ezduzzit

Hrrummpff! A very interesting thread, to be sure. I think Ant, Torero and Walter nailed it all down pretty well. I am probably older than most of you and I seem to recall LTCM (Long Term Capital Management) putting together billions of dollars, the best tacticians, the most powerful computers and coders who could probably program rockets to Mars and beyond.. in an attempt to use their edge in automated system trading and clean house. Well, house was cleaned all right. Despite all the best resources available, not only were they unable to win more than they lost, they collapsed in spectacular style soon thereafter. In other words, boys and girls, it ain't worth it, but I know that won't discourage most of you from attempting it nevertheless. Of course marketers like Modus and others will pronounce that the powers that be have taken a factual survey and 75% or more of the pros and big institutional players succeed only by using an automated system. Well, lest ye forget, they can afford some very significant drawdowns, which are precisely what kill most of the retail traders in their valiant attempts to play like the big boys. Additionally, they have a full cadre of analysts, computer whizzes, etc.. on hand at all times running up to date scenarios with informational access that you can still only dream about. Additionally, until they collapse, you never hear about their whopping losses or their real ROI, etc.. so best to stick to your own knitting and for most, that is going to still come down to being a discretionary trader. When the computers can do it all without effort on your part, the game will be over or they will change all the rules anyway. Happy Trading

I think Texxas was right on the money when he sort of jokingly inquired if you were really serious about your plans to trade the yen as a newbie, etc. Daytrading the Forex can be quite a challenge, even for experienced traders.. and in this one person's opinion it is one of the hardest instruments to trade, especially for beginners and for those depending mostly on tech analysis. Forex is whipped about considerably by news and you really have to be on top of your game to even have a chance of consistent profitability. Forex lends itself better to swing trading than daytrading but you better have had huge amounts of screen time and more than a smattering of education about what drives those markets and when. If you have not already done so, being as how you said you were such a newbie, you might want to read an ebook called Bird Watching In Lion Country. The title alone should give you some indication of the challenge you are taking on. It is a very worthwhile read even if you decide to trade with a somewhat different strategy later on. Best of luck to you.. and you might consider trading the e-mini futures markets initially since they much more closely fit with your local time frame and have somewhat limited leverage. You could always learn about Forex and decide to give it a try later if the e-minis don't aren't exciting enough for you. If you insist on starting out with Forex and especially the yen.. you had best stick to using a mini account until you are truly comfortable and even that shouldn't be traded until you have plenty of screen time and at least some demo or simulated trading under your belt. Just remember that demo trading is good for getting a feel for how to execute the platform you are trading with, but it is in no way any kind of substitute at all for what trading is like when you switch to real money where your emotions are fully engaged. What that means is, don't go into shock when all your winning demo results are immediately trashed with loss after loss once you switch to trading live money. It happens to almost everyone as this business is somewhere around 80% or more psychological. In summary, regardless of your methods or strategy, it is all about control of your emotions of fear and greed and also about mercilessly closing down your losing positions right away so that you and your capital can survive to trade another day. Happy Trading

Way to go Kiwi ! Guys like that spammer make my skin crawl whenever I think of them. Unfortunately there are far too many of those leeches running around. Let's be done with this one for good, I hope. Hope you are doing well. As for Tin Gull's issue of burn-out.. well, I suppose there are a couple of general ideas we all follow when we have had too much of something. First is to take a break, either a prolonged one so you can come at this fresh, or perhaps even better yet, either takes breaks all throughout your trading day or just trade the first 2 to 3 hours of the morning and be done with it and go have some fun. I have grown to love trading so I can't say I have felt burn-out as yet, but I think you will find it is always a good idea to keep a balanced life. Spend time with your loved ones, take up a small hobby, do some limited but regular volunteer work or find something else that really interests you that does not fall under the category of work or earning a living. My toughest times trading was when I was trading too tight of a time frame each day. I moved up to a significantly higher intra-day time frame, and lo and behold, not only less stress but better results.. much better. Anyway, if you set aside some time to think about it, you will come up with your own solutions. Best Regards and Happy Trading To All Happy Trading

Well, nothing works all the time folks. The only constant is change. RhodyTrader and Mr. Paul nailed the answers to stops already and there is really nothing useful I can add other than to reinforce and agree with what they had to say. Trading is a business of probabilities, nothing more. However, lest you think otherwise, your job is to place a trade you feel comfortable in taking, and then immediately begin watch for signs that what got you into that trade may be faltering or failing. There are no gold stars given for holding on til that trade eats its way all the way back to your stop.... so you should not be letting it happen very often. Also, don't be shy. If you got out quckly for breakeven or a very small loss and it turns to go back in your original direction, it only costs a commission to jump right back in and ride it. Just realize that a good portion of the time you are going to be wrong... and this business is about controlling your losses and playing by the rules of your method or strategy. Good luck and Happy Trading

