wrbtrader

In your particular situation, only trade markets that do not interfere with the work hours of your day job if your primary source of income is your day job. Yet, that implies when you're in a trade it will obviously overlap in your personal life (social life, family life, sleep routine and so on). I don't recommend opening and closing positions while at your day job. Thus, no trading while at work unless you have the technology to do such and that such will not get you in trouble with your job when caught doing such.

Mr. Howell, Thanks for the article and by below comments are for fellow retail traders. I'm a firm believer that retail traders experiencing such should then get help via an in person trading partner (a former client of yours) that no longers have these problems that can then show how to maintain a "positive state of mind" from open to close or from one trading day to the next trading day. Yet, the purpose of the trading partner is not to be a "psychology trader coach" but to be instead like a "compliance officer" to help ensure that lost or state of black hole is not reached...knowing when to recognize it in the problematic trader and telling the trader to call it quits for the day before its no longer manageable. Another way to look at it, this trading partner becomes your eyes into the at home trading environment of the problematic retail trader. Then after trading has stop...that's where you (psychological trader coach) comes into play. In fact, my personal experience with fellow retail traders is that everyone will experience what you've described but only a few will be able get through it on their own. Further, I believe this is one of the primary reasons why most traders are not suitable for trading prior to their first trade...they do not realize these are common issues for retail traders and are not prepare to resolve these issues on their own. If more traders spend just as much time & effort on themselves as a person as they do tinkering with their trade signals...they'll be better traders because their is a strong connection between the mind and success.

First of all, my definition of a trader using TA is a trader that opens a chart and then makes a trade decision based upon any information they get from that chart. Thus, if there's no indicators on that chart but the trader is still using the chart...its still technical analysis. With that said, a trader does not need for their TA to detect every high/low to prove its valid. You just need to show that when you use TA...it helps you to be profitable in comparison to when you don't use TA. That's something profitable traders understand because TA is just one chapter in their book called trading plan that contains many chapters. Simply, TA does not work alone nor is it a surrogate mother for other things a trader lacks in his/her trading plan. Therefore, if those other key variables (arguably more important) like money management, discipline, trading experience, proper capitalization, proper trading environment are not in place...most likely your TA will not succeed. By the way, I've never met a profitable trader that "only" uses TA and nothing else. Yet, folks get bent out of shape when a profitable trader uses TA as part of their trading plan. The same folks demands proof that TA works "every time" from those profitable traders that uses TA while ignoring the rest of the trader's trading plan. The main problem that I see is that too many traders only talk about their TA and provide very little information or no information about the other components of their trading plan. This gives the impression that they are using nothing else which is far from the truth. Just take a look at every trader forum you're a member of. You'll see the most popular threads are about technical analysis, indicators, chart analysis or similar. Yet, threads like discipline, money management, proper capitalization, position size management, proper trading environment and so on seem almost "not important" or barely manage to get a few replies. TA works and you don't need it to work every time. You just need it to work in your trading plan if you're going to use it. Therefore, if the overall trading plan sucks...TA nor anything else in the trading plan will help someone to be a profitable trader. My rant for the day.

