Reading Charts in Real Time

[thalestrader 14]

Current look at the ES (15 minute and 240 minute) has me tempted to add a few longs on a break up and hold ... on the 15 minute, the red rectangle represents a small area of nearby minor resistance, where a break up could find itself stopped cold, for now. Again, while a pullback, even one of some extent, could occur at any time, I beleive PA favors at lest a test of the prior break down zone (around 1024 or so) prior to resuming the down trend, if the down trend is indeed in tact.

 

For what its worth, I had been expecting a retest of the March 2009 low, or even a break to lower lows, after the rally off that low finished. PA over the last few weeks has me much less certain that such a retest will occur, and I tend to think that I need to keep my mind open to the possibility that the Big Bad Bear it truly over, and that we are in fact in the early stages of an ere where buy, hold, and forget about it may actually prove a profitable strategy. Of course, that will become most clear at the end of such an era. But right now, I had been expecting to see the reawakening of a full grown hibernating bear. But when I blink, I sometimes think I am seeing the birth of a baby bull.

 

Anything can happen, of course. I am open to all possibilities.

 

Best Wishes,

 

Thales

 

PS I thought I had taken a pic of the 15 minute prior to the breakout, but I hadn't.

[thalestrader 14]

Here is the 1440 minute CL showing the prior day's high&low. Price is for the second time today trading above the prior day's high (the orange and blue candles are due to my currency trading friend - he and I have been working together on this CL project, and he uses these colors on his charts, so I have adopted them for my CL chart).

 

Best Wishes,

 

Thales

[thalestrader 14]

Current view of the ES ...

 

 

Best Wishes,

 

Thales

[thalestrader 14]

EURUSD/6E is at a level within a zone of some signficance and I would expect a trade that trends away from that level at some point today ...

 

Current view of the EURUSD/6E shows a long sequence in the making as price probed below the level line and rallied. The proposed stop loss may change based upon the depth of this pullback...

 

 

 

Best Wishes,

 

Thales

[Marko23 10]

EUR/USD not Short, comes down too fast

 

Thales, did you consider the 123 Short ?

[Marko23 10]

Finally an ACD Short signal, too late for me; I'll shut down at 17:15 German time

[thalestrader 14]

EUR/USD not Short, comes down too fast

 

Thales, did you consider the 123 Short ?

 

I saw the short sequence, but I did not trade it, as the immediately preceding rally looked impulsive, the short sequence corrective. It would have been PT1 and holding for PT2 with a BE stop. Ahhh ... hindsight ...

 

 

 

 

 

 

At any rate, had the short sequence offered itself from levels closer to the HOD, I'd have taken it. Even with that decline off of that sequence, I am viewing this choppy decline off the HOD as a corrective phase, so my preference goes to longs

 

Best Wishes,

 

Thales

[MidKnight 12]

Very tight and choppy trade all session. Yesterdays lack of news clearly influenced this choppy nature. Nothing to do yesterday and proud of it. I continue to look towards the short side for more continuation today.

 

Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits.

 

The obvious short to look for is in the recent multi-day range low area, ideally in the 1.5660 - 1.5620 area. Shorts there will be aiming for a new low but will be out of 1/2 before making that new low. I'll attempt to trail the other 1/2 with successive LHs from the 60 min chart. Alternatively, can take obvious shorts above 1.5490 area and manage them slightly more aggressive in the beginning with 1/4 off before 1.5450 trades, 1/4 off around 1.5410 area and trail the other 1/2 with successive LHs on the 60m chart.

[ArkhamB 10]

EUR/USD ACD Setup for today

 

What does YH in the chart stand for?

 

Thanks

Brian

[MidKnight 12]

I think he is using that to mean 'yesterdays high'.

[Marko23 10]

What does YH in the chart stand for?

