Ideas for Struggling Traders

[steve46 12]

You know Atto you are right, there are many reasons why a broker would come into the pit. By long observation I have come to know when they are moving size for their own account. I have found that when that is happening they do so in a characteristic way. Frankly it is partly intuition and partly experience that I rely on in this instance. I agree that newbies would find it hard to do. But for those who ARE interested in beginning the learning process, well they have to start somewhere, so I am trying to show how one trader does it.

 

As to the reports, I believe I disclosed my thinking pretty clearly. I am sometimes right and sometimes wrong and the difference I believe is in the way that I setup the trade. Today for instance my interpretation of events was wrong but I still made money because I found an early entry and got some breathing room before the announcement. This is pretty characteristic of how I plan a trade.

 

I think it is difficult if not impossible to transmit "experience" to another person, that is why I always try to supply additional resources in this thread so that newbies who are interested can begin the learning process with the best possible tools at hand. I am hopeful that traders who watch what I am doing will learn just as much from my mistakes as from my successes. From my point of view periodic losses are inevitable, so it is important to know how to manage risk, and the losses that traders are surely going to take from time to time. Also I think it is important to "model" the kind of attitude that is necessary to stay alive in this business. On a final note, it seems to me that trading is a form of combat, and one has to be resilient, persistent and (when the odds are in their favor) aggressive if they want to win.

 

I hope some of this helps

 

Steve

Edited December 18, 2008 by steve46

[Tasuki 10]

Thanks, Steve, what a wealth of helpful info on this thread. I am also glad, and proud, that your fine contributions are receiving more respect than they did on the other forum where you posted "Ideas for Struggling Traders."

 

Short question: somewhere I read, I think on TradersLab, that you had done a short piece giving an interpretation of what was being said on a squawk box, and explaining what was really going on in the pit. Was that on Traders Lab or elsewhere? If here, what was the permalink number?

Many thanks again, Taz

[steve46 12]

Hello Tasuki

 

Thank you for your kind comments. I believe the post you are looking for is number #134 on this thread "Ideas for Struggling Traders"..

 

In that post Minoo asked me to comment on a recording of TradersAudio Squawk for a limitdown day. So I offered some comments and tried to "translate" the language that Ben Lichtenstein uses when calling the open.

 

I hope this is of some help to you

 

Best of luck in the markets

Steve

[benl 10]

Tasuki

 

Call me if you have questions I'd love to talk squawk.

 

Ben

773-580-7576

[steve46 12]

Hello Ben

 

Thanks for stopping by. I have been thinking about this subject (how to help new traders get more value out of tools like TradersAudio) and it occurs to me that there are a couple of things you can do that might help everyone.

 

Clearly the purpose of the squawk is to give traders a heads up as to what is happening in the pit. The problem new traders encounter is that early on, they cannot keep up with the commentary, probably because they don't understand the terminology used, and because of the speed at which the market moves. There are a lot of distractions and I think newbies tend to get frustrated and quit because they don't see a way to get where they need to go.

 

One nice thing you have done on your site is the FAQ's. Also I notice that you have additional commentary that shows newbies how to decode the language you use during the day. In addition to this I think new folks need some general context (some further explanation of how the pit really works). For example, I read in this forum that newbies think that noise levels are important in terms of trade entry. You could help them to understand why that happens (paper coming into the pit, news, etc) and give them a more accurate understanding of how it all works. Newbies might also be interested in the info that is posted on the boards above the pits and how some of the logistics happen on the floor. I don't know if this is part of your game or not, but it could be of interest to people looking to improve their understanding.

 

Also I have tried to explain how the different participants act for their own interest during the day. Perhaps you could talk a bit about how the market opens, the rotations (if you have that info), the way that paper comes into the pit, and the ways that the locals (and others) try to move markets as volume fluctuates.

 

Hey I may be putting more on you than you want, but reading the comments about the squawk I notice that newbies make a lot of assumptions about the pit that are clearly wrong. If they can find a way to learn more about the pit through your service, I am sure everyone will benefit.

