Reading Charts in Real Time

[Cory2679 11]

Short on EJ...

 

Nice to see it eventually got into gear...even if I wasn't there for the ride.

 

I guess if I was really committed, I could just widen my stop to allow for an increase in spread during news like the FOMC announcement. Still though, I'd probably rather just stick to the sidelines...or, as in this case, I could have waited until after the announcement so I could watch how price reacted to it...I could have still jumped in and caught that move.

 

Just things to think about.

[MidKnight 12]

Hi Cory,

 

Use the demo account as if it is a real account. None of this because it was in demo I traded it like X but in reality I would have done Y. Use it like its real, then there is no question at all that you are not fooling yourself with hindsight postmortems saying a different outcome would have happened if it was real.

 

I'm not trying to be mean here, but I've done exactly what you are doing here and it wasn't helpful to my development....

 

With kind regards,

MK

[Cory2679 11]

Hi Cory,

 

Use the demo account as if it is a real account. None of this because it was in demo I traded it like X but in reality I would have done Y. Use it like its real, then there is no question at all that you are not fooling yourself with hindsight postmortems saying a different outcome would have happened if it was real.

 

I'm not trying to be mean here, but I've done exactly what you are doing here and it wasn't helpful to my development....

 

With kind regards,

MK

 

Hey MK,

 

Thanks for the advice. Although for the record, I'm not demo trading for the sake of demo trading...I'm only demo trading to get used to the platform. Rather than demo trading for the sake of demo trading, I've decided to begin live with a $250 account. Real money, but real money that if I lose won't affect my life...I feel like plain demo trading could potentially do me more harm than good (for the reasons you point out)!...hence my $250 account decision.

 

I'm not going live until the very beginning of January...it's just not the best market conditions right now, and it gives me time just to watch the markets and get 100% comfortable with the platform and how to deal with the spread (plus it'd be one more account that I have to worry about come tax time---I've never done trading taxes before...this is my first year with any trading $$ to account for).

 

As far as hindsight, the trade I just posted was a real-time post I posted on here this morning. I was caught off guard today because I had forgotten about the FOMC announcement (as a general rule, I usually don't trade FOMC days), but I left the trade in to see how FXCM would react/how the spreads would behave/what would happen with the trade at the time of the announcement (to basically "test" FXCM...nothing to do with what I would have or would not have done if it were live)...and I was thinking aloud of how I might handle major economic news next time (creating a "rule," if you will). That's all...

 

And don't worry, I don't take it as you being mean...I appreciate the words of advice!

 

NOTE: Just to be clear, the question mark on my chart did not mean "which way will it go?" I really only meant it to mean something like "maybe it will do what I've outlined?"...the question mark was probably just confusing... I was anticipating price to fall (hence the down arrow).

 

-Cory

Edited December 17, 2009 by Cory2679
clarification & NOTE

[TradeRunner 10]

Yesterday's trading and my first positive day:

[traderbrazil 10]

Hi traderbrazil,

 

One of the problems with this approach as I have presented it here, at least over the last month or so, is that many have become focused on the trees, and as a result lose sight of the forest.

 

I see several higher lows prior to your entry. You just are looking for them somewhere else.

 

Best Wishes,

 

Thales

 

Thanks Thales!

 

I see what you mean...

I'm trying to micro trade the setup instead of looking at the bigger picture.

 

Once again, thank you for the feedback!

[TradeRunner 10]

Let me restate that: It may be better to say "time frame is secondary to what price itself is doing." I'll leave it at that for now while I try to figure out a more elaborate way to explain what I think I am trying to say.

 

Best Wishes,

 

Thales

 

Thanks Thales I think I understand.

 

My second part to the question is do you always consider how a candle is formed for every candle or just candles that are in interesting areas?

[thalestrader 14]

Thanks Thales I think I understand.

 

My second part to the question is do you always consider how a candle is formed for every candle or just candles that are in interesting areas?