* I wasn't claiming to be testing the 'exact' same strategy that the author was. That's exactly my point...why bother announcing your results are different than his results when you knew you didn't even share the same method ideal (volatility versus range). * Can you explain to me how you think that what the author is discussing differs in any non-specific way from what I have tested? The author method involves "range breakouts". He in error believes its a "volatility breakout" via specific market conditions (he did not disclose those specific conditions). I don't need to be a rocket scientist to understand the difference between your test results versus his test results. :rofl: As a reminder, the author is not comparing volatility breakouts to mean reverting. You are for whatever reasons suitable to you. * "Therefore, any veteran trader knows that when "volatility is low"...you fade the volatility breakout...". Now what on earth does that mean? It's a contradiction in terms, surely? You've implied you've tested, studied and traded "volatility breakouts". You've also specifically used the "fade them" term. Therefore, I will assume you know when your fades are performing well in comparison to when your fades are not performing well. I'll let you do the math on that understanding without my help. * shelve the method. Ah yes, the old "it works until it doesn't" clause beloved of vendors the world over. If you want to continue using a method that's not profitable when you can use a different method that's profitable...that's your choice. Actually and oddly, I've been meeting more traders lately that use different strategies for different types of market conditions. Yet, oddly, they continue hammering at a method that's not suitable for a particular type of market condition instead trying to milk something that's suitable for a particular type of market condition. Ah yes, the old saying..."“There's none so blind as those who will not listen.” * I find that doubtful, but I can't state with any certainty that it isn't true. I'll cut you some slack on that and we'll talk about it again when you get more actual real money trading experience with volatility breakouts. By the way, I have never doubted the trading of others when I watch them trade in person. Thus, if they say they are trading "primarily volatility breakouts" while I'm peeking over their shoulders...I believe him. If the guy sitting in the next roll in front say he's trading "primarily via a mean revert system"...I believe him too. * I'll say it again: the ES is not a breakout type market. Currently, volatility breakout methods do not perform well on Emini ES futures. Therefore, I will say it again as did the author...don't apply volatility breakouts if specific market conditions do not exist. If you have problems in understanding that and think its vendor mumbo jumbo, you won't get any sympathy from me when you show up at Traderslaboratory to announce "it doesn't work now". Yet, have there been profitable years in applying volatility breakouts to trading the S&P 500 Emini ES futures ??? Yes in 2001, 2002, 2005, 2006 (May - July), 2007 (June - August), 2008, 2009 (Jan - March), 2010 (April & May), 2011 August - early October and 2012 (May - early June). By the way, I do not know when volatility will return on a consistent basis but I do know its not there now for the Emini ES futures. Note: The above years that I don't mention specific months implies that the majority of the year was good. Also, most here know that I preach consistently that trade signals is just one chapter of a trading plan. Therefore, similar to the author, specific conditions will need to be in place to prompt me to venture into trading the Emini ES futures. I do not recommend Emini ES futures as a place to get their feet wet to newbie traders via any trade method.

Hopefully I didn't explain myself incorrectly. I am not saying that range breakouts (@ entry) and volatility breakouts (@ entry) are the same although in some price actions they both can occur at the exact same time. I'm saying that range breakouts are not dependent upon "volatility expansion". In contrast, volatility breakouts are dependent upon "volatility expansion". Its not uncommon for traders that use and entry signal based upon range breakout (not volatility breakout) to exit the position based upon volatility expansion. Some of these traders in error will call their trade method a "volatility breakout" to imply they enter the trade via a volatility breakout. The author's specific method in discussion involves a "range breakout" @ entry and a "volatility breakout" @ exit. In contrast, I myself have studied and traded "volatility breakouts" @ entry along with other types of trade methods (e.g. fading or mean reverting) that's dependent upon "volatility breakout" to setup the fade. Simply, a good volatility breakout trader will also be a good fade trader. In fact, I've never met one that's not able to do the other. Also, they tend to know when to use one instead of the other. Yet, I don't know if the author is "also" using a fade method when he said the following...

BlueHorseshoe, The only commonality you guys have is the trading instrument. Not sure why you're comparing your data study to his data study when you two have different interpretations of "volatility breakout". What's the range (dates) of your data results in comparison to the authors 1998 to 2012 ??? Your data results are via the "exact same" specific volatility breakout method as the author is using regardless to my opinion that the author entry method is not based upon a volatility breakout ??? (if not, why make the comparison via saying your info contradicts the author) Also, the issue is not about volatility breakout versus mean reverting considering the author has made "no comparison". In fact, the author has been clear that if volatility is not there...shelve the method. I myself have stated to change from the Emini ES futures into something that's more volatile if the trader wants to continue using the same volatility breakout method. I also put emphasis that the Emini ES futures is not a suitable trading instrument for newbie traders regardless to the method being used. Therefore, any veteran trader knows that when "volatility is low"...you fade the volatility breakout...something most newbie traders doesn't understand about changes in volatility levels. On a side note, two of the best traders of the Emini ES futures (both institutional) at one particular firm since 2006...one is using a volatility breakout method and the other is using something that's mean reverting. How's that possible now that we're making comparisons ? Hint: The mean reverting trader is not entering at the same price (in opposite direction) of the volatility breakout trader. Yet, both are successfully (profitable) trading the same trading instrument called Emini ES futures.