Frankly, I don't think chaos theory matters at all with regard to trading. You would be far better served to invest your time in understanding how the professionals move the market to and fro, whipping the retail traders into frenzies of fear and greed, while they accumulate and/or distribute their holdings at a profit to those same retail players. A decent understanding of dual auction theory and thus a smattering of market profile probably wouldn't hurt anyone either. However, focusing on chaos theory in some attempt at getting a usable edge in the markets is probably so far out of the realm of probability (you do think in terms of probabilities as a trader now, don't you?) that no further time should be spent on it and we should probably just let this thread die a natural death right here. I will go so far as to say this much... if you continue to trade using the same strategies, indicators and methods as most all the other retail traders, the professionals will continue to eat your lunch in short order. There are frankly very few highly profitable traders on Earth who are going to share much of value with you until such time as what they want to share is either of dimished value or they are too old or too rich to trade any longer. If you are somehow lucky enough to find and apprentice with one of them, be sure to pay strict attention to whatever they teach you, as it is bound to be immeasurably better than the re-hashed poop claimed as trading wisdom from 99% of the so called trading gurus out there in the marketplace who are really nothing more than opportunistic marketers. There is absolutely no substitute for learning the basics of the markets, a little crowd psychology and for investing tons of screen time actually trading the markets day after day, while examining your trades at the end of each and every trading day to glean what worked and what did not and more importantly, why. To think you can just buy a software program or take an expensive weekend course and become a trader is the height of foolishness and the more experienced traders will be most happy to take your trading capital as fast as you can put it on the table. Do your homework (and I mean LOTS of it), trade a single market until you know it backwards and forwards and trade with a single contract (or two if you are one of those who likes to scale out and keep a runner) until you are consistently profitable. Here endeth the lesson. Happy Trading...

Your opinion is a good one and I am sure it will continue to be validated over and over for a very long time to come as it applies to the markets. Happy Trading

Hmmm... good points Wrines... It is amazing to me that traders are still wasting their time trying to "forecast" the next movement rather than simply going with the flow. I daresay most traders couldn't even tell you from moment to moment if the trend has really even changed or not. I say, learn to become a master of the obvious. The support and resistance type indicators mentioned seem more "predictive" simply because of two things: 1. History tends to repeat itself to some degree; and 2. Big traders are often on the sidelines for a good period of time and they are there for a reason. They have key points at which they will enter the market (and if you want to know where those areas are, simply study a market profile or volume profile chart for recent periods.) To my way of thinking, that is more than sufficient reason to pay serious attention to those types of indicators. Again, just my opinion and nothing more. Happy Trading

Heh, heh.. agreed.. but while it didn't work well for them it sure worked out well for ME, having jumped in at the low extreme to ride the baloney move up.... gracious me that was a nice ride in only an hour's worth of play and of course what goes up must come down, eh? One of my better days. Happy Trading

Very true Wrines.. .but then we have always been subject to that kind of manipulation in all markets and the only sane response is to simply recognize the pigs are being fancied up as is usual for this time and take advantage of it while it lasts. Hopefully most people in here are traders rather than buy and hold investors and will be just as happy to take advantage of the swing back to reality when it occurs. Heck, it is obvious in the markets now that they are having major trouble keeping the cute little dresses on those poor pigs long enough to even get to the elections. Frankly, I can't help but feel that traders who trade the futures markets by listening to the news, etc. are already well on their way to emptying their trading accounts in short order anyway. If they are longer term swing and position traders then one can only hope they are not falling for this expected short term mirage. However, market statistics on winners versus losers have not changed much in eons and thus we can depend on the fact that in reality even most of the longer term traders are just as oblivious to what is really going on as the averge man or woman at the local shopping mall. But, is that a bad thing? Absolutely not. If it weren't for the huge percentage of losers in the financial markets, we wouldn't be pulling any meaningful profits out of trading them. This game was not designed so that most people could win and it will always be so. Happy Trading