 

I'm concerned with what price has done, and in what order it has done it, I am not concerned with each and every or any particular candle. I would caution against letting this turn into another "can't see the forest for the trees" moment. It is bad enough I have everyone looking candle to candle looking for two-three bar reversals and mising the big trend breakouts. I do not want anyone thinking they should see something significant in each and every candle.

 

I am always more attentive when price has declined to an area of potential support or rallied to an area of postential resistance.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi folks,

 

I just bought the ES and I'll risk 3 points or so here for the chance to make 15 on the day.

 

Best Wishes,

 

Thales

 

Update: Well, that went well, and by "well," I mean poorly

Edited December 17, 2009 by thalestrader

[forrestang 10]

Hi folks,

 

I just bought the ES and I'll risk 3 points or so here for the chance to make 15 on the day.

 

Best Wishes,

 

Thales

 

Update: Well, that went well, and by "well," I mean poorly

 

I shorted 95.50 After breaking through that 15 min 2Test you can see on your chart, got up to 2points in unrealized P&L before being taken out at BE. Bleh.

 

----Addition(10:27EST)--------

Adding some NQ observations right now. Attaching current 5min activity(hope it's easy to make sense of), and a S/R chart. We just probed down through support thus far.

 

----Addition(10:51EST)--------

Added another picture of current NQ activity.

 

----Addition(10:56EST)--------

Both NQ and ES putting in HLs on 15min after probing through support. See next two pictures.

Edited December 17, 2009 by forrestang

[thalestrader 14]

Yesterday's trading and my first positive day:

 

Good work, TradeRunner, thank you for sharing your efforts with us. Here is my work up of yesterday's 6E. Look at the comments I made and let me now what questions you have.

 

I hope you keep this up for a week or two or three. I think you will find that you will gain a great skill in a short period of time. I get so many PM's from folks who tell me they've been trading for 3 years, 5 years, 7 years, and still they are struggling. Yet few take my suggestion and just commit a few weeks to observing price and marking off highs and lows. You would think after years of struggle, they could muster a few weeks of concentration to try and right the ship.

 

It reminds me of Ed Seykota's Market Wizards interview where he says that "everybody gets what they want out of the markets."

 

Indeed they do. What frustrates folks is that what they actually want and what they think they want are usually two different things.

 

If you keep posting your 6E, I'll keep posting mine back.

 

Best Wishes,

 

Thales

[Gabe2004 10]

It reminds me of Ed Seykota's Market Wizards interview where he says that "everybody gets what they want out of the markets."

 

Indeed they do. What frustrates folks is that what they actually want and what they think they want are usually two different things.

 

I may have a senior's moment here but I never understood Ed's idea in that sentence.

 

Don't all of us want to succeed in this business/

Sure, some are in it for the thrill of it but those who want to succeed just to overcome a challange (and not the monetary side which is an obvious by product) what about them when they fail?

Did they want to fail?

 

Sorry but i simply don't understand what he wanted to say.

 

Gabe

[forrestang 10]

Here is a look at the G/U currently.

 

Ignore the red line stop for now, it was placed originally with the 30pt target and 15 point stop.

[Cory2679 11]

I may have a senior's moment here but I never understood Ed's idea in that sentence.

 

Don't all of us want to succeed in this business/

Sure, some are in it for the thrill of it but those who want to succeed just to overcome a challange (and not the monetary side which is an obvious by product) what about them when they fail?

Did they want to fail?

 

Sorry but i simply don't understand what he wanted to say.

 

Gabe

 

From my understanding, he believed that no, not everyone truly wants to succeed in this business...deep down. He believed there was some sort of subconscious desire not to succeed...or not to do as well as you think you want to do.

 

He gave an example of a lady who was dying, and out of pity she basically had control over her friends and family. When offered a "cure," she made excuses and finally outright refused the cure...the pity she received was actually more valuable than her own life.

 

So basically, there's something that you get from failing that you truly deep down want. Maybe it's pity or something else.

 

Honestly, in my opinion, I thought he took it a little to the extreme, but who am I to judge compared to him?? It's an interesting idea, though.

