Reading Charts in Real Time

[Cory2679 11]

Currently short the EUR/USD...3 profit targets this time...

 

UPDATE: Not liking the way this is looking...temporarily moving my stop down tight...

 

UPDATE: Looking a little better now...tight stop now lifted and back to the original placement to give it some room.

 

UPDATE: Well, I'm heading out now so I'm moving my stop to break-even. I don't have high hopes for this trade. We'll see what happens...

 

FINAL UPDATE: :doh: Taken out for break-even (+0.03R). :doh: It's crazy how I don't learn!

[thalestrader 14]

FINAL UPDATE: :doh: Taken out for break-even (+0.03R). :doh: It's crazy how I don't learn!

 

Yes. Yes it is.

 

Best Wishes,

 

Thales

[iwshares 10]

FINAL UPDATE: :doh: Taken out for break-even (+0.03R). :doh: It's crazy how I don't learn!

 

My two cents:

 

R is the amount you are risking on each trade. If you are not willing to risk R on each trade then reduce the size of R to an amount you are willing to risk.

 

A word of wisdom from another trader "each time you place a trade think of it as writing a cheque to your broker, then you might be pleasantly surprised when you check your screen later". Without wanting to sound like an advert for Amazon, check out "Trading in the Zone" by Mark Douglas.

[Deusomega 10]

You are being far too risk averse. And trying to finesse your trades far too much. You feel in control when you put your stop to BE because you feel like you have a "free" trade. But I think you've seen enough times that BE really isn't free you are merely transferring the risk. You have eliminated the risk of "losing" money on this single trade a single event as it were. But you have also further decreased your odds of having a good sized winner as you would have if you hadn't tried to finesse your trade through "intelligent" management( I mean it has to be intelligent if we have a "risk free" trade right? Or....)

 

So while you have reduced your risk on this single trade signal you have also increased your risk of not being able to cover your next trade should it hit your full stop with what would have been a nice sized winner.

 

So have you really decreased your risk in the grand scheme of things?

 

Besides all this talk on risk. You need to trade your plan and see what happens. Constantly managing your trade and trying to be as risk averse as possible will not provide you with any meaningful trade statistics of your system.

 

Figure out your plan before taking the trade-I think you do this pretty well

Put the trade on. And don't touch it.

Do this for a couple hundred trades. And look at where you are.

Otherwise you will constantly spin your wheels and end up where you started over and over again.

[brownsfan019 17]

My on trailing stops - don't.

 

Either exit trade or get stopped, I have never seen a successful consistent way of trailing a stop. I'm not saying it does not exist, I've personally never seen it.

 

IMO trails do one thing - remove your fear. You can think - yes, this is a 'free' trade now! But those 'free' trades will get costly quickly.

[Deusomega 10]

My on trailing stops - don't.

 

Either exit trade or get stopped, I have never seen a successful consistent way of trailing a stop. I'm not saying it does not exist, I've personally never seen it.

 

IMO trails do one thing - remove your fear. You can think - yes, this is a 'free' trade now! But those 'free' trades will get costly quickly.

 

 

Exactly the market often rewards fear at least dealing with our fear

 

Do the analysis and take the trade.

[thalestrader 14]

You are being far too risk averse. And trying to finesse your trades far too much...Figure out your plan before taking the trade-I think you do this pretty well

Put the trade on. And don't touch it. Do this for a couple hundred trades. And look at where you are. Otherwise you will constantly spin your wheels and end up where you started over and over again.

 

That sounds very similar to what I suggested to you on June 26, 2011:

 

Cory,

 

Try this for four weeks: Don't move your stop. Place entry, stop loss, and profit target(s), and then let it go. You have everything down except you are trying to finesse your stops as the trade ages, and you just don't have that feel yet. You will get it, but you will get it by watching your trades mature on their own...

 

And then we have this fine observation from another TL member:

 

My two cents:

 

R is the amount you are risking on each trade. If you are not willing to risk R on each trade then reduce the size of R to an amount you are willing to risk....

 

Recalling the second part of my recomendation from June 26, where I said

 

...Trade small enough that you do not worry about the $$, or demo trade if you must, but let your trades mature on their own according to your initial analysis - entry, stop, profit objectives. You may end the four weeks net +/-, but the pnl is not what matters. You need to stop actively micromanaging your trades and learn to watch and enjoy price moving again.

 

So now you have three different people advising you to do pretty much the same thing; and even you are realizing that what you are doing is crazy.

 

Now, get serious about taking some losses. It is the only way you will ever give yourself a chance to take meaningful profits.

 

Best Wishes,

 

Thales

[brownsfan019 17]

Cory - keep in mind we've all been there. I can't tell you how many times I've been in trades and thought to just creep that stop up a little bit to 'protect' the trade when really I just wanted to know I would at least breakeven. There's a psychological relief when you can be in a trade but know at worst you will get out w/o a loss. Let's face it, no one likes to lose money. So that protective stop movement is a natural reaction to wanting to protect your money.

