tulanch

Close to where I live is an expansive mining operation that has this one building with a very large writing on its side. It simply says “THINK”. I believe this is very profound when it comes to trading. For me, I am not interest in learning by blowing out an account or giving money away. Yes perhaps that will happen, but my plan of attack will not include a per-defined procedure involving such steps. I am prepared to accept it may occur but it’s just a curve in the path along the journey. In “live” mode I have lost money very quickly. So I went back to sim, then back live, then back in sim, then back live, then back in sim etc…and will continue to repeat this process until I prove to myself I am consistently profitable. Seems like an easy question to answer, but as example, do I count an unforeseen spike for or against me in this consensus? Am I reading the market correctly? Am I controlling my emotions? Am I taking trades that make sense in both hind sight and real time? I believe (mathematically know) all indicators are lagging, the move has already begun, but based on these can I still see at a HPLR trade (risk/reward)? Keeping logs of your trades is important, but even more important is to review these notes. As example, I found in sim I was not as “true” as I thought. Sometime I would have a winner and let it ride. In “live” mode I found there was no way I could hold for an extended period of time. I learned I am most comfortable being a scalper, 5 minutes to me is an eternity. Thus I adjusted my trading plans accordingly. I believe If you are true to yourself in sim, treating sim as real, then live will be more in line with your experience, but with that said, live greed and fear are very strong emotions to control, done so by gaining confidence with yourself, with your approach. I also found/learned that trading is extremely “personal”, what works for me most likely (more like absolutely) will not work for you. And furthermore what works for you, while interesting, I cannot not allow it to affect what I “do”. I will fine always tune what is working for me, I will adjust if it make sense to me, but only after THINKING. Adjustment thinking occurs after hours, not during trading; trading is a time to “do” not a time to alter the plan(s). I know my goal –being consistent – this differs from perfection as perfection implies predicting the un-predictable. I believe one profits from adaptability in real time to what the market is doing, using predefined plans of action, an approach you only gain confidence in from 1000’s of hours of real time interaction.

Recently I’ve liked this…given an established trend - check out the plot of an EMA9 and WMA30 Google floor trader method (on other site, but hey that’s the net for ya) shape of the pull back interesting to note number of bars 1st pull back seems to have a higher likelihood of success that subsequent pull backs A double pull back (2 legs) to EMA20 on 5 minute is a good setup The pace of the pull back is a good measure One must always keep market context in mind - prior major points of interest such as yesterdays close, yesterdays high, yesterdays low, etc.... News... news can really muck up the best of signals. Oh and pull backs when MA’s are flat are not pull backs – they are chop

Here's how I view it... A tic is a trade and a trade has volume. Most of the time (>95%) the volume of a trade is either 1 or 2 contracts. (export tic-based-data for a day, import/open in excel and validate for yourself) In the not so distant past, we most likely saw larger block trades in higher frequency. I suspect since the majority of trading is nowadays automated by computer, large blocks can be easily broken up and hidden within smaller orders so the big boys do not tip off each other and larger block transactions can be filled at more consistent prices leading to larger profits. Do you think the big boys pay a per-trade commission? I often wonder if seemingly large block trades observed today are actually a ploy. Anyway... back to my point. The price of a trade can be either up, down or the same as the prior price - this is the price you get filled at... An interesting aspect to analysis is if this trade price is at the Bid or at the Ask – hard to hide this fact from us. A common and rather valid assumption is that trades at the Ask are Buys and trades at the Bid are Sells - to validate consider what price you get filled at when you place a respective market order, ie what price do you get filled at when a Market Buy order is filled - typically at the Ask (if not always). What price do you get filled at when you panic and exit or panic and enter? Consider what type of traders placing such orders. Strangely this assumption does not fit traders who place Limit orders to buy below the market or sell limit orders above the market. Ask yourself what type of a trader does this... this knowledge is most definitely an edge to be taken advantage of. So to me a question of volume and tics up/down based on price is not as important or “tail” telling as the answer to questions about volume, tics at the Bid or Ask... it makes for a much better and easier market story read. Happy trading