You initial message made no reference about "trying to prevent new or naive traders from jumping in headfirst". . In addition, the author himself made his own warnings or negative commentary about volatility breakouts that I've highlighted in my initial reply that you seem to have ignored. Instead you made a choice to be rude and disrespectful via making the "ignorance" commentary to the author along with the fact you make an unsubstantiated commentary with no proof that the author "probably because the author has not carried out any sort of basic data analysis for this instrument". Therefore, I'll ask those specific questions again and you may choose again to ignore my questions: 1) With that said, what experience do you have with his specific type of volatility breakout system for current types of market conditions for the Emini ES futures ? 2) How do you know that this author has not performed any basic data analysis for this instrument ? Also, as I specifically stated myself in disagreement with the author, this is not a volatility breakout method nor a volatility method even though the author has labeled it as such. Further, you seem to imply that you yourself have experience with "volatility breakouts" and if that was the case you would have closely examined the charts to see that this is actually a "range breakout" system and not a volatility breakout entry signal method. This method involves an entry system as a "range breakout" with an exit system that's dependent upon "volatility breakout" to reach whatever profit target the trader has designated. In contrast, a true volatility breakout system (differs from volume breakout) involves an entry system dependent upon "expanding volatility". As for my own personal experience with volatility methods and volatility breakout methods involving specifically trading the Emini ES futures, there are hundreds out there that are dependent upon the entry signal being volatility based. I myself have profitably used "a few" for trading the Emini ES futures for several years prior to leaving the Emini ES for other trading instruments. Simply, when the volatility dried up in Emini ES...it was time to move on to a different trading instrument. Note: I have studied (backtested and simulator traded) and traded with real money about 72 volatility methods as an entry signal and 15 of them were based upon volatility breakouts in many different trading instruments that includes the S&P 500 Emini ES futures. Thus, as the author noted, there are many types of volatility breakouts that were highly profitable in 2008. I noted in an earlier message here at the forum that it was high profits (excellent trading conditions) for Emini futures traders (including the Emini ES) back in 2008 that carried into the first quarter of 2009. However, it has been "difficult" to maintain or match the same unusual profit levels since (e.g. smaller profit targets, less trade signals, less runners) the first quarter of 2009 especially since the record breaking number of money pulled out of the markets since. This has resulted in many Emini ES futures volatility traders and Emini ES futures volatility breakout traders shelving their methods in favor of switching (changing) from the Emini ES to trading other trading instruments that have excellent volatility (e.g. EuroFX 6E futures, Light Crude Oil CL futures, Brent Oil futures, Eurex DAX futures, Hang Seng HSI futures and many others) mainly because they wanted to maintain their profit levels or exceed it in comparison to trying to trade the Emini ES futures in today's market conditions. Yet, there as still some volatility breakout methods profitable in trading the Emini ES futures even in current "low volatility" trading conditions that have been adapted for today's market conditions. Reality, the successful adaptation has been by veteran traders...not newbie traders. Therefore, my warning to new traders getting into volatility trading, there are better choice trading instruments for such instead of trying it on the Emini ES futures as an inexperience trader of volatility or via any other trade method. Simply, I don't care what trading method someone is using even mean reverting..the Emini ES futures is the most advertised, most hyped trading instrument being shoved down the throats of new and naive traders regardless to the choice of trade method being used. It doesn't take a rocket scientist to understand...volatility methods are designed for volatile trading instruments and most newbie traders can't even tell the difference between low volatility, normal volatility and high volatility price actions. That is the primary reason why newbie traders struggle with volatility breakouts or any type of volatility base trading method. It's not the method that's causing the problem. It's the trader that lacks the experience to know when to use a volatility breakout method versus when not to use the method because the trader doesn't have the ability to recognize that volatility has changed. :doh: Regardless to the method (volatility, mean reverting or whatever)...trading the Emini ES futures is "one" of the toughest game in town. It is highly advertised by brokers, highly advertised by data vendors, aggressively traded by the pros (e.g. institutions) and one of the most discussed futures instruments at forums. Simply, newbies are trading against the best of the best. Good luck with that.

Although the author (NatStewart) doesn't seem to impressed by "volatility breakouts" in general nor impressed by specific volatility breakout strategies by others via phrases like... * more difficult to use and less effective. * I do not see any real edge. * I have found that it is too easy to over-optimize these complex patterns. He does imply he has found his own version of a volatility breakout and that its been working well for him. Therefore, if such is true, I don't think your going to be able to persuade him to stop using something that's profitable for him. 1) With that said, what experience do you have with his specific type of volatility breakout system for current types of market conditions for the Emini ES futures ? 2) How do you know that this author has not performed any basic data analysis for this instrument ? By the way, the generic charts posted by the author doesn't qualify as a "volatility breakout" strategy in my opinion. It's more like a "range breakout" without the volatility in hopes that the entry interval develops expanding volatility after entry to allow for an exit as volatility shows up. Last of all, the author's closing statement seems to imply to "use with caution" via the "left on the shelf" commentary until the correct market conditions are present. If it works, keep using it.

