joshdance

No reason it should not go to 1290 by Friday. If 1267 SPX holds, seems to be reasonable target. If it sells off aggressively below that, maybe different. But still very bullish.

Wow, it sounds like you have it all figured out. Again, you seem to have a perfect understanding of this, even though you have no clue what you're talking about. Life is too short to try to help people like you who ask questions but have no real desire to learn.

A more apt baseball analogy for your methodology is that of a batter focusing on the runners on base, the left fielder, the lights above, an airplane flying overhead, the vendor selling peanuts, and the pitcher all at the same time, with no particular focus to any one of them. Sure, he needs to know strategy, such as what the probability is of the pitcher throwing the ball inside, outside, etc., based on a number of factors, such as the current count, inning of the game, score of the game, and etc.. But while these things may be quite important, the real important thing for him is to keep his eye on the damn ball and respond accordingly. Your eyes are on so many things, that you can't describe in a relatively simple paragraph what you're even trying to do. Or can you? The banks also hire programmers and pay them $200,000 a year to write incredibly complicated software that will make sub-millisecond trade decisions; they co-locate their servers at the exchange at enormous cost, and they have millions of dollars worth of transactions per day. Do you think you should make it your goal to do the same? My point, if it's not clear, is that you are not a huge bank or institution, and you do not play by the same rules that they do. You cannot, and attempting to do what they do simply does not make sense, because you are not them. I'm not telling you that their strategies will not work for you; but what I am telling you is that trying to mimic them will no more make you successful than pretending to be Harrison Ford will make you a successful actor. Sure, and after you watched 9 baseball games you couldn't remember who was playing who, what the score was for any game, or any other details probably. And you certainly couldn't describe the mood of any one game in particular; you couldn't describe if the score was really reflective of how the game was played. What was the sentiment for the game--was it a close, competitive game, even if the score does not say so? Who really was the best team for most of the game? These types of details are things you cannot see when you are distracted by 9 markets, or even 2 or 3. All you see are price bars and lines on the chart. You have no sense of market sentiment when you are distracted by so many of them. You want a cut-and-dried solution, something which says "do this or that" ... you want no ambiguity, no uncertainty--you want to be able to take one glance at the score in the game (the price of the instrument, if the analogy is not clear) and know what to do. But this is not how it works. The market is rarely clear and cut-and-dried. But this is what people want--to not have to deal with uncertainty. Learn one market, get to know it, learn how it moves. You're trying to date 9 girls at once, and none of them are putting out for you, because you don't know any of them well enough intimately. Make one of them your steady girl, and ditch the rest. I will answer your question with a question: why is it that in the attached screen shot, four different brokers offer four different set of quotes? Another way of asking this is: what is the price of GBP/USD at some given time? Would like to hear your answer.

Well, you do need capital, but having lots of capital if the trading is going poorly will only mean you would be losing more capital. Capital will get you in the trade, but it will not help you lose less money. Capital will help a good trader be able to trade with greater size and make more money, and it will result in a poor trader losing more money if he increases his size, or else it will sit there doing nothing if he decreases his size and therefore is not using the money as margin.

Much more useful IMO to learn how to trade all-in-all-out (trading 1 contract or 100) and learn how to manage a trade (something I have a lot of work yet to do), than increase initial risk and diminish returns by scaling out.

All the forum junkies who have not yet had any success at all read all of this garbage about systems and rules, and they write these intricate, long, detailed documents containing "rules" which are just a total waste of time only impede the learning process. It's like going to a baseball game for the first time, sitting in the stands, and sitting there with your head in a baseball rule book memorizing all the rules, and thinking you understand how the game is played. Maybe you should get your head up out of the book, and WATCH the baseball game that is being played right in front of you. It's funny that you say "I am not going to use 3 vague rules" while instead you have 20 vague rules. You actually have no rules except for the section "Exit Rules," all of which are actually specific (note: not necessarily good or bad, just specific). You are looking at 9 markets, multiple time frames. Drop them all except for one market, and limit it to 3 time frame charts (2 would be better). And unless you are a long term swing trader or investor, and do not mind getting screwed by bucket shop forex brokers, you should get your butt out of spot forex ASAP and into a real centralized exchange and instead, trade currency futures. My advice (since you asked for advice and feedback) is the same I gave someone here: http://www.traderslaboratory.com/forums/e-mini-futures-trading-laboratory/11074-advice-day-trading-es-futures-4.html#post131797

Thanks MM -- these are really not rules, but rather guidelines. They are general enough to be flexible, but specific enough to give guidance, and this is what I think traders do well to have. A "rule" would be so specific as to be programmable, and could not contain a notion of "trying" to do something, or defining exactly what a range base trade is, or would seek to objectively state where to add, and how much, etc... so, what many traders call rules are actually guidelines, and I think the danger lies in blindly following the rules all the time. It's as if the rules were sent down from the gods and are guaranteed to make money if followed to the letter. They perhaps don't consider that the rules themselves are rubbish and that it's like following a road map off a cliff.

