40draws

I think it would be a good idea for everyone to print out today's NQ chart and then hand write this post DbPhoenix's on the printout, and then tape to the wall next to your screen, or laminate it and paste it to the top of your desk.

Can't be stressed enough. I very quickly got to the point were even if I am not able to trade that day, I do this work or I have a strange feeling of anxiety that I won't be able to shake. It is THAT important to create this habit if you want to trade SLA/AMT, imo.

All this can be tested and has to be tested in order for you to be able to relax. How many? 50 or 100, however many it takes so that you have something in which you have confidence. It takes no time at all to do this. A couple of evenings maybe. Add: When you do the reviews, you'll find little "tells" that telegraph intent. For example, when price dropped out of the range, it futzed around for three minutes. This is not unusual since so many are surprised by the move. And then it resumed the downmove. However, it then stopped again and began to retrace its steps. This is not good and should not happen. If the move is genuine, all the thinking should have been finished. That it isn't suggests that traders aren't as committed to the downside as one might have thought. And for whatever reason, they decided to return to the "value area". That is from DbPhoenix, and I didn't want it to get lost in the body of timokrates post. FWIW - price needed two hinges to get back to the top of that range. When a hinge forms near a limit, and the breakout from the hinge does not carry through the limit, I look the other way. You can test that too.

Tracking higher out of that hinge. I suppose that the midpoint of the hinge, about 105.50 by eyeballing it, might be a place to keep in mind should price revisit that area in the future. Thanks for posting these charts, Niko!

I found an interesting journal over at the other forum, and you might find it useful to you: Forums - Making of a method

That is a great image! I had two trades today where the fish were clearly swimming, en masse one way and I was trying to convince them to go the other way. Guess who won?

I debated whether to post this or not, but as you did reach out to me via PM, I thought I would not be out of line to give you a few thoughts based on what I have read from you here. I mean everything I say in a friendly way, but I know you might feel offended. I hope you can accept that I don't mean any offense. So, here it goes. You said that: Interestingly, I posted my chart from today in DbPhoenix's thread over at ET today and I mentioned a "double top." He reminded me that it is not the pattern that is important, but the behavior of traders. It is their behavior that creates the pattern, and it is their behavior that provides the signal. You seem maybe too much to be hung up on the "feel" and the "sense" when what Thales is really talking about is a "skill." Again, in my discussion today with DbPhoenix, he pointed out that any of these patterns are dependent on a particular bar interval. What matters is simply to observe that sellers failed to push price below a certain level or that buyers failed to push price above a certain level. I watch a one minute chart during the day, and I do not consider myself a "micro-precision" trader. You make much of the "effort" you have put forth. I may be wrong, but it seems as though you do not want to expend any effort learning what you call tape reading. Instead, your efforts are primarily concentrated on trying to find a pattern that you can react to without having to know why, i.e. without having to "see behind the curtain." And for what its worth, I would bet that you severely overestimate how many people have become consistent. I would bet that the number who can "see behind the curtain" and the number who are consistently profitable are very nearly identical. Tape reading got in the way? This is like saying I could have been a successful doctor but I couldn't get into med school because organic chemistry got in the way. The subject matter is not in the way, what is in the way is your mastery, or lack of mastery over the subject matter. Here is one of the first posts by DbPhoenix I read here. He was not addressing me directly, but if you go back to this thread you'll see that one of my posts had been, indirectly, part of the impetus behind this post: Your resistance to "tape reading" is allowing you to keep your relationship to the market "somewhat mysterious." I would not want to remain on the wrong side of the curtain if I were selecting a job or business that I hoped was going to provide an income for myself. I can't remember if you mentioned your circumstances, so I don't know if you have a family or not, but I do have one, and I would not want them to be dependent upon my maintaining a mysterious relationship with something that could take my money if I let it. Good Luck, humbled, but you should try not to need it.

I see several places where a long would have been called for. Can you find them too? I know you didn't ask me, but if you were to ask me what I think of that chart I'd have to say that it looks more like something intended to induce a stroke rather than serve as a trading tool I do not trade the ES emini, but I took a look at it tonight and did a little exercise to see what I would be looking at tomorrow. I know you didn't ask, and I know I've not been at this as long as most people here, but I have to say that the last few days, the charts you've posted look like you're going backwards.

I can't tell you how to detect it. It is a sense of what is going on that you must develop. Here is the link to DbPhoenix's essay "How To Do It." I guess my advice would be to read that essay, and take seriously the task under the heading "Hire yourself to do a job." http://www.traderslaboratory.com/forums/wyckoff-forum/15896-how-do.html#179656 "The job is just to sit there and watch the bars form, to watch the buying and selling waves, the pokes and prods and feelers cast by buyers and sellers looking for a trade, not to create or test a strategy, not to make money, not to learn the "secrets" or the "tricks", just to develop a sensitivity to buying and selling pressure. No indicators, no MAs, no nothing but price bars/points and volume bars." I did essentially that by doing a lot of market replay. I have traded stocks exclusively since I started, and specifically trade stocks that gap open higher. By using market replay, I was able to watch many "days" each and every evening. I just started trading futures on Friday, taking my first trade on the NQ. I did a few days of replay leading up to that trade, in addition to going back through several weeks and doing a manual "bar by bar" left to right reading. I was lucky in that my first exposure to trading literature was Wyckoff's Studies in Tape Reading, which is also published as The Day Trader's Bible. I also stumbled upon TL.com and DbPhoenix's posts. I bought his eBook, and it was a great help. I say I was lucky because I started out thinking in terms of supply and demand and I understood the artificial nature of bar intervals. I read your post a few days ago where you said the one minute timeframe was too fast or too noisy for you. I think that is a big tell that you do not view the market as an auction market. I find that it is easier to gauge buying and selling pressure on a shorter bar interval than a longer. Here is a link to a copy of Studies in Tape Reading: http://cdn3.traderslaboratory.com/forums/attachments/131/6500d1211046697-introduction-dtb-1919.pdf The "layer" you ask about is supply and demand. It is not a set-up that I can spell out for you. The elements or forces are described and explained in Wyckoff and DbPhoenix. You need first to acquaint yourself with those elements, and then "hire yourself" to get to work learning to understand and recognize these forces in action with one another. Good Luck!

