Reading Charts in Real Time

[Cory2679 11]

Potential EU short...

 

UPDATE: Order filled...per Thales's advice, I will be letting my trades mature on their own according to my initial analysis, so I won't need to post a million updates...basically just a before and after...

Edited June 27, 2011 by Cory2679

[Cory2679 11]

Potential EU short...

 

UPDATE: Order filled...per Thales's advice, I will be letting my trades mature on their own according to my initial analysis, so I won't need to post a million updates...basically just a before and after...

 

FINAL UPDATE: Losing trade. I got a pretty good move in favor, but it wasn't a happy ending. Perhaps I should have had my break-even line just a little higher...in line with the break-up...

[JEHs 10]

A break-out trade.

I left a lot on the table after this, but I stuck to the plan...

 

http://mydaytradingcharts.blogspot.com/2011_06_27_archive.html

[bigsnack 10]

I'm sorry to bust in on this thread, but JEH your PM inbox is full

[thalestrader 14]

FINAL UPDATE: Losing trade. I got a pretty good move in favor, but it wasn't a happy ending. Perhaps I should have had my break-even line just a little higher...in line with the break-up...

 

Is that what you are going to take away from today?

 

Study that chart, Cory. There are a number of things worth noting, the least of which is your concern about your breakeven threshold.

 

Best Wishes,

 

Thales

[joshdance 10]

Is that what you are going to take away from today?

 

Study that chart, Cory. There are a number of things worth noting, the least of which is your concern about your breakeven threshold.

 

Best Wishes,

 

Thales

 

Thales, I would love to hear your thoughts on this. I'll take a stab at one thing, would like to hear if I'm on the right track. Is one issue that the short is taken into prior resistance which then served as support? (1.4143)

[thalestrader 14]

...Is one issue that the short is taken into prior resistance which then served as support? (1.4143)

 

That's a good observation ... what else?

 

Best Wishes,

 

Thales

[SIUYA 11]

for me....two things stuck out that influence any trades I do.

 

In Corys case, IF taking his trade, because of these I would have moved the stop to BE quickly....meaning the trade still might have made money, but no harm if stopped out.

 

(presently using a different measure - but similar Thales, but one involving more gut feel from me and so no real need of a chart, I have shorted it at 1.4307....no target, stop initially at 1.4322, moving that to BE on a break of 1.42875....just in case)

Also as the stock market is pretty crap at present, starting to look more at FX again - only taking shorts for me in the EURUSD.....waiting to sell rallies.

 

http://www.traderslaboratory.com/forums/attachment.php?attachmentid=25021&stc=1&d=1309235224

[joshdance 10]

That's a good observation ... what else?

 

Best Wishes,

 

Thales

 

I am probably off here, but I will try anyway--I drew in the red line.. looks like a solid support line.. but, price did break it which would mean a possible test of lower support. So, not too sure about this observation.

 

How about this: we've basically dipped below prior support, and have rallied nicely to the trend line. Perhaps it's not a good short because we've seen strength, and while we may not be in an "up trend," it's going against the most recent movement in price.

[joshdance 10]

Since we're posting charts, though I never trade off charts this long term (60m), here is a CL that may close as a reversal bar in a few minutes, at which point a buy at .98 would trigger, stop below the low of the bar, target would be the globex high near 91.40, and a 2nd target would be the weekly PP or more conservatively the 91.90 level or so.

 

Just to be clear, I'm not comfortable taking these types of trades, particularly at this time of day, so I won't be taking it. Just posting this chart because on the 60m chart it looks decent--support off the globex open after a meandering move down, and closing above the EMA.

 

EDIT: break down just happened below the low of this bar before trade triggered, invalidates the setup.

Edited June 28, 2011 by joshdance

[Cory2679 11]

Is that what you are going to take away from today?

 

Study that chart, Cory. There are a number of things worth noting, the least of which is your concern about your breakeven threshold.

 

Best Wishes,

 

Thales

 

I've posted a chart with my thoughts on why maybe one should have had an eye out for a long rather than a short (much of which has already been discussed while I was away).