While I essentially agree with your argument, there's really no validity in what you say that "it has been proven that TA holds no significant value." You should know that that's a very subjective subject, and can no more be proven or disproven than the statement that "Hondas are much better cars than Toyotas." There's no criteria, no objectivity there. For you personally, traditional TA obviously holds no water, and that's cool. I do not really give much brain power to searching for "pictures" such as head and shoulders, and the rest. However, there is great power in the ability to recognize a move out of consolidation for example. Or, in identifying how price moves within a channel. Or recognizing what a trending movement looks like, and understanding the normal retraces that happen, and what those look like. I think the problem comes when people try to be robots and mechanically trade something because the picture looks like what they are used to seeing. Being able to recognize the sentiment of the market, being able to read the volume, and putting the market into context are all things that I think good traders have a good grasp on. I've heard it said that you don't have to be smart to be a good trader, but I don't buy it. Smarts alone won't get the job done, that's for sure, because there are a ton of smart people trading who are mentally not with it and do psychologically stupid things (I've had my share of "what the hell is wrong with me" days where I self-sabotage, etc.). But neither will not engaging the brain and clicking "buy" when you see something that looks like a bull flag. I group "support and resistance" under the "traditional TA" category, and use these concepts quite a lot every day. Sometimes I will use price alone, sometimes I use the profile. But again, the problem comes when people just buy or sell blindly. The NOW is always more important than the past. Reading the mood and sentiment as the potential level of support is approached is really the key. Agree again, except that while I use the DOM and tape quite a bit to gauge sentiment, I probably do not focus as extensively on it as you do. I don't need to and have no desire to drill further than I currently do, as my "zoom level" is sufficient for the type of trading I do. Certain rules are helpful. However, people talk about rules, and I just don't get it. I'm not the best trader and not even close, so maybe when I get better I will. A rule that says "don't lose more than $X in a day because you're sucking and not in sync with the market" is good I think. But technical rules are just too hard for me to quantify to make them of any use to me. Perhaps someone who is very rule-based could give me an example of a set of trading rules. Chances are, they're more like guidelines, and belong in the "duh, dumbass" category. I've seen people with written "rules" that are things like: (1) Don't trade before 9:30am; (2) Only trade long when above the VWAP and vice-versa" and other things like this. Inflexible, or obvious, or... again, if anyone has rules like this can you maybe post a couple of them and how they are helpful to you?

Thanks for the info steve, good luck in this, and have a good weekend. Negotiator and anyone else reading, happy holidays, see you next week (or next year if any of you are taking next week off).

How do you define "the TA approach"?

Closed this at 56 for +4.25 ... need to do some shopping this afternoon and not wanting to sit through mid day slop. Happy weekend and holidays all!

I was also looking to buy at the open steve, but I got in a little late, 51.75 ... I expected a gap fill and was looking to buy 49, but it only went to 49.75 ... the bottom rounded off but no further test down which I was expecting. But better late than never, at least if it works out... target is spx 66 or so, which would put ES around 61 to 62.

Didn't do much else today, but took the 47 long at the end for a nice little trade. No sellers today to speak of..

Something to keep an eye on perhaps.

Perhaps that's because everyone's view of the market is internalized in a different way. I can explain how I see it all I want, but it really has to be internalized by the listener. I've heard some explanations from people and was convinced that they knew what they were doing, but their explanations simply did not jive with me. We each have our own perception of the world and the market. Unfortunately, very often those who begin threads claiming to have some special insight, indicator, or system, are trying to sell something or boost their own ego. Perhaps this is what turns off so many. Not saying that's the case here of course, but it is often the case.

This is a very interesting idea. You may be a little out there, but my personal BS-o-meter is reading low when I read your post Just curious, you kill game and cook it on a fire you make? Like the good ol' days?

Apology accepted ....

I hate straight up or down days...

AgeKay, do you trade ES? Given that the volume there is typically 5x or so higher than the Bund and 10x more than the Bobl, isn't it a bit more challenge to identify the players when the market trades so much more volume? I think the deal with charts is that for me, they give a frame of reference. Too many people trade blindly on the chart alone; I simply am not trained enough yet to make much sense of the orders on the book; however, no one can hide their traded volume, and this is what I use through look at time and sales and a simple volume histogram (both per bar/time and at price).

