Does Traditional Trading Advice Work?

[gifropan 10]

I find most traditional advice on trading seems not to work but trading literature is full of them. Perhaps someone can shed some light on my predicament. Below are some examples. Please feel free to suggest some of your own.

 

Always go with the trend.

 

There seems to be no clear way to define "the trend" and if your are successful in seeing a trend its already too late.

 

Buy low sell high.

 

You buy low it goes lower, you sell high and it goes higher so this does not work.

 

Cut your losses quickly

 

Road to ruin.

 

Run your profits

 

You stay too long in a profitable trade the you give it all back.

 

As you can see I am quite frustrated and disappointed with trading. Can anyone give me some encouragement and reason to continue?

 

Thanks

[sep34 10]

Ahh the frustration stage...been there, it is normal and most will experience it.

Also I agree all those addages can seem trite, but there is some wisdome behind them, which becomes evident as you progress with your trading endeavor.

 

Always go with the trend.

Simply understand what the Supply Demand situation is so you can determin what type of trade you are getting involed in. Type of trades (Trend continuation trade, Counter trend trade, Trend reversal trade, by the way there is diference between counter trend trades and Trend reversal trade and most traders dont undertand the difference, at times even seasoned traders too).

So the importance of understanding the trend is so you can understand what price is doing, therefor you will be better informed and you understand the current price action and now you can begin to implement your trading plan with eyes wide open as opposed to operating in the dark.

 

Buy low sell high.

 

In an uptrend buy the pullbacks in a down trend sell the rallies...as you can see the above paragraph about understanding the supply/Demand situation i.e. Trend is crucial else you wont know to buy the pullbacks or sell tehr rallies.

 

Cut your losses quickly.

 

If you make mistake trade get out and... cut your loses.

If your long and your analysis changes and you are no longer bullish get out.. cut your loses

 

The key is for your loses on average to be smaller then your winers.

 

 

 

Run your profits.

 

Again the key is your average winners should be larger then your average losers.

 

 

As you can see understanding the supply Demand/Situation "trend" is at the heart of the "traditional trading advice" as you call them.

 

Understand the current supply/demand situation and be able to see the supply/demand shifts as they occur in real time then trading will suddenly be much simpler.

Edited June 3, 2009 by sep34
spelling

[ckait 10]

First thing a trending market is making higher highs and higher lows. You must know what time frame you are trading. If you are trading a 2 hour chart a trend will mean something different than a two minute chart. So try to pick entries that are the most favorable to your time frame. If a time segment is going to keep trending what is the limit of the amount that it can go to keep the trend intact I personally like to trade around 80% of the hourly and thirty minute.

[BlowFish 10]

OP all bar the last two comments concern correctly understanding market structure, price action or whatever you want to call it. Trading trends (which don't occur that much of the time) require a completely different approach to trading ranges. You can trade one or other or both if you have the correct strategy. Many People trade only one or the other and the advice they give pertains to there favoured approach. It's usually completely inappropriate for the other side of the coin.

 

Forget about trading for now learn a bit about 'market structure' to get a framework that makes sense to you. There must be 100's of ways of detecting a trend none perfect, all effective if used correctly. Personally I like using price action and simple geometry (trend lines). It is possible to trade without an understanding of price action which is one of the reasons people use 'indicators'. You might like to search out Joe Ross' law of charts, a free download that describes basic price action pretty well imho.

[86834 10]

I find most traditional advice on trading seems not to work but trading literature is full of them. Perhaps someone can shed some light on my predicament. Below are some examples. Please feel free to suggest some of your own.

 

Always go with the trend.

 

There seems to be no clear way to define "the trend" and if your are successful in seeing a trend its already too late.

 

Buy low sell high.

 

You buy low it goes lower, you sell high and it goes higher so this does not work.

 

Cut your losses quickly

 

Road to ruin.

 

Run your profits

 

You stay too long in a profitable trade the you give it all back.

 

As you can see I am quite frustrated and disappointed with trading. Can anyone give me some encouragement and reason to continue?

 

Thanks

 

The trend is your friend, but in day trading you need to learn how to guage price action and momentum in the market. You have to remember that support and resistance levels are not set in stone, they are merely points where you can enter the market, but price action and momentum will determine how you use the level. So for example if price is trading quickly to the upside, momentum in the market is high and there's high volume to add fuel to the fire as well as strong open interest to the upside, then in this case you shouldn't be looking to sell a resistance level above you, if you did you would be standing infront of a steam train trying to fight the market. In this situation the highest probability trade is to wait for the level to break and turn to support and then use it as an entry point to get onside with the trend and momentum.

