How Do You Know When To Stay Flat?

[Lopen 10]

Lately the market has been consolidating making it tough to trade for newbies like me. I would like some advice from the experienced traders in this forum. How do you know when to stay away and when to trade aggressively? Do you still trade in the current market conditions?

 

Ive been chopped around badly lately and have been taking losses. Any advice would help. Thanks

[feb2865 10]

The market will fool you everyday. No exception You see the price moving your way and you're tempted into follow that move and forget whatever you already have in place. Or maybe you missed the bus and you're looking to ride it before it gets to the next stop. Your hands get sweaty. Your heart start pumping blood all the way up real fast as your brain is "demanding" for an inmediate action. Then the market starts to move her hips in a sexy arabian way, and you're falling for it. Oh boy, seem like you have no choice. what do you got to lose?

 

Well yes you could lose, a lot. That's what the market wants. Soon your hard-earned cash will be like a grain of sand in the middle of the sea.

 

Become a player of the market. Don't let the market "play" you. You're the one who call the shots. Not the market. Accept the fact that sometimes you lose even if you follow your system to the core. But your winings will surpass you loses by far more.

 

All of the above is assuming you have a profitable system in place.

 

Remember you're responsible for you entries as well as your exit. Not the market.

 

Regards

 

Raul

[feb2865 10]

Another thing

 

if you feel like your strategy is nor working out for you, just let us know. The whole purpose of this site is for traders to help each other. We will have an objective view of your system and we will try to help you out the best we can. You have my word that I will keep the integrity of your post and I won't let anyone make a fool of your strategy for as simple or complicated it could be.

 

Here we have plenty of capable and experience traders that will gladly throw some ligth to you in your path for success.

 

Feel free o share with us, we'll be happy to help.

 

Regards

 

Raul

[protrader 10]

there are always opportunities. sometimes you have to tighten your stops, reduce your size, tweak your system.

 

in the crash of 87 some of the largest gains were made from people that bought the bottom at 1:30 and sold an hour later.

[Lopen 10]

Thank you Raul and protrader. I have been learning several new strategies through this forum. Just like any newbie I relied heavily on indicators without cleary knowing how they work. I started using S&R points and pivot points. What I find difficult is when the market rotates back and forth between the daily pivot or opening price.

 

How important is the opening price? I try to look for short opportunities when price is trading below the opening price and vice versa. Thank you.

 

Lopen

[torero 10]

Thank you Raul and protrader. I have been learning several new strategies through this forum. Just like any newbie I relied heavily on indicators without cleary knowing how they work. I started using S&R points and pivot points. What I find difficult is when the market rotates back and forth between the daily pivot or opening price.

 

How important is the opening price? I try to look for short opportunities when price is trading below the opening price and vice versa. Thank you.

 

Lopen

 

 

lopen,

 

Pivots are important but they MAY be support or resistance. There is no guarantee that prices will stop at these levels. I have them there to see how prices react to them: will prices stop and bounce or pierce through and continue? Only prices will answer the question, not the pivots. I used to make this mistake and think that's a 100% bounce area. Not true.

 

For me, this is one way (of many for others I'm sure) to determine if you're seeing trending or trendless market is viewing them through higher highs/higher lows and lower highs/lower lows.

 

 

 

This works in any timeframes. We all know prices move in waves. Learn to read this and mark them throughout the day so you can identify if you're in an uptrend, downtrend or notrend. Start from the higher timeframes (day, weekly) then work your way down (60min, etc) to see your preferred intraday timeframe. This is the meat of my strategy. Good luck.

[protrader 10]

nice torero also i watch volumes at critical levels, IE increasing or drying up

[Lopen 10]

Thank you for the explanation Torero. WOW! I never thought about this but yet its so simple.

 

Powerful trading tip.. thank you

[torero 10]

It's so simple, people think there has to be more to it than that. In the end, it is simple but getting to that simplicity point of view takes time. Simple eh?

[Soultrader 12]

It's so simple, people think there has to be more to it than that. In the end, it is simple but getting to that simplicity point of view takes time. Simple eh?

 

Very true torero. Trading is simple but for a new trader this is very hard to grasp. It takes time to trade with simplicity!

[MrPaul 10]

Yeah it's interesting how you have to "Get" to simple. Somewhat of a regression to the mean. You start out learning with time, price and volume in most cases, expand on that with numerous studies, indicators, psychological studies, newsletters, moon projection analysis :p etc. All to discover that you return to "simple" for anything to be consistently successful.

[Guest rwalkerx]

I'm sure you may of already heard this. I stay flat from noon-2pm. The lunchtime/deadzone hours always have low volume. I've been head faked in this time so much! Occasionally there will be some stealthy selling/buying in these hours but that doesn't offset the amount of loss I've taken by trading these hours.

