steveh2009

Best scalper's book is: "Forex Price Action Scalping" by Bob Volman Even if you don't scalp, lots of words of wisdom in this one.

page 265 - "WHAT TO AVOID" "There is one kind of exit that is designed to get rid of losses, but it totally goes against the golden rule of trading of cut your losses short and let your profit run. Instead, it produces large losses and small profits. This type of exit is one in which you enter the market with multiple contracts and then scale out with various exits...On a gut level, this sort of trading makes sense because you seem to be "insuring" your profits. But if you step back from this sort of exit and really study it, you'll see how dangerous this type of trading is. What you are actually doing with this sort of exit is practicing reverse position sizing. You are making sure that you will have multiple positions when you take your largest losses...It's a perfect method for people with a strong bias to be right, but it doesn't optimize profits or even guarantee profits" --- "Trade Your Way To Financial Freedom" by Van Tharp Reading between the lines, Tharp is saying that this style of position management will force you to maintain a HIGHER winning pct because your long-term avg win will be LOWER than someone who trades all-in / all-out (due to the larger account beatings you took on the total losers and the trades which could not match the performance of the all-in / all-outer).

For the small trader, the CL is the premier scalping instrument. Once you start looking at that, the e-minis won't hold much interest unless the VIX gets over 30.

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Amibroker is a fixed cost of $279 which includes about 3 upgrade cycles. Then it's like $125 or so to get another 3 after that and so on. So no monthly "pay the rent" or "lifetime for $1300+" expense. Then, there's a 3rd party add-on for 149 Euros at patternexplorer.com that sounds like what you want. You can scan in real-time. If you already have a datafeed which gives you 100+ symbols then you're set and can get on with the trading.

UB, could there have really been any other simple and obvious answer? Occam's Razor strikes again. Heck, "TheRumpledOne" is now posting youtube videos of his ramblings and so it all makes sense why 1 + 1 = "not 2" in his world as well.

Forgot to mention... MultiCharts DT is free and you can use their trading interfaces for free as well. This is great for discetionary traders who have no need for automating trades or writing their own indicators. Psst. Little money advice. If you're not a successful trader already, it's a bad idea to buy the lifetime license deal for either NT or MC.

Whisper, give Al Brooks a read. His first book is tough reading but a gold mine of information. The 1st new book on trends is a longer rehash of parts of the original work but at least it's written more clearly. I would pass on the new 2nd and 3rd books and get their info from the original after the new 1st starts making sense. He personally trades the ES with size and a high winning pct so that inverts his payoff ratio (i.e., risking $1 to make 50 cents). Ignore all of that. You can take his approach on the CL and get the 2:1 with 50/50. Search the recent postings on elitetrader dot com for NoDoji and you'll find a wealth of information relating to price action edges adapted from the Brooks book. I would recommend that you stop looking at the Forex and focus on practicing on the Crude futures (CL contract). That contract MOVES and you need nice volatility like that on a consistent basis where you get plenty of opportunities on a 5 min chart with a 20 ema as a simple trend guide (e.g., what Brooks uses) I may get flamed for this but all I see in the Forex market on forums is an overwhelming majority of either young or under-funded (or both) wannabe traders getting their head handed to them time and again because the market they're in is designed to require larger stops and incur horrible spreads and slippage. Apply good price action methods to the CL in sim over a year's time before going on a board and declaring the impossibility of it all. That's a GREAT day trader's market where you can risk $100-$150 per contract to get $150 to $500 on scalps...within 2 to 10 mins during pit hours (9:00 AM - 2:30 PM EST) If you don't have a minimum of 10K to trade with to trade the CL, then your time is better spent sim trading *that* until you do instead of throwing it away in the Forex, a completely unregulated market with no 3rd party (e.g., CME) involved. I say this over and over again. This isn't a team sport. You're in this for yourself. You enter alone and you exit alone so trade in an isolated environment where your focus promotes greater levels of intuition to come into your trading. Most of the people I see in forums "getting it" over time tend to be older, well-funded and have an emotional maturity which extends beyond just sounding smart and objective. When the heat gets turned up, you see the differences emerge. People from an engineering or programming background or have been successful in their lives from having the gift of gab or a strong personality tend to have the hardest time in learning to trade well. Having a lot of perfectionist tendencies is the worst. You need more creative thought involvement and less rigidity in your beliefs. Finally, if you're under 30 years old, what the heck are you doing in the first place? You should be experiencing real-world jobs, growing relationships and treating this as more of a hobby for making extra money for nicer vacations or gaining the knowledge to occasionally adjust your 401K / IRA to the rhythms of the markets (1-3 decisions per year). You've got YEARS to hone your skills at that time of your life in case you get fed up with things in your 40's and, by then, you're more than capable to make a full-time living at this. I'm certainly not the best trader but I do have 8.5 years full-time at day trading the futures markets (Russell 2K e-mini futures and now the CL for the past 1.5 years) so I think I speak with enough of an understanding to have at least a 70% chance of a clue as to the advice I'm giving is of above average benefit to those less down the road than I.

