BlowFish

Nicely written post Steve, though I am not sure I completely agree with all the points you have made. Firstly there are many more types of participant with many more motives than the ones that you have mentioned. I always hype Harris 'Trading and Exchanges: Market Microstructure for Practitioners' for those wishing to know more. I hear O' Hara is good too. I am not sure you need to understand why these participants enter and leave the market just see that they are. If you do want to know why and how, the book makes a fascinating read. I should warn it can be a bit 'difficult' because of the sheer amount of information it contains. Of course you are not going to be able to provide a complete thesis on market micro structure in a single forum post Steve:) Markets flow tick to tick but according to our objectives it helps to 'sample' them at appropriate intervals. This is what a chart really is a sampling of the data. Personally I think 'noise' is rare (you could advance a hard to rebut argument that it is actually non-existent) however depending on what your objectives are and how you sample the market you might view some flutterings as noise. Of course to another participants this 'noise' is there bread and butter. Which is I think one of the points you made. I am not sure whether markets are fractal in nature or not but they certainly appear to exhibit some fractal qualities. What is interesting and of real practical use is the interplay of different time frames. Can the weekly keep going up if a monthly high is being put in? Obviously not. What is really useful though is as that monthly high is put in you will likely see chop in a lower time frame as the month high is distributed. More interesting is that drill down a bit further (in time) and you will see lovely trend runs down then up over and over. A lot of successful retail traders (most?) seem to trade in a broadly similar way they sample coarsely to find areas to trade. This might be literally zooming out a chart or looking at a higher tame frame and drawing S/R or using MP or even some indicators like a MA (by averaging x periods you are taking a coarser sample). They then zoom in and trade in these areas using price action or another trigger. I guess the real question is how complicated do we need to make all this. Generally speaking the simpler the better, it needn't be hard to draw a few lines on a chart and then trade from them. Really the difficulties are ones of human nature, patience, discipline, emotional responses etc. P.S. I think you could have warranted your own thread on this Steve goes beyond entrances and exits

Incidentally the heat you mention is known as Maximum Adverse Excursion. There is a flip side (but far less used technique called Maximum Favourable Excursion). I only mention this in case you wanted to google for more information. Sounds like you are arriving in an interesting place under your own steam.

Personally I like 5 or 6 times the period. If they are too close they are showing similar information if too far apart then you are going to pick up too many of the 'flutterings' that you want to sit through. Remember the market cares nothing of time frames or charts, you are just zooming in or out to allow yourself to focus on the information that interests you.

I wonder if wer are likely to see some spot forex brokers will try widening the spreads, eg. saying that it is no longer feasible to offer a 2 pip eurusd spread, IF the current level of thin liquidity/volatility continues? I wonder that too many times the spreads are better than the underlying market (well the bit I can get a glimpse of through IB). I think they (the bookies) probably do better in these conditions all the time the punters don't widen their stops or don't widen them enough.

Hi Atto, Great thread, mind you its always nice to see a post about the nuts and bolts of a trade. I know its about exits but just for completeness could you post a brief post with your entry? It gives us some context for the trade management. Also maybe an idea of your initial stop loss criteria? I hope you don't mind me asking.....you clearly have already put a lot of work into the charts you have posted to date. Are there circumstances you will close all of the remaining position? (e.g. This is a really big selling climax and there is a case for minor support here maybe I should stand aside and re-evaluate). Nice trade btw, hope you manage to post a few more. I'd be interesting to see how things pan out when price dosen't stair step in a strong well defined trend, I guess you take your profit on the first leg(s), get stopped on the rest, and look for the next trade

On the subject of waiting for confirmation (or completion bars), this precisely why people use lower time frames to trigger entries. You would look at say a 30 minute or hourly chart (as an example) for your big picture to spot the signs of weakness in the back ground, (climax test etc). This is going to be fairly major intraday strength/weakness. Having established that you want to trade to the long side you would drop down to a lower time frame (e.g. the 5 min) to find the 'pattern' to trigger your entry. This allows you to fineness your entry.

You got stickied, its all good.

I was trying to think from the point of view of new visitors. Actually I seldom visit the home preferring to jump straight in to new posts, its (the home page) actually pretty clean

Good job but.....there is a best of TL in the beginners section and the threads are linked from there. Thats not to said your efforts are not appreciated

Perhaps have 2 domains, if you arrive through the TL one the business tab starts with its forums unsubscribed requiring and active decision to subscribe. The converse would be true if you arrive through the bussiness domain. Or conversely ask the question what you are intrested in when you first arive and store a cookie.

I found that indicator to be inaccurate sadly.

Also you can read all the messages on page 1 of unread messages but the system still is counting filtered threads here (i think). So you can have 3 pages of unread messages with pages 1 and 2 blank.

Fair enough, he will loose that sum at some stage The way to set your psychological limit is by knowing your ror and using that to make your judgement other wise you are just guessing. Guessing is OK if you guess conservatively. Low % methods with high R:R have higher RoR as you might expect.

seems to work but takes a while to set up. Would be nice to be able to ignore sections at a higher level in the forum 'tree'.

Your poll is skewed mate, it has 0% on one side and highly improbable on the other.

Well really they are a bookmaker rather than a broker. Though CFD's are better regulated than spread bets they are still a bet. I have no first hand experience of them but they seem like one of the more credible operators. They tell me there platform is very good too!

If a trade dosen't go my way within a 'reasonable' amount of time I stop it out. Usually that is the cue for it to take off! I should really define 'reasonable' in my plan (hell 3-5 bars would do) but as it is now its pretty much a feeling (so emotional) thing.

Using those high levels of risk you will blow out your account its just a question of when. T The key stat is Risk Of Ruin, find out more here http://www.traderscalm.com/ror0.html

Yeah I :shocked:

Powerful Feature!! Having said that it's a bit like having a night in when you where a youngster, always thinking you are missing something great.

Neill is good as is Rollo Tape (a pseudonym of Wycoff). For a pretty straight forward take Emini-Watch.com has some free basics.

IB's own book trader has come on leaps and bounds too. It probably makes most of the order front ends obsolete for all but the most advanced functions. Having said that I use bracket trader mainly for historical reasons.

The more I think about it the more I think prop would have (probablly still would) have suited me. All but the very best traders have issues with over/under trading assuming too much (or not enough!) risk etc. It would be great to have a risk desk auditing you. These high profile disasters seem to happen when the guys who monitor risk un-shackle the traders that have 'proved' themselves. Greed at the management level I guess. Leesons case was different as he was falsifying the books to hide is over extended positions. I think I'm probably quite competitive (or was) and that may have spurred me on some what. I am not sure you mentioned the social aspect, may not count for much with some of the loners, but that's one thing I really miss working at home. That all ties in with learning from your piers.

Nice post James. I would say state of the art trading platforms/software are available to retail nowadays. TT is and pats I was using years and years ago. Also depending on brokerage number of markets is probablly similar too, mind you that's kind of academic if you are restricted to half a dozen by your institution. IB have hundreds if not 1000's of instruments. I guess having your risk closely monitored can be an advantage as well as a disadvantage. Though of course there are high profile stories where individuals have brought large institutions to there knees because there risk was not adequately controlled.

Exactly. It is not a software issue it's a 'broker' issue. There are only few retail brokers (and they tend to provide market depth information). Most are actually bookies and these do not provide it as they are simply running a book. Incidentally how do you find Quotetrader?