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Soultrader

Tools of the Trade

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Just wanted to post my workspace and go over the tools that I use everyday.

 

I use a 233 TICK candlestick charrt. I find it easier to trade with and I do not like price bars being plotted in intervals of minutes.

 

I use the PC ratio as a contrary tool. Whenever the PC ratio is high, this means there alot of traders are short. Therefore I will start looking for long setups. When the PC ratio is low, alot of traders are long and I will look for short setups.

 

The TRIN helps me gauge market internals. The trend of the TRIN and the range of the TRIN is something I look for.

 

The TICK is also a tool to judge market internals. However, I use this tool to time my entries along with the tape. A line on close TICK chart is a helpful tool to prevent you from chasing the markets.

 

I use the TAPE for entries and exits. Whenever price reaches a key pivot level, I will read the tape and see if price will hold or fold.

 

The premium helps me see when buy or sell program kicks in. The levels change daily and you need to adjust them manually each day. The numbers can be obtained at Program Trading, Fair Value, Index Arbitrage Values - indexArb.com.

 

See the attachment for the pic:

5aa70db54f173_ToolsoftheTrade.thumb.jpg.847cd50f5dc8ab2095e2e9aabadbd048.jpg

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  namstrader said:
thanks for sharing your desktop soultrader, do you also use workspaces for the longer term timeframes also? thanks

 

I use a 30 minute market profile chart, a daily chart to look for key support and resistance points, and a weekly chart to see the bigger trend.

 

Im not a fan of 1,3,5 minute charts. I find the 233 TICK chart more useful to my style of trading.

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I am brand new to your forum and site here and wanted to say many thanks for sharing the workspace you trade. Some of it reminded me of some stuff used by Hubert Senters. You also mentioned you use a 30 minute market profile chart. Have you found market profile to be terribly useful in your trading to date for things other than determining support and resistance? It seems to me you rely heavily on order flow for entry and managing your trades. How and where did you learn to read tape? I am a newbie trader so I do appreciate any and all feedback.

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Hello ezduzzit,

 

I first learned how to use market internals after reading some of Linda Raschke's articles, books, and interviews. Then I picked up how to use TICK hook's from Hubert Senters. I think Hubert is great at reading market internals and there is alot one can learn from him.

 

I also use market profile for my trading methodology. One of the main purpose for market profile in my trading is for market understanding. I like to ask questions such as, "What is the market trying to do?", "Is price being accepted within value?", "Is there price rejection outside of value?", etc.....

 

Market profile enables me to understand the bigger picture of the market auction. Then I can narrow it down to my setups. So in my trading, I can not trade without market profile. This is how important market profile is to me.

 

I think having rules to managing your trade is important. Some people may think I tend to cut my profits short but the reason why I scale out so quickly is because I would rather much prefer to eliminate risk. The last quarter position is the main portion where I try to ride it out. The rest is only there to minimize risk and ring the register.

 

Tape reading is something I picked up naturally. I studied Wykcoff, Livermore, and Neill's tape reading tactics. I learned early in my trading career that learning to read tape is a huge advantage in intraday trading. So I spent approx 8 months or so staring at real-time market data with just a candlestick chart and time of sales. I never plotted an indicator and all I did was practice tape reading when price reached a certain level of importance. Tape reading is not easy but if you spend enough time watching it and practicing it you will gradually understand it. I would not say I am perfect in reading tape... there are times I will get faked out. But it has helped me tremendously in timing my entry and exits.

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Soul just wondering how your setting out your T&S.

 

E.g., at ask color, above ask, at bid, below bid, between.

 

I noticed you have some with green background white writing, some with +, some white foreground and black background, and then red foreground (which I assume is @ bid and red background being below bid). Is this right?

 

I like the look of your T&S so want to copy.

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Thank you Soultrader. Very interesting. I was always wondering what kind of tools you use and what you use them for. It would be very cool if more traders share their "tools of the trade".

 

Do you use the same tools and layout for every market? I had the impression you were also trading Japanese or Chinese markets.

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FYI - this thread is TWO YEARS old. My guess is that James' setup now is a little different. Actually, based on what he has posted RECENTLY I would almost guarantee it's different then this post that is TWO YEARS OLD.

 

Maybe focus on RECENT threads James has posted in, such as here or here.

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Thanks brownsfan. Sorry, did not look at the date. This thread popped up on the front page of Trader's Laboratory, so I assumed that it was current.

 

Well maybe, Soultrader, if you read this, would you mind updating this thread with your current "tools of the trade".

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  RobinHood said:
Soul just wondering how your setting out your T&S.

 

E.g., at ask color, above ask, at bid, below bid, between.

 

I noticed you have some with green background white writing, some with +, some white foreground and black background, and then red foreground (which I assume is @ bid and red background being below bid). Is this right?

 

I like the look of your T&S so want to copy.

 

Hi Robinhood,

 

Sorry for the late response. I actually no longer use TS and cant seem to remember how I adjusted the preferences. Green represented contracts at the ask and red at the bid. White was contracts traded in between (according to TS.. no idea what this means). Hope this helps.

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  AgeKay said:
Thank you Soultrader. Very interesting. I was always wondering what kind of tools you use and what you use them for. It would be very cool if more traders share their "tools of the trade".

 

Do you use the same tools and layout for every market? I had the impression you were also trading Japanese or Chinese markets.

 

Different tools for different markets. Mainly because certain tools are not available on other markets. Like $TICK is for US.. not available for the Nikkei. However, since the bid/ask is thick... the Nikkei tape is alot more important for my trading compared to ES tape. KOSPI for example... I just use price, volume, and market profile.

 

Hope this helps.

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FYI TICK is available for the KOSPI. However, it is very heavily weighted towards a small number of issues, namely:

 

- Samsung along is 13.6%

- The top 5 are 32%

- The top 30 are 68%

- The top 50 are 80%

 

So the last 150 stocks make up only 20% of the index.

 

Given this information, would a custom TICK that only included the top 30 to 50 stocks be beneficial? Or is the TICK actually more useful because it does indicate broad market sentiment?

 

These days, I tend to think that the most active stocks in each particular sector should be chosen. That way you get a broad but indicative view of market sentiment, without having stale issues skewing your statistics. Of course, in NeoTicker, I can calculate a custom TICK like this for myself..

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you should use the most heavily weighted because if they are trading a basket against the future,(arbitrage),those are the stocks they will hit, and when they move, the future will also. They only use a small number of heavily traded stocks in a basket,GE doesnt move that much but it is a heavily traded stock in volume terms,the most heavily traded stocks on avg are the ones that are being used in the arb baskets

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Guest anhksha

Thanks guys, my first day paper trading think i kind lost it. Made about 34 trades (enter/exit executions) in the first 50 mins

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