Hmmm.. these are just guesses on my part but the ES is very closely tied to the performance of its pit-traded big brother and the pit traded S&P 500 is largely made up of the giant computerized program trades (they say program trading accounts for more than 63% of all trade volume there). The ES is clearly the liquidity beast of the online futures game, there is no doubt about it so yes, I suppose in theory it could perhaps be easier to manipulate the far less liquid online markets of the YM and the ER2 compared to the ES. However, the far lower liquidity levels of these other online futures markets probably precludes the largest traders from taking much of an interest at this stage as they cannot easily float anywhere near the size they need to meet their profit expectations. As was already noted, a 1,000 contract trade on the YM would not only move the market, it is simply seldom if ever seen. Bigger traders who may occasionally dabble in the smaller electronic markets beyond the ES most often break their large trades down to disguise them and seldom take them all in one fell swoop anyway. They don't want other players piling on at their level, they are more dependent upon the mass horde of retail traders jumping in more toward the end of the move so it is then easy for them to exit for a tidy profit. They don't want to give away their intent from the very outset. I also think that with the more limited liquidity of the YM, a 100 lot contract size or greater would suffer a good deal of slippage in getting the whole thing placed in addition to alerting everyone else to the point of your participation and the the possible strength of your trade. I would certainly love to hear other viewpoints on this as I find the idea somewhat intriguing. Happy Trading

Oh my gosh Torero.. are those REALLY signs of aging? Dear me! I certainly hope not. You realize of course those white whiskers of mine are nothing more than blonde hairs, right? Actually, I am very much like you in regard to daytrading versus swing trading, etc. I do not subscribe to the idea that it is smart to daytrade either stocks or the Forex. I also think you can rest assured that you were simply being eminently sensible when you switched to no more than three screens of data for the one index and little else as I have seldom met anyone who can effectively monitor more than and still trade on a consistently profitable basis. Sometimes less is more. I must also say that I do quite enjoy your posts. Keep them coming. Happy Trading

I think Torero's points about the e-mini Russell are absolutely spot on. I too used to trade the YM but gave it up for the ER2. As to Carter's assertions of the ER2 leading the YM... I have not found that to be the case often enough to bet my money on it but further observation should prove if that has any useful merit. I will be interested to hear anyone else's observations in that regard as time progresses. Happy Trading

Hmm.. an interesting thread to be sure. However, let me suggest that they are equally important and that you do yourself a dis-service to think of them in any other manner. Also, I think it is not really a question of having to buy a ticket to win the raffle as someone earlier quoted.. I mean I assume we are talking here about the "timing" of entries and "timing" of exits, not whether you are psychologically capable of ever pulling the trigger to get into the trade in the first place as I think that is a different topic altogether. If you are a rules based trader (and I hope you are, unless you are truly clairvoyant) then you have specific reasons and locations based upon risk/reward, money management and proximity to support and resistance areas to enter your trade, in addition to your high-probability set-ups. Your exits can also be rule based but I suspect many traders are more focused on trying to bleed the maximum amount of profit out of each trade. Therein lies the rub and the quandry. If you are like Torero and cannot be constantly at your computer to manage the trade and jump out when the going gets rough, then your exits probably have to be strictly entered as formal targeted profit stops or else. However, if you are a full-time daytrading desk jockey then you are probably caught up in either holding a "runner" to grasp that rare and unexpected big final run in price (even though it is with the tiniest portion of your contracts risked in a given trade) or you are like others who move their stop loss up to breakeven plus 1 or better earlier on (giving you essentially a "no risk" trade) and you are letting your whole position ride in an attempt to garner either a fixed amount of profit or else as much profit as possible with the bulk of your position. I think we obsess over capturing those final tail-end profits for two rather obvious reasons. One is greed for the maximum possible profit and the other is to avoid that feeling of loss we get when we get out with our "reasonable" profit only to watch the market zoom much further ahead after we exited the trade. Is a bird in the hand truly worth two in the bush as the old quote said? Should we grasp a reasonable and sure profit and not worry ourselves over those rare instances where we got out too early? Or are our trading lives truly financially dependent upon our participating in all or even most of those rare run-ups and deep declines that go on a little longer than anyone expected? Do we truly need to go after those additional ticks on our tiny "runner" positions even though more often than not we screw up the exit timing and that position eats its way back into our expected profit? Are there really exact and final answers to these questions? Do our lives as traders totally depend on capturing the maximum profit in most instances? Frankly, if we have done our homework on our trading plan, we already know how much profit we need to capture on average each day, week or month to make trading a continuing worthwhile endeavor. If that is the case, and we are capturing an acceptable profit already, do we truly need to drive ourselves nearly bonkers over getting more? At some point the challenge disappears and the stress takes over. Hopefully, most will agree that there are sufficiently good reasons to give both entries and exits our full and undivided attention and not unnecessarily worry ourselves about which is the more important. If we keep allowing ourselves to get caught up in these conundrums they will serve to slowly diminish the pleasure we get from trading to where it eventually becomes just too stressful and we begin to burn-out. If you do this for the pleasure as well as the money, as I do, then give this idea some serious thought before you obsess too greatly over the timing of your next trade, especially the exit. Happy Trading