 

Best Regards

Steve

[brownsfan019 17]

Good points Steve.

 

Personally I have never found any value in a squawk service b/c it's never been explained to me in a way that I can use it to make money. It's that simple. If Ben were you put together a User Guide, that might help others that have the same view as me, which is the squawk is a tremendous distraction that adds no value.

 

Again, that's b/c I've never seen or even read about a trader that uses it to make money. I've never seen it explained in a way that can provide value to my trading.

 

[steve46 12]

Yeah I understand and agree. Most newbies (not talking about you here) don't have the bandwidth to monitor the squawk and pay attention to their signals at the same time. The result is they just get confused. I think one has to develop their skills in an incremental fashion and it takes time, no question.

 

As to how to use it, that is another story. I think one has to learn the language first (what the terminology means) and then get some idea of how the pits really work (how they open the market, how locals act on the open, what happens when paper comes into the market, all that). Finally one has to know when to take note of important info (for instance when locals are "short in the hole") and when to simply wait for something to develop.

 

As you can tell some of this is based on experience and that is difficult to transmit to new players. People have to be patient and observant, and of course this is easy to say, difficult to practice.

 

Best Regards

Steve

[steve46 12]

On an unrelated note folks, I am going to be away from this forum for about a month (perhaps two). I have taken a job training a group of fund traders ( I think of it as "continuing education for professionals") and they require that I don't post. I wish everyone the best of luck during this important time of the New Year.

 

Take Care

Steve

[BlowFish 10]

Sounds like a fun project. Hope that you enjoy it and it brings you stuff of value too.

[steve46 12]

Hey Blowfish, thanks for the comment. I like working with professionals. It is much easier than trying to help newbies. I can't imagine being a vendor or a chatroom guy, it would just eat me up...lol. I have enough trouble trying to type and trade (as my recent posts show)....

 

Good luck in the markets

Steve

[steve46 12]

Since I have some time left today, I want to post this last time showing the open trade setup

 

The attached chart shows the open at 9:30am EST (on the left), then price shows a "double top" (haven't talked about this yet). In my opinion the double top is one of the best signals to trade if you have a way to confirm it.

 

In this case the confirmation is the retest of the 200 ema. Also if you put up a one minute chart with volume right next to it, you can see how volume "tells you" that price is going to fail the second time up.

 

Profit targets are based on the previous low (to the left) and I always look for price to test "singles" from previous sessions (shown on the right at 915).

 

Going back to the open, you can see the 80 period ema drop under the 200 just before the market opens. You also see two (2) higher lows right before the "double top" which challenges the open....when that fails...odds favor price moving lower for x number of bars.

 

Okay then I am done for the day...Good luck everyone

 

Steve

[MidKnight 12]

On an unrelated note folks, I am going to be away from this forum for about a month (perhaps two). I have taken a job training a group of fund traders ( I think of it as "continuing education for professionals") and they require that I don't post. I wish everyone the best of luck during this important time of the New Year.

 

Take Care

Steve

 

All the best with the venture Steve. I hope to see you back in a couple of months.

 

With kind regards,

MK

[Soultrader 12]

Hi Steve, all the best on your training program. We will miss you and hope to see you back on the boards soon. :beer:

 

James

[diablo272 10]

Steve, thanks again for your awesome work here, and I hope your job goes well for you and the people you're training.

[namstrader 10]

I enjoyed learning from you and I will miss all your inputs and hope you return again.

[steve46 12]

First, thanks for the kind words from folks who I hope have benefitted from the posts.

 

Now I would like to move forward with some words about "trading plans"

 

Especially for traders who find they are at or near breakeven status, but are having trouble getting past that point, I suggest writing a detailed trading plan. There are many examples in the public domain and I will at some point publish an example outline that could be used. The purpose of the trading plan is to focus the trader's attention on his business. This last sentence is perhaps the most important one you will read. FOCUS on those elements of your BUSINESS that make MONEY. Inherent in the plan is discipline. Simply put the plan provides artificial discipline by creating a set of rules that you are obligated to follow. This obligation is self imposed, and when a trader committs to a plan, it is because he or she realizes that they need to impose that kind of discipline on their actions. We will come back to this in a bit.