 

-Cory

Edited December 17, 2009 by Cory2679
clarification

[Gabe2004 10]

From my understanding, he believed that no, not everyone truly wants to succeed in this business...deep down. He believed there was some sort of subconscious desire not to succeed...or not to do as well as you think you want to do.

 

He gave an example of a lady who was dying, and out of pity she basically had control over her friends and family. When offered a "cure," she made excuses and finally outright refused the cure...the pity she received was actually more valuable than her own life.

 

So basically, there's something that you get from failing that you truly deep down want. Maybe it's pity or something else.

 

Honestly, in my opinion, I thought he took it a little to the extreme, but who am I to judge compared to him?? It's an interesting idea, though.

 

-Cory

 

So the above is about a mentally ill person.

Are most wannabe traders mentally ill?

 

Is it possible to want to succeed in trading but fail misarably for some subconcsious (spelling??) reason?

 

Gabe

[Cory2679 11]

So the above is about a mentally ill person.

Are most wannabe traders mentally ill?

 

Is it possible to want to succeed in trading but fail misarably for some subconcsious (spelling??) reason?

 

Gabe

 

I've attached the sentence in context so you can get a better idea of what he's talking about (I figure I certainly can't explain it any better than he can! ).

[forrestang 10]

Here is a look at the G/U currently.

 

Ignore the red line stop for now, it was placed originally with the 30pt target and 15 point stop.

 

Stop at BE, been in this for a while and am pulling the 'cord.' And I am sure I will now be stopped.

[thalestrader 14]

Stop at BE, been in this for a while and am pulling the 'cord.' And I am sure I will now be stopped.

 

I'm in with you Forrest. My entry was 1.6255 (6B), and I'm only looking for 30-5 ticks myself. I've got a limit at 90 but I'll hit the flatten button at 85 if I don't like the DOM.

 

Best Wishes,

 

Thales

[Cory2679 11]

<<<<post deleted>>>>

Edited December 17, 2009 by Cory2679

[brownsfan019 17]

I see some possible resistance here on the 6B. I'd be looking for new highs to come in fairly soon to remain in this one. Just my

[thalestrader 14]

I see the validity of this exercise...to get someone's eyes trained to "see" the highs and lows, am I right?

 

I only ever meant this to be an exercise to train folks to both see and think of price in terms of trend, trend direction, trend reversal, and I would add trendlessness (chop zone).

 

Here is the quote exactly:

 

Here is a suggestion...: Why not take a week, and watch a 15 minute chart of the EURJPY or the EURUSD or the 6J or the 6E, and just focus on what happens if you bought the break up of every low-high-higher low-higher high pivot sequence and sold short every high-low-lower high-lower low pivot sequence.

 

Just mark off the high and low pivots, and make it mechanical if you'd like: Buy stop above a high, with an arbitrary 15 or 20 tick stop loss, and a 30 tick Profit target. Just go ahead and see how you do. Paper trade it - as I stated elsewhere, paper trading is marginally useful, and here is an example of where it can be useful.

 

If you do this for a week, you will learn to read price action in a way that will put you solidly on track to where you want to be. One week. You should mark each high (H) and each low (L) and when the market turns, you should have an (H) pivot, followed by an (L) pivot, followed by a Lower High pivot (LH) followed by a Lower low (LL). If price makes a high and pulls back to a low and then rallies to the exact high tick of the previous high and then begins to pull back, consider that a Lower High unless it is bettered (and vice versa for two equal lows).... Try this for one week. Post your chart at the end of the day here and if you have any questions I'll help you. I'll help anyone here who will put in the effort and post his or her chart (I prefer not to do this through PM as this should be individual efforts that benefit all of us as a group). I would bet that anyone who does this for one week will, after that week, have much more confidence in his or her ability to watch price and determine whether to buy, sell, or wait.

 

S/R is primary. But, S/R not only exists at various levels, but it is in the process of being established at new levels. The H-L-LH is the first indication that price is finding resistance, and the L-H-HL is the first indication that price might be finding support. So donot think that the 1-2-3's are somehow separate from S/R considerations, as they are themselves indications of S/R, at least the potential for S/R.