Frankly Pierre... For my own two cents, although non-linear dynamics is not a new idea, I personally consider chaos theory, in the form of fractals applied to predict short term markets, as nothing more than a mystical science at best at this stage. No doubt brilliant researchers will continue their quest of such theories and methods in hopes of some day being able to accurately predict stock prices and the like but come on.. how do you feel they do so far with predicting the weather after all this time, eh? Not too well if you ask me. I can still just stick my head outside, look up into the sky and do a better job than my high tech weatherman most days, even with all his access to doppler radars, research from chaologists, etc. While I am too old and seen too much in Life to consider anything impossible any more, let me just suggest to you that even if they somehow achieved accurate predictability somehow through application of chaos theory, the markets as we presently understand them, at least as played by speculators, would cease to exist. Once proven accurate predictability exists, all the rules will have to be changed to eliminate the advantage of the predictors. If you want to just take up the science as a hobby and you happen to be brainy enough to be a Mensa member or something, then go right ahead and knock yourself out. Otherwise, if you are truly interested in trading spend your time learning about price action and move up to a large enough time interval on your charts to feel as comfortable trading as you feel necessary. Happy Trading

Tsk! Tsk! Kiwi.. Here I was trying my very best to refrain from bashing the whole thing publicly and you've gone ahead and stirred the pot for sure heh, heh. Shame on you ha ha.. Happy Trading

Pierre.. If you want to learn more about chaos theory as it supposedly pertains to making sense of the randomness of market action, you can read the books of Bill Williams. However, I own and have read them and from my own personal point of view, the money could have been better spent. Mind you, that is just my own personal opinion and others may not agree. I am not at all suggesting his ideas do not have value but perhaps am suggesting that I perhaps did not see the valid practicalities as applied to trading the markets. Maybe the subject was too deep for me or perhaps our present understanding of chaos theory as it might apply to trading either has a long way yet to go or I simply just don't quite get it. I have tried using the indicators designed by Williams for trading his ideas (fractals, alligator, awesome oscillator and such) but felt there were either too many false signals given or the signals were often far too late in a good number of cases. Now that may just be that I don't personally have sufficient background or training to implement the strategies and indicators properly so you would have to try them out for yourself and make your own assessment. The actual books themselves frankly did not go too deeply into actual chaos theory so I am not even sure whether or not they are particularly good explanations of the field as it would apply to trading. Perhaps you can search the Net for others who currently trade such methods and are willing to share their experiences. I did not find that readily available in my own cursory searches. Williams is reportedly considered an absolute genius in some circles and a total crackpot in others. I wish I could help you more but all in all, I guess I will admit the subject is still a bit deep for me and after 25 years as a banker, I recognize my current limitations and perhaps need something a teensy bit easier on the brain. Happy Trading

GRrrrrrrrrrrrrrr.... I must say that in reading this thread I was surprised at the tone expressed by some as they voiced their own personal opinions on how one way is, at least to them, clearly superior to another, especially as though that should mean it would be true for others. It seems that some people feel strongly that they have somehow reached another level in their trading that clearly most traders should aspire to. Well, don't you believe it. If you have been around in Life as long as I have then you have almost certainly been smacked in the face again and again with the fact that one man's meat is another man's poison and that what works for one often doesn't work at all for another. You can safely assume as fact that some people trade better with indicators and some trade better with watching pure price action, while yet others trade better with a smattering of both. Opinions one way or the other don't change that one iota so don't ever accept other trader's "opinions" to the contrary. Opinions are pretty much like derrieres (your posterior heh, heh) and pretty much everybody has one. Some traders may think they have "graduated" beyond the need for indicators and that is fine as there is plenty of room in the markets for all types. There is no such thing as a pure best method of trading no matter how much some may wish to protest to the contrary. What is reality? Reality for any particular person is the result of how that particular person experiences Life events. It is based upon their own unique ways of processing information through the filters of their own life experience, opinions and already formed beliefs. The self same events may be processed quite differently by another person of a different background, culture or belief structure and thus one person's view on something external to them is nothing more than their opinion. Does that make it the right way to go for you and will you receive the same results and experience that others are claiming from following the same methods or practice? The answer is often "absolutely not". Does that mean that their opinions don't hold value, at least to them and possibly even to you? Not at all, but I would first and foremost suggest you never accept any of it as absolute truth and that you simply try it out for yourself (if you wish to do so) and see if it holds up in your own experience. You may be surprised to find that you get very different or even quite opposite results. That is what makes Life interesting, otherwise the whole experience here on Earth would be boring as heck! So that I don't get wildly criticized here for not taking at least some type of stand, let me just say that my own personal experiences tell me that indicators can be useful to me (not necessarily for others, as they have to experiment for themselves.) However, I tend to use them for easily and quickly determing the tone or trend of the market at a single glance. When I focus on price or especially on tape reading, I can often get so caught up in the nitty gritty moment to moment action and spread of the range that I sometimes forget the overall trend in the period I am trading and in the next confirmation time period I am using), but I personally do not use them as actual trading signals. As I pointed out in another recent post, it is my personal opinion that constantly looking in your rearview mirror is a most challenging and inefficient way of driving down the street without having a major accident. I guess that is my personal way of saying that lagging indicators, even if they are enhanced and smoothed and only lagging minutely, are often good to spot trend and tone of the market and for those that need it, even confirmation of price action, but could prove somewhat hazardous to your trading if used as the actual signals to take trades. To my way of thinking, that last comment is far more accurate for daytraders than for position or swing traders but I had best let those types of traders speak for themselves. Having said that, I can tell you I have a few trading buddies who say they have removed all their indicators and say they rely purely on price action. Well, in competition, we are almost dead even on who consistently takes the most points out of the market on a consistent basis. If you haven't figured it out yet, trading is about a great deal more than whether you mostly follow price action, indicators or both. However, all is not lost! You can still have a good laugh when the price action folks try to persuade you to their side of the fence, especially when you realize that VAL, VAH, POC (point of control), Balance Lines, Dual Purpose Trend Lines, Floor Pivots or Support and Resistance Lines,etc. are all indicators of sorts and yes, they depend on them as much as you do on your own indicators, whatever those may be. So have a nice little chuckle inside and then go on about your trading. Again, never accept any trader's pronouncements (or even those of a group of traders who agree) as the final edict on the best way to do something, not even if it is a famous trading guru and certainly not just from traders in some online forum (me included!) Find what works for you personally and then trade it tenaciously, never letting anyone shake your faith in something as long as it continues to perform. Happy Trading

