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thalestrader

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Need to wait and see. GBPUSD finally getting a bounce at that support level. A rally back to last weeks low before a break and hold of the 1.6200-1.6230 would be a preferred scenario.

 

My currency trading friend sent me sent me a chart with an edited fib expansion tool to show various target levels. I liked it so much I decided to copy it and use it here for the short on the weekly GBPUSD. Again, I am a very unoriginal trader.

 

Best Wishes,

 

Thales

5aa70f7d88dcd_12-09-2009GBPUSDShort1.thumb.jpg.dc881d39e4361d5de86b7bdb80f6b97c.jpg

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I would have gone to BE if price had printed at 128.89, which is reprsented by the dotted magenta line in the picture. However, I went to break even once price traded to a lower low after the first reaction against the trade.

 

Best Wishes,

 

Thales

 

Many thanks!!!!:thumbs up:

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Sorry i've been absent for awhile gents but i've been fine tuning my method using this logic. I found that using the value chart was getting me a bit too many pars that should be winners. However, I wanted to address the issues that I was facing and what i've done to correct them and then show the trades from this morning using this criteria.

 

Problems:

  • 1. Where to trade (Personally, I find looking for prior S/R as hit or miss as any other filter, except much more complicated and messy.)
  • 2. When is "too late" to get in?
  • 3. When to get out?

 

Solutions:

  • 1a. I used a smoothed CCI (available on this forum) to show extremes in the market. Its just a oscillator but I found it was as reliable as prior S/R but without the confusion of knowing which prior S/R was really in play, etc... and it made my charts clutter free and simple. I know this is where most of you will not agree (and thats fine - S/R works obviously well as you all know) just showing what i'm doing rather than that.
  • 1b. Furthermore, I only use it when there is divergence from swing to swing. It filters out a lot of the mess and while yea it misses some winners I feel that what is left at the end of it all are good opportunities. I have problems overtrading as well and this filter really cuts down on my trades and allows me to focus on only the best opportunities rather than shotgunning at ALL the opportunities.
  • 2a. Then knowing when to get in - I look for a simple rotation pattern. Some of you are good enough to "see" the rotation on swings intrabar and trade off of them. Personally I don't trust myself that much and I needed something a bit more concrete. Which is why you'll see in all of my examples price makes a close lower or higher than the high/low of the previous bar, and then another higher or lower close beyond the prior bar as well to show the HL, LH pattern. You can see this in the dark red or green dots on certain candles on my charts. That way there is no subjectivity in my setups.
  • 2b. I modified the CCI indicator to use a 0.00 midpoint line. If price hasn't triggered an entry off the HL or LH before the CCI crosses the 0 line the trade is null. I miss a few here and there but it seems to be very consistent in getting me in on those opportunities with a clean rotation from one direction to another and at a point on the chart where my stops are small and contained relative to the price action. And it stops me from jumping in on moves that have already played out and have a higher probability of reversal. Smaller stops = less risk, less movement required for pars and targets = better odds in my opinion.
  • 3. Knowing when to hold and fold. Its what we all struggle with. Personally I rather hit singles 4 times than a home run once. Thats just my personality. So I either target a 270% extension using a fib retracement tool off the HL, LH swing or I exit on the first close at +/-100 on the CCI. What I found was this - the moves that were moving perfectly got to my targets prior to me exiting on the CCI - the moves that weren't got me some profit rather than getting me to par and taken out on a backfill.

 

And now that my novel is over... the trades from today. EACH TRADE WAS TAKEN AND EXECUTED EXACTLY FOLLOWING THE STEPS ABOVE.

 

attachment.php?attachmentid=16444&stc=1&d=1260377268

attachment.php?attachmentid=16446&stc=1&d=1260377268

attachment.php?attachmentid=16445&stc=1&d=1260377268

 

The Trades fell as follows:

EC: +13, +7

BP: +4

JY: +7, +3

+400/per overall. Not bad for an hour and a half of work.

 

Now did I knock it out of the park on each trade? Nope. Did I step in a take a good chunk of the middle part of the swing out of each trade. Yup. Thats all I personally can hope to do.