 

Even when volatility is low, you're still looking to stay on side with the trend, buying support into an up trend and selling resistance into a downtrend. I've attached a chart that i took from wednesday last week of the emini spoo. Here you can see the trades i took that day with explanations of why.

 

As for cutting your losses quickly... it's not the road to ruin. Remember that a lot of the books out there are based on swing trading, but it doesn't matter what style of trading you're into, the principles stay the same. An example of this would be the other day when we reached the high of 2009 in the emini sp500, we traded up to it on the back of very strong economic data, so even tho i had a quick short at the high, the best trade at the time seemed a be a break above the level where stops would start getting hit, shorts would get nervous, and the chances were that the market wouldn't look back once broken. So we high ticked the level which failed to produce a follow through, market traded off, then at the time if we high tick it again it should go with a bang, so on the second break i got long off the high using a 5 tick stop, the market failed to follow through. So seeing as the the market failed to follow through on the second high tick, i didn't need my stop to get hit to know i was wrong, i just scratched the trade and the market ended up trading off. In trading you need to fickle and think fast on your feet.

 

As for letting your profits run, this is also true. If you're in a position and you have no reason to get out of it, then why get out? When you lack the ability to read how price is trading and momentum then you have no way to gauge the strength of your position. For example if you're long, and after 5 points price starts to struggle to trade higher, the open interest on the book is leaning more towards the offer, and there are very large parked orders on offer that won't lift no matter how many times they get high ticked, then you gotta start thinking to yourself to this move is coming to an end.

 

Learning how to read price action and momentum is key to being a consistent day trader, but unfortunate it's also the hardest aspect to get a feel for and the only way to learn it is to put in the screen time. There are no indicators that are going to do it for you, you gotta put the hard work in.

 

Welcome to the hard knock life of trading

 

You'll get there in the end as long as you put the hard work in.

[gifropan 10]

The trend is your friend, but in day trading you need to learn how to guage price action and momentum in the market. You have to remember that support and resistance levels are not set in stone, they are merely points where you can enter the market, but price action and momentum will determine how you use the level. So for example if price is trading quickly to the upside, momentum in the market is high and there's high volume to add fuel to the fire as well as strong open interest to the upside, then in this case you shouldn't be looking to sell a resistance level above you, if you did you would be standing infront of a steam train trying to fight the market. In this situation the highest probability trade is to wait for the level to break and turn to support and then use it as an entry point to get onside with the trend and momentum.

 

Even when volatility is low, you're still looking to stay on side with the trend, buying support into an up trend and selling resistance into a downtrend. I've attached a chart that i took from wednesday last week of the emini spoo. Here you can see the trades i took that day with explanations of why.

 

As for cutting your losses quickly... it's not the road to ruin. Remember that a lot of the books out there are based on swing trading, but it doesn't matter what style of trading you're into, the principles stay the same. An example of this would be the other day when we reached the high of 2009 in the emini sp500, we traded up to it on the back of very strong economic data, so even tho i had a quick short at the high, the best trade at the time seemed a be a break above the level where stops would start getting hit, shorts would get nervous, and the chances were that the market wouldn't look back once broken. So we high ticked the level which failed to produce a follow through, market traded off, then at the time if we high tick it again it should go with a bang, so on the second break i got long off the high using a 5 tick stop, the market failed to follow through. So seeing as the the market failed to follow through on the second high tick, i didn't need my stop to get hit to know i was wrong, i just scratched the trade and the market ended up trading off. In trading you need to fickle and think fast on your feet.

 

As for letting your profits run, this is also true. If you're in a position and you have no reason to get out of it, then why get out? When you lack the ability to read how price is trading and momentum then you have no way to gauge the strength of your position. For example if you're long, and after 5 points price starts to struggle to trade higher, the open interest on the book is leaning more towards the offer, and there are very large parked orders on offer that won't lift no matter how many times they get high ticked, then you gotta start thinking to yourself to this move is coming to an end.

 

Learning how to read price action and momentum is key to being a consistent day trader, but unfortunate it's also the hardest aspect to get a feel for and the only way to learn it is to put in the screen time. There are no indicators that are going to do it for you, you gotta put the hard work in.

 

Welcome to the hard knock life of trading

 

You'll get there in the end as long as you put the hard work in.