Is this the shadow traders stuff where they have either one of two women demo the software on a Tuesday night at 8 PM EST and they show the 6E contract live and pick off 2 pips in the trading sim? Then, when anyone asks what the stop-loss would be on a trade like that, you won't get a straight answer and she'll act like you don't need one because "shadow trader knows" where the market is going just about all the time? Guys, I only have 8.5 years trading the futures full-time, but the whole thing (to me) wreaks of the ST software sellers posing as real traders, appealing to the primary weakness within all newer traders: the desire to trade a high winning pct system. It is bogus to scalp at market noise levels even at the 90% winning level. You never want to have just 1-2 trades taking back 5-10 super small winners. You want to look for systems more in the 50% winning area and look to get 1.5 to 2.5 more on the wins (averaging out) in the long-term to the 1.8-2.0 area. This woman showed what looked like simple short-term trendlines and attached a different name to them. The big warning sign was when she said that this was just a very small portion of the overall package. It's a warning because newbies perceive "more" as better while more experienced traders strive for as little as possible to find the trading opportunities. Another weird thing was that youtube was showing seminar attendees giving short testimonials from some resort in the Caribbean. WTF? So they can say make claims which would not be legal on American soil? Cut your looses and learn some price action type trading. Stay away from trading groups which promote a trading system, let alone want your money for its use. NO ONE is in the business of selling you a winning system. They're in the business of convincing you to part with your money before the market takes it from you first before you quit. All of these people are NOT TRADERS. Instead, they give you the impression that they are so that you drop your guard and think your just doing what you need to in order to succeed (i.e., paying someone else for help). If it were all real then they would be attracting all kinds of hedge fund money to apply their methods to and would be making 100's of millions in performance fees and not this small-timer stuff (like you, at the retail level of the biz). I've said my piece. ST software, Woodies CCI indicators, "red light / green light" black box infomercial stuff...whatever...it's all the same...the quickest way to a blown-out account. All of these have one thing in common: the sales pitch to the objective observer sounds to good to be true. Look if you're a day trader in the futures and you can't see loads of price action opportunities on a simple 5 min candle chart with a 20 ema as a trend reference point where all it demands is your research time and execution practice and not extracing $1000's from your wallet on "proprietary indicators" and "advanced workshops", then you really need to reconsider if this is a game you should be playing. The beginners who survive everything I've warned about return to simplicity backed by research, not complexity which was welcomed when they started and thought to be greater protection against the probability of losing...it's not. [interesting note. nkhoi over at elitetrader did a business lookup on them and it appears there are 4-5 people involved running several shell companies related just to this ST biz. Since when do you need that kind of business structure for so few people involved?]

"After 2 win/losses cease trading for the day" If you were flipping a fair coin and you made $150 if you guessed right and lost $100 when guessed wrong, would you limit your flips per day to the above rule? I think not. If you are taking good trading signals which fit your plan, you would actually want to take as many of them as you could per day, allowing the odds to play out. You cannot increase your odds of success by making ad hoc rules based on a number of consecutive wins or losses. All you would be doing is delaying the inevitable should your system not have a positive expectancy. Drawdowns have no memory of which day it is or when they started. True, human beings feel the emotions of winning or losing many trades in a row. But you cannot control the long-term outcome of a probability distribution by restricting your exposure to it.

Just a comment on the results posted here: In the long-term, having super high winning pcts in combination with super high payoff ratios (i.e., avg win / avg loss) don't exist. They have an inverse relationship. If you are at 90% or better, it's even more likely that your payoff ratio will be no higher than 0.50 (risking $2 for every $1 you expect to make). Actually, it's probably closer to 0.30. I wish I were wrong but I'm not. Show me 500+ consecutive trades and you will see the convergence for yourself. If you don't, then there's a mistake in the coding of the algorithm which has introduced forward-looking knowledge. If you still don't believe me, then show me 100+ consecutive real-time trades (something like an Interactive Brokers sim-trade account is sufficient) and that will take care of all doubts without anyone having to risk money to get the point across. If you want to gain 4 or 5 times what you risk on a regular basis, then you'll find that the winning pct is more in the 30-40% area long-term. A nice surprise of a stable 30% winning pct system is that you can even experience upwards of 40 to 1 reward to risk opportunities, given that you add during the trade in equal increments along the way.

