Reading Charts in Real Time

[Gabe2004 10]

The GBPUSD looks like it is rounding downwards in the 5 min. forming a double top. This could create a short setup.

 

Could be or the poke below the lower line of the frlag could be a fake and it will just continue up.

 

Gabe

 

PS SL hit.

I would not do anything now because there is no market until 8PM EST.

So 2 trades 2 losses.

Could this be avoided?

[johnjohn1hew 10]

Could be or the poke below the lower line of the frlag could be a fake and it will just continue up.

 

Gabe

 

PS SL hit.

I would not do anything now because there is no market until 8PM EST.

So 2 trades 2 losses.

Could this be avoided?

 

Hey Gabe, right after you posted that long setup i posted the exact same chart in a 5 min. interval, but i had a bearish outlook. A double top was forming and the 15 minute did not show this. You should watch more than one interval for confirmation.

[Gabe2004 10]

Hey Gabe, right after you posted that long setup i posted the exact same chart in a 5 min. interval, but i had a bearish outlook. A double top was forming and the 15 minute did not show this. You should watch more than one interval for confirmation.

 

Hi jj

 

The point I am raising is that I was killed twice in a row.

Not that this is a big problem because a losing string could last longer but the question is, is there a way to avoid this or it is just a statistical fact that has to be factored in and in the long run the winners will outweigh the losers.

 

Gabe

[Gabe2004 10]

Could be or the poke below the lower line of the frlag could be a fake and it will just continue up.

 

Gabe

 

PS SL hit.

I would not do anything now because there is no market until 8PM EST.

So 2 trades 2 losses.

Could this be avoided?

 

Maybe my Stop was too close.

 

I have a problem with this.

 

Gabe

[Kiwi 16]

Kiwi, here's the big picture. Resistance at 132.91-ish (in my view) and an anticipated move down to support at 132.36 (about middle of the 132.90 - 131.83 area). So target 1 was before that first R, and target 2 below it. R:R would be close to 1 for the first target so the setup looked attractive to me.

 

I know you have described a similar context earlier in this thread and I found it interesting then (as I did now), I will definitely try to keep it in mind in the future.

 

 

The example was less obviously completely wrong than some. There was some stalling activity before the signal. One of the things I note is that Thales also picks slightly higher timeframe reversals as the base of 123break entries.

 

But if you look carefully at them he is often doing it with an awareness of more reversing activity. The usdchf ones showed considerable time and retests as part of many reversals. Thales has shown some good ending diagonals on 15m - some of those work and some become abcGos when they become what afterwards look like bull flags in an uptrend. But he's doing it in the context of reason to think its reversing.

 

I know I showed a zone reversal on that opening but I wouldn't normally take FIRST test of a zone unless there was a good reason. The good reason on that one was that there was a gap behind it ... so filling the gap would provide some momentum and the probability of getting out be+ even if it filled and then price kept going down.

 

The 123break is a sound entry with momentum and confirmation AT ITS TIME FRAME to give you a small edge. But people need to add edges to become consistent. One is the 123break. Another is exiting half at next 1:1.1 S&R to give comfort/confidence and consistent income flow. Another, if appropriate to the S&R is pulling to be+ very fast. A very important one is trading with the flow of the market (call it trend, call it momentum, call it whatever but the nature of the order filling in forex means that it will be there) and if you're going against it look for real signs that this flow is ending:

- three little indians / ending diagonals

- test and then retest of S&R (does it have to reach the swing or is zone ok in what you are trading (they vary!)

- time in congestion/chopzone and then a break down

 

You see what I'm getting at? A good strategy like Thales and his daughters trading adds edges to get a solid combination.

 

Thales recommended a couple of books on price pattern reading that his girl read before she started. These + his exit approach add to the 123break.

 

Thales, can you recommend the books again?

 

 

Note1: An example of Thales "possible reversal thinking" and note the ascending triangle within it. If you traded it then you'd be looking at the swing support below for a first exit and thinking (I hope) ... well, once it gets there, lets see if it holds or breaks solidly because if it holds or breaks just a little bit this could form a bull flag before progressing up.

 

Note2: For thinking about how forex works and why trends and retracements are there I find no better thread than an old institutional trader/manager talks at forex factory and the links he provides. I would recommend everyone read William Eckhardt's interview in New Market Wizards - he is one of the smartest guy's I've read in this game even though he lost the bet to Richard Dennis. You need to get past the issues he discusses.