 

With that said, I've never seen it work b/c so many times I would get ticked out only to watch price do what I thought it would. So that protection cost me a winner, but then my quick losses were full sized. That provided 3 outcomes:

1) Full sized loss

2) Break-even trade

3) Winning trade that withstood being ticked out

#1 and #2 are no good for growing your account size. #3 requires near perfect entry AND near perfect stop movement so it doesn't turn into #2. Do you see how difficult that is? So that means you have a 1/3 chance of making money w/ those outcomes. If you remove #2 from the possible outcome list, now your chance of making money is 1/2:

1) Full sized loss

2) Winner

These 2 outcomes do not require you to enter perfectly and trail perfectly. It just requires you to follow the plan and exit where you should be exiting. From there, as long as your win %, risk-reward and all that adds up, you can make some money.

 

Trading is hard enough as it is, at the very least put the possible outcome of your trades at a 50% shot at working, not 33%.

[Cory2679 11]

Thanks for the advice, everyone...it means a lot.

 

Currently long the GBP/USD...

[Cory2679 11]

Currently long the GBP/USD...

 

UPDATE: Taken out for break-even (+0.03R)...would have otherwise taken a full 1R loss.

 

I figured what I might do for now is give up trailing stops 95% (I'm not committing to 100%...for when there's a very clear natural stop, or when there's a stop-and-reverse, etc.).

 

I also thought I would still allow myself a break-even threshold, but just try not to be too constrictive with it. I thought the break-even threshold made sense on this trade...it was at a nice area of resistance, which could potentially serve as a "trend-killer"...and it did.

Edited August 31, 2011 by Cory2679

[iwshares 10]

UPDATE: Taken out for break-even (+0.03R)...would have otherwise taken a full 1R loss...

 

I thought the break-even threshold made sense on this trade...it was at a nice area of resistance, which could potentially serve as a "trend-killer"...and it did.

 

My questions for you, and it's just food for thought, is at what point did you identify it as an area of resistance? How did this affect your decision to take a long versus a short position? Is a break-even trade the same as a neutral position?

[Cory2679 11]

My questions for you, and it's just food for thought, is at what point did you identify it as an area of resistance? How did this affect your decision to take a long versus a short position? Is a break-even trade the same as a neutral position?

 

I identified it as an area of resistance before I put the trade on...I had it drawn on my original chart (the dotted magental line...my break-even threshold).

 

It didn't really have much affect on my decision to take a long versus a short position...I got long because price had bounced at support (the long solid steel-blue line)...and that level of support can be seen better on the 4 hour chart I posted where you can see it served as support multiple times...the resistance was far enough ahead for me to get long and have some room before price reached it. Looking back, the trade could have gone a bit better had I gotten a better entry.

 

I didn't consider a short where I went long...although in hindsight, a stop-and-reverse short would have been worthwhile once price reached my break-even threshold, but I was simply still holding onto my long and I missed it.

[thalestrader 14]

...my break-even threshold...

 

Lose the idea of a BE for now - profit target one should get filled before the remaining is brought to break even for now.

 

Best Wishes,

 

Thales

[Cory2679 11]

Currently long the EUR/USD...

 

UPDATE: Hypothetically moved my stop tighter (dashed red line)...stop actually in original placement...

Edited September 1, 2011 by Cory2679

[Cory2679 11]

Currently long the EUR/USD...

 

UPDATE: Hypothetically moved my stop tighter (dashed red line)...stop actually in original placement...

 

UPDATE 2: Would be out for about a 0.46R loss...still holding...

 

FINAL UPDATE: Taken out for the full loss (-0.99R). :crap:

Edited September 1, 2011 by Cory2679

[Cory2679 11]

Well, I just did something I'm not very proud of. Basically, as a result of my immense frustration from the past several weeks, I completely fell off the wagon and basically tried to gamble with the NFP report...took an entry right before it.

 

It's stupid, I know. Even if it would have gone in my favor, it does nothing to help my development, etc.

 

I'm obviously an emotional mess with this stuff. I knew better...that's why I didn't post it in real-time. :doh: I think being sim contributed a little bit too...I think I felt a little bit like hey, it's not real money anyway, who cares.

 

I took an entry, got stopped out with some slippage, then re-entered with a market order and took another full loss. Overall result of the two trades was -2.16R. Very stupid.

 

On that great note, I think I'm just going to call it a week. I look forward to a weekend of crushing anxiety.

 

Next week I'm just going to dedicate myself 100% to no trailing stops, and I will not have a break-even threshold either (just maybe getting to break-even at PT1). Might as well do what Thales and everyone else have been begging me to try for a while.

[Cory2679 11]

Currently long the USD/JPY...

[Cory2679 11]

Currently long the USD/JPY...

 

UPDATE: Looks like I got in just as it was going down for its weekend nap. I pulled it right before the FXCM close (4PM Eastern Time) for just a little worse than break-even, I think...I did it from my phone and it wouldn't let me view the closed position to see exactly how I did, and now my FXCM demo account is down for the weekend.

 

This week was something of a tough week...while I certainly could have done better than I did...and I sort of lost it toward the end :embarassed:...this week was kind of lousy opportunity-wise. Even NFP failed to really wake it up.