 

Hope this helps you all! Cheers!

pic001.PNG.ca67a450ec79501e7ff0637f98757eae.PNG

pic002.PNG.0cbeaadfcddb2536e9d31b15cc8b3d91.PNG

pic004.PNG.8e592420eb6cbd0f867aa77c0edd75a2.PNG

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I used a smoothed CCI (available on this forum) to show extremes in the market ... I know this is where most of you will not agree (and thats fine - S/R works obviously well as you all know) just showing what i'm doing rather than that.

 

I am here both to teach and to learn from others. I am not trying to create an homogeneous bunch of unthinking Thales-clones.

 

Thank you for sharing your efforts with us. I can only show folks how I have come to apply this approach to my trading. My way will not suit everyone. Your example, daedalus, should help give folks an idea of how they may be able to appropriate a solid price action approach for themselves by using it within a framework with which they are already somewhat comfortable.

 

Thank you for showing us how you are making this work for you. I hope that you will continue to post your charts and trades so others can learn from your example.

 

Best Wishes,

 

Thales

Edited by thalestrader
typos, typos, typos

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^ Completely agree Thales. The story at the end of the day is simple - if people would apply this logic to almost any system or framework they would be doing 10x's as well. I just want to thank you again for starting this thread and keeping it alive. There is so much to learn here regardless of how the end user applies that concept.

 

Its like we mentioned before, when you dig down into most systems out there when you find their winning trades that are huge almost all of them show the HL, LH pattern in them - but the people selling the systems don't take this into account because price is so skewed by the other squiggly lines and bright colors everywhere else on the chart.

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+400/per overall. Not bad for an hour and a half of work.

 

Now did I knock it out of the park on each trade? Nope. Did I step in a take a good chunk of the middle part of the swing out of each trade. Yup. That's all I personally can hope to do.

 

Hope this helps you all! Cheers!

 

Right you are that there is no need to knock it out of the park on each trade, and I think many folks hurt themselves by trying (or hoping) to achieve this very feat. Your post made me curious about what my daughter and I have done since Sunday in our little forex account. Since the Sydney-Tokyo open on Sunday through today, closed trades only, we have made 19 trades. Here is how they break down:

 

19 Trades Total:

 

7 Losses (includes break even trades): 7 losses for a total gross loss of -43.7 pips, or an average loss of -6.24/losing effort. Smallest loss (non-breakeven) -1.7 pips, largest loss -30.1 pips. The 30 pip loser was mine, and my daughter, who is home from school today because of the weather wanted to make sure I took credit for it. She also just reminded me that it should have been -12 (Even I can be stubborn and allow myself to think I'm right and the market is wrong from time to time).

 

12 Wins: 12 wins for +249.20 pips total gross profit, or an average of +20.76 pips/winning effort. Smallest profit +1 pip, largest profit +115.1 pips.

 

Total PnL thus far = +249.20 - 43.7 = +205.50 pips.

 

20.76/6.24 = 3.33R based upon actual closed risk.

 

Cut your losers, let your profits run. And do not let profits turn into losses. Keep taking your swings, and in between the singles, the strike outs, and the bases on balls, you will get the homerun. But, if you try to squeeze home run distance out of every swing, you will strike out a lot, be thrown out more often, and soon find yourself on the bench (afraid to pull the trigger/swing the bat).

 

Best Wishes,

 

Thales

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As an extension of my last post I just wanted to show some examples of different providers and their systems....

 

Now this is one providers examples of some winning trades. Can anyone spot the patterns that turned a lot of these winners into actual winners? I don't know about you but I see a lot of LH and HL in action.

 

8-25-2009%20Beans.png

 

EURFX%2060%20min.png

 

And another provider...

 

CAD.jpg

 

ES2.jpg

 

And one more...

 

img_1240193744_29_lg.jpg

 

img_1240193746_983_lg.jpg

 

Now i'm not trying to throw these guys under the bus... but the fact is this... their methods don't work because of their fancy indicators... these entries work because of the framework behind their signals - the LH and HL's that are blatantly there making their "signals" look so sexy.

 

The point is their signals work because of the underlying price action - not in spite of it.

 

Cheers!

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As an extension of my last post I just wanted to show some examples of different providers and their systems....

 

Now this is one providers examples of some winning trades. Can anyone spot the patterns that turned a lot of these winners into actual winners? I don't know about you but I see a lot of LH and HL in action.