Reality check...an individual with $100 million dollars would not be trading with it. In contrast, he/she would retire and take it easy for the rest of their life. Further, if they do decide to try to use "a little" of that $100 million...they would most likely hire someone and that someone would recommend art collections and such. I think the ceiling for an individual trader is $10 million or less. That's the amount where the trader would still consider trading. Thus, anything more than that...the individual is thinking of other opportunities that's not trading related, early retirement and pleasures. With that said, with a trading accounts LESS than $10 million, most would only use a small portion (e.g. 250,000 or less) for trading purposes. The rest of the money, some smart person will sniff out the trader...get married...then divorce and take whatever the trader had left that hadn't already been spent on love. That's reality. :rofl:

Hi, Assuming we aren't talking about a trader using an automated trading system... Continue trading one contract considering the trader is a good trader and has the ability to double the account size while only trading one contract. If it ain't broke, don't fix it. Yet, if the trader decides to increase position size, do such only after about 1 - 2 years of consistent profitability via the prior position size. The 1 -2 years time span will allow the trader to have real trading experience in a few different types of market conditions to help prepare/determine if increasing position size is appropriate.

Market Context will more often than not over-ride any technical analysis. Then again, with all the contrast amongst us traders that use TA in the trading plan...I'm sure there are those out there that would say today's price action was not trending along support. In contrast, they would say that their TA showed price hitting a ceiling (resistance) and that it then dropped as expected with tons of help from the overnight situation involving Europe (ECB) decisions. Therefore, to answer your question, I get my directional bias (you used the word basis) from market context (e.g. key schedule and unscheduled market events). I then use my TA to help with position size management. For example, if I'm bearish via my market context analysis and I get a Long signal via my TA...small size only in the Longs and normal to large size in the Short positions. The above approach works very well for me.

It will be impossible for all traders on this planet or most traders on this planet to be using the same readings. To do such implies we would all need to use the same data vendor, same time frames and so on. Simply, we would have no individuality and that's a contradiction to trading, markets and capitalism itself.

Hi, I don't use priceactionlab, don't know anyone personally that does use it and I have no affiliation with priceactionlab. Yet, I have seen them discussed at various trading websites about "Quantifying Price Action". Further, they were one of the sites I noticed on the first page of google search. Also, I do know there are a few traders here that's "into" quantifying price action". Hopefully, they'll be very helpful to you in answering your questions.

No answers because its all on the first search page of Google unless he meant something else. :doh: Quantify Price Action

Hi, It's very simple. If you believe learning what the Big Boys are doing will not improve your trading...ignore the information. Yet, if you think your trading will improve with such knowledge, research it to see if there's any merits to it for your trading purposes. By the way, its not just the Big Boys. I've seen the same question about other things that's market related. "Why would I bother learning how FED actions impact markets" "Why would I bother learning how Global Crisis impact markets"

Looks like the thread is evolving into intermarket analysis. So you want some clues to trade via swing trades or position trades like some of the big boys ?

At first glance someone may in error think you're saying that the same trade strategy that's profitable on Emini ES futures will also be "just as" profitable for example on the Hang Seng HSI futures. My point is that the there are some markets correlated and other markets not correlated. The correlated markets can use the same trade signal strategy and same trading habits (e.g. trading Emini ES or Eurex DJstoxx50 between 0830am - 1100am est). In contrast, markets not correlated can use the same trade signal strategy but not the same trading habits.Thus, the trade results in Emini ES versus Hang Seng HSI futures will be greatly different while using the same trade signal method. That's why its important for traders to test their trade methods on different markets, correlated and none correlated, to determine which market produces the best results via that trade signal method. Next, factor in the personal reasons to determine which market is suitable for trading. For example, trade signal A produces on average $500 per day while trading Emini ES between 0830am - 1030am est while the same trade signal A produces $1200 per day while trading Hang Seng HSI futures between 1130pm - 0100am est. Therefore, the only reason why that trader will continue trading Emini ES must be due to "personal reasons" (e.g. night time security guard at the hospital that prevents him/her from trading the HSI futures). Therefore, I will assume you're talking about when you say "things that make markets move are the same in other markets" that the analysis (e.g. supply/demand, market context) is similar from one market to the next market. That's very true. By the way, strongly agree that position size management is one of the keys to successful trading. Good traders know when to increase their position size and they know when to decrease their position size.

