Reading Charts in Real Time

[thalestrader 14]

Hi Folks,

 

I thought it would be interesting if we had a thread where we could all post charts of potential price moves in real time. These do not have to be actual trades you are taking. The purpose would be for us to learn from one another how to recognize these opportunities in real time. Therefore, when you post a chart, be sure to clearly state the direction in which you anticipate price to move, and the reason you are interpreting price action in that manner. This is not a thread for secrets, show-offs, or salespeople selling systems.

 

 

I'll start off with the GBPUSD here soon after the markets have reopened for trading this Sunday evening. Looks like a potential short trade if there is a break of 1.6421 (For the record, I am not trading this).

 

The first red arrow would have been a nice short entry as the Cable put in a 1-2-3 top per Trader Vic (easy to see after the fact). The second red arrow swas a second chance short entry on the retest of the break of the "2" point on that 1-2-3 top (also easy to see in hindsight).

 

The third red arrow is the current market as price is trying to find support. If that support does not hold, a test of 1.6389 - 1.6406 would be next. I have some family time now, so I'll check in later and update the chart.

 

Best Wishes,

 

Thales

Edited June 14, 2009 by thalestrader

[thalestrader 14]

The third red arrow is the current market as price is trying to find support. If that support does not hold, a test of 1.6389 - 1.6406 would be next.

 

Price did decline into the next area of anticipated support. A nimble scalper should have been able to come away with a respectable amount of ticks even as buyers stepped in at the anticipated support level surrounding Friday's reversal higher.

 

Natural stops are indicated by the dashed red lines. Any trade above there would certainly be enough to have me out of the market if I hadn't already taken myself out.

 

Best Wishes,

 

Thales

[thalestrader 14]

If I were short from the initial post, and I had I stayed short this far into the rally off the low, I'd right now have my stop fixed at a tick or so above that last reaction high.

[thalestrader 14]

If I were short from the initial post, and I had I stayed short this far into the rally off the low, I'd right now have my stop fixed at a tick or so above that last reaction high.

 

And at this point the stop would be more or less at breakeven (+/- a few ticks). I'd be looking for a retest of the 1.6393 low, and if that breaks and price holds below it, then the green dashed lines would be the next target.

[thalestrader 14]

I'd be looking for a retest of the 1.6393 low, and if that breaks and price holds below it, then the green dashed lines would be the next target.

 

Price broke 1.6393, and quickly popped back above that level, but not by much. Price will need to break and hold below the shaded rectangular area to keep pressure on the downside and press toward a retest of the dashed green support zone around Friday's low.

 

The chart shows how the rectangular box is calculated using a fib extension tool - as you can see, as I was taking this screen shot, price has started to get in gear to the downside.

[thalestrader 14]

Price will need to break and hold below the shaded rectangular area to keep pressure on the downside and press toward a retest of the dashed green support zone around Friday's low ... price has started to get in gear to the downside.

 

Closing in on support, and I'd be moving my stop to protect some profit. 1.6401 would be one tick above the highest price reached after price first poked below the 1.6393 support.

 

If you look at a time based chart (1 or 2 minute, for example), and you will se that there was a bit of resistance built at 1.6379. I guess that if I were trading this and I had a position that could be broken in two parts, I'd have a stop on half at 1.6380 and on the other half at 1.6401. I would probably also place a buy limit to take profits on one half at 1.6350.

[thalestrader 14]

I guess that if I were trading this and I had a position that could be broken in two parts, I'd have a stop on half at 1.6380 and on the other half at 1.6401. I would probably also place a buy limit to take profits on one half at 1.6350.

 

Since I didn't trade this, it is hard to say what I would have done here, but price jumped quick off that 1.6359 and I may have taken some off there.

 

If not, I'd have one stop at 1.6380 (+40 ticks) and one at 1.6401 (+19 ticks), presuming I had a position that cold be broken in twain.

 

See you on the other side of the night.

 

Best Wishes,

 

Thales

 

PS As I was about to shut down I see that the first stop was just hit, so that would leave one half open with a stop at 1.6401. If I actually had this trade open, and I had just taken +40 ticks on half, I'd pull my limit orders and set up a 50-75 tick trailing stop and then I'd go to bed and see what it looked like in the morning.

[thalestrader 14]

See you on the other side of the night ... and see what it looked like in the morning.

 

Hi Folks,

 

Well, had it been a real trade and had I sat up to monitor it through the night, it looks to me that the second hald would have been stopped out at 1.6337 or so for an 80 +/- tick profit.

 

The first 1/2 was stopped out at an admittedly arbitrary stop loss level. The second chart shows the natural progression of stop levels for this "trade." Had the whole trade been managed accoring to the stops dictated by price action itself, then a +80 tick profit on the whole position would have been attainable, and at one point, the open trade equity would have been 100 ticks +/-.

 

Of course, unless one is trading real money it is always a mere academic excercise to conjecture how the trade might actually have turned out, as even sim trading does nothing to train that most important prt of the traders soul - that part that deals with fear, greed, and the desire to be right, or at least not to be wrong.