 

8-25-2009%20Beans.png

 

EURFX%2060%20min.png

 

And another provider...

 

CAD.jpg

 

ES2.jpg

 

And one more...

 

img_1240193744_29_lg.jpg

 

img_1240193746_983_lg.jpg

 

Now i'm not trying to throw these guys under the bus... but the fact is this... their methods don't work because of their fancy indicators... these entries work because of the framework behind their signals - the LH and HL's that are blatantly there making their "signals" look so sexy.

 

The point is their signals work because of the underlying price action - not in spite of it.

 

Cheers!

 

I like your charts.

They look happy.

 

Gabe

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Right you are that there is no need to knock it out of the park on each trade, and I think many folks hurt themselves by trying (or hoping) to achieve this very feat. Your post made me curious about what my daughter and I have done since Sunday in our little forex account. Since the Sydney-Tokyo open on Sunday through today, closed trades only, we have made 19 trades. Here is how they break down:

 

19 Trades Total:

 

7 Losses (includes break even trades): 7 losses for a total gross loss of -43.7 pips, or an average loss of -6.24/losing effort. Smallest loss (non-breakeven) -1.7 pips, largest loss -30.1 pips. The 30 pip loser was mine, and my daughter, who is home from school today because of the weather wanted to make sure I took credit for it. She also just reminded me that it should have been -12 (Even I can be stubborn and allow myself to think I'm right and the market is wrong from time to time).

 

12 Wins: 12 wins for +249.20 pips total gross profit, or an average of +20.76 pips/winning effort. Smallest profit +1 pip, largest profit +115.1 pips.

 

Total PnL thus far = +249.20 - 43.7 = +205.50 pips.

 

20.76/6.24 = 3.33R based upon actual closed risk.

 

Cut your losers, let your profits run. And do not let profits turn into losses. Keep taking your swings, and in between the singles, the strike outs, and the bases on balls, you will get the homerun. But, if you try to squeeze home run distance out of every swing, you will strike out a lot, be thrown out more often, and soon find yourself on the bench (afraid to pull the trigger/swing the bat).

 

Best Wishes,

 

Thales

 

 

So if you take off the largest trade you will have 11 trades that made ~135 pips, or an average of 12.3 pips.

I thik that the logical conclusion is that one has to take ALL trades because we will never know which trade will contribute the most to our bottm line.

 

Gabe

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Now that was funny!

 

Thanks for the laugh, Gabe. I hope you and your family doing as well as one could pray for undert he circumstances.

 

Best Wishes,

 

Thales

 

Yes we are doing better.

 

Thanks again to you and everyone else for your support.

 

Gabe

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So if you take off the largest trade you will have 11 trades that made ~135 pips, or an average of 12.3 pips.

I thik that the logical conclusion is that one has to take ALL trades because we will never know which trade will contribute the most to our bottm line.

 

Gabe

 

Puting it another way, one trade out of the wining ones or about 8% accounted for a 50% increase in the average profitability of all the winners combined.

 

Gabe

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So if you take off the largest trade you will have 11 trades that made ~135 pips, or an average of 12.3 pips.

I thik that the logical conclusion is that one has to take ALL trades because we will never know which trade will contribute the most to our bottm line.

 

Gabe

 

Right. And that is a very consistent result for me, no matter if I am trading futres or stocks. Many small wins, many smaller losses, and a few big runners scattered throughout. For November, for example, my stock trades were an average loss of -14.37 cents/share, with an average profit of +53.78 cents/share. But most of my trades were exited between -10 cents and +10 cents, which is fine with me.

 

You do not know which will be the big winner and which will be the big loser and which ones will be among the small wins and smaller losses. I use a trade plan that is all in on entry with 1-3 scale out with profits. I am very aggressive in terms of not letting a 20+ tick winner turn into anything worse than a +5 to 0 trade.

 

Someone who does an all in/all out approach would likely have a lower winning percentage than we do, but he would have an average winning trade that would be substantially larger than we get. Neither is right or wrong.

