - it's a myth. The RISK part can be defined but the REWARD is unknown and depends on what the market gives you and what it does between entry and when it gets there. Two traders will exit the same trade differently. So much for calculating REWARD in advance unless you are scalping for smaller amounts.

I'd take those all day. Trend continuation trades.

Most people just look at the price fluctuations and see the opportunity. They don't make a trading plan, they don't back test they don't do the due dilligence that a person would carry out before they start a new business. And most importantly, they assume they have the required skills without having developed/learnt them. The competition out there is huge. People are not "entitled" to succeed. You need to earn your place in the order flow. EL