Edited November 23, 2009 by Kiwi
to add the note at the end

[thalestrader 14]

Thales recommended a couple of books on price pattern reading that his girl read before she started ... Thales, can you recommend the books again?

 

Stikky Stock Charts, and How Charts Can Help You in the Stock Market by WIlliam Jiler, and the price action/chart reading section(s) of William J O'Neil's How to Make Money in Stocks

[Gabe2004 10]

Thales recommended a couple of books on price pattern reading that his girl read before she started. These + his exit approach add to the 123break.

 

Thales, can you recommend the books again?

 

 

Post #616

 

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-62.html#post78242

 

Gabe

[thalestrader 14]

Am I right to assume that XXXX is back to normal (you're still posting spot fx charts)?

 

I'm still getting hit with a chunk of slippage, but by a chunk, I mean .2-.5 of a tick, so I really shouldn't complain. I have no idea why we are now seeing slippage where for six months we had absolutely none. I even drew the account back down to $500 thinking maybe the account was being penalized for being too large, but still slippage where before there was none. Who knows? In the end it is really not that big of a deal except that we used to run "clean" numbers, i.e. profits/losses where whole tick numbers, whereas now we'll move a stop to lock in, for exampe, a +5 profit, but if the stop loss is hit, we end up with +4.7 ticks.

 

Best Wishes,

 

Thales

[thalestrader 14]

The point I am raising is that I was killed twice in a row... but the question is, is there a way to avoid this

 

You can easily avoid this by following these steps (do not skip any):

 

1) Stop trading

 

2) Turn off your computer

 

I guarantee you will never lose again.

 

Of course, if you decide you'd rather keep trading, then get used to losses, even multiple consecutive losses.

 

Best Wishes,

 

Thales

[Kiwi 16]

Thanks Thales, Gabe. I think people can benefit from those books.

 

Had I been in this trade I would have been taken out for a small loss and probably I would have reversed and gone long but there is still too much resistance overhead.

 

Gabe

 

 

Instead of thinking of it as overhead resistance what about reversing that and thinking about it as an overhead magnet. The thing about S&R is that price likes to test it so if there is enough range compared with your stop them when it has another shot at the 6680 area. If it does you'll get half off for better than 1:1 and can then watch to see "does it cut through it like a hot knife through butter?" or push back in which case the second half is be+ or better.

 

Here's a cute strategy that I've not tested. Round numbers are resistance in forex ... but they are also magnets. So when price gets to 15 ticks below a RN (for a long) you go long. You take half off at the RN and have a target on the other half 15 points beyond. You move stop to be+ when the first half is taken. I must test it sometime.

[Gabe2004 10]

You can easily avoid this by following these steps (do not skip any):

 

1) Stop trading

 

2) Turn off your computer

 

I guarantee you will never lose again.

 

Of course, if you decide you'd rather keep trading, then get used to losses, even multiple consecutive losses.

 

Best Wishes,

 

Thales

 

I counted to 10 before I started to answer.

STOPPING IS NOT AN OPTION.

The question is whether you or anyone else would have just stopped and reversed when the entry signal reversed or there is something else that would have prevented you from doing that/

 

Thanks

 

Gabe

[thalestrader 14]

The question is whether you or anyone else would have just stopped and reversed when the entry signal reversed or there is something else that would have prevented you from doing that

 

I took both of these trades today (on the 6B) and the short I closed at +2 after price made a lower low by a tick or so and reversed. The long trade was stopped at entry.

 

Best Wishes,

 

Thales

[Gabe2004 10]

I took both of these trades today (on the 6B) and the short I closed at +2 after price made a lower low by a tick or so and reversed. The long trade was stopped at entry.

 

Best Wishes,

 

Thales

 

You could have said that before.

Just to make me feel good.

Thanks anyway

 

I think that the notion here is that you don't make mistakes and I (and maybe others) feel inadequate) so thank you for your honesty.

 

 

Gabe

[MidKnight 12]

Don't feel bad Gabe, I'm on a run of 5 losers in a row at this time. My overall results for nearly 4 weeks of this are net 8.85 pips. Worse than pathetic IMHO. So don't feel bad.

[thalestrader 14]

Hi Folks,

 

My daughter and I were talking tonight, and she made the statement that she is very happy that she she has been able to keep "making 100 before I lose 50." I thought about it for a few moments and then I asked her what she meant. She said, "You know. You told me I should try to make twice what I lose. I should try to make 100 ticks before losing 50." And of course I said, "I said that?" And she laughed at me and my wife made a crack about me starting to have "senior moments." (In my defense, I am sure I was referring to a 2R risk reward, but so be it).