If someone gave you a strategy that worked 90% of the time for them, it will not work 90% of the time for you based upon some of the following reasons you stated yourself in another thread: The few reasons above that were mentioned by yourself are just a few of many other reasons that you didn't mention that will prevent you from duplicating in real trading ( with real money) the results of someone's 90% winning system. Also, another reason not mentioned by you is that market conditions are always changing many times every year. A 90% winning system will eventually have a drawdown period. Will you be experience enough to adapt to minimize the drawdown or will you come back looking for another 90% winning that performs well in a new market condition...outperforming your prior winning system. If the system does exist and is automated...it will be too expensive for you and it will eventually have drawdown. If the system is discretionary...the key element in the system is the trader that has the ability exploit the system. Thus, a 90% winning discretionary system is just an extension of a great trader. My point is that a 90% winning system has a great trading plan. Thus, all the variables in that trading plan are working together well as a team. Variables like market experience, psychology of the trader, discipline, money management, proper capitalization, position size management, proper trading instrument for your trade strategy, stress management, proper broker platform, proper trade workstation, proper trade environment, team collaboration et cetera. Therefore, a profitable simple 90% system is by a great trader that has found a way bring together those other variables that may seem like complicated ingredients in the team to another trader. A simple method that's consistently profitable is accomplishing such because the trader has a deep and complex understanding of today's markets along with being able to adapt the trading plan (not the method) to maintain profitability when markets change.

You can post your new set of indicators @ Traderslaboratory Coding Forum

Siuya, I think any retail trader that spends 10% or more of their trading capital on books, data, equipment, research, vendors are probably "under capitalized". In contrast, someone that's a professional trader has a salary, bonus performances, pension, medical/dental plans, paid vacations and so on. These are the advantages that professional traders have that most successful retail traders do not have...primary reasons why the failure rate is higher for retail traders because retail traders do not have the supporting cast like professional traders. I also think the failure rate amongst retail traders equals the failure rates amongst small business owners is due to the lack of capital (not properly capitalized) and lack of understanding of operating a business. Too many retail traders don't understand they are self-employed. Therefore, they need to treat their trading like a business especially when their tax government views them as self-employed unless the trader is employed elsewhere at the same time. Eventually anyone will go belly up if their expenses are higher than their income.

The most successful retail traders do not make more money than the most successful doctors. In contrast, the most successful professional traders (those working for a firm or institution) do make more money than the most successful doctors... Assuming you're comparing their life earnings, endowments, bonuses et cetera. By the way, a little off topic, I remember an advertisement (a few years ago) by Google looking to hire bond traders. Google wanted to have its own (in house) trading group that has now branched off into other markets besides bonds. Google is not the only company doing such...will this be the new type of wall street someday ?

I've highlighted some key words you've said above. I'm curious to hear more about your "reading and learning" environment. For example, are there distractions there, you studying while tired, do you have health related problems, you eating healthy, you sleeping well, do you have ADD, changes or issues in your personal life... My point is that maybe your problems has little to do with trading unless VSA is boring or too complex for you. Therefore, if its not trading related, you may need to find some books on how to be good student, efficient time management, improving memory, improving concentration and so on.

What is ‘disciplined trading’? What does it imply? Some (not all) traders have a trading plan that they know is profitable when executed. These same traders also know that when they do not execute their trading plan...they lack discipline. Therefore, discipline trading implies one is executing the trading plan as designed.

Why have you put some phrases in your post in bold? Is it to highlight keywords for the search engine spiders to find? It's very clever of you. Maybe I shall start doing something similar . . . I put Mysticforex questions in bold because others do it too instead of using the "quote" box...similar to what samuel23 had done before me. In addition, I highlighted the words family and low volatility market conditions to put emphasis on what can impact a traders profit level. Regardless, highlighting (color or bold fonts) helps ensure something is not overlooked in any message. I'm not sure what search engine spiders will do with words like family. Maybe it will help Traderslaboratory become more family orientated. :rofl: By the way, I use to be a moderator at another popular forum and that's were I first learned to use bold or color fonts in replies to other members of the forum to ensure they don't overlook a particular point I or other moderators were making.

Whether you're making 5% a month, or 10% a year, are you consistently profitable ? Yes and as a full time trader How many months in a row have you made money ? Many years and the last losing month occurred when I first traded the Emini ES futures (market taught me some valuable lessons about position size management) Trading is a lot more difficult now because I now have a family. Simply, I miss a lot more trade opportunities due to personal reasons involving the family in comparison to having what seem like endless involvement in the markets when I didn't have a family. In addition, the low volatility market conditions has reduced a lot of trade opportunities and lowered profits.