Reading Charts in Real Time

[rigel 10]

Hi Rigel,

 

I trade the 6b using the Cash GBPUSD chart - it is about $6 per tick.

 

The attached chart will illustrate how I determined the target. It is purely a previous support / resistance area.

 

Cheers

 

Thanks to you and thalestrader, actually I should have clarified, I was thinking of Nasdaq futures as here you have the nickname EminiNQtrader. So 1pt =$20 was in reference to that instrument,

If you trade that, do you find liquidity good enough and do you encounter much slippage???

[fxThunder 10]

Thanks to you and thalestrader, actually I should have clarified, I was thinking of Nasdaq futures as here you have the nickname EminiNQtrader. So 1pt =$20 was in reference to that instrument,

If you trade that, do you find liquidity good enough and do you encounter much slippage???

 

Hi Rigel,

 

Liquidity on the NQ is fine. I have however moved from the emini's to forex as I find forex vastly superior to trade.

 

Cheers,

eNQ

Edited January 9, 2010 by fxThunder
typo

[thalestrader 14]

Liquidity on the NQ is fine. I have however moved from the emini's to forex as I find forex vastly superior to trade.

 

Probably a matter of perspective determined by how you wish to trade (what you want from the markets and how you wish to get it). The top chart is the 6B, and to my eyes it offers much more opportunity for the day trader to catch tradable swings, at least over the period shown. However, the NQ moves in a steady, if somewhat choppy fashion from lower right to upper left, making for a very nice swing trade.

 

Had you bough the 6B at the fhigh of the first bar at the far right and held to the close of the last bar at the far left, you would have made 22 ticks. Had you done the smae with the NQ, your profit would have been 189 ticks. Perspective.

 

 

Best Wishes,

 

Thales

Edited January 9, 2010 by thalestrader

[fxThunder 10]

Hi imorgan,

 

I placed some notes on the chart: Once price breaks below that blue trendline, it should not return above the double red lines before it first reaches the lower red line. So a sell stop at 1.5594, with a stop loss at 1.5634, and a profit limit of 1.5544 (as price feeds vary not only between different brokers but also betwen different customers of the same broker, anyone looking at these figures would have to adjust to his or her broker's price feed).

 

As you can see, price did rally briefly and choppily above the double red lines prior to breaking below the blue trendline. It did this after I had finished watcing and gone to bed. If I were trading these markets myself, I would have set my orders exactly as I outlined above - if price dropped to 1.5594, I would want to be short, and if ater getting short, price rallied above 1.5634, I'd want no longer to be short.

 

As I said last night, a drop below that blue line would be a high probability 50 tick profit in the bank. Makes me wish I had my own forex account to trade. Again, as I mentioned last night, I know traders, in fact, I see traders posting right here at TL who place 4-6-8 or more trades each day and at the end of the week haven't made 50 ticks net profit. I'm not saying that there are not successful scalpers out there (and I am aware that neither what they do nor what I describe here is "scalping" in the sense of buying and selling inside the spread), but it does seem to me an awful difficult and stressful way to earn a living. But to each their own.

 

Trading S/R:

 

1) Allows you to plan your trades in advance,

2) Allows you to scalp for 30-50-100+ ticks per trade rather than 2-5-10 ticks per trade,

3) is so easy to learn even a child can do it.

 

That third characteristic is what makes trading S/R so difficult, as human emotion balks at the thought that something where 95% of the participants are unsuccessful should have so simple a solution. Of course, leaning S/R is made somewhat difficult by misinformation about what it is. For example, in a recent issue of TASC, an article about S/R contained at least one glaring mistake where a test of support is characterized as a false breakout because the author identified a price level as support before that level could legitimately have earned the honor of being so named. I am sure most folks reading that article would have agreed with the author that a "false break" had occurred.

 

The good news is that you do not need to spend thousands of dollars on a trading course, special software, or a paid mentor. A few inexpensive books, a demo account, and lots of hands-n, eyeballs-on practice and screen time and within a few months, you should be well on your way to freedom.

 

Of course, learning to trade S/R is truly the easy part.

 

The hard part is controlling your emotions, your fear and hope and greed, but mostly your fear of loss. If you can control that, and learn S/R, then you will have acquired something truly liberating.

 

 

Best Wishes,

 

Thales

 

Hi Everyone,

 

Whilst reviewing this thread again (there will always be nuggets of wisdom which was missed the 1st time around), i found this post particularly interesting and therefore decided to post this reference to it.