 

Thanks

Brian

 

MK is correct. The abbreviations are

YH / YL -- yesterdays high / low

ZH / ZL -- day before yesterday high / low

2H / 2L -- two day high / low, including today

3H / 3L -- three day high / low, including today

[Marko23 10]

Very tight and choppy trade all session. .....

 

Indeed all sessions, FDAX , FGBL and EUR/USD were choppy.

[Marko23 10]

EUR/USD above Thursday's high

 

Thales' long idea was right.

 

ACD method has a huge stop today.

Nice continuation signal for trend followers in 15m chart.

 

Too steep or fast for a long continuation through the ACD level, should consolidate first.

Edited February 23, 2010 by Marko23

[Marko23 10]

I don't buy that signal, stop too large for me.

 

Long now at the ACD Long level

Edited February 23, 2010 by Marko23

[Marko23 10]

EUR/USD stopped.

 

My first impressions about the huge stop were right.

But impressions are not part of a trading system.

Edited February 23, 2010 by Marko23

[Marko23 10]

The 123 method did much better with this 6R Short.

[thalestrader 14]

I am viewing this choppy decline off the HOD as a corrective phase, so my preference goes to longs...

 

My long from 1.3607 proceeded to both profit targets. The atached chart shows that long from yesterday. It also shows a short sequence that occurred for the benefit of our European friends. I was asleep at the time, hece I denoted that trade in dotted lines to indicate that for me it "twas but a dream ..." A t the right hand edge, there is a long sequence with a buy point of 1.3585 for which I was just filled (a quick look at the DOM shows 85/87 bid-offer as I hit the submit button). Not entirely enthralled with this one. That was quite a plummit from the highs, and it looks like price needs at least a re-test of the low, if not a new session low altogether in order to clear this thing for a decent rally, but, if I were to sit this out on that basis, I may miss a +4R trade. It's only going to cost me -1R to find out, so I'm in.

 

 

Best Wishes,

 

Thales

[Marko23 10]

EUR/USD with large daily range.

[MidKnight 12]

... if I were to sit this out on that basis, I may miss a +4R trade. It's only going to cost me -1R to find out, so I'm in.

 

It will cost you at most 1R but more than likely, less than 1R

 

With kind regards,

MK

[MidKnight 12]

Outstanding spike like reaction from the obvious R (on the 60m). I continue to favour the short side, especially as that test of obvious R resulted in such a fierce sell response spending very little time in that area.

 

Only longs to be had will be scalps unless there is a very very clear capitulation. Should it capitulate I will aim to be out of 1/2 by the time we trade the recent multi-day range low and attempt to trail the rest and scaling out the remaining 1/2 into 2 separate exits.

 

Obvious shorts above 1.5460 - 1.5490 with the aim of being out of 1/2 before making a new low for the year and trail the other 1/2 as per LHs on the 60m chart.

[thalestrader 14]

It will cost you at most 1R but more than likely, less than 1R

 

A little less than 1/4R to find out - sometimes it is very clear that it is time to pull the rip cord.

 

I've been going back over the Linda Raschke seminar material again over the last few weeks, and one line that must have resonated with me at the time is this: "The trade must move in your favor right away. Sideways is not an acceptable response."

 

Well, if I'm long, and if sideways is not acceptable, then down is an absolute no-no!

 

I did call Linda's office, and it seems that she has no plans at this time to offer her seminar again. Too bad - it is a wonderful, wonderful learning experience. I have always said I am a most unoriginal trader - everything I do that works I learned from someone else. Going through her seminar materials again, I would say that while the few books and authors whom I have mentioned here in this thread were important, they were but the game pieces. LBR provided the the playing board and the rules. I've been very busy with some other projects, most notably a study of the character CL's intraday price action, but perhaps this weekend I'll have some time to share a few real gems from LBR's seminar.

