phantom

Sell orders dry up at a bottom; buy orders dry up at a top. Pretty simple, heh? Phantom

Why is this thread located in the psychology department as adversed to, say, the trading methods or technical department??? Phantom

And my mileage varies considerably! If one MUST buy this, pleeze wait for a divergence signal in either RSI, MACD, STOCH and keep the risk as tight as a ... never mind... Phantom

Curious, isn't it? I once read that Jack Schwager (Market Wizards author) could trade other people's money very effectively, but couldn't trade his own account to save his life... Inconceivable?! Phantom

DAVT, Are these trade setups trades that you actually traded or is this hindsight stuff? Phantom

Thank you all; you are all so right in your observations... Back to work. Phase two in the management of a trade, once I've entered and placed the initial risk stop, and most probably been tested, is to look for a place to build my position. (It was pointed out previously that many times the market will not carry through enough to even give chance at a profit, let alone a chance at adding to the position). To add additional contracts, I must witness a subsequent test, this being a hammer or doji on the larger time frames (10, 15, 20 minute). Incidently, when a hammer or doji occurs on a larger time frame, one can clearly see a consolidation formation on a micro time frame. Once the breakout of the subsequent test occurs, I am able to place my risk stop across that bar and move my original stop alongside it. Notice how I did NOT move my original stop to break even at any time. Too many times I tried the break even stop and was able to survive a loss, but the market faked me out and never reached my original stop placement location, only to move on in what would have been a sizable gain. Its akin to taking the 1 tic profit mentioned earlier in the thread. I'm not saying its what you should do, especially if you trade the stock index markets, but its what I do. In the case that the market moves a significant distance but hasn't provided a hammer? I'll lock in approx 50% of the profits. This is, of course, totally subjective. Surviving tests of risk stops is, IMHO, the most difficult element in trading. This is exactly why I incorporated the use of hammer bars (price rejection) into my trade plan. I let these critters "do the work" for me. (The psychological work, in this case). I've been experimenting with range bars lately. These wonderful little creatures really seem to do an excellent job of showing concise consolidations/tests while removing the time element from the equation completely. (I think that time as a trading factor is an enemy to the trader. Time builds expectations into a trade that should not be a part of the trade). Using range bars has given me a turn of successes in the energy markets that I was never able to achieve in the past. But that's another story for another time... Luv, Phantom

Not true, mslk. You have given thanks time, and time again. These things are noted whether you realize this or not. I appreciate you. I already know that you and bobc and certain others do NOT fit in the takers category. I'm not asking for quid pro quo. I didn't join this forum because I wanted someone else's secrets to success; I joined because I wanted to help people avoid some of the mistakes I made when I had difficulty "figuring it out." BTW, its not just about me...Its about every giver in this community. What I'm saying is that most people want to be lurkers and take what they want, take more, and hide in the shadows, be invisible. Its taxing on ALL of the givers in this community, not just me. (BTW, while I'm on the subject, thank you MMS and your cadre for all your hard work). There are approx 100k traders that visit this forum? I can list the contributors and grateful receivers on a single sheet of paper. That's sad. A little gratitude goes a long way. Anyway, thank you for your kind comments. I'm always glad to help your kind. Luv, Phantom

I read a book not too long ago written by a world-renowned artist who claimed that she received a visitation from Lord Jesus Christ and he asked her to paint his portrait. While she painted him, for a period of about 4 months, they conversed on a wide variety of topics covering everything from the Bible to the future of the world. One of the key points that Jesus made was that we should express gratitude, even on a daily basis. Now there are givers in this world, and there are also takers. Mostly, the givers ask very little from the takers, save for a little gratitude. But, the takers are not even capable of supplying even that. Take this forum, for example. I see a proportionately very small amount of givers on the site extending a helping hand to a multitude of takers, and in return, gratitude is withheld, but criticism abounds. What is it about people, that they will take, take, take, without even saying "thank you?" I know that this post has nothing to do with technical analysis, but it has everything to do with common courtesy. I feel that I need to "go to bat" for the givers on this site, who expend a lot of mental energy to give, with very little in return. Take this thread for example. Well over 13000 views. Less than 72 "thank you" expressions. Are that many people really that indifferent to the trading knowledge being dispensed? Take another example. Maelstrom's "Trading The Storm." Well over 9000 views and only 5 people "liked" it? What's wrong with this picture? I can't speak for Maelstrom, or for anyone else who gives and gives and gives, but I will say that if there isn't a lot more gratitude dispensed on this thread, I will assume that my lessons are falling on deaf ears and I will discontinue revealing anything else. Thank you to everyone who HAS given the courtesy of showing gratitude for that which they have received. Blessings to you. Phantom

