Reading Charts in Real Time

[thalestrader 14]

Sure doesn't look like a market that is in any hurry to go down.

 

Best Wishes,

 

Thales

[jonbig04 10]

Hi Jon,

 

Well that is one fast and thin chart, but yes, that is what we are doing. The question for you is how do you manage the trade? Are you using profit targets? Trailing stop?

 

Best Wishes,

 

Thales

 

Had I been in the trade I would have been out BE right now at 1109.5. What I am trying to do is use your method as confluence. A few months ago, I would have just placed a limit short at 1111 and watched and waited. Coincidentally, this would have worked out this time, but I found I needed more confluence than just simply short/buying major areas. That is when I began to look a t the 5 sec chart for various things.

 

My reasons for this trade would have been that 1111 is major resistance + the LH and LL=sell short. But FWIW I would have been knocked out BE as my target of 1099 was never hit.

[Don4 10]

You might be right, but unless it breaks 1.5142 well I just looked over and it did.

[thalestrader 14]

Hi MidK,

 

The more I think about this the more perplexed I am.

 

7 losses in a row

 

If you are still with us, would you consider posting the charts of your seven trades so that we might be able to better determine where the problem is?

 

I was thinking that perhaps you are not playing when the market is swinging. For example, here is the current EU. It looks like a proper opportunity, and yet I do ot know if I'd want to trade it, as there is no volatility in the market right now.

 

Best Wishes,

 

Thales

[MidKnight 12]

Sounds as though you should stop trading this approach and try to identify why you are having these difficulties. Seven losses in a row is a tough stretch.

 

I didn't see your EURUSD post until after the fact. For what its worth, except for Sundays, it is probably best not to place orders between the NY close and the Tokyo open.

 

Hi Thales,

 

You are telling me that you do not see the entry on my post here?

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-170.html#post81833

 

You are filtering out these trades in some way that you must be unaware of. These entries that we talk about, the H-L-LH type thing is nothing more than entry trigger with perhaps a minor execution edge. It is not a complete setup IMHO. Taking every one of these trades will put one in the net loser category unless there is something else that completes this entry trigger as a setup. For you Thales, that comes from a rich integration of context. And like so many great traders it is highly subjective and the trader is unaware of all the inputs into what a setup really means to them. Such is the sign of the greats, and such is the sign of something difficult to replicate by others - especially without face to face hands on experience.

 

I hope to see you back here, MidK. Though your frustration is evident, and I understand that you may already have moved on. In either case, I wish you well and much success.

 

I'm still around here, but I don't see the point in posting my charts with this entry trigger anymore as it has become beyond an embarrassment. Thanks for the kind wishes, I wish you and your family the same. And because I'm a bit of a hippie at heart, I'll throw in some flower-power, peace, love, and happiness too

 

With kind regards,

MK

[jonbig04 10]

Hi Thales,

 

You are telling me that you do not see the entry on my post here?

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-170.html#post81833

 

You are filtering out these trades in some way that you must be unaware of. These entries that we talk about, the H-L-LH type thing is nothing more than entry trigger with perhaps a minor execution edge. It is not a complete setup IMHO. Taking every one of these trades will put one in the net loser category unless there is something else that completes this entry trigger as a setup. For you Thales, that comes from a rich integration of context. And like so many great traders it is highly subjective and the trader is unaware of all the inputs into what a setup really means to them. Such is the sign of the greats, and such is the sign of something difficult to replicate by others - especially without face to face hands on experience.

 

 

 

I'm still around here, but I don't see the point in posting my charts with this entry trigger anymore as it has become beyond an embarrassment. Thanks for the kind wishes, I wish you and your family the same. And because I'm a bit of a hippie at heart, I'll throw in some flower-power, peace, love, and happiness too

 

With kind regards,

MK

 

 

If it's any consolation MK, November has been my worst month ever. Been getting owned left and right. Been doing decently the last few months, but this month was a blood bath. Granted I can make it all up with 1 good trade, but still.

 

To me it all depends on how you see it. If you simply followed that plan to a T it may be difficult. Seems to me you have to take into account where price is in the larger scheme of things and the LH, LL or HH, HL have to be significant "full moves"-which seems difficult to quantify. But thats where I think Thales saying "look with your eyes, not your head" comes in.

 

The chart I posted today may be an example, even though its only a 30 second chart there is a fairly clean drop from the major resistance level, then price tried to retest the high but is quickly rejected. Even looking at the candle-it closed way off its high, making a lower-high. Then it sat there, and sat there, and sat there at the low tick before breaking down into a lower low.