 

Best Wishes,

 

Thales

[MidKnight 12]

But surely there are some loose criteria to validate 'sideways', and 'against your position'. The terms are too general I feel, just like the cliche 'cut your losses'. Is 2 ticks against your entry a loss? Many call that getting filled! You see what I mean? This is my difficulty with it and in my case, more often than not I end up thinking that I am cutting my losses at the time, but really I just end up cutting my profits. This small aspect of trade management is extremely hard for me to get a handle on. The problem is that it means something different to everyone based on their style. The guy that originally came up with the term - who knows what he/she really meant!

 

With kind regards,

MK

[thalestrader 14]

... This small aspect of trade management is extremely hard for me to get a handle on....

 

No small aspect, friend Midk, surely!

 

Let me give an example from today:

 

I've mentioned that I've been working with my currency trading friend on a trading plan for crude oil. We're doing basic S/R - sell resistance, buy support - type stuff. We worked up a plan where we enter using limit or market orders, and we have determined that we generally need a 15-20 tick initial disaster stop, though typically price will print a stopping point much closer, sometimes a mere tick or two from our entry, within minutes if not seconds of entry. Our plan also calls for a fixed tick take profit level on the first contract.

 

Today, we did a live test run of our plan. We were not together during the trading day, and we did not communicate between 9AM and 2:30PM - no e-mail no phone, etc. At 2:30, he called to compare notes. We each had five trades. They were all the same. We had 3 wins and 2 losses. Our losses were identical - one for -2 ticks and one for -7 ticks. One winning trade we each made it to target (we were trading one contract and we agreed to exit at our predetermined profit target level. One two other trades, he made it to target, but on each I was stoped out on reactions that hit a trailing stop. The difference? I made close to 72 ticks in spite of myself. He made nearly 50 ticks more than I! Not bad on a day where there was only a 126 tick spread high to low during the pit session!

 

That 50 ticks on 1 CL is $500. So my trade management cost me $500 in profit opportunity. No small amount if averaged over the course of 200 trading days or so. And that is per contract, so multiply that out if trading a 3 lot, a 5 lot, a 10 lot.

 

No sir, friend Midk, trade management is no small matter at all - as my currency trading friend said to me this afternoon, "'tis the key to the kingdom, methinks," I think so too.

 

Best Wishes,

 

Thales

[thalestrader 14]

But surely there are some loose criteria to validate 'sideways', and 'against your position'. The terms are too general I feel, just like the cliche 'cut your losses'. Is 2 ticks against your entry a loss? Many call that getting filled! You see what I mean?

 

I think, though, if you look at what price did immediately after stopping me in you'd agree that there was no doubt that the best course was to exit at market quickly. I did place a new buy stop at 1.3591 after I exited the trade I had entered at 1.3585. As I tried to explain to Cory last week - pulling te rip cord is fine, but it only works for me over time because I always have a plan to re-enter in the original position should price get in gear. The basic structure of a long sequence was still in place until price made a new low. If you are going to trade based upon those sequences, you have to take them, even if you already had entered once and cut it loose with a small loss.

 

I have always made clear that I re-enter if called for even after pulling the rip cord. Re-entry makes the difference.

 

Best Wishes,

 

Thales

[Kiwi 16]

I think, though, if you look at what price did immediately after stopping me in you'd agree that there was no doubt that the best course was to exit at market quickly. I did place a new buy stop at 1.3591 after I exited the trade I had entered at 1.3585. As I tried to explain to Cory last week - pulling te rip cord is fine, but it only works for me over time because I always have a plan to re-enter in the original position should price get in gear. The basic structure of a long sequence was still in place until price made a new low. If you are going to trade based upon those sequences, you have to take them, even if you already had entered once and cut it loose with a small loss.

 

I have always made clear that I re-enter if called for even after pulling the rip cord. Re-entry makes the difference.

 

Best Wishes,

 

Thales

 

 

I think that the reentry issue is important because:

- if you can't reenter then exit quick strategies are much harder to take (cause u miss out)

- if you look at breakouts you get quite a few immediate failures but the break of the failure push is a much higher probability situation if the pattern stays clean.