Reading Charts in Real Time

[ektrader 10]

Hi Corey2679,

 

I just want to add that you seem to be on a good path. The only thing I want to mention is that on charts 2 and 4 you didn't draw any diagonal trend lines where the trend is obvious, and so is the trend break on the EU. (Is'nt that the main focus of Stikky Stock Charts?) Anyway.... I wish you extended luck with your trading.

 

Ektrader

[Kiwi 16]

Hi Cory,

 

Your charts look excellent. Also, I always felt that O'Neil does not give credit enough to Darvas. Isn't O'Neil's CANSLIM nothing more than a formalized version of Darvas's Technofundamentalist approach?

 

Good work, Cory. I think it is an excellent course of action, and it can only help your trading, even if you eventually change course. And it didn't cost you anything other than the price of the books and your own time and effort.

 

I hope it pays you great dividends over the coming weeks, months, and years.

 

Best Wishes,

 

Thales

 

I wonder who Darvas didn't give credit to though Thales.

 

When I read the book I:

- enjoyed it immensely,

- noted the simplicity of style,

- note the pure luck that overcame his lack of discipline,

 

and now, wonder where his source was because he really didn't seem to be the sort of guy who created strategy - more flowed with it. I think O'Neil might be closer to Wyckoff than Darvas but I'd have to go back and read all 3 again to test that thought.

[thalestrader 14]

I wonder who Darvas didn't give credit to though Thales...and now, wonder where his source was because he really didn't seem to be the sort of guy who created strategy - more flowed with it.

 

"Darvas trained for the market just as methodically as he had studied his dancing, read some 200 books on the market and the great speculators, spent eight hours a day until saturated. Two of the books he rereads almost every week: Humphrey Neill's Tape Reading and Market Tactics and G. M. Loeb's The Battle for Investment Survival."

 

One could certainly do worse ... Loeb is among my favorites as well.

 

Best Wishes,

 

Thales

[Kiwi 16]

I must read Loeb then

[Marko23 10]

Hi Folks,

 

Here is a series of charts from another Nat Gas trade, also from 2007. Again, whether you call it a 123 or an ABC, the concept is the same - a low, a high, a higher low, a buy.

 

Best Wishes,

 

Thales

 

Hi Thales,

 

took the example in your 3rd chart to show a useful observation about 123 ( or ABC ).

This may already be known to members of this thread.

 

One can get a projection on a minimum target for the third move:

- draw a line from point 1 to point 3

- draw a parallel to this line of the same length

- move the parallel so that it starts at point 2

 

The endpoint of the parallel is a target which

- has the same distance from point 3 as point 2 has from point 1

- takes the same time to develop as the move from point 1 to point 2.

 

When the target is taken out earlier, a further upmove may follow as seen in your example.

[Marko23 10]

 

... call it a 123 or an ABC ...

 

 

One can repeat the procedure with the next larger degree

[thalestrader 14]

Hi Thales,

 

took the example in your 3rd chart to show a useful observation about 123 ( or ABC ).

This may already be known to members of this thread.

 

One can get a projection on a minimum target for the third move:

- draw a line from point 1 to point 3

- draw a parallel to this line of the same length

- move the parallel so that it starts at point 2

 

The endpoint of the parallel is a target which

- has the same distance from point 3 as point 2 has from point 1

- takes the same time to develop as the move from point 1 to point 2.

 

When the target is taken out earlier, a further upmove may follow as seen in your example.

 

Memories. I learned this from a guy named JR Stevenson who used to pop in and out of various trading rooms way back in the early days of the internet. Last time I heard from him was back in 2006 when he sent me an email telling me that he was preparing to move from South Carolina to Memphis. I haven't heard from him since. All this to say that he is a real person who really trades. His book is available from Trader's Press. I own it myself, and it has a few tricks in it that are worth knowing, including something he calls a "cyclic trend line."

 

Good stuff, Marko. I do not utilize this simple channel technique nearly as often as I probably ought to do.

 

I have always wondered whether the method associated with JH didn't at some point have some interaction with JR (who was an old-timer from way back) given the similarity between JR's method and JH's "tapes, lateral, traverses" as well as certain uses of trendlines one finds in the various JH threads.

 

Best Wishes,

 

Thales

[Marko23 10]

... JR Stevenson... His book is available from Trader's Press. I own it myself, and it has a few tricks in it that are worth knowing, including something he calls a "cyclic trend line." ...

 

Thanks for this hint. I'll take a look at Trader's Press web site.

 

The projection is just another piece of the daily puzzle. I came accross it when I tried to find rules of thumb from the Elliott stuff. One important rule over there is: wave 3 of an impulse cannot be the smallest of waves 1, 3, and 5.

Therefore when I see C > 100%A it may be "3" > 100%"1" and a "5" may be following.

[Marko23 10]

... the method associated with JH ...

 

sorry, I don't have a single clue what or whom you are writing about.

[Cory2679 11]

Also, I always felt that O'Neil does not give credit enough to Darvas. Isn't O'Neil's CANSLIM nothing more than a formalized version of Darvas's Technofundamentalist approach?

 

I just ran across this post of yours from another thread that made me think of what you had said on this thread. Interesting.

 

O'Neil has admitted to various inteviewers that it was Darvas's book that inspired his trading and the formulation of his famous CANSLIM approach.

 

-Cory

[thalestrader 14]

The last four weeks or so the weekly Tokyo open as been an opportunity to seel the USD and the Yen and buy just about anything else - gold, oil, stocks, etc and so on.