 

At any rate, she explained that she keeps track from day to day how many ticks of closed profit she has made net of ticks lost. Her goal is to make 100 ticks profit before ever losing 50 ticks from her most recent "starting line."

 

Let me give you an example. Suppose today is your "strating line. You start trading. Your goal is to get +100 before (i.e. avoiding) a -50 drawdown from your starting line. "What do you do when you get to +100?" I asked her. She shrugged her shoulders and said she starts over. New starting line, new +100 tick goal.

 

What happens if she finds herself -50? She doesn't know. She has never been down -50 from a starting line. Kids!

 

Anyhow, I know it might sound a bit gimmicky, but it also sounds like a fun way to organize your progress. After all, if you can develop your skills to the point where you know you can reach +100 without ever falling -50 from your starting equity (basically never falling -50 from a recent equity peaks selected at points equal to 100 tick profit increments), well, you have yourself some skill set!

 

Once you make it to +100, that becomes your new starting equity, and you hit the reset button. And why not treat you and your family to something special when you hit that +100? I told my daughter that she should reward herself whenever she hits her +100 ticks. I asked her what she would want, and she said she'd like to buy her mommy flowers. What can I say, she's an angel.

 

Any way, starting tonight, I'm going to join her in the game (I guess I have been playing along anyway, I just didn't know it).

 

Best Wishes,

 

Thales

[thalestrader 14]

I think that the notion here is that you don't make mistakes and I (and maybe others) feel inadequate) so thank you for your honesty.

 

A losing trade may be the result of a mistake.

 

But losing trades are going to happen even when you do everything right. I make my share of losing trades. I don't think I made a mistake on either of those two trades today. Unrewarding trades happen.

 

Unfortunately, I still make my share of couldwouldashoulda's as well.

 

 

Best Wishes,

 

Thales

[thalestrader 14]

I wonder if some here are not trying to knock the cover off the ball with every trade. You have to be willing to take what the market seems to be willing to give you.

 

My daughter and I had two trades this evening. Total PnL in pips is 14.8 (+14.8 on a GBPUSD short, and a +/-0 on a short EURJPY.

 

Be patient, take your swings, but try to swing at strikes and let the balls pass, and be as happy with a single as your are with a homerun.

 

Best Wishes,

 

Thales

Edited November 24, 2009 by thalestrader

[MidKnight 12]

Thales, isn't that pound short less than 1:1? I thought you didn't do trades like that (assuming stop is at the recent DT pivot highs).

[thalestrader 14]

Thales, isn't that pound short less than 1:1? I thought you didn't do trades like that (assuming stop is at the recent DT pivot highs).

 

Here is how we set the trade. Our PT1 was the actual low, and we did not get filled.

 

Best Wishes,

 

Thales

Edited November 24, 2009 by thalestrader
typos/spelling, its always spelling and typos

[Gabe2004 10]

Potential GU SHORT.

 

Gabe

[Gabe2004 10]

Potential GU SHORT.

 

Gabe

 

Or a potential GU LONG.

 

Gabe

[thalestrader 14]

Potential GU SHORT.

 

Gabe

 

I see you have an entry and an initial stop loss. How will you manage the trade? What will cause you to bring your stop loss to breakeven? Where will you take some profit? What will you do if/when price gets to 1.6550? 1.6542?

 

 

Best Wishes,

 

Thales

[Gabe2004 10]

Or a potential GU LONG.

 

Gabe

 

Forgot to mark the targets.

 

Gabe

Edited November 24, 2009 by Gabe2004

[Gabe2004 10]

I see you have an entry and an initial stop loss. How will you manage the trade? What will cause you to bring your stop loss to breakeven? Where will you take some profit? What will you do if/when price gets to 1.6550? 1.6542?

 

 

Best Wishes,

 

Thales

 

I markd the targets in the previous post.

As far as moving my SL, I would wait for a minor swing point to materialize and then move the SL to the PEAK or the TROUGH of that swing point (for the SHORT and LONG trades respectively)

 

Gabe

[Cory2679 11]

I'm watching the EUR/USD (6E) right now....possibly looking for a break of 1.4962...

 

Looks like I had the right idea...PT at +22.

 

It sure took it's sweet time, though. I wouldn't have held from 5pm-6pm (globex close). Maybe I could have pulled out and re-entered, who knows.

 

NOTE: The reason I didn't take the trade was that it didn't fill until after 2pm EST, and I left my computer at 2. The trade itself was fine, as far as I know.

Edited November 24, 2009 by Cory2679