 

I guess all I could say in "defense" of the trade was that it may not have been ideal, but I thought it worth a try...it was the only thing I had in that moment. I did after all get about 1R of favorable movement...right to support where one could anticipate a reaction/reversal. That's why I was so frustrated with my break-even placement...if I was going to take a trade in this situation, the break-even point clearly should have been placed at that level of support or even a little above.

 

Perhaps I should just be more patient and wait for the ideal situations.

 

Anything else I/we are missing?

Edited June 28, 2011 by Cory2679
forgot chart

[JEHs 10]

 

Perhaps I should just be more patient and wait for the ideal situations.

 

 

For me, this is the key. And also the hardest thing.

...the waiting...

[Cory2679 11]

I've posted a chart with my thoughts on why maybe one should have had an eye out for a long rather than a short (much of which has already been discussed while I was away).

 

And the trend continues...

 

 

 

Sorry for the after-the-fact post...I just thought it was relevant...

 

I've realized that I need some work...after Thales's post, I was honestly thinking to myself, Gosh, he's picky! My trade was ok! But then later I began to think, if he's so picky, shouldn't I be, too?

 

I'll be back to posting real-time tomorrow...taking my trades but letting them mature on their own according to my initial analysis...I will most likely be doing this exercise with a demo account for the month of July...then I figured maybe during the month of August I could gradually work in some stop-management...cutting losses is important, after all...I'll basically test the waters in August after hopefully I've benefited from a month of not moving my stop at all except as dictated by my initial analysis...

[Maelstrom 10]

Perhaps I should just be more patient and wait for the ideal situations.

 

 

Hardest thing I had to learn

[joshdance 10]

I was honestly thinking to myself, Gosh, he's picky! My trade was ok! But then later I began to think, if he's so picky, shouldn't I be, too?

 

I also thought the trade was not bad.. in other words, I've seen some dumb trades, mostly on my own screen, and that was not among the worst. Maybe not the best, but the fact that it did go in your direction means you weren't so far off that you were dead wrong. But thales is a successful trader who I want to learn from, so I am eagerly waiting his thoughts on your chart so I can improve my trading eye.

[SIUYA 11]

patience and being picky are key to all styles and all instruments......

 

One thing I have realised out of doing more FX trading, and implementing some of Thales ideas....and this works more me me personally, is that if I am going to take a trade such as yours Cory - and then the one that I took in a similar manner slightly higher, as I dont think your trade was so bad, is that I will move my stop to BE very quickly. ..... this way pickiness does not become such an issue.

You might have more scratch trades....but so what - this is not a competition of who has the best looking trade journal statistics.... its about not losing money, and then making the most of those that go our way.

 

When it comes to FX - and I dont apply the same thing to other instruments, as my bread and butter has been equities and equity indexes..... I am happy to have 90% trades go out at scratch (or lets say an average of a small loss) as I then only need a few to go my way. The liquidity of the FX markets allows this. I found personally that FX and equities trade ideas are different and for me personally applying the exact same ideas to both does not work.

 

I would add one other thing where this works more for my personal situation is that I dont require the income from the FX trading....this is for me something I build positions in, and if they keep trending my way and I have a big position on then it makes money - great, if not no big deal.....taking profits off each individual trade is an entirely different situation....hence pickiness OR a move to BE very quickly may be an option depending on the situation. Can you have both? - probably.

 

(I still occasionally read this still Cory and hope you feel you are making good progress and it becomes a good thread for how continually challenging/frustrating/learning this can be)

Edited June 29, 2011 by SIUYA

[thalestrader 14]

I've realized that I need some work...after Thales's post, I was honestly thinking to myself, Gosh, he's picky! My trade was ok!

 

It is not about that trade or any particular trade right now, Cory.

 

Yes, you still need to watch price, make your analysis, and place your bet (or at least know where you would be placing your bet if you were indeed betting).

 

What you need to do right now is pay attention to what is going on around your trade, i.e. where has price been, where is it now, and how did it get there. I guess this is what others refer to as "context."