Been a long time since I posted to you... many moons ago on Stockfetchers... Oh and thanks a lot my head hurts... I got hit by a ton of bricks...not to mention run over by a heard of rats going for the cheese-wizz Given... Green Body bar is an up bar Red Body bar is a down bar Nice Number lines (I simply adjusted Ninja's grids to “fixed tic” lines) You indicated 00 25 50 75 for Pips After a little review, I sorta like the 5 ‘n’ 10's (dime stores) for the 6E Recently I’ve liked smaller time frames... but seems like 5min is lowest for this with 6E Lower than 5min seemed very choppy, fuzzy, and unclear, sorta pixelated so I stepped back. Process... New bar opens The Open of this new bar establishes the next Green Line and the next Red Line Nice number line above open is next Green line (go long line if/when this new bar’s body goes green ) Nice number line below open is next Red line (go short line if/when this new bar’s body goes red ) The new bar now progresses (keeping simple) Keep asking one’s self, 1.) What is the color of the body of this new bar, Red or Green? 2.) Has price passed the corresponding Red or Green line? Entry if... Both answers Red - go short or Both answers Green - go long Get/set your profit.... 6E 4 ticks is nice Stop Loss is "natural" Example, if your long cause the bar's body was green, and now bar's body has gone red... 1.) conservatively - exit right there when it turns red... 2.) aggressive/riskier - set stop loss at other line (if in long, the other line would be red line) Bank is made trading multiple contracts... 1 for the scalp to feel good and cover commissions 1+ for the runner(s), scale out at desired profit target typically one moves their stop loss to break even after 1st lot is won. Most important be done when one hits their daily quota ( I like your 2% concept) Exceptions... If price/market is already in a run/trend...you may have missed the boat... it does not appear to be as simple to jump back in, so to keep it simple, simply wait. Reversals 3 bars in one direction (same color) ding ding ding ding ding ding (thats my alert sounding) Enter counter trend (CT) direction using rules for the CT direction... ie, if 3 Green Bars, enter short on a Red bar at it's Red Line established using the process defined above . Ps I still like my squiggles....maybe one day I'll remove my training wheels... Thanks...

Trading is both science and art. The science is in your trade plan rules - signal setup, entry here, stop loss there, profit target here, manage the trade... whereas defining/reading market context is one aspect of the art-part of trading. I agree news, time of day, open values, close values, 5th wave of Elliot wave, 930 cross, slingshot, 123 setup, ross hook, etc… etc… etc… all are part of reading context but I submit you can look at from a higher point of view. Take any chart, the first instant you look at it - what do you see? This is the basis of what defining context is about... Do you see an uptrend? Do you see a downtrend? Do you see a sideways motion? Say for example you see an uptrend.... and yes things depend on your definition of uptrend, me I have found I like a chart for at least 3 time frames of the market I'm trading – I find conforming context in all three is more comforting and conclusive. Do you believe that there are only 3 possible directions the market moves? I do and they are: up, down or sideways, what else is there? I believe profit becomes available when the market context changes. Nothing makes me happier than to help others get out of bad trading decisions – enter where they exit. Therefore, if it's already up, what are the remaining possible direction changes? Sidways or down. Get the idea...( I think that makes for 9 possible combinations...I find it interesting how other techniques come together at some basic levels). So if you see an uptrend...(by whatever means you define up trend) and as time rolls on you start to notice that for whatever reason you now see sideways or down movement... ding ding ding context change It’s important where this change occurs... it may be a reversal forming or it may be a pullback leading to continuation....ask yourself what else is there? Now THINK...(actually this should be done outside of trading hours during nightly research/review, the science of trading should kick in here) When do the best pullbacks to trade occur? During the beginning of the trend, the 1st pullback...which occurs after a reversal. When do reversals occur? At the end of the trend with exhaustion or final flag sideways motion on the failure of the test of the prior extreme... (thanks Al Brooks for showing me this) Reading context is not mathematical in nature, if it were we would all have automated scripts to trade these moves...(ok taking it to the limit in millisecond timeframes - maybe) Understanding this, thinking this way, is what I see as the basis of market context... Other components I consider are: is price rising into a well-established resistance area... how many times has it done this 3-4 means reversal? How much profit potential is there in this setup versus risk burden? When did it last do this? Is this just before the well-established 10:00 EST news hour? Is this occurring on the 4th minute, 14th minute, 29th minute, 59th minute? Is price at 94 rising to 100(round numbers)? Did it spike on low volume thus is this a probe? Was there just a huge volume spike? Where are the prior reversal /swing points, does it want to head back there? Reading context gets complex... but It adds significantly to your confidence when you read what is going on correctly – confidence leads to consistency. Reading market context requires you to summarize the infinite number of market influences that come into the equation. (if you know differential equations, consider solving one with an infinite number of and ever changing constants). With all this said, don’t over complicate things, pick one concept and master it, then move onto the next. happy trading...