 

 

But how often does this happen that you buy the support and you get stopped out and then the market reverses and your original position would give you a healthy profit. Then you next time you give a wider stop and the same thing happens. An alternative is to attempt two or three trades in the same direction near the support and you get churned out in a tight range loosing more ticks than the actual range itself. When do you decide that the support is broken and you should give up the long side trades.

[86834 10]

In answer to your question about how often do i get stopped out before the market goes where i was expecting it too... pretty rarely to be honest, and i only use a 5tick stop per trade. That's not to say i don't have losing trades, everyone has loosing trades, just some more than others, but i very very rarely have a loosing day, but i still have them.

 

I understand that you're frustrated, we've all been there, but you seem to be looking for a set rule. There are no set rules that are the same every single time you enter a trade. I know it isn't what you want to here, but that is the truth of trading and it is what it is. You have to develop a feel for how the market is trading. You have to also remember that day trading is the hardest discipline in the trading world because there are so many time frames above you, so you need to be aware of all the time frames and where you are in relation to them, as well as anything else that may effect the market such as economic data etc (people who were using an array of indicators that told them to short just before the consumer confidence figure will know what i mean lol)

 

I'm not trying to put you off or anything, but don't underestimate what you're trying to accomplish. Learning to trade is hard, really, really hard, and it will be a long time until you're proficient to do it full time. Speak to any full time trader on these forums and you will see that we've all walked the long right of passage before we eventually got there. Regardless of what some stuff advertises, you ain't gonna be a millionaire this time next year. This time next year you're probably going to be thinking to yourself that you've finally cracked it, only to find out that you haven't... You have to remember what you're dealing with... you're active in the global financial markets, so once the romantic view has been removed, you're trading on a field full of banks and professionals. Put it this way, you wouldn't decided that you could all of sudden become a top lawyer by reading a couple of books and a forum would you? Or you wouldn't get up one day and decide that you want to be a professional football player because you want to earn lots of money. If trading was easy to master, then everyone would be doing it.

 

As with the lawyer example, if you put the work and time into it then you can become a lawyer, and that's the same with trading, but it takes hard work, time and dedication. There's a post somewhere on here from a full time trader who stated that it took him 8 years to get where he had and it cost him a marriage.

 

It can be done, and if this is what you really want to do then don't give up on it because you will get there, but you have to take it for what it is. My advice is to put your levels in and watch how price trades all day for as long as you can, then you'll start to see what i was on about in my previous post.

 

It is what it is.

[DbPhoenix 42]

gifropan,

 

Whether the examples of trading wisdom which you've provided "work" or "don't work" depends entirely on how well the trader understands what it is that he's working with. To apply them as if they were laws is much the same as selecting a car based on its color and how many cupholders it has.

 

If you haven't defined "trend", you're going to have difficulty going with it.

 

If you haven't defined "low", you're going to have difficulty buying it.

 

If you haven't defined "high", you're going to have difficulty selling it.

 

And so on.

 

It's up to you, then, at minimum, to determine how an auction market works, how the shifts and imbalances in supply and demand move price, how to determine when those imbalances are mostly likely to result in a profitable trade. If instead you elect to settle for applying a variety of indicators, drawing lots of lines, taking calls in chat/trading rooms, etc., then whatever success you happen to achieve, if any, will not likely meet your expectations.

 

As for where you go from here, I suggest you look at the stickies for the Market Profile Forum beginning here and for the Wykoff Forum beginning here. If either of these resonate with you, then read the rest of the stickies, then explore the rest of the forum(s).

Edited June 3, 2009 by DbPhoenix

[thalestrader 14]

Always go with the trend.

 

There seems to be no clear way to define "the trend" and if your are successful in seeing a trend its already too late.

 

Buy low sell high.

 

You buy low it goes lower, you sell high and it goes higher so this does not work.

 

Cut your losses quickly

 

Road to ruin.

 

Run your profits

 

You stay too long in a profitable trade the you give it all back.

 

 

I presume from your post and your responses that you are day trading or at least trading a smaller time frame than a daily chart. If so, then what will be most helpful to you right now is lots of screen time watching live price action. This can be watching price charts, e.g a 5 minute ohlc bar chart, or it can be watching streaming depth of market.

 

Also, "Buy Low, Sell High" with respect to trend trading is incorrect, and it should read "Buy High and Sell Higher (for longs trades) and Sell Low and Buy Lower (for short trades). You yourself note that when you sell high, price more often continues higher to deliver you a loss rather than decline to hand you a profit.