 

Cheers,

eNQ

[thalestrader 14]

If you were going to teach someone new to trading, what would your "range expansion/contraction" talking points be? .

 

Actually, I talk about this a lot here in the thread, impulse/thrust/expansion/trending versus corrective/overlapping/contraction/chop zone.

 

The market moves impulsively, expanding its range until it reaches a level at which S/R exists, or at which S/R is being established. You want to trade those moves.

 

After such moves, price will typically consolidate, the range contracts.

 

Ideally you play golf, sleep, play with your children during periods of range contraction and you trade during periods of range expansion.

 

Recognizing a period of rest or contraction is the dificulty, and that is where the notion of a chop zone is helpful. Once the market establishes a high and low of a short term range, and then pivots a lower high and a higher low without breaking the high or low of the range, it is time to stop trading and take your cues from the high and low of the range.

 

So, you see, I really do speak of this often: impulse/thrust/expansion/trending versus corrective/overlapping/contraction/chop zone. You just have to put it all together.

 

Best Wishes,

 

Thales

[Dinerotrader 10]

Actually, I talk about this a lot here in the thread, impulse/thrust/expansion/trending versus corrective/overlapping/contraction/chop zone.

 

The market moves impulsively, expanding its range until it reaches a level at which S/R exists, or at which S/R is being established. You want to trade those moves.

 

After such moves, price will typically consolidate, the range contracts.

 

Ideally you play golf, sleep, play with your children during periods of range contraction and you trade during periods of range expansion.

 

Recognizing a period of rest or contraction is the dificulty, and that is where the notion of a chop zone is helpful. Once the market establishes a high and low of a short term range, and then pivots a lower high and a higher low without breaking the high or low of the range, it is time to stop trading and take your cues from the high and low of the range.

 

So, you see, I really do speak of this often: impulse/thrust/expansion/trending versus corrective/overlapping/contraction/chop zone. You just have to put it all together.

 

Best Wishes,

 

Thales

 

I guess you do, I am just slow to put it all together and I hadn't seen you post a chart with such compelling range expansion notes before so it opened my eyes to the significance. Thanks.

[Rashid_G 10]

Hello Thales and everyone...

 

Very nice thread!... After swing trading stocks and doing well in 2008 decided to "simplify" by trading futures.. Picked ES of course.. Suffered badly.. Moved to NQ.. flat-lining for now but the whipsaws, particularly in ES have so eroded my confidence I wonder if I can ever rebuild my account.. I have always thought to find movement reliability before everything else, risk included. I see some here trading sub-$500 accounts??? Is currency movement dependable enough not to be assuming ridiculous levels of risk??? I have looked at E7, 6B, 6E, and 6A and they do "seem" to backwash (borrowed from a trader at ET.. ;-)) ) less than ES, particularly 6A... traded 6A this week (1k acct) and did just fine, beginners luck maybe but was terrified!

 

Surely I will have to pay my dues in screen time but any comments on the comparable risks in ES/NQ to currencies and others greatly appreciated..

[thalestrader 14]

Long Jets & Long Eagles - both bets more emotional than technical or fundamental.

 

Best Wishes,

 

Thales

[thalestrader 14]

Long Jets & Long Eagles - both bets more emotional than technical or fundamental.

 

Jets hit profit target.

 

Still long Eagles.

 

Best Wishes,

 

Thales

[jonbig04 10]

Jets hit profit target.

 

Still long Eagles.

 

Best Wishes,

 

Thales

 

Nice thales. Perfect setup.

 

Totally stopped on the Bengals trade. Currently long the Cowboys based on initial point-action.

[thalestrader 14]

You know that feeling you get when your just know your stop is about to get hit, but instead of cutting the loss you just sit there and watch it take you out full stop ... that's a bit like I feel right now ...

 

Nice thales. Perfect setup.

 

Totally stopped on the Bengals trade. Currently long the Cowboys based on initial point-action.

 

 

 

I'm all in/all out on this one, and now I'm just waiting for my stop loss to take me out ...

 

Best Wishes,

 

Thales

[jonbig04 10]

You know that feeling you get when your just know your stop is about to get hit, but instead of cutting the loss you just sit there and watch it take you out full stop ... that's a bit like I feel right now ...

 

 

 

 

 

I'm all in/all out on this one, and now I'm just waiting for my stop loss to take me out ...