Sent a PM Don't want to be accused of foul play. Phantom

Some trades just will not give the trader access to profits... Suppose one does enter at the tip of a rally and the market does not exceed the entry point. Is it more important to hold the trade and attempt to "be right," or is it better to minimize the financial damage and cut your losses? I choose the latter. My initial risk stop takes care of this for me. Furthermore, I can't imagine using a limit order in a breakout situation; I usually use stop orders to enter breakouts, or sometimes market orders, but the point is that if the market reverses in this scenario I will limit my loss with the risk stop loss I entered immediately after I was stopped into the market. If the market does indeed reverse strongly, I may even reenter and take a NET profit from the series of trades. Trade management is all about cutting your losses and letting your profits run (cliche, but true nonetheless). Luv, Phantom

I must also take issue with this statement. Once you are in the market, trade management should be the imperative. Although this doesn't preclude the exit strategy, one should be looking to BUILD the position, not exit it. Once a trader learns how to build upon a profitable entry, he/she is well on the way to the real riches that are available in this amazing profession. Luv, Phantom

Predetermined? Nitpicking, to say the least...but, if you say so... And yes, what nakachalet was saying was quite different. Phantom

Kuokam, Let me stop you right here, right now. I must say, I totally agree with Wingnuts' statement, and if you have patience, you'll know why. I do not try for break-even on my first stop movement, but you are jumping the gun here. Luv, Phantom

You are correct; I haven't discussed price acceptance. Right now I want to continue with trade management while we are on the topic, so we'll revisit price acceptance at some other time. But I will give you this: look for consolidation zones with continuation breakouts at prior points of price rejection... Luv, Phantom

As an aside, a high standard deviation can also precede a market reversal. Luv, Phantom

I have used time stops in the distant past. Problem was, I would take myself out of a trade, and then come back later to find that I would have been profitable if I would have left the trade alone. Price rejection is a powerful ally in the hands of the well-informed. I would much rather hide my stop behind evidence of price rejection and then let the natural market forces do their thing rather than place a clock on my trades. Impatience will eat your lunch in this game. Luv, Phantom

Sorry nakachalet, but your statement couldn't be farther from the truth. Ever heard of a floor trader? Some of us professional traders react to price action on a daily basis. In my trading, and I know many other pros who do the same, I wait for consolidations and then trade the breakouts. I let the ongoing price action determine my entries and exits, as I trade from consolidation zone to consolidation zone, adding contracts at some points, subtracting contracts at others. Its akin to surfing the market waves. Granted, I am much more experienced at this technique than many other traders, but I would rather react to price action than go in blindly at some price level and hope I reach some other price level to achieve my financial goals. Traders that are "doomed" are the traders who do not have the ability to take what the market gives... Luv, Phantom

No, just good, old fashioned hard stops as mentioned previously.

More like driving in a foreign city with a map in one language that you speak fluently and the actual street signs in another language that you don't speak at all...

Quite a bit easier said, than done...

Ever seen the EKG of a dead man?

Smooth ride??? Better keep your day job. Phantom

DAMMMMM. 6 pages of banter and not a single word of good advice. Any newbie should flee from this thread ASAP!!! No wonder 95% of traders fail...LACK OF FOCUS!

Sounds like you've got a grip on the entry portion of your discipline. Unfortunately, you haven't even begun to experience the reality of the emotional experience that awaits you once you go live. And that cannot happen until you go live. It's akin to hitting 10,000 tennis balls off of a wall, and then stepping onto the court against Raphael Nadal. The emotional stress that live trading incurs, when your money is really on the line, will cause you to experience feelings you didn't even know existed inside your mind. You will begin a whole new avenue of discomfort and second guessing and "premature ejectulation" on trades that you couldn't have possibly foreseen during your tenure as a sim-trader. You are going to have to take the leap, and this will require you to overcome your "type-A" thinking (if I am reading you correctly) and allow yourself to experience those feelings if you are ever to become a pro at this game. 1-4 contracts with a 342k account? You're also going to have to learn some money management techniques because this is WAY out of line. You might try opening a modest account (say, $10k - $15 k) and trade 1 car at a time with tight risk stops (no more than $150 per car per trade) and get used to the real world of the psychology of trading. You can do it TRADEWINDS, all it takes is the first step... Luv, Phantom

Sorry TAMS, but 2 cents is about all that statement is worth, and I'm being generous. I stopped looking at volume a LONG time ago. Ever heard of tick charts? Also, volume spikes oftentimes lead to erroneous assumptions that a move is terminating soon, and after exiting a trade, one comes back later to find that he/she has left 75% of the profits on the table. Volume is just another indicator, no more important than anything else (except price and volatility) as long as one is trading in liquid markets. Phantom