A buy stop limit order doesn't ensure execution, but it will ensure that you get the price you want or better. What I do with my own trading interface to IB when trading the CL is, if I want in the market immediately but don't want a market order which could slip me 2-4 ticks, I go 1 tick inside the bid on a buy limit or 1 tick inside the ask on a sell limit. If I am staggering buy orders ahead of where the last is in an uptrend (e.g. 20 ticks between entries), I'll put in stop limit orders when my averaged up buy-ins are closer to my initial position abd have the ones farther away with stop order triggers where the slippage isn't going to threaten my overall cost average within the trade. I'll give you an example of an actual pleasant experience I have had with limit orders. I'll have my software set to trigger a limit buy (or sell if going short) on touching, say, a 20 ema on a 5 min chart. The CL can get pretty jumpy on such an event so by the time my limit buy at, for example, hits 95.50 and got executed, I found that I got filled at 95.45...5 ticks better than what I wanted and then price is suddenly at 95.55 or better, 10 ticks to the positive in the blink of an eye. Had I placed that limit order directly in the market beforehand, I would have gotten filled at 95.50. You can see what's going on here. The software sees a last of 95.50, sends the limit order to the exchange. Meanwhile, the exchange sees my limit order at 95.50 while its ask is touching 95.45. I get a much better fill in this case. It helps to keep me from getting stopped out on a sudden surge into support / resistance because my stop loss order, along with a target offset from the actual limit fill price reported by the exchange, is submitted as an OCO order on the execution status info from the entry. It doesn't happen a lot, but when it does, it's usually a good thing (for a change!) Over the long term, if you're executing market orders based on something like X seconds before a bar close, you'll see price favoring you many times too relative to the actual closing price of that bar. You've got a lot of programs out there waiting for the exact close of a price bar (5 min being a common one) before they react so a market order like 3 secs before the close averages out pretty well to that close. I prefer this approach to finding out the closing price first and then entering a limit order because A) you can and will get skipped over at your ideal entry point and B) you're NOT going to like your at-the-market fills if your analysis is right and that closing price was what you wanted to have all along.

Just a caution about trading plans. I saw some great ones back when I was learning the futures ropes in 2003-2004 in the Woodies CCI "Club". They all failed even though the discipline of many following their plans was done as well as humanly possible. They all refused to see the obvious: They were all so captivated by the personality of their "mentor", Ken Wood, that they failed to ever observe they were trading a losing system to begin with...until the trading account eventually told them the truth. It was a sad thing to watch because you had people in their retirement years with too much money available to comfortably burn before they could wake up from the crowd behaviorisms. And the second obvious: Their mentor wasn't even daytrading futures (the focus of "the club" to begin with) so he could stick around the whole time, collecting money from seminars / DVD's / website advertising / brokerage kickbacks while the actual traders became a revolving door of losers. So sure, a trading plan is a nice way to help focus / discipline your trading efforts. But you have to have some decent evidence of a positive expectancy in what you're trying to do in the first place. Word to the wise: Trade alone. No chat rooms, trading forums (while trading). This isn't a team sport. You will be at your best when you are alone with no one elses opinion to rely on but your own. Market intuition grows much faster based on self-reliance.

If you're a small trader, the CL is the best contract.

You have chosen a very hard road to take. Unless your part-time trading produced enough savings to support your family lifestyle and fund your accounts for sufficient drawdown periods for at least 1.5 years before you had to give up, I can't relate to you putting their welfare above your immediate desires for trading success. Get a real job (again) and keep the hobby trading money for vacations and long-term wealth building. You are dangerous...and they have completely no idea why.

There's a free room on Paltalk with "price action" in the title. ...if you're bored. Trading the CL, the last thing I need is to take my eye off of that chart to read someone else's opinion to possibly decrease confidence in mine.. Last time I checked, this wasn't a team sport.

Long-term, it's not possible to have 80%+ winning pcts. and win 1.4+ times more than you lose. The price you pay for a high winning pct is that you will have an avg win/loss ratio below 1.0. I don't care what a backtest shows. Winning pct is INVERSE to the payoff ratio (avg win / avg loss). Anyone who tries to show you this is not the case is fooling themselves with a flawed backtest which can never work in real -time.

Al Brooks has three new price action books soon to be released. I'm betting they will help greatly to decrypt and expand on his first, horribly edited effort. So, the money is probably better spent learning re-edited and expanded price action tips from Al who keeps it visually as simple as possible with a plain 5 min chart and a 20 ema than some Generation X-er with a potty mouth.

