Reading Charts in Real Time

[thalestrader 14]

What type of action are you watching for on the DOM during the test of the wave 3 extreme (or whatever S/R level you are watching), and how would what you are watching for differ between a reversal versus continuation of the trend?

 

snowbird

 

Ideally, I see trade volume falling as price tests the extreme. Price can be dropping like a rock or simply fluttering down slow and steady, but trade itself should be falling off. Then, as price breaks the prior low, I look to see trade volume (and size) pick up while price makes no further progress, in effect you would like to see some churning at the lows. Of course, sometimes you get huge volume all at once and price rockets from the lows. But ideally, I like to see a few minutes of churn on increasing volume with increasing size. But, you do not always get what you want, and in the end, price holding and reversing after a prior low/high trumps whatever you may see in terms of trade volume, size, speed, "intensity," etc. and so on. But ideally, you will see price dropping (or rising) and probing past an extreme on falling trade, and then the drop or rise is checked by a brisk increase in the pace of trade while price movement itself seems to "hover". Then, of course, I look for the first High/higher Low. This can be, and often is a spread of just a few ticks. As jashanno noted above, the R/R profile of a 2B is typically so favorable that you can lose a bunch of these and make it all up on the next winner.

 

Best Wishes,

 

Thales

[Cory2679 11]

I've implemented the 2B into my trading, and have had success with it, but I don't trade it "right"...I trade it more like a 123 (I buy/sell on the break of the high/low).

 

NOTE: I'll often take very small 2B's (1 minute chart) at significant levels.

NOTE2: Actually, the same thing applies to 123's.

NOTE3: I currently don't watch a DOM.

 

 

 

-Cory

Edited April 24, 2010 by Cory2679
notes

[thalestrader 14]

Hi Folks,

 

A week ago sicktrader posted the following in another thread here at TL:

 

I will turn $1,000 into $1,000,000 in 20 weeks. Actually I should get it done in 10-15 weeks, but I'll give myself some extra time. I believe that across the street I used the S&P, here I will do currencies. Nonetheless I hope to show that it is not the system that brings profits, but money management. I have done this many times in real life, a few times on trading and gambling forums. I do not reach my goal within the time frame every time, but certainly the majority of times.

 

An interesting proposal, don't you think? At any rate, I suggested that we hold a litle race here at TL, with the objective being to see who can generate the greatest pnl in nominal dollars trading a small (less than $3k USD) account.

 

I posted some suggested ground rules in sicktrader's thread, and on Monday I will start a thread devoted to the race. It is open to anyone - all instruments, all stules, etc and so on, so long as you start with a small account. The only otherrequirement is that you be wiling to post a daily statement/equity run with your name and account nu,ber blotted out, painted out, or simply left out of the screen capture. Right now it looks like sicktrader and I are the only two, but I would hope that we can get a few more to praticipate. Even a $25 microlot account is sufficient. Here are the proposed ground rules below. If you think you would like to join in, even if you do not have a small account open and funded, let us know by posting your interest in sicktrader's thread.

 

Best Wishes,

 

Thales

 

I propose the following Ground Rules for The Race.

 

 

 

 

The Race

 

Objective: To be the first participant to trade a small account to one million dollars USD in profits, including closed and open trade equity as well as cashed out funds, or at least to have a load of fun trying!

Ground Rules:

 

A. Accounting

1) Starting balance of trading account is not to exceed $3000.

 

a. Deposits are allowed at any time, either to replenish a blown account, or to allow additional margin, so long as the deposit does not result in an account balance greater than $3000.

 

b. No deposits are allowed if equity exceeds $3000.

 

2) Withdrawals are allowed. Notice of a withdrawal request to your broker should be posted to The Race thread on the day you make the withdrawal request.

3) Participants must post daily screen shots of his or her daily equity run by 9:30 AM EDT, unless the equity run has not been received, or if there has been no change in positions or equity since the previously reported closing equity. If the equity run has not been received from your broker by 9:30 AM, it should be posted as soon as possible after it is received. Again, this is only required when there has been a change to the previously reported closing equity.

 

4) I will post a weekly summary of each participant's performance both for the week and from the beginning of each trader's individual participation in The Race.

 

a. This summary will be in terms of nominal dollars profit and loss. This is not a percent return race, but an accumulated profit race.

 

b. This summary will include both closed trade equity, open trade equity, and cashed out profits, if any.

 

5) The Race is open to new participants at any time. The only requirement for participation is a live, real money trading account of $3000 or less starting equity, and a willingness to post a daily equity run. A trade blotter is not sufficient. Your post must show instrument(s) traded, entry price, exit price, commissions, fees, etc. as well as closed equity and open trade equity.

 

B. Trading

 

1) Real time calls are not necessary - just post a copy of the daily equity runs with your name and account numbers painted out.

 

2)The Race is open to all trading styles - day traders, swing traders, scalpers, position traders.