Interesting comments you posted there from Lescor on ET. When in doubt, I would simply say always focus on his goal # 1, preserve your capital ! Happy Trading

Yes, I read the book and frankly I consider it a really shameful waste of good paper. If you truly want to manage your money intelligently when trading, stick to risking no more than 1 to 3% of your trading account per trade. The most successful pros say to risk no more than 1% per trade which is why they strongly recommend your trading account have a good deal more capital than the pitifully small $5,000 or $10,000 most peopole bring to the trading game. Stay on the side of the trend, set a reasonable profit target to get out of each trade (getting greedy will often result in things reversing on you for a loss), and if you are still having trouble, move up to a longer time frame and cut your position size so you can afford the larger stop loss points until you get the hang of things. Focus on successfully waiting for and taking only those trades that match your rules and method, the profits will take care of themselves over the long run. Focusing on the profit in each trade means you are more likely than not feeling the fear of perhaps losing your money on that trade and you will often attract exactly that result in your trading. Focus instead on the proper executions of your rules and method. You will eventually be very glad you did. Happy Trading P.S. If the real answers were in all these books we read, those authors would be some of the richest traders on the planet. I assure you they are not. Yes, you can still find an occasional snippet of a useful idea that you have perhaps overlooked in your trading, but just don't expect to find any real trading secrets.