I've looked at things with volume bars, range bars (both true and ninja format types), tick charts, etc... I just do not like how non-time based charts can generate x number of bars in the blink of an eye. With that said, I do not base my approach on any specific time... rather I have found a timeframe for the time of day and the market I trade, which I am comfortable with. I’m a scalper and have yet to learn how to hold over 10-15 minutes. I’m more than happy to take what the market offers by readying what it’s doing. I see the chart as a “map” of where it has been. When the market "gets lost" I think it back tracks, pulling back to prior high/lows. So I keep an eye out for when it gets lost and simply follow the map along with it. I like the Matrix Movie – “I look for when something is wrong in the matrix”. I find watching how price reacts at these locations as a key component of my approach. It does not need to be represented as candles; it could be just numbers, which at the end of the day is really all the market is. I personally find candles make it quick and easy to confidently summarize/read/observe the complex inputs that have brought the market to where it is at any given moment. There is no doubt that the market is driven by computers, specifically those that are but milliseconds away from the main servers in Chicago and New York. But they still leave bread crumbs to follow/consume. I keep telling myself I am one of those little fish that follows sharks, making a meal out of the scraps left behind. My goal is to not become the food. Yea candles may be the hype of days gone by, but they work for me. Confidence in one’s trading plan is crucial and need not be validated by anyone but yourself. If it looks like it, it is and close is close enough. Confidence leads to consistency which is the key to success in this business.

I did not invent this and I am not affiliated with any provider or trainer. I have done my homework for years and continue to do so…what I am about to explain was best described to me by Lance Beggs..If it seems I’m starting out simple, that’s because PA is simple. Remember from tiny acorns come mighty oak trees. Here is an example of an up bar And here is an example of a down bar The difference is obvious, it depends on where the close is with respect to where the open is. If the close is above the open you get an up bar. If the close is below the open, you get a down bar. If the close equals the open you get what is called a doji. What If you had to place a trade based on only 1 bar? Does it make sense to determine the direction of the market and trade with the trend of that given bar? Thus what is the direction of the market given the following bar? Well it’s easy to see the close is below the open, so the market movement is down… So what if you only saw the following bar… Well we see that the close is above the open, so it would seem to make sense the direction is upward. This is the basis of reading Price Action. Oh there’s more, don’t worry… What if both of these bars were consecutive (and they were as I took them from one of my charts) What do you see given these two bars… Well the first bar ended down, but the second bar ended up. Did you notice there is an embedded gap up from the close of the first bar to the open of the second bar? So in this orientation the movement is more than just up, it’s really up, up with a purpose if you will… Given just this small bit of information, you have read/observed upward market sentiment….and a body in motion stays in motion until acted upon... Reading Price action is about paying attention to the tiniest of details and THINKING about why price moved like it did…. This is the edge that changes a setup from just a another setup to a higher probability, lower risk setup. You can also apply what is called “Bar math” Notice that the combination of the 2, 1-minute bars creates the single 2-minute bar… Can you see how the Red and Green areas combine to create the single bar? It’s logical. Thus far my examples have been created with only complete “fixed” time bars. Keeping it simple, consider that during the creation of the first 1 minute bar, say for example purposes within the first 10 seconds of the creation of this bar it looked like the complete 1-minute bar. For 50 seconds price stalled in this orientation… Furthermore, assume that the 2nd bar sat at this orientation for another 50 seconds. Lets also assume this was during regular trading hours within the first hour of the day, so trades are taking place at these values, it’s just that price has stalled… And then in the last 10 seconds of the creation of the 2nd bar, we end up with the final orientation For this 2 minute period , for 100 seconds (the last 50 seconds on the first bar and the first 50 seconds on the last bar) price was at or below this High=Low=Close=Open value and pretty much stalled… Then in the last 10 seconds it "popped" up Does this seem to provide a little more information you can use as an edge? Do you get a feel for what this would look like in real time? Here’s your home work…. What if you were given this as a 5 minute bar? What possible 1 minute bars could add up to create this 5 minute bar? What would the formation of the 5 minute bar look like given one of these orientations? To me this is the basic aspect of Price Action… One needs to get to a point where the trading action you take comes just as natural as the action you take when you see a Traffic light change from Yellow to Red or from Red to Green given various driving conditions. Your trading sense needs to become intuitive; you must train your brain to see and react…after a few thousand hours of watching you get the hang of it… Oh a final note of importance, it's one thing to Read Price Action... and a completely different thing to Trade Price Action....that’s where your personality and style weigh heavily upon your success or failure. happy trading to all...