 

Now as regards my own work, I trade intraday....If you do the same, these comments may help you.

 

I have a plan that works for me. In that plan I outline the various setups that I use. Lets say for the sake of argument that I trade a dozen different setups. On a given day not all will occur. I trade only what I see. I don't "freelance", no matter what I see on the screen, no matter what I hear from other traders, no matter what I hear on the news, or see on TV. Also I do not modify my plan (my setups) during the week. You will understand why later...

 

Now I have those setups. I trade them each day faithfully. At the end of the trading day I take my brokerage record and I enter the data into a spreadsheet. On that sheet I have specific information about each trade. I have a name for each setup. I have specific data regarding the setup, the entry conditions, specific price data, time of entry, time in the trade, time of exit and other data that I find important. I regard each setup as a "profit center" (a business that stands on it own merit). At the end of each quarter year, I analyze how that setup is performing. I do this for each setup that I trade intraday. Some may feel that this is unecessary or that it is just too much work. I believe however, that success in any business requires similar effort.

 

Now there is much more to say about this and related subjects, but I will stop here and see if there are questions or comments from readers. Remember if you will that these are simply "Ideas for Struggling Traders". If there is interest we can develop some of the ideas further.

 

Best Regards

Steve

[brownsfan019 17]

Welcome back to the forums Steve!

 

If you or anyone using the ideas here want showcase the results, feel free to come on over to this thread. It's just 2 of us posting now, so hoping some seasoned traders like yourself can step up to the plate and give the thread some momentum!

[steve46 12]

I appreciate your kind words. Naturally its up to the individual trader to decide whether to reveal their personal financial info on the Internet. I notice that neither James nor DB have decided to post theirs. I am guessing that like many traders, they value their privacy.

 

Clearly it is natural curiosity that prompts people to want to view this information. Whats interesting to me, is that you talk about how it helps others.....in light of the fact that I wouldn't be willing to show time of execution, how exactly does it help other traders?

Edited March 8, 2009 by steve46

[steve46 12]

Well then Swingfade. If you agree with Brownsfan, I am sure you will be posting your blotter on his thread.

 

Congrats Brownsfan, you have another poster coming your way...

 

Good Deal

[steve46 12]

I have never seen a single blotter of yours.

 

I think its wonderful that you have stepped up to post on Brownsfans thread

 

I am sure your record is very impressive. I think its very generous of you.

 

I am not that generous. So what I willing to do is post in my thread and try to help traders that way..

 

Since you view it as worthwhile, I am sure we are all looking forward to seeing your posts.

 

Best Regards

Steve

[steve46 12]

Sorry, you are incorrect....again

 

My advice to you sir, if you feel I have nothing to say of value, is that you point and click somewhere else.

 

Best of luck to you and goodnight

[brownsfan019 17]

Clearly it is natural curiosity that prompts people to want to view this information. Whats interesting to me, is that you talk about how it helps others.....in light of the fact that I wouldn't be willing to show time of execution, how exactly does it help other traders?

 

Good question Steve.

 

There are 2 valuable insights provided if you, DB and any other regulars were to post some blotters:

 

1) It would lend some credibility to all the different things you guys discuss. There's some great stuff in your thread, but we have never seen any proof that it can work when it counts - in real-time, with real money. Posting a daily blotter (even w/o times) would just show the newer traders around that it can be done AND you'd shut up guys like t28 - a win/win.

 

2) It would provide some motivation to everyone, myself incl. We all hit ruts and can use an added kick in the butt and if you and DB would post, it could help motivate me to get the job done more too! Again, it goes to help the community which is a fundamental reason we are here.

 

 

You have to understand Steve the public's perception when someone that posts a lot on the forums refuses to post any proof that his ideas actually work. It's the same thing w/ vendors - we are apprehensive until they can show some proof. Same premise here - it's nice to see ideas discussed on after the fact charts, but what about when it counts? Does anyone using the ideas make real money? After all, that's why we are in this business. So seeing some evidence that the ideas can work is a marvelous thing! I'm not sure why you, DB, etc refuse to do that...