Maybe I'm spoiled because I have a good broker, but seems to me that this should be pretty much the minimum requirement and only major requirement for any broker, namely, you should get filled at the proper price on a market order. Since you're running another data feed which is reliable, I get this. But some people use IB for data and execution, and given the truly terrible quality of their data, I can't imagine trying to trade with it alone, unless it's a long term swing trader who doesn't care about a few ticks missing from the chart here and there, and who doesn't look at the immediate order flow.

Perhaps some are not understanding "anything can happen at any time." This is true in every aspect of life. There is an element of chaos and randomness at every level. However, you organize your life around certain repeatable events. For example, statistically your kid gets off the school bus at 4:00 every day for the last month, +/- 10 minutes. You plan to be there to meet the child every day at that time. However, one day the bus does not arrive. The bus had a flat tire. The randomness of the moment struck, and the expected event did not occur. Does that mean that tomorrow you expect the bus to not arrive? Is it now not statistically significant that the bus has arrived 99% of the time at 4:00 +/- 10 minutes, because ONE major deviation occurred? Trading with any basis for success is dependent upon the trader believing that he has the ability to place a trade and profit from the market going his direction more often than not (or more correctly, by a larger amount than when he is wrong). I believe this is practically based on experience, and cannot be based practically on back testing, though that is another can of worms. If the trader did not believe this, he would not expect to make money and should not trade. Yet, we also know that the randomness inherent in all things can cause an event in the market which will be completely out of the ordinary and not meet the expectation of the trader at any moment. This can be a huge bank getting pissed off and selling; it can be a catastrophic political or social event; it can be a computer which has a flaw in it which does the wrong thing (flash crash); it can be anything. So each event is independent, yet, over a statistically significant sample size (this will vary depending on your needs), a probability can be determined. That being said, I abhor the "it's just math, place your trade regardless" crap. If someone wants pure mechanical performance, write a f***ing black box and go do something else. The human element makes it possible to see that, for example, while 70% of the time this should work based on the past, it likely won't right now. Some people will say that's screwing up the probabilities. Well, so be it, and we just have to agree to disagree. But if someone is SO confident in their "edge" or "set up" (boy I hate that term) that they ALWAYS take it, then program it, and go play golf. Seriously.

What matters is how far away the close of the first 30 minute bar is from the opposite side of the VA, and if there is a tradeable opportunity. Say the prior VA range is 1250 to 1238. The 9:30 open the next day is just below at 1237, and it does an opening drive up, closing at 10:00 at 1247. This is a different potential trading opportunity than if it opens at 1230, and closes 30 minutes later at 1240, if we are looking at this particular trade premise. Also, with major news often being at 9:55 and 10:00, additional criteria would need to be used to filter these out, or at least account for them somehow. It just changes the practical trading situations enough that it's not as simple as saying "62.5% of the time it does XYZ" ... well yes, but that does you no good if you can't profit from it in a sensible and risk-managed way. This is why I put very little weight into back test results. There are simply too many variables, from scheduled news reports, to surprise news which will never show up on any calendar if you even wanted to account for them, to sociopolitical factors, to "it's the Friday before Christmas and everyone's gone home" to ... you get the point. I find it much more helpful knowing this now, that if I do happen to see that the first 30 minutes closes inside the prior day's VA, that statistically there is a better chance of it touching the other side than not. But beyond that, attempting to create a hard trading rule that takes advantage of that is, IMO, a waste of time at best, and at worst, probably a losing strategy until much more specific, human, experience-tested rules can be applied. IMO it's much more important what's going on NOW (as in, the last few seconds, minutes, or since the opening bell); sometimes people get too caught up in the past and forget to look at the present.

carltonp or anyone else using IB: have you considered using a different data feed for data only, while still using IB for your order routing (I am guessing you can do this in IB?)? I ask because I can't imagine doing business with a data feed that does not accurately show transactions. I personally couldn't live even with the snapshot way they show transactions; I also knew another trader (a good one) who would say that the high and low prints would sometimes not be correct due to the snapshot being off. Why would you trade with this garbage of a data feed? It's almost as bad as spot forex; no accuracy not only in the timing of the transactions shown, but many transactions not even shown period!? So you can get filled at a price that does not show on your chart as having printed... I know a trader who uses IB who this has happened to quite often... so what about IB makes you stay with them?

Correct. That is the tradeoff. Apparently steve has found through his experience that he will typically not pick a price such that he will be one of the last ones filled (in other words, price will typically overshoot a bit), so he can afford the chance of doing a software-triggered order this way for the chance at a better price. Depends on the market; steve said, I think, that he trades CL. I used to, and can easily see this being useful in that market. In the market I trade, it is highly liquid and virtually no reason to do something like that.

This is what he said (bold mine): I can also explain my methodology, in probably 5 minutes, but he said "could you teach someone how to trade your system" ... big difference.