Trying to ensure that the winning pct is high only ensures that your avg win/loss ratio will be lower (than you want). There is an inverse relationship between the two. In other words, you can kiss that dream of finding a 2:1+ win/lose ratio with a 65%+ winning pct trading system goodbye because it doesn't exist for any sustainable period of time to be a viable long-term average. Your efforts will be better spent looking for 20-50% winning systems which add to positions as the trade goes your way. These systems tend to have very small, fixed losses related to their gains which can show individual wins as high as a 40:1 risk/reward. [so why care about losing more often when 1 trade can potentially wipe out 40 losers? Your recovery factor can be phenomenal in these systems.] What you're not emotionally attracted to in trading can give you the best chance of not only survival, but prosperity as well.

Steve, Just so you know...this "stuff" has been posted on dozens of boards over the past several years without one decent set of statistics on its viability as a trading system. It doesn't matter how frequently a system wins. What matters is achieving and maintaining a positive expectancy. If the creator of the above system repeatedly pounds the table on how good it is for 2+ years yet will not divulge their own long-term statistics on trading it, well, would you be so excited on being the one to find out for yourself? The better trading systems are counter-intuitive to what a more green trader wants. They typically have moderate to low winning pcts and that's not what newbies want to experience. They tend to have too high of an emotional response to losing so they're attracted to people yelling the loudest about how often their systems win. Steve, take some time to research 30-40% winning systems which add to their positions when they're right. No one goes around advertising those. That's your big hint.

High winning pct systems tend at best to lose $2 for every $1 at risk. And a lot of them lose $3-$4 for every $1 at risk. They break down severely when the winning pct drops below a certain threshold (usually around 67% for the better ones) The number of winners alone is not important. If you want to reach a really stable middleground in your trading then winning a net $1.50 for every net $1 at risk is where the majority of long- term successful traders are to be found. You'll be around 50-55% winners long-term to achieve that ratio. If you want to go to the low side where you win 20-30% of the time, then that's where you get the good win/loss ratios and survivability becomes a little easier. Few choose this way of trading because their egos cannot stand to lose many times in a row to get to the winners, even though the loss per trade is fixed and tremendously smaller in relation to the those winners. To give an extreme example, if your winners are composed of add-ons as the trade goes your way, it's possible for one winning trade sequence to take back up to 40 fixed cost losers. If you desire to be right an overwhelming majority of the time, it's important for you to understand from the very beginning of your adventure that it is THE most difficult way to succeed in trading.

The ideal way to get started in this biz is to have your significant other be able to 100% fund your family's lifestyle while you take enough excess savings to trade with and that savings loss would have zero impact on your lifestyle. The money you'd really be losing this way is possibly the guaranted income you'd be making every year for having a full-time job in the real world (duh). Personally, there was no way I could have ever even considered trading for a living in your situation vs. the above. What I would have wound up doing was continue to be a swing type trader who doesn't have to monitor the markets as closely. In this era, things have become easier in a way with being able to hook up alerts in your smart phone so that Big Brother at work can't know or monitor you when you simply have to make an important swing trading decision during the middle of the work day. I mean, how cool is it to swing trade from your phone anyway and still have that guaranteed income arriving on schedule? Maybe you're a special case and I was not to try it your way. But 8 years later, I have the luxury of 20/20 hindsight to tell you that, in my case, I wouldn't have made it. I never blew out a futures account or suffered a severe draw-down but I sure as heck treaded water for so long that I wouldn't have been able to feed, clothe and shelter myself long enough to see the other side. [before the comments start rolling in, I'm not talking about some trading addict who is trading all the time from work. When I say swing, I mean like no more than 5 intraday decisions a week. This rules out futures. Go more for QQQ or SPY option trading where you get the same Section 1256 Contract 60/40 split mark-to-market tax treatment...one-liner on the tax form to boot!]

For those of you who want more scalping action, put a 34 ema on a volume-based chart. They're smoother for this kind of thing and you'll get more signals than minute-based charts.

If a vendor of a trading system won't setup a Collective2 or ZuluTrader account (etc) as a 3rd Party auditor who can establish a track record which lines up with what they've claimed in forums then, plain and simple, the odds that you are being totally scammed go way above 50%. If you wanted to keep TL a "safer place" vendor-wise, then you would require something like this of anyone wanting money or donations in exchange for trading knowledge. If they can't trade their own method in an open arena through which they can't fudge results, then they should be asked to leave. For example, You simply can't imagine how many 1000's of newbie traders would have saved blown-out accounts over the past decade if "Woodie" had to show first that his method of trading the CCI was profitable for HIM through a 3rd party trade auditor. Hint: it never was because he never ever traded it for a living.

The cheapest deal you'll probably find is to trade through Tradestation to get their platform for free and then pay the monthly data fees for the futures data packages you want. The places which have data fee waivers still get you paying a minimum of $600 a year for usage costs. There's no such thing as paying for just one symbol. The exchanges don't work like that. Everything is packaged.