 

I've recovered a bit emotionally and am simply looking forward to diving back in next week. I'm just going to take any free-time this weekend to study my charts and next week, like I've said, I'll be using no trailing stops whatsoever and no break-even thresholds...hopefully I can break my habit of cutting winners...then maybe I can work on trying to intelligently cut losses, too...without cutting all the winners.

 

I guess this will be a long weekend with Monday's holiday, so I guess I'll be back here Tuesday. Have a good weekend!

 

Cory

[Deusomega 10]

Maybe I'm retarded but why do your candles change shape?

 

First 15 min you have wicks in the middle of 6:45 and 10:00 and second updated picture the candles have changed.

[Cory2679 11]

...why do your candles change shape?

 

First 15 min you have wicks in the middle of 6:45 and 10:00 and second updated picture the candles have changed.

 

I guess just because a lot of time had passed and I'd shut down and started it back up between the two posts...timing/alignment got a little off from the original post I guess.

Edited September 3, 2011 by Cory2679

[brownsfan019 17]

Cory - I may have mentioned this through a PM, but the more I look at these charts the more I feel your frustrations. Maybe I can toss some ideas out there and Thales or others can chime in.

 

IMO...

1) If your S/R levels are good, you are buying into resistance and selling into support. You should expect a brick wall at these levels. At least on the charts you are posting, this is what I've seen. I don't recall seeing the same brick wall on Thales' charts, so I'm wondering what the difference is. Is Thales doing some additional step(s) that you are not? Time of day, trading around news, etc.

 

2) Instead of driving into that brick wall, wait for others to fight there and just be patient for a pullback to enter. Get your bias down (long/short) and then enter on a pullback.

 

 

 

In that example, you could enter on the pullback and EXIT at your breakout level or wait to see if it does break the 2nd time. Keep in mind that 1st tests of a S/R level should be expected to push price back. The more times that S/R level is tested, the weaker it becomes. I just imagine someone on a trampoline bouncing up to break a floor board - the first test for sure is going to hurt and be hard to break. The more times you bounce up and hit that board, the weaker it becomes till you blast through.

 

Here's your chart with a few ways to define your pullback once the long bias is in. You don't need all of them and I know the 'no indicator' crowd is all over the forums, but all you're looking for is a visual that confirms you have a pullback. Over time it may become 2nd nature, but why not let the computer do it for you if it can -- at least in the beginning.

 

 

Just some ideas to work with - I do not trade this myself, just trying to work w/ your existing charts.

[thalestrader 14]

I guess just because a lot of time had passed and I'd shut down and started it back up between the two posts...timing/alignment got a little off from the original post I guess.

 

Why would that change what any time segemented bar would look like? 6:45-7:00 is always going to look the same no matter when you start your chart from, right? On a range bar chart, small changes will occur depending upon the starting point of the data. But on a time based chart with an exact start and finish, the data, once populated, should be stable, right? Or is there something I'm not seeing here.

 

Sure looks strange to me? Who is providing your data? I'd send them copies of your two screen shots and ask them for an explanation.

 

Best Wishes,

 

Thales

[thalestrader 14]

... Instead of driving into that brick wall, wait for others to fight there and just be patient for a pullback to enter. Get your bias down (long/short) and then enter on a pullback. ...Here's your chart with a few ways to define your pullback once the long bias is in. You don't need all of them and I know the 'no indicator' crowd is all over the forums, but all you're looking for is a visual that confirms you have a pullback. Over time it may become 2nd nature, but why not let the computer do it for you if it can -- at least in the beginning.

 

Not a bad idea, Cory. Just be sure to pick one and apply it consistently. The way Brownie is using these indicators here seems to be intuitively correct - first use S/R and PA to set you "bias", i.e. the direction you are expecting price to go, and then use the indicator to tell you when a pullback against that direction may be coming to an end (Optiontimer's thread uses indicators in just this sort of way, I think, though he applies it to daily charts - it may be worth a look for you).

 

Like Brownie says, at some point, if you do it long enough and consistently enough, it should become second nature. But in the meantime, if "second nature" is not yet kicking in, let mathematics and technology help you until it does.

 

Best Wishes,

 

Thales

[gosu 10]

With the caveat that I do not trade currencies, it looks to me the charts above are showing the market in a lateral. Advice was offered to wait for a "pullback" (what I call a retrace) before entering. There is something that precedes a retrace, however, and that is a BO (breakout). In this case, it would be a BO of the lateral.

 

Having the market "clocked" in terms of volume data if it were available would be of great help. Regardless, trading inside low volume laterals in index futures sucks big time. I can't imagine it being all that great for currencies either.

[Moyyim 10]

Maybe I'm retarded but why do your candles change shape?

 

First 15 min you have wicks in the middle of 6:45 and 10:00 and second updated picture the candles have changed.

 

Yes...something strange going on there.

 

Apart from the wick being different, in the period from approx 8.15>9.30 things have changed into completely different candle formations.ie

1 x large down, followed by 2 x inside down candles....changes to.

2 x large down then up candles.

 

And the breakout bar (10.45am?,last bar in 1st pic)...on the 2nd pic it didn't make a new high above the blue line.

 

 

Worth investigating indeed.