 

3) Any freely traded liquid instrument is allowed - futures, spot forex, stocks, bonds, options. The Race can accommodate the $25 microlot account holder, a $1000 futures account holder, as well as a $3000 cash or margin stock account holder.

 

4) As this is open to all trading styles, there is no requirement that a trader place a trade every day, every week, or even every month for that matter. The only requirement is that a daily equity run be posted whenever there has been a change in equity from the previously reported closing equity.

 

5) No trader is required or expected to divulge anything more of his or her trading system, method, approach, etc. than what he or she wishes to divulge. The trader can tell all, or tell nothing.

 

6) If it is known that you will be unable to trade for a period of time, then that should be posted in The Race thread with an expected return date. The race doesn't stop just because one or more participants is unable to trade for a period of time. The notice is requested simply because it prevents anyone of us from dropping out of The Race without giving the other the courtesy of a public notice.

7) The initial period of The Race will be twenty weeks starting with the week of 4/26/2010. At the end of 20 weeks, the remaining participants, should any still be standing, will decide whether or not they wish to extend The Race.

[snowbird 10]

on Monday I will start a thread devoted to the race. It is open to anyone - all instruments, all stules, etc and so on, so long as you start with a small account.

 

This should be very interesting (especially the initial instruments traders pick.. sounds like sicktrader is giving it a go with currencies!

 

Thales, it looks like you picked ES as one of your instruments. Found this very curious given the previous discussions in this thread about how much it tends to back-fill, which led me to believe it was more difficult to trade with your method.

 

Brownsfan... are you in?.. would be very curious to see what someone could do with oil... and such a thread is certain to have some entertainment value!

 

snowbird

Edited April 25, 2010 by snowbird
found instruments Thales planned to use in sicktraders thread

[Marko23 10]

...

Then you wonder about what you really had before your eyes during your trading hours.

 

A first (and painful) consequence is: for some time I'll not participate in the forum during during trading hours.

It is just too much distraction:

- it takes about 2 minutes to write a comment and publish it together with a chart.

- it takes another 2 minutes to focus on the latest price action and to recall what I really thought before starting the comment

 

Since this thread has "Real Time" in its title the above 4..5 minutes often coincide with the last phase before a signal appears. Because of this dead time before a signal I tend to ignore the opposite aspect of a signal, e.g. occures the up signal at the near end of a correction.

 

So please don't expect any "real time" comments from me for some time.

[Marko23 10]

....

For a long time I read and re-read a few pages of Trader Vic every night before I would go to bed, and I recently renewed that practice...

 

Interesting... The two books from Mark Douglas serve exactly the same purpose for me.

Edited April 25, 2010 by Marko23

[Marko23 10]

What is your criteria for taking the 2b trades?

...

 

The 3rd push up in an uptrend or the 3rd push down in a downtrend are good hints for a 2B setup.

[thalestrader 14]

Brownsfan... are you in?

 

I would hope that Brownie would join in the fun. He was always a big advocate of the small account trader.

 

... are you in?..

 

As importantly, are you in, snowbird?

 

...Thales, it looks like you picked ES as one of your instruments. Found this very curious given the previous discussions in this thread about how much it tends to back-fill, which led me to believe it was more difficult to trade with your method.

 

Well, to tell you the truth, two of my friends and I were about to commence a little "competitive" experiment of our own using our "sand box" accounts, and the ES is part of that competition. I am simply leveraging my participation in that project by adding "The Race" dimension, a dimension that was prompted by sicktrader's interesting and wondrous promise to turn 1K into [1K * 1000] in 20 weeks in his "Let's Trade" thread.

 

My trading for the purpose of The Race will be dictated by that separate and independent "experiment" proposed to me by my currency trading friend and my TF trading friend, and my approach for this small account will differ somewhat from what I have presented throughout this thread as it harkens back more to my time as a would-be "systems" trader (kiwi might be interested to know that this little side experiment has prompted me to fire up my old Trading Blox software for the first time since '06).

 

Best Wishes,

 

Thales

[thalestrader 14]

The 3rd push up in an uptrend or the 3rd push down in a downtrend are good hints for a 2B setup.

 

Agreed. I find that the two patterns that hint at a potential 2B that I like best are the three pushes (especially when wedging into the highs/lows), and the other is a sharp impulse, followed by a shallow retracement, followed by another impulse past the extreme of the first impulse that quickly reverses.

 

Best Wishes,

 

Thales

[Marko23 10]

...

the race...

 

I won't be in because I have to eradicate some bad habits.

I've been sitting over more replays during the weekend only to find some more.

That will be hard work.

 

Good luck and a lot of fun to all participants.

[snowbird 10]

 

As importantly, are you in, snowbird?

 

 

LOL... a fair response to my prompt of Brownsfan!

 

Although it would be a dream to meet traders I have come to have such an immense respect for on this board should any achieve the goal; I must humbly remain a spectator of the games since I am still on a very steep learning curve in my own journey to develop a method that matches my nature.