Hmm.. I would have to say there was definitely some market wisdom in those comments by Ant. Let me very strongly suggest to you however that much of the long period of struggle is perhaps unnecessary because it is foolishly spent looking for the Holy Grail of indicators, systems or strategies. Yes, you have been told this numerous times before, but did you really pay attention? New traders seldom take the time to learn the lay of the land (the real underlying structure of the market they wish to trade) or find a trusted guide to this treacherous territory, until such time as they have totally exhausted themselves and their trading capital in their useless search for what others told them (on day one) did not exist. Would they listen? Absolutely not! Thus the actions of most traders, in their early years, cause them to appear to be "dumber than a tree stump" until they have finally reached that exhaustion point. It seems only then that they will begin to listen to the wisdom of those who have gone before them rather than thinking they will somehow come up with that one right combination of magic indicators that works almost every time. Here's a (really important) little hint: It is more about observation of market movements and also harnessing your own emotions than it is about strategies, indicators, methods and systems. Don't be blinded by the B.S. comments bandied about by the 95% who can't trade to save their lives but who still love to read their own opinions in print! I wholeheartedly assure you that there are traders successfully trading many of the methods and/or strategies that you have already tried and discarded as useless. It is far more about you than it is about the individual method. Some compare the markets to a dangerous jungle, others to a battering trip down the rapids. Either way, if you don't understand the lay of the land and act accordingly you will either get eaten or bashed upon the rocks in very short order. If you were suddenly uprooted from your quaint, comfortable and cozy little home environment one day and suddenly forced to make your living in the jungle wilds (with no realistic possibilities of escape) would you take the time to survey things and get a lay of the land or perhaps even search out an experienced and trustworthy guide to help assure your survival? Would you perhaps begin to look for the tell-tale signs of all the treacherous snakepits, quicksand, crocodile haunts, lion and tiger dens, etc. or would you boldly stride through the jungle with only your fancy new hip-boots, trusty multi-function pocketknife and some newfangled high-tech compass and just hope for the best? I daresay that although the right answer to the question above seems obvious, 95% of newbie traders choose the second alternative almost every time. They have already firmly and unflinchingly bought into the hyped idea that trading the markets is going to be their financial savior. That it is going to be easy and the one sure way to an eventual fortune if they just open an account, select a robust charting system that offers enough of those amazing indicators and pay attention. They feel they are already "smart" and thus quite capable of pairing the right indicators and strategies together to make this thing totally "easy peasy" so they can soon be "rolling in the dough" (celebrating their huge winnings.) If you are going to ride the rapids of a river for the first time, I daresay you had best either hire yourself a damn good guide or else you had better find out where it is deepest, which way the currents flow at different points, where the bends and treacherous twists and turns might be, how fast it moves across these key points of danger (and whether there might just be an undertow at some of those points that could suck you under never to be seen again) whether the time of day makes any difference in the flow of those rapids, and even what type of boat and paddles migh best serve you on your trip as you finally set out to navigate that river. If you cannot find an acceptable guide, then yes, you will have to do all that surveying and planning work on your own, through observation and more than a little testing BEFORE you just jump in and wing it. The same holds true for navigating a trip through the markets. [by the way, for those of you who did not quite understand all that.. the jungle and the river rapids=the markets, and the professionals (who eat, sleep and breathe these markets) are the snakes, crocs, lions, tigers, etc.] Once you jump into the markets you are already in the jungle or the rapids and your job is to get through each day reasonably unscathed while slowly but steadily improving your long term survival skills based on what you learn from each outing (trade.) Perhaps truly "smart" new traders would best be served by taking an initial period of 6 months or so to simply observe the price action in the markets day to day. They should perhaps also give up most, if not all of those fancy and mostly useless lagging indicators. I mean who in their right mind would dare risk driving their car down the high-speed freeways while focusing almost entirely on the view in their rearview mirror for guidance and direction? Also, just as a side issue since we are speaking of "smart" here, why do you think that the reportedly best "analysts" in the market invariably make some of the absolutely worst traders? Is it possibly that they get too caught up in the trees to see the forest and keep running directly into huge trees right in front of them? Is it perhaps also because they are used to playing a safe and emotion free game as analysts and thus are not prepared for the real battle of the trading those same markets with real money, a battle which is mostly fought between themselves and their own emotions? Nobody but nobody knows exactly what is going to happen next in the markets, so don't invest your extremely valuable time and hard earned money into trying to come up with indicators and fancy, complex methods to predict it. A firm called Long Term Capital Management tried that already and failed quite miserably. Mind you, they had more computing power than almost God himself, a large group of some of the very brightest minds in the business,etc and yet they still lost so much capital that their failure almost sent the whole U.S. economy into a tailspin. If you wish to be truly "smart" about trading then I'd say you should have precious few indicators and instead should focus on becoming a Master of the Obvious. That means focus intently upon what is happening right now, right in front of you on your screen in the form of price movement and the reactions that repeat themselves over and over again as movement comes to value points, S/R or Fib points that lie in its path. Otherwise, you will become little more than an impulsive gambler and likely a very poor one at that. That is the best advice I think I can come up with for potentially acting "smart" in today's markets. Thanks for reading and I hope I didn't totally bore you with all that. Happy Trading P.S. For those who felt the above was a little off topic, please do not confuse "simple" with "easy". Trading is simple, meaning price can only go up, down or sideways. However, even though it is simple at first glance, it is anything but easy. The trick is to learn how to jump in as price moves up or down (not sideways) and then jump back out with a profit before it changes its mind. If you think that is easy then you clearly have never traded real money for more than a few days. Will you be one of the not so smart traders who needs loads of indicator based, after the fact confirmations before you jump in or will you be one of the very few smart traders who has learned market structure and price flow and uses market profile, volume profile, support and resistance pivots or other real time buy and sell pressure information to time your trades? The choice is up to you and it can be as simple or as complex as you wish to make it. The real pros swear that simple strategies are best and I happen to think they are right. Good luck to you