 

Develop a plan that suits your personality. But keep in mind that while matching your personality, it must also reflect the realities of the marketplace. In other words, just because you want a 125 pip profit target on every trade. You may have the personality that would let you either get sit on your hands until your trade either filled its 125 pip profit or a a -40 pip loss. But, the market is such that you cannot expect to get many +125 tick moves in your favor. Therefore, while the plan may match your personality, it is not at all based upon your observations of how a market works.

 

Best Wishes,

 

Thales

Edited by thalestrader

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Puting it another way, one trade out of the wining ones or about 8% accounted for a 50% increase in the average profitability of all the winners combined.

 

Gabe

 

You can cut it up anyway you wish, Gabe. One of my favorite trading quotes, and I do not know from whom I heard it, is this:

 

"You must let your winners run or they will never pay for your losers."

 

Best Wishes,

 

Thales

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My internet here is crap. I'm moving in a few days though, then it won't be a problem. I'm missing data so the entry chart looks spotty. I will try to reload historical tomorrow so we can more clearly see the entry. For now all i have is this chart. Same trade as last nights BE. Trying again. I will move to BE if/when we make a LL. Target is the S below.

 

attachment.php?attachmentid=16464&stc=1&d=1260422563

12110.png.9b1032af02641b9668b20a3d9468986b.png

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Sounds like you know exactly what the problem is :) Like many things admitting to the problem is the first step. By all means look at a few things to try and find something that resonates with you but at some stage you will need to focus on one thing and really work on that. Siming (or god forbid trading) before then is putting the cart before the horse at best you will simply waste time, at worse you may well pick up bad habits.

 

The advantage of this approach is that it is pretty simple to learn and apply. Of course that will immediately put some people right off it!

 

Staying out of the market is a huge problem for me, so simple is better. At the moment im doing exactly that, sifting through everything I've looked at and simplifying, cutting... focusing down..

This is a really awesome thread by the way guys, thanks for the feed back!

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Here's your short, Gabe.

 

Best Wishes,

 

Thales

 

Gabe, your short would have hit PT1, and the double bottom should have gotten you out with a decent profit on the second half, and some folks may have gone long when the reaction high betwen the two lows was taken out to the upside, even though the second low undercut the first. William O'Neil actually prefers a double bottom where the second lwo undercuts the first but is quickly reversed. Trader Vic calls this a "2B", and his entry would be when price came back above the prior low.

 

Best Wishes,

 

Thales

5aa70f7e4ec80_12-09-2009EJAsiaShort1.thumb.jpg.597fd9702e50d882005a6742c7f71fc0.jpg

5aa70f7e52d72_12-09-2009EJAsiaShort2.thumb.jpg.da85debed0f7d9efd1472c50dfcee0b4.jpg

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Hello all!

 

I took two paper trades this morning...

 

I believe that both setups were valid and although the second trade in hindsight could have been a winner I'm not sure if I should have stayed in it longer...

I guess the part I'm struggling with is when I should move my stops to BE/cut possible losers short versus giving my trades room to breathe.

 

Please take a look at the attached charts and let me know what you think.

 

Many thanks!!!!!!!

5aa70f7e56bf8_shorttrade.gif.8471d567c8108b7b168235115d56191a.gif

5aa70f7e5b67d_longtrade.gif.d7b4c5398bc2773de9a921bedce5d1d3.gif

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Hello all!

 

I took two paper trades this morning...

 

I believe that both setups were valid and although the second trade in hindsight could have been a winner I'm not sure if I should have stayed in it longer...

I guess the part I'm struggling with is when I should move my stops to BE/cut possible losers short versus giving my trades room to breathe.

 

Please take a look at the attached charts and let me know what you think.

 

Many thanks!!!!!!!

 

I would have gone short here.

 

Gabe

TB.png.675b6122cd83fdcf307b2e524cecc063.png

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Thanks for the feedback, Gabe!

 

Agreed, although I was asleep at that time... : )

But wouldn't you have considered my short a valid opportunity?

 

Cheers!

 

No, because the move down was already in progress and the H's and L's were in a widening shape so it would be dicey to enter.

 

Gabe

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No, because the move down was already in progress and the H's and L's were in a widening shape so it would be dicey to enter.

 

Gabe

 

In other words, you would prefer to get in at the beginning of the move after a HL/LH formation and with "shorter candles" (lower volatility) - Is that so?

 

Thanks again!

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