 

A 50 tick trailing stop would have been stopped out at 1.6354 for +66 ticks; and a 75 tick trailing stop would have been stopped out at just about the same price as the first 1/2 position was last night at 1.6379 for +40 ticks give or take a few ticks.

 

 

Best Wishes,

 

Thales

[thalestrader 14]

I thought it would be interesting if we had a thread where we could all post charts of potential price moves in real time.

 

Well, I still think it will be interesting, but then again, I watch charts for fun!

 

I'm going to continue with the GBPUSD. I am not trading it, and I do not trade forex (though I occassionally day trade the 6B and 6E).

 

I am looking at a short trade at 1.6301, based on price reversing the HHHL pattern of the afternoon rally with a potential LHLL.

 

Inital stop loss is placed at 1.6329

 

Profit objective is a retest of today's low at 1.6241.

 

Best Wishes,

 

Thales

[thalestrader 14]

Inital stop loss is placed at 1.6329

 

With that new low, stop loss could probably be lowered to 1.6322

[thalestrader 14]

With that new low, stop loss could probably be lowered to 1.6322

 

 

lowering stop to 1.6313

 

This price decline has a good bit more overlap and choppiness than I'd expect of it for a retest of today's low.

Edited June 15, 2009 by thalestrader
spelling

[thalestrader 14]

lowering stop to 1.6313

 

This price decline has a good bit more overlap and choppiness than I'd expect of it for a retest of today's low.

 

Downside price action has started to get into gear with a low at 1.6262, a decline of 40 ticks. A reasonable profit target would be a limit at the 1.6241 low +/- a few ticks.

 

I'd like to see price give a natural stop point within profitable territory so the stop could be safely lowered to capture some of the move.

[thalestrader 14]

I'd like to see price give a natural stop point within profitable territory so the stop could be safely lowered to capture some of the move.

 

No sooner had I posted the previous update and price obliged with a new stop point at 1.6277 which would lock in +25 ticks or so.

[thalestrader 14]

BOOM!

 

 

 

When price chewed through this morning's low it found a nearly 30 tick vacuum waiting for it!

 

Obviously, had one traded it with a limit, the limit would have been filled for approximatley +60 ticks. If one were trailing, then at this point I would probably move my stop down to 5-10 ticks above this morning's low.

[thalestrader 14]

The market has rallied back to test the breakdown from this morning's low. It first rallied to 1.6239 before falling back, and price has now rallied to 1.6242, besting the low by one tick, and has now fallen back a few ticks.

 

If I were still short here, I'd bring my stop down to 1.6243.

[thalestrader 14]

If I were still short here, I'd bring my stop down to 1.6243.

 

And that would be a wrap - short from 1.6302 and covered at 1.6243

[thalestrader 14]

Hi Folks,

 

This has turned out to be a far sleepier thread than I thought it would be. But reading charts from the "hard right edge" as they say is what this business is all about, so I'll carry on for a bit longer.

 

The first two charts, BNI (+30 cents) and AET (+06 cents) are trades that are finished and in the books.

 

The next two show AKS and NUE consolidating at the highs of the day, and may be long trades for me later in the day (while not a hard and fast rule, I try not to enter new positions between 11:30 am and 1-1:30pm unless the move is exceptionally strong).

 

The last chart shows HUM, and the sometimes result of trading breakouts to new highs/lows. I didn't take HUM, as I saw it after the fact, but I would have been tempted to trade that breakout (which would have resulted in a quick loss.

 

Best Wishes,

 

Thales

[thalestrader 14]

The next two show AKS and NUE consolidating at the highs of the day, and may be long trades for me later in the day (while not a hard and fast rule, I try not to enter new positions between 11:30 am and 1-1:30pm unless the move is exceptionally strong).

 

NUE false breakout - I didn't take that one either (but not to worry, I do my part to take more than my share of fakeouts!)

[thalestrader 14]

This stock should see 7.25 before the end of the day, and it might see 0.

[thalestrader 14]

This stock should see 7.25 before the end of the day, and it might see 0.

 

Looks like it has been halted - I hate when that happens.

[Dinerotrader 10]

Thought I would give ths a shot. I am not trading this with real money. My green line show where a new high broke out and would have been my buy point. The red lines shows where my stop would be and the blue lines shows where I think upper resistence might come based on prior days resistence. I would set a sell at the blue line in order to just take profits and move onto the next trade. Hopefully my attachment worked.

 

[thalestrader 14]

AET, a long from this morning is now a short trade, as is NUE, a potenital long from this morning (had a false bullish breakout).

Edited June 16, 2009 by thalestrader
spelling

[thalestrader 14]

I wanted to post this 6B (Pound Futures) or GBPUSD short trade as it was setting up, but I was busy getting a bunch of orders entered. It has progressed nicely while I was trying to annotate the chart.

 

First chart is the GBPUSD as the trade got started, and the second is the futures contract 6B (it has reached first support/profit target).

[Dinerotrader 10]

Everything has turned to the downside over the past hour so short positions would be what I am giving more attention to. Would you agree?

[thalestrader 14]

Everything has turned to the downside over the past hour so short positions would be what I am giving more attention to. Would you agree?

 

 

Short ZMH (see chart).

 

Yes, all of my positions are shorts right now.