 

I am also selfishly aware, that exposure to methods of various traders will only help in that journey, so I sincerely hope you and sicktrader are successful in getting others to join the fun... Thanks kindly for the invite.

 

snowbird

[brownsfan019 17]

Brownsfan... are you in?.. would be very curious to see what someone could do with oil... and such a thread is certain to have some entertainment value!

 

snowbird

 

I do not trade for anyone's entertainment and will not be participating in this.

[sicktrader 10]

Well, to tell you the truth, two of my friends and I were about to commence a little "competitive" experiment of our own using our "sand box" accounts, and the ES is part of that competition. I am simply leveraging my participation in that project by adding "The Race" dimension, a dimension that was prompted by sicktrader's interesting and wondrous promise to turn 1K into [1K * 1000] in 20 weeks in his "Let's Trade" thread.

 

My trading for the purpose of The Race will be dictated by that separate and independent "experiment" proposed to me by my currency trading friend and my TF trading friend, and my approach for this small account will differ somewhat from what I have presented throughout this thread as it harkens back more to my time as a would-be "systems" trader (kiwi might be interested to know that this little side experiment has prompted me to fire up my old Trading Blox software for the first time since '06).

 

Best Wishes,

 

Thales

 

 

Thales,

 

Never promised anything other than my perspective on money management. I hit this about 35% of the time, so wouldn't promise anything. I will reach the 1 mil mark, I expect within 20 weeks, but I haven't made that guarantee.

Edited April 26, 2010 by sicktrader

[ziebarf 10]

Wow, I really wanted to post this trade in real time... Too bad it was all over in about 10 seconds.. Damn you free Malaysian wifi!

 

Before and after on the NQ. 1-2-3 around last weeks highs.

 

EDIT: Nice rejection at prior swing, looking for another 1-2-3 to test the highs again..

[ziebarf 10]

more interesting action..

 

EDIT: Filled, then closed at BE. Huge volume on the breakthrough and no real movement. I am no volume expert, but it looks like someone is buying.

Edited April 26, 2010 by ziebarf

[Dinerotrader 10]

Oil long.

 

[thalestrader 14]

Thales,

 

Never promised anything other than my perspective on money management....

 

No problem, sicko, my reference to your "promise" was meant to refer to your sharing your MM perspective and (I do hope you still intend to share your MM regimen with us), and not that you would actually succeed this time around in multiplying your stake 1000-fold.

 

Best Wishes,

 

Thales

[thalestrader 14]

Current view of the 6E ...

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Current view of the 6E ...

 

Here is how it looks in a Ninja demo account ...

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Here is how it looks in a Ninja demo account ...

 

And here is how it looks with the risk reduced to .25R ...

 

 

 

Best Wishes,

 

Thales

[thalestrader 14]

And here is how it looks with the risk reduced to .25R ...

 

Profit target 1 has been filled ...

 

 

 

Best Wishes,

 

Thales

[Cory2679 11]

Profit target 1 has been filled ...

 

I was in this (off a smaller swing), but I closed it in anticicpation of the news (consumer confidence & Bernanke), which indeed spiked the EUR/USD spread to 10 ticks with Oanda...

 

 

Had I not closed it, and was still in, I would have been up 4R+ in unrealized p/l by now...

 

 

To those that trade spot forex:

 

Do ECN forex brokers, such as MB Trading, do the same sort of thing around news events (spike the spread)...or can you hold a position through a news event like consumer confidence. (I understand that even with futures, events like the FOMC announcement can be troublesome, but with Oanda, there's something every day that spikes the spread, usually more than once...)

[Cory2679 11]

To those that trade spot forex:

 

Do ECN forex brokers, such as MB Trading, do the same sort of thing around news events (spike the spread)...or can you hold a position through a news event like consumer confidence. (I understand that even with futures, events like the FOMC announcement can be troublesome, but with Oanda, there's something every day that spikes the spread, usually more than once...)

 

Actually, I just created a thread concerning this...

 

http://www.traderslaboratory.com/forums/f24/spot-forex-news-7827.html

[thalestrader 14]

Current view of the 6E. The hashed blue line is a short entry at 1.3236, and the solid blue line would be a place below which I'd be tempted to add. This could develop into a tremendous short. However, while I am not ready yet to do so, I am tempted, given how this looks, to stop and reverse if price breaks and holds above 1.3237 ...

 

 

Best Wishes,

 

Thales

[traderbrazil 10]

Current view of the 6E. The hashed blue line is a short entry at 1.3236, and the solid blue line would be a place below which I'd be tempted to add. This could develop into a tremendous short. However, while I am not ready yet to do so, I am tempted, given how this looks, to stop and reverse if price breaks and holds above 1.3237 ...

 

 

Best Wishes,

 

Thales

 

Hello Thales!

 

I hope you are doing fine!

 

Just one question about the setup:

 

If you anticipated that there could be support where you drew the uptrend line, why did you decide to go short at that point?

 

Thanks four feedback!

Leandro