 

I've never backtested the 30PT15SL on the 6E, and I no longer have the interest or inclination to do such things. But perhaps Kiwi, our master of the Round Table, would ragale us with a tale of whether or not such a crusade would bring the would-be Knight wealth and glory, or would it be but a fool's errand.

 

At any rate, I only meant it as an exercise to be paper traded. If it turns out that someone can make a living doing it, then that would be a bonus for having paid attention and taken me up on my suggestion.

 

Best Wishes,

 

Thales

 

PS Cory, if things are working for you as you are doing them, my suggestion would be do not change anything. Do not let yourself become confused.

[Cory2679 11]

Cory, if things are working for you as you are doing them, my suggestion would be do not change anything. Do not let yourself become confused.

 

Thanks for the reply, Thales. I had "deleted" the post before you replied because of what you just said...about my getting confused. I decided to step away, not to let myself get off track and confused, and just focus on what I've been doing that has seemed to be working (that I have indeed learned from this thread!).

 

NOTE: I'm always second guessing myself, especially because even though it seems to be "working," technically it's not unless I'm trading live and I've made consistent money with it. My posts on here and demo trading don't really "count" as far as whether what I'm doing works or not. But, I'll be trading on a live account again soon enough...

Edited December 17, 2009 by Cory2679
note

[thalestrader 14]

I see some possible resistance here on the 6B. I'd be looking for new highs to come in fairly soon to remain in this one. Just my

 

I did close 1/2 my contracts at 1.6265 for +10. I have a +5 stop and my +35 limit order in and I'll just let either the clock or the market decide (I won't hold past globex close).

 

Well, as I was typing this the second batch of contracts closed at +5. I'm done.

 

Best Wishes,

 

Thales

[Kiwi 16]

I wont test that one thales ... too busy tilting at other windmills.

 

On the subject of paper trading. In my opinion the "paper trading is useless because your balls are not on the line" arguments are complete and utter ...

 

It is very important to paper trade. If one can't make something work for oneself in paper trading (forward testing) then one won't make it with money and real broker/user issues. Most people seem to put money on the line without testing an idea first and then frustrate themselves by adding their money/psych issues on top of interpretation and execution issues. It just doesn't make sense however I guess I should thank them for the donations they make in their haste to waste.

 

First year med students don't do operations. They inject oranges not people (I know, there are a few dead oranges and a lot of different syringes around my house at present). Invest in the time required to do your testing and training!

 

One of the things to do in the later stage of paper trading is to make it feel as real as possible. Say to yourself ... this is xx real dollars and try to imagine it. Similarly when you win or lose.

[thalestrader 14]

Well, I never said it was completely and utterly useless. It does as its place. But, once you have the mechanics of when you're going to be in the market and how you are going to get out in place, there is no substitute for trading with the very real prospect of gain and loss, no matter how small one is trading.

 

That is why I like the micro forex accounts (who knew I'd find it as useful as it is). Such accounts let the new trader (or even a not so new trader who simply wants to try some ideas out) an opportunity to do so in a real market with real money under the most adverse conditions imaginable, i.e. bucket shop broker.

 

 

Best Wishes,

 

Thales

 

Thales

[TradeRunner 10]

I feel lucky to come away with another positive day and I'm only $50 away from BE on the week. My third trade was a gamble and is born out of wanting to come away with more than 30 ticks. I could fix this by trading more than one contract but I'll keep it simple for now.

 

However, I need to change my stop loss strategy because I have found it frustrating to watch price almost hit my TP and then watch it reverse and take a full SL. This is causing me to doubt some of my entries - sometimes I just don't feel that it’s going to move 30 ticks and therefore that will mean a 15 tick loss. I don't think I would be able to follow a fixed SL strategy if I had real money on the line.

 

I’m going to change it to the following:

 

1. Move SL to BE when price ticks past 15 ticks.

2. Stop and reverse if the price action dictates it.

 

So my exit options are -15, 0, +30, -14 to +29. I didn't follow this rule today but I did manage my SL to reduce my losses.

 

Thales thanks for your time and feedback. It's late I'll respond to you last reply tomorrow.