 

I personally am trying to determine what time frame to apply it. To big and you could end up missing moves, too small and you get whipsawed to death.

[MidKnight 12]

Hi MidK,

 

The more I think about this the more perplexed I am.

 

 

 

If you are still with us, would you consider posting the charts of your seven trades so that we might be able to better determine where the problem is?

 

I was thinking that perhaps you are not playing when the market is swinging. For example, here is the current EU. It looks like a proper opportunity, and yet I do ot know if I'd want to trade it, as there is no volatility in the market right now.

 

Best Wishes,

 

Thales

 

Hi Thales,

 

I can dig them up if you think its beneficial. Will take a little time, but I'll do that after lunch.

[MidKnight 12]

I personally am trying to determine what time frame to apply it. To big and you could end up missing moves, too small and you get whipsawed to death.

 

Hi John,

 

You won't find an ideal time frame unfortunately. As volatility changes, so does the ideal time frame. Increasing volatility has the effect of speeding up time and a volatility reduction has the opposite effect. The joy of trading, nothing is static.

 

With kind regards,

MK

[thalestrader 14]

I can dig them up if you think its beneficial. Will take a little time, but I'll do that after lunch.

 

Hi MidK,

 

No hurry here, as tomorrow is Thanksgiving and I will likely not have much time between then and Saturday.

 

It is up to you. I'm willing to try and help you. But I would need to see the trades if I am to be of any help.

 

Best Wishes,

 

Thales

[Don4 10]

Ok Thales, Since I have never had any luck with stops. (But bleeding me dry) Could you walk me through it how you would do it? I believe there is many here that would appreciate it. Not necessarily for this system but with there own. (Its a demo)

 

Thanks,

Don

[thalestrader 14]

Of course I saw that post, I only said that I did not see your post until after the fact. You posted the chart with your trade intentions at 6:29 PM my time, and if you look at my first post after that, I did not get back here until 8:17 PM, almost two hours after your post, and an 62 minutes after you had already posted the trade was triggered and stopped for a loss.

 

 

You are telling me that you do not see the entry on my post here?

http://www.traderslaboratory.com/forums/208/reading-charts-real-time-6151-170.html#post81833

 

 

Best Wishes,

 

Thales

[Don4 10]

So, I believe the pullback will occur somewhere in this circle. Or would you have already been stopped out?

 

Thanks,

Don

[thalestrader 14]

So, I believe the pullback will occur somewhere in this circle. Or would you have already been stopped out?[ATTACH]15869[/ATTACH]

 

Thanks,

Don

 

I'd be out at break even, and waiting for the next opportunity.

 

Best Wishes,

 

Thales

[jonbig04 10]

Hi John,

 

You won't find an ideal time frame unfortunately. As volatility changes, so does the ideal time frame. Increasing volatility has the effect of speeding up time and a volatility reduction has the opposite effect. The joy of trading, nothing is static.

 

With kind regards,

MK

 

That's true. But I'm sure I will find one that works well with my targets and stops, which may have to be adjusted with a huge increase/decrease in volatility.

[thalestrader 14]

Ok Thales, Since I have never had any luck with stops. (But bleeding me dry) Could you walk me through it how you would do it? I believe there is many here that would appreciate it. Not necessarily for this system but with there own. (Its a demo)

 

My hard stops are nothing mysterious. The initial stop that is attached to my entry order is one tick above/below the last reaction prior to my entry trigger. I always have at least one profit target, usually two, sometimes three. I will set my OCO limit order or bracket order for my second profit target. Once my entry is triggerd, I manually enter my firt profit target imit order.

 

Before the trade is triggered, I have a level at which if price moves that far in my favor, I will move my stop to break even. An old one eyed trader from Texas I know used to call it "the trend killer level." It is a level at which there is potential support/resistance to kill the move in your favor. (Take a look at the attached chart. The dotted Magenta line is my "trend killer level" where if price touches it, I want to protect myself form outright reversal against me with a break even stop. I extended the line so you can see from where it came).

 

Some trades, there is nothing between my entry and my first profit target. In that case, there is no trend killer level, and I will simply watch price as it makes its way toward my first profit target. I will move to break even once price moves 10-20 ticks in my favor. Each trade is different, and it depends upon how price is moving.