Yep, the ER2 definitely bucks like a bronco, but you were spot on regarding the rewards of trading it. Heck, Life was meant to be fun and a wild ride or else why even be here? There will most definitely be those who wish to timidly (they will say "calmly") muddle through life, comfortable and assured, however as long as I was lucky enough to be dropped in here to all the fun, I am gonna continue to go for it and enjoy the ride. I must say that I am not even at the beginner's rank in MP but let's face it, the market has one basic tenet... to find equilibrium. It rises or falls to shut down runaway extremes and then attempts to edge its way back to efficiency. Also, while many academics would disagree with us, I agree with SoulTrader that the markets are not simply random. I think the randomness we think we see comes from the constant struggles and impulses of trade placement from the large horde of retail traders as they constantly run to and fro in their mad dash to catch up with the runaway market moves. Yes, the bigger answer comes back to fear and greed but let's not forget the market hovers at and stops at value points, be they MP or Fibonacci or S/R or what have you, because people accept them, believe in them and act on them. That makes the game basically self-fulfilling, with the big players leading the greedy and fearful all over the board. Our job, at least as I see it, is to ascertain what the big boys are doing and what the likely reaction will be by the horde of retail traders (of which we are a part) and then to take advantage of that highly probable response (once we ascertain any reasonable confirmation of it) without getting too greedy. As long as we continue to then think and ACT in terms of probabilities, expecting our rules and methods to keep us profitable over time, then this can be a fun game rather than one of stress, frustration and unaccceptable levels of loss. It may be a simple game, but it abounds with tricks and unexpected plays carried out by those who simply understand the game far better than we do. we either learn how to find and join in on the positions they take (through whatever means of buyer/seller pressure we follow) or we continue to allow our accounts to remain avaiable for savaging by them. Happy Trading

I have used the TIKI briefly and while I cannot speak to how wonderfully it performed in prior times, these days I frankly think it is grossly over-rated. Stick with the TICK and TRIN and gets lots of practice following the tape (time and sales) and you will be right more often than not. If you also add pit audio in addition to that and you take the time to discern not only how the volume level changes when actions begin and subside but also learn some of the pit audio jargon that Soultrader was kind enough to provide at this forum, then you should fare even better. Happy Trading

Hmm.. that's a pretty interesting question Soultrader. However, being a daytrader I don't really make trend plays unless you want to call them mini-trends. I suppose they would more appropriately be called Intraday volatility swings. That is probably not all that different from some of the momentum traders in our midst, so not sure I am qualified to voice an educated opinion on how the shrinkage in holding periods is going to impact us in the short term, if at all. Perhaps if I was more of a multi-day swing trader or a position trader, I might have some concerns, even though I think Ant rightly points out that in those cases, you may just have to do some more shopping through the instruments or various stocks to find the better trading plays. Personally, I would not sleep well at night as a swing or position trader, so I will just stick to my knitting, while keeping an eye open for market changes that might affect us shorter term players. Undoubtedly things will change, but I think the marketplace will continue to come up with new instruments and things to be traded to keep us all busy enough for the foreseeable future. I mean there's always Forex if all else is lost heh, heh. Those of you who have been around awhile may remember back when the e-mini S&P 500 used to swing 23 points high to low in a single day. While those days are clearly over, it doesn't seem to have stopped people from trading. Perhaps some have moved over to the Russell and others have simply turned up the number of contracts a bit. Either way, I am going to watch with keen interest to see how things change. Happy Trading