 

Also, and this will be key to determining fi you succeed or not - You must not abandon the principle of "Cut you losses short but let your profits run." This is the road to rishes, not the road to ruin.

 

Blowfish suggested that you read Joe Ross's Law of Charts. I've attached it here for you.

 

Best Wishes,

 

Thales

Law_of_Charts.pdf

Edited June 3, 2009 by thalestrader

[DbPhoenix 42]

Blowfish suggested that you read Joe Ross's Law of Charts. I've attached it here for you.

 

I should mention, however, that Ross leaves out quite a lot, and the trader who is less than successful with the approach should not blame himself. While the concepts behind Ross are largely sound, he presents them in terms of recipes, which are what the OP is having difficulty with in the first place.

[zdo 20]

gifropan, Until you can really accept that the trend that you just entered may fizzle, and the low you just bought may fail, (etc.) it really doesn’t matter how well you understand auctions (even though it is ultimately critical that you do understand this type of auctions) Your learning and progress will be delayed, impaired, discouraging and you will rarely experience the flow that will tune you into long runs of winners instead of a miserable mess of losers. Check to see if you just didn’t list your own version of Douglas four trading fears. I forgot them, but what I didn’t forget from Mark is that I had to keep going in self work and edge work until I had absolutely no fears or regrets left - regardless of how any individual trade turns out. Spend as much time processing at this level as you do processing your actual trades and results.

Read back through 86834’s posts – paying particular attention to the balance of objective and subjective, technique and attitude, etc. he is bringing to it and attempting to share with you.

For a while, spend nearly as much time observing your perceiving itself (seeing the seeing) as you do observing ‘charts’ and trying to figure out markets and/or what rules, idioms, axioms, principles will work for you(seeing the seen).

 

The list you presented - Those are system specific axioms and in the systems to which they apply, they are statistically sound. I applaud you for questioning them. Make them and a whole additional list of stuff you encounter false for a very long time… later their slivers of truth will be much different slivers of truth than they could be to you now.

 

re “Trend is your friend”. To you, is trend a loyal, faithful friend or is it a fickle, weak friend? Are you sufficiently tolerant and forgiving in your makeup to be a lasting friend to trend also, regardless of how it treats you? Capitalizing only on the ‘good’ trends will not sufficiently offset the whippings. Trend systems actually require that every runner be fully exploited – especially the extreme outliers. They also require that every single every single every single loss be taken on time. With pure trend trading, you only get to be right in the middle and you/system will be wrong at the ends and the beginnings. Is all that you?

 

re: “buy low and sell high” This old saw may or may not apply to your ‘styles’ of awareness and trading. If you have a proclivity for breakouts then, as others have mentioned, your truism is “buy high, sell higher”. See? Every construct we accept / create is system specific and needs to be seen as such.

 

re “cutting losses” and “running winners” Again – very system specific! Check your system. You may be developing a system in which your need for expertise at loss exits and profit exits per trade instance dwarfs your required skills at making great trade entries. You may need to develop expertise at attuning to and following the moments’ path of least resistance instead of the trend – and yes, there is a huge difference.

 

Basically create your own repository and lexicon of trading systems and then master knowing how you act and react to each of them. Persistently practice matching every looking outward for technique, tips, help, etc. with a serious 'meditation' of how that really fits with you at your core. Create what is a fit with your true nature AND aligns with your market(s). Then build on your strengths… Things started clicking for me when I got tired of compromising/searching and got back true to my original visions and passions of trading. Turns out they weren’t too idealistic or fantastic at all… they had to be grounded in reality of course, but they were what was right for me all along...

 

yada yada … hth

Edited June 3, 2009 by zdo

[gifropan 10]

I presume from your post and your responses that you are day trading or at least trading a smaller time frame than a daily chart. If so, then what will be most helpful to you right now is lots of screen time watching live price action. This can be watching price charts, e.g a 5 minute ohlc bar chart, or it can be watching streaming depth of market.

 

Also, "Buy Low, Sell High" with respect to trend trading is incorrect, and it should read "Buy High and Sell Higher (for longs trades) and Sell Low and Buy Lower (for short trades). You yourself note that when you sell high, price more often continues higher to deliver you a loss rather than decline to hand you a profit.