 

Best Wishes,

 

Thales

 

lol, that feeling is the worst. I managed to catch the cowboy breakout.

[forrestang 10]

Jeez, that was rough.

[thalestrader 14]

Jeez, that was rough.

 

I'm shaking it off and staying long Jets.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi Folks,

 

A week or so ago I shared John Hill's Ultimate Trading Guide as the weekend reading. I came across this interview with John Hill from TA of S&C Magazine.

Sorry for the highlights - someone sent me this artcile and that is how I received it.

 

 

Best Wishes,

 

Thales

JohnHill.pdf

[Kiwi 16]

He's a smart guy, John Hill.

[thalestrader 14]

Hi folks,

 

Not trading yet, but I am getting warmed up. Here is the currecnt GBPUSD and EURUSD. The EURUSD chart looks different becasue it is from a metatrader demo account I quickly opened just now - for some reason I am not getting data for the EURUSD through Ninjatrader right now, and I have not been able to connect to FXCM either.

 

Anyhow, I'm showing short here, but either of these are free to go long as well. As I said, I'm just geting warmed up.

 

Best Wishes,

 

Thales

Edited January 10, 2010 by thalestrader

[thalestrader 14]

I'm showing short here, but either of these are free to go long as well.

 

..., and long it is, at least for now. Looks like after a few weeks holiday break, we are back to US Dollar selling Monday's, which for the last few months has meant big Monday rallies in the US equity markets as well.

 

Ninjatrader is up and running properly now, as is FXCM.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hello Thales and everyone...

 

Very nice thread!... After swing trading stocks and doing well in 2008 decided to "simplify" by trading futures.. Picked ES of course.. Suffered badly.. Moved to NQ.. flat-lining for now but the whipsaws, particularly in ES have so eroded my confidence I wonder if I can ever rebuild my account.. I have always thought to find movement reliability before everything else, risk included. I see some here trading sub-$500 accounts??? Is currency movement dependable enough not to be assuming ridiculous levels of risk??? I have looked at E7, 6B, 6E, and 6A and they do "seem" to backwash (borrowed from a trader at ET.. ;-)) ) less than ES, particularly 6A... traded 6A this week (1k acct) and did just fine, beginners luck maybe but was terrified!

 

Surely I will have to pay my dues in screen time but any comments on the comparable risks in ES/NQ to currencies and others greatly appreciated..

 

The small accounts you see are trading spot retail forex through a bucket shop, so the risk/tick can be as low as $0.10 (one US dime). I have not traded the mini-currency futures contracts, but I would have questions concerning the liquidity there.

 

As far as ES/NQ compared to the currency futures, there are many charts of each in this thread (though currencies do predominate). You will have to watch both and decide for yourself which if either will get you where you want to go.

 

Best Wishes,

 

Thales

[thalestrader 14]

Current look at the ES ...

 

Best Wishes,

 

Thales

[forrestang 10]

Not trading any of these, just observations, I think the move up might at least be temporarily suspended.... awaiting LHs to form.

 

----Update---- 20:24EST

1-2-3s have occurred on all, and prices are starting to coooperate to the downside. On all but the Yen.

Edited January 11, 2010 by forrestang

[MidKnight 12]

Euro is on a tear today, no idea why....just mass liquidation of the dollar I guess...Maybe even taking advantage of low liquidity in Japan session today because it is a holiday there.

[thalestrader 14]

Just thinking out loud ... GBPUSD hovering above midpoint of recent range, eventually it will test one end or the other of it, right?

 

Best Wishes,

 

Thales

[fxThunder 10]

Set the entry for a long on GBPUSD and had to leave my office for a while.

 

Came back to a trade in which I can now set the stop at breakeven and hold for target or a reversal formation against me.

 

Cheers,

eNQ

 

( I am unable to load charts but I essentially took a breakout entry at 1.1610 and am target the next big resistance at 1.6220 area.)

[thalestrader 14]

Current look at the ES ...

 

Best Wishes,

 

Thales

 

Current look at the ES shows it going basically no where since night, vacillating 2-3 points on either side of what I would have thought to be a decent long entry.

 

Dollar selling has continued over night. Over the last few months whenever Seunday Dollar selling occurred, Monday US equity rallies have followed. ES has obviosly rallied from where it closed last week. But I think it will be interesting to see whether the old script has reasserted itself once the US exchanges open, or if the pattern starts to break down.

 

Best Wishes,

 

Thales