 

The reason I want you to stop playing with your stop is that I think you need to free yourself again to pay attention to the whole chart rather than focusing on the last few bars and next 300-400 tics.

 

You should place your bet, and then write down what you see, and do it immediately - Are you going long or short? Is the trade a reversal, or a continuation of the preceding main trend? Are you really trading a sharp, clear 123 or is it more of a choppy consolidation with little to no distinctive swings? Where is the nearest support? Why do you feel it should be support? How do you expect price to act if and when it gets there? What will you do if it acts as you expected? What if it does the unexpected? Where is the nearest resistance? Etc...

 

All those observations posted by your friends here, those "take aways," are what you need to be aware of in real time. You can say you are, but are you really?

 

And I do mean write it ... put pen to paper.

 

Best Wishes,

 

Thales

[thalestrader 14]

I am probably off here, but I will try anyway--I drew in the red line.. looks like a solid support line.. but, price did break it which would mean a possible test of lower support. So, not too sure about this observation.

 

How about this: we've basically dipped below prior support, and have rallied nicely to the trend line. Perhaps it's not a good short because we've seen strength, and while we may not be in an "up trend," it's going against the most recent movement in price.

 

Support/resistance is rarely a line or a pot so much as it is a zone or a bed - take a look at the line you drew and try to imagine a rectangle, i.e. a zone or bed of support with depth, not a mere line. If you see what I see, then you would likely change your opinion from "a soid support line which price broke" to a "bed of support which price tested and support help."

 

Best Wishes,

 

Thales

[joshdance 10]

Support/resistance is rarely a line or a pot so much as it is a zone or a bed - take a look at the line you drew and try to imagine a rectangle, i.e. a zone or bed of support with depth, not a mere line. If you see what I see, then you would likely change your opinion from "a soid support line which price broke" to a "bed of support which price tested and support help."

 

Best Wishes,

 

Thales

 

Thanks Thales -- I suppose we might say it broke the top of the zone, but found support toward the bottom of the zone in this case?

[Cory2679 11]

You should place your bet, and then write down what you see, and do it immediately - Are you going long or short? Is the trade a reversal, or a continuation of the preceding main trend? Are you really trading a sharp, clear 123 or is it more of a choppy consolidation with little to no distinctive swings? Where is the nearest support? Why do you feel it should be support? How do you expect price to act if and when it gets there? What will you do if it acts as you expected? What if it does the unexpected? Where is the nearest resistance? Etc...

 

You know, I think this could also be a good first step in my morning trading routine...before I even think about placing a bet...for each of my charts, write up my observations and attempt to answer some or all of the questions posed in the above quote.

 

Too often I find myself narrowly focused on the last few bars looking for a "123," and once I find one, then looking for contextual justification to take the trade...

 

[Cory2679 11]

Just wanted to drop a line to make clear that I haven't dropped off the map despite not posting any trades for a few days...I've been merely taking a little time to do some work (ie developing a new morning checklist, reviewing the thread, reviewing charts and practicing writing down what I see, etc.). I'm going to start my "four weeks" next week...I promise I'll be back full force next week trading consistently and posting every single trade...although it may not be until Tuesday due to the US holiday Monday...

 

EDIT: Hey, whaddya know...this my 1,000th post! I'm a "Master Trader" now! (hahaha)

Edited July 1, 2011 by Cory2679

[thalestrader 14]

Thanks Thales -- I suppose we might say it broke the top of the zone, but found support toward the bottom of the zone in this case?

 

I would just say that it tested support, and support held. Had it pierced the lower limit of that support (zone), then we'd have had a break, and if that break was quickly reversed, we'd have a 2B (though I like 2B's better when they occur at a swing high or swing low, rather than somewhere is the middle of the last important swing).

 

Best Wishes,

 

Thales

[Cory2679 11]

Potential EJ short...

[joshdance 10]

This is not to influence your trade decision--please take your short, and IMO it does have that look like it may want to roll over and fall a bit based on the recent activity, but here's a line that other traders may also see, just posting your chart with another perspective.

[Cory2679 11]

Potential EJ short...

 

UPDATE: Profit for the first half, break-even for the second...