 

Also, and this will be key to determining fi you succeed or not - You must not abandon the principle of "Cut you losses short but let your profits run." This is the road to rishes, not the road to ruin.

 

Blowfish suggested that you read Joe Ross's Law of Charts. I've attached it here for you.

 

Best Wishes,

 

Thales

 

I think the factor that affects my trading a lot is how long does one stay in the trade. Just as you say let your profits run.... thats fine but very oftern you have some profit that if you sit on it to get more it all evaporates or your position starts going into the negative. This is why I find it hard to sit on profits. The question is how long do you stay in a trade. I have tried also to put a break even stop loss as soon as the trades goes in my direction but, as every one knows, you get stopped out and then the price goes in the inteneded direction where you are either reluctant to enter at a less favourable price or you do chase the market and get burnt. VERY CONFUSED i AM!!!

[BlowFish 10]

I should mention, however, that Ross leaves out quite a lot, and the trader who is less than successful with the approach should not blame himself. While the concepts behind Ross are largely sound, he presents them in terms of recipes, which are what the OP is having difficulty with in the first place.

 

I wont disagree with you there. One of the more useful bits is not the LL LH HL (or 1 2 3 low in Ross parlance) but the section on ranges and congestion. There are a couple of handy methods to quickly say "we are going sideways for the moment".

 

It can appear a bit 'recipe book' however the unambiguous nature of the definitions might be helpful to those struggling to find a framework that doesn't require discretion. Even if one was to move on to a more comprehensive model of market behaviour learning a bit of basic structure is not likely to be time wasted, or worse....hold you back if and when you seek to learn more.

[ckait 10]

Another thing, nobody knows how long a trend may continue for or if support will hold or not. There are endless waye to determine support or resistance. If you have levels to take trades at where you usually get a bounce of some kind, put the trade on take some off for a quick profiet and if you get stopped on the rest at B.E who cares. Or you could leave your stop at your original entry to let the whole trade be at B.E. so you should maybe try and think a little more flexible you could even take some off at a point and then buy it back again all can be profietable if done correctly. It takes time and practice. If your trying to hit homeruns in the bigs and your still in little league your gonna get hurt. Try and learn to bunt ,talke some walks,a few singles and in time you should see the potetiail for bigger gains. Here is another way to put it If you try and stuff a whole pizza in your mouth at once it probably wont work,but if you take small bites you'll eventually get full. Trading accounts grow the same way.

[sep34 10]

The trend is your friend, but in day trading you need to learn how to guage price action and momentum in the market. You have to remember that support and resistance levels are not set in stone, they are merely points where you can enter the market, but price action and momentum will determine how you use the level. So for example if price is trading quickly to the upside, momentum in the market is high and there's high volume to add fuel to the fire as well as strong open interest to the upside, then in this case you shouldn't be looking to sell a resistance level above you, if you did you would be standing infront of a steam train trying to fight the market. In this situation the highest probability trade is to wait for the level to break and turn to support and then use it as an entry point to get onside with the trend and momentum.

 

Even when volatility is low, you're still looking to stay on side with the trend, buying support into an up trend and selling resistance into a downtrend. I've attached a chart that i took from wednesday last week of the emini spoo. Here you can see the trades i took that day with explanations of why.

 

As for cutting your losses quickly... it's not the road to ruin. Remember that a lot of the books out there are based on swing trading, but it doesn't matter what style of trading you're into, the principles stay the same. An example of this would be the other day when we reached the high of 2009 in the emini sp500, we traded up to it on the back of very strong economic data, so even tho i had a quick short at the high, the best trade at the time seemed a be a break above the level where stops would start getting hit, shorts would get nervous, and the chances were that the market wouldn't look back once broken. So we high ticked the level which failed to produce a follow through, market traded off, then at the time if we high tick it again it should go with a bang, so on the second break i got long off the high using a 5 tick stop, the market failed to follow through. So seeing as the the market failed to follow through on the second high tick, i didn't need my stop to get hit to know i was wrong, i just scratched the trade and the market ended up trading off. In trading you need to fickle and think fast on your feet.

 

As for letting your profits run, this is also true. If you're in a position and you have no reason to get out of it, then why get out? When you lack the ability to read how price is trading and momentum then you have no way to gauge the strength of your position. For example if you're long, and after 5 points price starts to struggle to trade higher, the open interest on the book is leaning more towards the offer, and there are very large parked orders on offer that won't lift no matter how many times they get high ticked, then you gotta start thinking to yourself to this move is coming to an end.