 

Once my first profit target is filled, I will definitely have a break even stop on the remaining position, and I will typically start to trail it with a 5 tick move for every additional 5 ticks in my favor.

 

This works for me. You have to find what works for you. All I know is that I hold it as no badge of honor to hold a 10 or 20 tick profit into a loss. I see folks all over the place trying to squeak 2-4 ticks/trade out of the ES. Why should I feel bad to take 10 ticks of a one time 20 tick profit on the 6E? Why would I want to allow an open trade equity of 20+ ticks roll back to a -10 tick loss? For what?

 

I know when I am playing for 100 ticks. I know when I am playing for 20 ticks. I am not going to get upset if I take 10 ticks of a 20 tick move that the runs for 100+ ticks without me. I am not going to get upset if I am playing for 100 ticks, and I get stopped out with +30 if price is going to go all the way back to -20 before rolling for +100.

 

You have to take what the market gives you, and get out with what you can.

 

Best Wishes,

 

Thales

[MidKnight 12]

Hi MidK,

 

No hurry here, as tomorrow is Thanksgiving and I will likely not have much time between then and Saturday.

 

It is up to you. I'm willing to try and help you. But I would need to see the trades if I am to be of any help.

 

Best Wishes,

 

Thales

 

Sure, at your leisure.

 

With kind regards,

MK

[thalestrader 14]

Sure, at your leisure.

 

 

No problem. I'll take them one at a time as I have time.

 

First, a couple of general remarks. I would suggest that anyone trying to learn to trade this approach pick one market and study that market. If you are going to use spot forex, I would pick either the EU, GU, EJ, or UJ. The GJ would not be among those I'd suggest to start exploring this approach. For currency futures, I suggest the 6B, 6E, 6J. I also see you have a USDCAD trade. I would only use this approach ona 15 minute USDCAD or 6C if I were looking for a favorable entry based on a larger opportuntiy presenting itself on the 4 hour or higher time frame. My daughter really came into her own when she basically fixed herself on the EJ.

 

First, your GJ short from the Sunday open. I have a couple of questions on the chart for you. Basically, I see two long entries. If you recall, we had gotten long of the EJ on Sunday. I see what you did, but I do not see it as an obvious short opportuntiy.

 

Look at the questions on the chart and let me know what you think.

 

Best Wishes,

 

Thales

[MidKnight 12]

Hiya Thales,

 

As I saw it at that time, this was a H-L-LH into the the late resistance from Friday. Based on your questions, I have one for you of which I will ask after answering yours.

 

1) No, I don't see why you were so aggressive on the first long. Even after you posted it I remember saying to myself that I thought that was an aggressive entry and I didn't really see it. At the time of your first entry, yes, it could have been a false break below Friday's low but I still saw it as an aggressive stance (which is fine of course!). The second one I could see as taking, maybe....but it isn't what I would have called an obvious trade, especially with the R from late Friday just overhead. If I only noticed the second one and wasn't in from somewhere near the assumed false break after the open, then I would have felt too late getting on the long side as this would have been in the middle of a fairly tight range (tight for GJ) and would have preferred to play the edges of that range. The first obvious trade I saw based on the type of trades posted in this thread came at the short that I took.

 

2) I can't answer this question properly because my hit rate with this style is so terribly low that most of my entries are losers. Because of that, no, I wouldn't have reversed. Because of the lack of skill, it permeates into the rest of the trade management encompassing everything from moving stops, pulling the rip cord, exiting close enough to PT etc. I'm sure you can see why - with such a low percent of winning trades (winning decisions), each decision made has a better chance of being the opposite to what is done.

 

Now my question to you is why were you not concerned about the R overhead - if you were concerned, then you would have been looking for any reason to get short. But you don't seem to be and are even saying it isn't obvious. I've seen you post countless trade ideas with less of a reason to enter (like your two longs right here). Obviously as it turned out, your ideas were right and mine was wrong, but I just can't see why.

[thalestrader 14]

Hi Folks,

 

Hundreds of ticks available if I'm right about this short opportunity on the GU.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hundreds of ticks available if I'm right about this short opportunity on the GU.

 

-40 initial stop for a +130 PT1 ... I wasn't going to trade, and the market will probably punish me for this, but I'm in at 1.6688 short for a 1.6558 PT1 and 1.6458 PT2.