 

If that practice continues, then the EJ and the EU have some clear buy points. If not, and instead we see USD and YEN buying and traders start selling everything else, then a break and hold of last weeks lows should be clear "starter's gun for some downside targets. The EU, should it break last week's 1.458x low and hold below it, should have a go at 1.4440 and down to 1.4325 (with some possible fib support at 1.4387) before any real buying might materialize. By the way, if either of these trigger, I would not let the trade run clear to the other side of the current trading ranges befoe pulling the plug.

 

At any rate, this may be an interesting few days (perhaps the last interesting days) before 2010. Don't forget there is a two day FOMC meeting. Often times this means if you want to trade any kind of short term moves, you had better do it in Tokyo, Frankfurt, or London, because the NY traders seem to freeze and pucker shut at the very thought of the FED crew sitting and sipping cappuccinos.

 

Best Wishes,

 

Thales

[thalestrader 14]

Current EURUSD

 

Best Wishes,

 

Thales

Edited December 14, 2009 by thalestrader

[thalestrader 14]

Current EURUSD

 

Rip cord pulled, and awaiting further instructions - need a break of last week's low to go short or a new high to re-enter long.

 

Best Wishes,

 

Thales

[thalestrader 14]

a break and hold of last weeks lows should be clear "starter's gun for some downside targets.

 

Sorry for the late post, but I'm watching the Eagles trying as hard as they can to snatch defeat from the jaws of victory against the Giants.

 

EJ has been a nice successive short. Just keep selling more and more until PT is hit.

 

Best Wishes,

 

Thales

Edited December 14, 2009 by thalestrader

[thalestrader 14]

Current look of the EURUSD. If that last low holds then something big and bullish may be in the works.

 

Best Wishes,

 

Thales

[Don4 10]

Thales so you would have entered around here on the eu. Did I hear you right about the last trade. Keep selling more and more(on the ej) So you wouldnt be just scaling out but you would be scaling in too! Please correct me if I am wrong.

 

 

 

Thanks

Don

[thalestrader 14]

Current look of the EURUSD. If that last low holds then something big and bullish may be in the works.

 

That kind of looks big and bullish ...

 

Best Wishes,

 

Thales

[Gabe2004 10]

Looks like there was an early leak.

 

Gabe

[thalestrader 14]

Thales so you would have entered around here on the eu. Did I hear you right about the last trade. Keep selling more and more(on the ej) So you wouldnt be just scaling out but you would be scaling in too! Please correct me if I am wrong.

 

Thanks

Don

 

Hi Don,

 

Sorry, I didn't see your post as I am 90% focused on the Eagles game right now.

 

Sure, that looks good to buy the EU. I see Gabe also posted about a leak. I don't know what leaked, but at any rate, that would have been a good buy point for me but I wouldn't let it retrace too much below my buy point before I'd give up on it, but that's me.

 

As far as the EJ, it isn't really scaling in, as that implies a partial position at various levels to accumulate a full position. The way I look at it is like this: If I am short and I have a profit target at price level X, and I see nothing to make me think a bounce is anything more than a brief respite before the decline continues, then why not add to the position if I have a break even stop on the exiting position, and if a reasonable stop level on the new position is within our predefined risk levels, then why not add? If you have confidence in your entry and your targets, then show it, right?

 

At any rate, I had three shorts, and all three were stopped out at the break even level of the last entry.

 

Best Wishes,

 

Thales

[Cory2679 11]

<<<<post deleted>>>>

Edited December 14, 2009 by Cory2679
made a mistake

[BlowFish 10]

Memories. I learned this from a guy named JR Stevenson who used to pop in and out of various trading rooms way back in the early days of the internet. Last time I heard from him was back in 2006 when he sent me an email telling me that he was preparing to move from South Carolina to Memphis. I haven't heard from him since. All this to say that he is a real person who really trades. His book is available from Trader's Press. I own it myself, and it has a few tricks in it that are worth knowing, including something he calls a "cyclic trend line."

 

 

'Baldy' (JR) hung out for a while fairly recently (18 months ago?) in a trading room called Sanuk. I seem to remember him having some health issues a while back. I hope he is OK.

[Gabe2004 10]

This is off topic but does anyone know of a timer for Ninjatrader that will sound an alarm 10 seconds before the end of the current bar?

 

Thanks

 

Gabe

[Tams 20]

This is off topic but does anyone know of a timer for Ninjatrader that will sound an alarm 10 seconds before the end of the current bar?

 

Thanks

 

Gabe

 

 

you know it is OT... why don't you start a new thread ?

 

have you tried the search button !?!?

[traderbrazil 10]

Hi Thales,

 

Good afternoon!

 

I really like the simplicity of your method but sometimes I struggle to find the relevant swings. If you take a look at the attached chart, could you please let me know if you would consider the dotted lines to be valid breaks or if you wait for the "larger" swing area to break to place an order...

 

Many thanks for your help!!!

Leandro

[Cory2679 11]

I'm watching the EJ this week...here's an annotated chart.

 

EDIT: The more I look at the PA for that first "setup" the more I think it may have been a break-even effort or just locking in some small profit. I doubt after that second attempt to touch profit I would have held on all the way back past BE. Also, on the short of the current PA, I may be inclined to take it with a tight stop...price would have to present a natural stop level that made the R:R more desirable.

 

We'll see what happens! I'm not trading this week...just watching...

 

EDIT2: I added a second chart with another possibility for a short...

 

-Cory

Edited December 14, 2009 by Cory2679