 

[DbPhoenix 42]

Good question Steve.

 

There are 2 valuable insights provided if you, DB and any other regulars were to post some blotters:

 

1) It would lend some credibility to all the different things you guys discuss. There's some great stuff in your thread, but we have never seen any proof that it can work when it counts - in real-time, with real money. Posting a daily blotter (even w/o times) would just show the newer traders around that it can be done AND you'd shut up guys like t28 - a win/win.

 

2) It would provide some motivation to everyone, myself incl. We all hit ruts and can use an added kick in the butt and if you and DB would post, it could help motivate me to get the job done more too! Again, it goes to help the community which is a fundamental reason we are here.

 

 

You have to understand Steve the public's perception when someone that posts a lot on the forums refuses to post any proof that his ideas actually work. It's the same thing w/ vendors - we are apprehensive until they can show some proof. Same premise here - it's nice to see ideas discussed on after the fact charts, but what about when it counts? Does anyone using the ideas make real money? After all, that's why we are in this business. So seeing some evidence that the ideas can work is a marvelous thing! I'm not sure why you, DB, etc refuse to do that...

 

 

Since you keep pushing this blotter business, I will point out (a) that the sort of thing that's being posted to your thread can easily be faked, (b) that even if it's true, no one is going to get anything out of knowing how much somebody else made unless the somebody else provided calls in real time and the reader was there to take or at least log those calls, © that one's P&L, unless he's selling something, is really nobody else's business.

 

If you're having accountability issues and posting your results are helpful to you, then by all means continue to do so. But there's no reason for those who do not have accountability issues to post anything unless they want to prove something to somebody, in which case you're going to need much more than what has so far been posted to your thread. In short, if somebody wants to post there, he or she will post there. If they don't, then suggesting that they have something to hide is at the very least unwarranted.

 

Anyone who is interested in real-time calls and real-time observations and real-time trading is welcome to log in to the TL chatroom. Those who can't be there during the trading day are unlikely to derive any benefit from results that are posted in hindsight.

 

As for Steve46 and Swingfade, this is TL, not ET. Please do not transfer whatever squabbles you were/are engaged in there to here. If this bickering continues, the posts will be moved to another, separate thread, perhaps the Steve46/Swingfade Childish Bickering thread. If that isn't satisfactory, then expect to start racking up infraction points.

[diablo272 10]

What is important here is that Steve and others on this forum are NOT vendors. They aren't selling anything--what they are providing is a FREE service, so to demand proof that what they espouse can be profitable is to display a tremendous lack of respect to someone who spends a lot of time and energy to share their ideas (free of charge!) with anonymous people on the internet. REGARDLESS of whether these ideas are profitable or not, it's about sharing ideas, not about trying to find the "holy grail".

 

And keep in mind that this thread is titled "Ideas for struggling traders," not "Steve's winning system".

[minoo 11]

Since I have some time left today, I want to post this last time showing the open trade setup

 

The attached chart shows the open at 9:30am EST (on the left), then price shows a "double top" (haven't talked about this yet). In my opinion the double top is one of the best signals to trade if you have a way to confirm it.

 

Hi Steve

 

I would like to ask you where you last left off Post 261, due to other commitments

Below is the link for the post

 

http://www.traderslaboratory.com/forums/32/ideas-for-struggling-traders-4333-27.html#post56155

 

Would you please kindly elaborate a good way to confirm the double-tops within your system;

 

My obervation from the previous chart posted by yourself are:

The Delta / Difference between the 80 & 200 MA lines is narrow (When narrow I called it the Crunch Zone)

The MA lines has just cross (fast line is lower than slow) with the slope evidence

Double Tops are the first test and retest of MA's after the cross

Between the tops there are higher lows, a trendline support would be breached by lower price action after the double top was formed

 

Regards Minoo

Edited March 8, 2009 by minoo