[torero 10]

I don't even hang around before noon strikes. I take my opps in the first 2 hours. If nothing happens, then there's tomorrow. After time after that, I'm already exhausted and it's a different market from my trading style so I stay away.

[lbj 10]

nice torero also i watch volumes at critical levels, IE increasing or drying up

 

protrader, just a coincidence, or do you have anything to do with the ProTrader platform?

[Tams 20]

Lately the market has been consolidating making it tough to trade for newbies like me. I would like some advice from the experienced traders in this forum. How do you know when to stay away and when to trade aggressively? Do you still trade in the current market conditions?

 

Ive been chopped around badly lately and have been taking losses. Any advice would help. Thanks

 

there is a reason for you to enter a trade (whatever basis of your signal)

stay flat when the reason does not present itself.

 

if you get chopped up,

it is not because of the market,

the market is always trending,

or consolidating,

 

some people make money when the market is trending,

some people make money when the market is consolidating.

 

if you get chopped up,

that's because your MADA is in error (or deficient).

 

MADA =

Monitor (Observing the market action)

Analysis (trying to make sense of your observation)

Decision (product of your analysis)

Action (pull the trigger)

Edited November 5, 2010 by Tams

[zdo 20]

Tams, what a timely answer! The very next day - if you don't check the year :haha:

 

Seriously though - that was a good solid anwer.

 

re the question: Context and how one's method(s) incorporate context is the answer.

How you do that is as individual as the style and methods, etc you are drawn to.

In some systems, the setup and triggers don't need to change while the stops and 'targets' have to be adjusted... etc etc. Some systems do need to 'learn' how to stand aside during 'range bound' type action. And as Tams mentioned, some systems are designed to perform during congestion...

And, btw, if one is trading a strict rule / mechanical mom or trend type system with no inclusion of intraday conditions in "analysis" then you just got to keep taking the signals (and accompanying losses...)

Noobs, the main thing is to get to where you are not the least bit bothered by the occurence or size of losses -- period

 

Not exactly my cup of tea, but some may be helped by Reading Price Charts Bar by Bar by Al Brooks Pg 148 (and the surrounding material ... ) hth

[Tams 20]

Tams, what a timely answer! The very next day - if you don't check the year :haha:

...

 

i saw the year,

but what does it matter?

there used to be an idio here who jumps on anybody and everybody who revives an old thread.

this is a discussion forum for crying out loud,

the topics never go out of style...

because there is nothing new under the sun,

100 years from now,

we will still be talking about methods developed 100 years ago.

(ok, may be not 100 yrs ago, Lefevre, wykolf and graham schools, etc., are not that "old".)

[zdo 20]

"this is a discussion forum" now devoid of levity "for crying out loud"

 

Admin, please remove all the happy smilies - they are no longer needed...Thanks

[emg 12]

Lately the market has been consolidating making it tough to trade for newbies like me. I would like some advice from the experienced traders in this forum. How do you know when to stay away and when to trade aggressively? Do you still trade in the current market conditions?

 

Ive been chopped around badly lately and have been taking losses. Any advice would help. Thanks

 

what market are u referrring too?

[MadMarketScientist 11]

I can tell you what I do.

 

I have found I'm awful at predicting when a market is going to get hot, and when it's going to cool. How do you know right? However, I will say markets do get streaky. So, if I'm trading a market like the Russell, S&P, Dow e-minis, etc... what I always do is have some circuit breakers. For me that is time based. I typically will only trade maximum the first 2 or 3 hours of the trading session. Opening bell at 9:30am EST - 12:30pm EST maximum. In some cases in my testing only until 11:30am EST. This limits the number of trades I take.

 

In addition, once I have 2 wins and I'm positive I stop on the day - no matter what. If I'm not positive after 2 wins I'll keep going but I will stop taking new trades as soon as my time limit is hit.

 

This really does help me catch the markets when they are hot, and exit many times when they start to consolidate, or stay in long enough to survive an initial chop and many times I pull positive literally with that last trade before my cut-off.

 

This has served me well over the years.

 

MMS

[brooky29 10]

lopen,

 

Pivots are important but they MAY be support or resistance. There is no guarantee that prices will stop at these levels. I have them there to see how prices react to them: will prices stop and bounce or pierce through and continue? Only prices will answer the question, not the pivots. I used to make this mistake and think that's a 100% bounce area. Not true.

 

For me, this is one way (of many for others I'm sure) to determine if you're seeing trending or trendless market is viewing them through higher highs/higher lows and lower highs/lower lows.

 

 

 

This works in any timeframes. We all know prices move in waves. Learn to read this and mark them throughout the day so you can identify if you're in an uptrend, downtrend or notrend. Start from the higher timeframes (day, weekly) then work your way down (60min, etc) to see your preferred intraday timeframe. This is the meat of my strategy. Good luck.

 

Torero.

Images seem to have gone?

Could you perhaps attach them instead of linking to them.

Thanks.