Gosh, this forum always has such great topics for discussion and interesting posts. I really like it here and I rarely say that about forums of any kind. Anyway, back to the idea of stress from trading. Would you think it wishy washy of me to say there are probably as many answers to this as there are traders out there? Would you think that a cop out? I agree 100% with the point that trading can take a lot out of you. If you research the average adult attention span you will find claims that it lasts from anywhere as low as 7 seconds all the way up to about 20 minutes. But let's get real here. It is easy to give your undivided attention to something you are really passionate about, isn't it? Isn't that especially true in trading when something is actually "happening" in the market? Unfortunately, most of the time each day is spent by traders having to wait for that something to happen. Is it perhaps the sheer boredom that wears us out? Assuming for the moment that you actually very much enjoy action movies (whether it is true in reality or not) how bored do you get watching a good two hour action movie? I would bet you seldom miss an important detail during the entire two hours. Yet put you in front of a slow, plodding 65 minute drama and you can barely remember the plot at times and feel totally drained by the time the movie is over. Personally, I find I am sometimes a little miffed or upset when the trading day comes to an end too soon. Sounds strange until you realize I spent 25 years as a banker in commercial finance wherein I spent 10 hours per day or better (when not out in the field visiting companies) behind a desk examining cash flow projections, reams of historical financial statements and the like. Trading for upwards of 6 hours or so per day sometimes seems like a bit of a vacation. Time spent following stuff like price charts, etc. is probably different for most of us personally, based upon our prior life experience, our passion for trading and last but not least, our tolerance for posterior pain and numbness. However, is it waiting for the trades to trigger or living through the emotions of the live trades we take that is really getting to us? If for you it is the former, then perhaps you need to find a more active market or instrument to trade. If it is the latter then perhaps you need to learn how to harness the power of your most positive emotions so that you can trigger those when taking your live trades. Now I know some traders shy away from the more volatile markets in favor of what they view to be safer, steadier and more stable price movement in some other instrument (for instance some e-mini players will avoid the Russell like the plague yet happily volunteer to trade the slow and steady ES, whereas I am just the opposite.) But I say show me a more quiet and mostly stable market and I will show you a bunch of traders so bored out of their skulls that they are sometimes even nodding off momentarily at their desks and often missing out on the few good moves that ever take place there anyway. Now that of course is just a personal feeling and I have not confirmed it by any national surveys or anything so perhaps you can just enjoy that as a little foolish but hopefully entertaining conversational rambling. I do know from many years of sitting behind a desk and in front of a computer that you must, of necessity, make sure you get plenty of exercise for both your body and your mind. What's that you say? More exercise for our minds! Are you nuts? Well, not having ever visited a shrink I shall have to defer an answer to that last point for the time being, but let me just say that my spare time spent playing brain jumbles, mind based games and the like, as well as speed reading drills, have served to improve not only my attention span and powers of observation but seem to have given me some improvement in making decisions faster. Does that mean I can easily sit there for long periods of time scanning those screens incessantly during slow periods? Well, the honest answer to that is that I am quite often in a trade in the market and thus that is far less of an issue for me (and no I am not a scalper.. far from it actually). Is there an overall answer that works for everyone to bust trading stress? I highly doubt it. But, staying healthy and phsyically fit is, I think, paramount if you wish to do this for any extended lenth of time without it weighing so heavily on you that you are forced to give it up. Beyond that, I would say pick out what works for you. Don't ask others when is the best time to trade and then take it as fact! Find it out for yourself. If they told you "Hey, don't waste your time with lunch hour trading, there is light volume, not much chance to make money and you will probably get your head handed to you by the locals".. and let's say you blindly followed that advice for the next several years. Then you happen to have other time commitments and find you have to trade lunch hours in the markets or you will miss trading for several weeks or months. Once you trade those periods regularly let's say you suddenly realize that some of the best moves of the day take place during that time (I am not saying this is a fact, find out for yourself is what I am saying.) How would you feel upon finding that out? Would you waste time and heavy emotion blaming that other person who supposedly "wrongly" informed you or would you feel silly that you had not taken the time to confirm it for yourself one way or the other, learn your lesson and vow to do your own homework in the future? Remember, "One man's meat is another man's poison" as they say, so please do your homework and decide those important issues for yourself. No, it does not hurt to ask and get some hints from more experienced traders, but for your own peace of mind, please verify for yourself that what you have been told holds up to the light of day and make sure it fits with how you best function as a trader. Meanwhile, if you wish to at least reduce the stress, exercise, eat healthfully, get plenty of rest and do NOT risk capital that you need to pay your monthly bills or put food on your table. If you follow those simple guidelines in addition to figuring out for yourself how, when and for how long eacy day you personally trade best, this should become less of an issue for you. Happy Trading

Hmm.. interesting question and no doubt one that has been asked since trading began. However, I am not sure there has ever been a satisfactory answer given. I won't venture any guesses at this juncture for at least two reasons: 1) Because I would fret that there's still the tiniest chance that you might just foolisly pay attention to it in a weak moment and lose a precious portion of your valuable trading capital;and 2) Because I am a trader and thus not in the guessing business. I trade what I see, not what I think I "might" soon see. I empathize with your quandry but to me it seems you already have a trade bias so I have to wonder if perhaps you are not almost half beaten before you start. Additionally, I am a day trader not a swing trader so I have to take my lumps here and admit to you that you play in a venue somewhat unlike my own. That having been said, I would still advise someone like yourself to forget about forecasting tops and bottoms and trade only what is obvious to you from your viewing of the market at any given point in time. Some gurus will tell you that won't work as you would get into the move much too late. To that I say "poppycock". You would be amazed how little most traders see when they look at the action. Most of them are far too busy forecasting where it s "going to go" to pay any serious attention to where it actually is from moment to moment. However, if someone does just happen to have the proverbial crystal ball and shares something with you that is truly revelatory, do please keep it a secret from the rest of us lest we all once again get caught up in the unholy search for the holy grail Happy Trading