 

Best Wishes,

 

Thales

[thalestrader 14]

Now my question to you is why were you not concerned about the R overhead - if you were concerned, then you would have been looking for any reason to get short. But you don't seem to be and are even saying it isn't obvious. I've seen you post countless trade ideas with less of a reason to enter (like your two longs right here). Obviously as it turned out, your ideas were right and mine was wrong, but I just can't see why.

 

Good questions, and I'll answer you tomorrow or Friday or Saturday. I'm too tired to put my thoughts together right now.

 

Best Wishes,

 

Thales

[jonbig04 10]

short.

 

[Cory2679 11]

my hit rate with this style is so terribly low that most of my entries are losers.

 

MidK (or anyone else, for that matter),

 

I'm just a relatively new trader, far from a guru of any sort, so I'm hesitant to give any type of advice, so just take it for what it's worth...

 

It just surprises me when you say your hit rate is so low, because I've only been doing this for a couple weeks and I see so many winning opportunities and I don't know how you're missing them...so my advice would be...just take a chart, say the 15 minute EURUSD, load 100 days of data, and just scroll back, hour by hour, and witness how price behaves and the many opportunities it has presented over the last several weeks. You won't have to scroll far to see the opportunities.

 

Maybe it will sort of get you in the right mindset and perspective to see the opportunities.

 

I'd advise looking at a range chart too, perhaps the 13 range. I just think it gives you a slightly different perspective on the same information. Sometimes it can make things clearer. Your choice, though.

 

I just think that SEEING the past opportunities might help in identifying real-time opportunities. While dissecting each individual trade and scenario can certainly be beneficial, I don't think you're going to find success with this approach until you basically develop an "eye" for or a "feel" for it, to some extent.

 

I know Thales has talked about PICTURES being key in teaching his daughter.

 

Anyways, like I said, I'm no expert so just take what I say with a grain of salt.

 

No more trading for me until Monday (hopefully I'll knock out some good LIVE trades next week!). Have a great Thanksgiving everyone!! (EDIT: everyone in the US at least!)

 

Cory

Edited November 26, 2009 by Cory2679

[MidKnight 12]

It just surprises me when you say your hit rate is so low, because I've only been doing this for a couple weeks and I see so many winning opportunities and I don't know how you're missing them...so my advice would be...just take a chart, say the 15 minute EURUSD, load 100 days of data, and just scroll back, hour by hour, and witness how price behaves and the many opportunities it has presented over the last several weeks. You won't have to scroll far to see the opportunities.

 

Maybe it will sort of get you in the right mindset and perspective to see the opportunities.

 

I'd advise looking at a range chart too, perhaps the 13 range. I just think it gives you a slightly different perspective on the same information. Sometimes it can make things clearer. Your choice, though.

 

I just think that SEEING the past opportunities might help in identifying real-time opportunities. While dissecting each individual trade and scenario can certainly be beneficial, I don't think you're going to find success with this approach until you basically develop an "eye" for or a "feel" for it, to some extent.

 

Hi Cory,

 

Thanks for taking the time to comment. I must admit to being a little offended in reading it though (but I know that wasn't your intent). You are suggesting that I haven't or do not study the historical charts - of course I have been. The last 4 weeks exploring this have been no different than all my prior weeks since trading. Exploring various ideas (for the last 4 weeks, strictly this Thales stuff) through historical study of some sort and also exposing myself to real-time markets. I'd easily do a 10 hour day during the market week and a good 4-6 hours each day over the weekend.

 

Yeah sure, I can see lots of winning opportunities as well when I look at historical charts. If that is the case and then the real-time study is showing a massive mismatch that is a strong sign of severe hindsight bias. So far, this has been my experience, and I'm sharing the experience for everyone to see.

 

I was hesitant to post those 7 trades because I know that with hindsight, people will be posting comments like, "c'mon man, that was obviously long, why would you want to go short there?". The comments will likely communicate all the reasons why the trade should not be taken and probably none of the reasons why the trade should have been taken, thus implying the absolute invalidity of the trade idea. I'm not saying you are doing this in your comments, I'm just typing this thought up as an attachment to my reply to you.

 

With kind regards,

MK

[Cory2679 11]

I must admit to being a little offended in reading it though (but I know that wasn't your intent).

 

MidK,

 

I regret the post and I'm terribly sorry for having offended you. I understand what you mean...my bad. I just wasn't thinking.

 

Hopefully some good and maybe even a breakthrough of some sort will come of the analysis of your 7 losing trades. I'm interested to see the correspondence over the next couple days to see what comes of it.

 

I wish you luck!

 

Cory