 

Learning how to read price action and momentum is key to being a consistent day trader, but unfortunate it's also the hardest aspect to get a feel for and the only way to learn it is to put in the screen time. There are no indicators that are going to do it for you, you gotta put the hard work in.

Welcome to the hard knock life of trading

 

You'll get there in the end as long as you put the hard work in.

 

86834,

 

I agree with everything you said, I either have not the patience or ability to communicate it like you did.

In any case your post clearly explains what is needed to consistantly daytrade profitably. here is the paradox...not sure if anyone will really appreciate your comments until they reach that level on there own, but I may be wrong.

 

Learning how to read price action and momentum(volatility) is key to being a consistent day trader, but unfortunate it's also the hardest aspect to get a feel for and the only way to learn it is to put in the screen time. There are no indicators that are going to do it for you, you gotta put the hard work in

 

This paragraph in italic or bold, literly is the key and for anyone that is interested in trading as a job and source of income generation , needs to understand that this is the level they need to reach....wont put any time limits on it because everyone is different. however, To think that you can reach that level in a few months is most likley not going to happen for most, there are allways exceptions, every person has exceptional potential, but people that tap into there exceptional potential are not that common.

 

Lastly 86834 great post and I would encourage any one that wants to be a trader to read and reread your post #5 & #7.

 

Ragards

Edited June 3, 2009 by sep34
added #5 & #7

[DbPhoenix 42]

I think the factor that affects my trading a lot is how long does one stay in the trade. Just as you say let your profits run.... thats fine but very oftern you have some profit that if you sit on it to get more it all evaporates or your position starts going into the negative. This is why I find it hard to sit on profits. The question is how long do you stay in a trade. I have tried also to put a break even stop loss as soon as the trades goes in my direction but, as every one knows, you get stopped out and then the price goes in the inteneded direction where you are either reluctant to enter at a less favourable price or you do chase the market and get burnt. VERY CONFUSED i AM!!!

 

You have not yet said what you're trading or how or in what interval: week, day, hour, minute. Therefore, it's difficult to get specific. If you're trading price action, then it's true that you're going to have to put in a lot of screen time due to the "action" part. One can learn principles from a book or article or series of posts, but that's all up there. At some point, you're going to have to bring all that down here, transforming theory into practice, the general into the specific. And that, again, means screen time.

 

But screen time alone isn't going to do you much good unless you make some choices. Whatever profits you make are the result of a compromise between what you want from the market and what it's willing to give you. Do you want to make a point a day? Two? Five? Do you want to make the day's range? Twice that? Three times? Five? Or are you happy to make a few ticks here and there? Once you've made those choices, then you have to determine how probable it is that the market is going to give you what you want and, if the probability appears to be there, how to go about interpreting the messages it sends you. In other words, screen time per se is not enough. You must also know what to look for and know exactly what you're going to do with it if and when you see it.

 

Most beginners have trouble reconciling what they want (making the most money possible in the least amount of time) with the likelihood that they're actually going to get it. They see all the money to be made in trading trends, but catching that turning point proves to be more difficult than it appeared to be. So they enter later, which necessitates a wider stop. And their stop gets hit. So they make it wider. And that gets hit as well. But then price takes off in the intended direction while they're sitting there with a loss. So the next time, they're determined to make their stop even wider. Or use no stop at all. And that's when the market reverses on them and they take an even bigger loss.

 

Or they decide that "swing" trading is safer. Or scalping (how hard can it be?). But then they lose out on all that money they could have made if they were trading the trend. So they try that again. And they lose again because now they're fearful, and they cut short whatever profits they stumble in to. So they make the swing trading/scalping circuit again, not particularly successful, if successful at all, because they still haven't decided what they want, much less figured out how to go about getting it. They have not reconciled what is possible with what is practical. Nor have they addressed the greed and fear that are now a part of the landscape.

 

So, what are your trading goals? And do you have any idea how to go about reaching them? If your goals are very general (make as much as possible) and your methodology is to do whatever "feels right", then you will likely continue to experience these difficulties.

[86834 10]

Just posting a chart of my trading today to illustrate the point i made earlier in the thread.

 

It was a really slow and boring today, there was a complete lack of volatility in the market and after the worse then expected figures we just trended down all day. I had four trades, all going with the trend using a trading style that i like to use when volatility and momentum is low. I went with the trend,adjusted my came plan to how the market was trading, and i walked away with 8 points on ES, and not one of my trades was a buy.