I'm a relative newcomer to this trading game, and I mean no offense to Thales, but it does seem to me that humbled is missing a piece. When I read his posts and look at his own explanations for his trades, I am reminded of the following passage from DbPhoenix's essay, "How To Do It": "If he focuses on setups and patterns as gimmicks rather than as manifestations of changes in the balance of buying and selling pressure, then he blocks the process through which he would otherwise understand it and profit from it." I do not see that humbled looks at the market as buyers and sellers looking for a trade. I do not see that he views the market with an awareness of the ever present functioning of the law of supply and demand. I do agree that other than that, he has everything he needs. I use a 2B set up, but I simply call it a double top or a double bottom. I use the 123 set up, but I simply call it a lower high or a higher low. I use supply and demand lines to clue me in to when the market may be in for a change of pace. I use support and resistance as price levels where I look for a trade. What I have that I think humbled is missing is a sense of what Thales referred to above in his post about candlesticks: A sense of the flow or continuous nature of the market as the constant shifting in the balance, or lack thereof, between supply and demand, those who wish to sell and those who wish to buy. As I said, I'm new, just coming up on a year since I decided I would try to learn to day trade, so take what I said with whatever size grain of whatever substance you might think it is worth. Whatever it is, the op is missing something. Whatever it is, I hope he finds it. Good luck!

This thread sure has developed since I was last here - I went searching for where I left off and I can't believe how many posts I had to go back through to find me! I've been working at working and working at trading. I am now a few weeks away from the big change. While I had originally planned to retire from my business completely and to rely upon trading as my sole means of support, it looks like the best I'll be able to do, at least for the first six months of 2013, is to "flip" the two activities in terms of time and priority. Right now, I work full-time and trade part-time as my my work schedule allows. Starting in January, my main prioirty will be trading, and I will gradually decrease the time committed to my current trade until I can phase it out more or less completely. This is due to my desire to preserve my good relationships with my past customers than financial considerations. I enjoy my trade, and if I can reduce it to a hobby status, albeit a paid hobby, that would suit me fine. Good to see you Db - your book has been a real eye-opener - Thank You!

I have observed that the best entry is usually between 9:35 & 10:00 AM. This first move usually stalls between 10:30 AM and 12 noon. Then the stock often drifts lower until sometime between 12:30 PM and 2PM. If price then moves up on high volume compared to the volume during the pullback, then a new entry often works.

Thanks for that ... I agree, and toward that end I sent a check to Interactivebrokers today and I'll replace that money with the check from the old broker. It looks like Interactivebrokers will still put a seven day hold on the funds, so I'll be in paper trade mode until then. Funny thing today - with nearly every stock I follow gapping higher at the open, I found myself unable to decide which I would trade. Usually I may have ten or so candidates at the open, and several of those quickly fade away. It is easier to decide which to trade when faced with 3-5 choices rather than 38!

Thank you. My first and only attempt to trade today was a long entry on TDC. As was the case yesterday, the trade was rejected by my broker ("You have $0.00 buying power.") Again a phone call pointing out that given the price of the stock (about $78.14 offer when I was submitting my market order) and the size of the trade (500 shares) the cost of this trade would be $39,070, which represented less than 65% of my available cash ... never mind margin at 2X's or day trading margin at 4X's cash! I spent the rest of the day requesting that cash be returned to me in the form of a check, and opening an account with Interactive Brokers LLC. By the time I receive the check, and the funds clear, and I send a check to Interactive Brokers and then those funds clear for trading, it will likely be two weeks or more before my next trade. I will use the next two weeks to continue to follow the stock market as time allows. I will continue to add stocks to my list of trading candidates.

Today was my first day of trading since taking an early leave for the long holiday weekend. I tried to execute two trades, both longs, one on RAX and the other on TSCO. In each case, my broker's website rejected the orders, saying that I did not have sufficient day trade margin. I checked my share count and everything, and clearly the broker was in error, as neither trade on its own would have required any margin at all. I called the broker, and the representative agreed. He assured me that it would be fixed quickly. I tried another trade later in the day using a limit order far enough from the market that it would not be executed. The same thing happened - order rejected for insufficient margin. Another call, another rep, and again, the rep agreed with me. They put me on the phone with the margin department. The margin clerk could see nothing wrong. Again, I received the customary assurances of the customer service rep that all would be well soon enough. I'm used to this broker, the website is easy to navigate, the mobile app is a breeze, and the commissions are reasonable, my withdrawl requests are processed quickly and accurately. I am not in a hurry to take my trade elsewhere, but if this continues for more than a day or two more, I will seek another broker. Any suggestions? I trade stocks only.