 

Do you need a better example of the trend is your friend?

[sep34 10]

Will keep this breef because I have to pack for trip out of town this evening.

 

Considering yesterday and its price action near the close and the follow through in the overnight price action I started the day with a bearish bias.

How I approach each day is not to trade my bias, instead I flow with price action and only adjust my position size based on my bias.

 

Most of Today was creeper down trend. Volatiltiy was low and the best volatility presented it self at the end of day... sadly I was not there to take advantage of it.

 

A picture is worth a thousand words...at least thats what they say and I understand that there is no explanation of what is a shift. The goal is to show that a creeper price move down or up may still present trades in both direction--because a Trend has many subgroups (High/Low volatility/ seasonal etc.)...

Also it is a follow through of my first post (#2) and what I mentioned about understanding the current supply/demand situation and noticing shift in supply/ demand in real time as the day continues--for in the Emini's most of the time we dont have a trend day with a straight line from open to close pointing north or vice versa.

[DbPhoenix 42]

Since we're playing Show-and-Tell, these were my trades for the morning.

 

Resistance was expected to be around 77. Support was expected to be around 64. Though of course you never really know, which accounts for the false starts near the open (the black arrows, which are SOBEs).

 

The red arrow is the short, the green arrow is the long, the blue arrows are the scaleouts. I try to quit by 11:00. Both sides were played as trends, which, at the time, they were.

 

 

[BlowFish 10]

Just posting a chart of my trading today to illustrate the point i made earlier in the thread.

 

It was a really slow and boring today, there was a complete lack of volatility in the market and after the worse then expected figures we just trended down all day. I had four trades, all going with the trend using a trading style that i like to use when volatility and momentum is low. I went with the trend,adjusted my came plan to how the market was trading, and i walked away with 8 points on ES, and not one of my trades was a buy.

 

Do you need a better example of the trend is your friend?

 

Don't want to take this too far off topic......but......

 

That made me (in a good way) when I identify low volatility and momentum I usually start thinking get ready to fade extremes and certainly start taking profits at the tests of prior lows.... however...... price is king and the market was going down (and was in the European session which I traded) that was pretty clear (to a 'price action' trader, by whatever measure they use).

 

I guess this further illustrates there are no glib one liners are going to describe market action. You have to evaluate each hour/day/week on its own merit. Without some sort of framework that's always going to be a daunting task.

Edited June 4, 2009 by BlowFish

[gifropan 10]

I suppose the other side of the coin is once you identify support/resistance, how and when do you exit from your trades without either loosing a lot on a wide stop or without loosing a substantial portion of your profit when the trade has gone well.

[BlowFish 10]

Absolutely! imo that is one of the big 'traders dilemmas'. Do you enter at support on limit or do you wait for price to stall or maybe you actually wait for price (and perhaps momentum) to let you know that currently support is holding (by moving away from it)? Of course the more confirmation you require the more risk you are likely to need to take (assuming that your stop is behind the S/R).

 

Maybe even you enter on the second try (a test)? Same issues how far must price move or how long should you wait until you can say the test was successful? There is no right or wrong answers just what suits the individual trader.

[DbPhoenix 42]

I suppose the other side of the coin is once you identify support/resistance, how and when do you exit from your trades without either loosing a lot on a wide stop or without loosing a substantial portion of your profit when the trade has gone well.

 

If that's a question addressed to nobody in particular, I hold it until I get to the other side of the range, though I scale out at predetermined intervals. But then I've reached that accommodation between what I want and what the market's willing to give me, which is one reason why I try to get it all done in 90m. If a trader wants to work 20hrs/day and make $1m/week, this might not work for him.

 

 

 

 

To amplify the previous chart, the first contract is sold when the "supply line" (a type of trendline) is broken, the second when the last swing high is exceeded. The rest are sold at the target (S), though a bit of room is given in case there's a continuation. In this case, there was a reversal signal, which prompted not only a complete exit but a new trade to the long side, so there was no need to waffle around about it.

 

After the long, the first contract is again sold at the break of the trendline. In this case, there is no subsequent violation of the last swing low. Everything else is sold at the target ® and I go riding.

Edited June 4, 2009 by DbPhoenix

[BlowFish 10]

I must be being dense here but SOBEs?

[DbPhoenix 42]

I must be being dense here but SOBEs?

 

Sorry. Stopped Out at Break Even.