Reading Charts in Real Time

[ziebarf 10]

I am currently watching this potential short setup on EU. I was stalking a long on UJ earlier but it became to choppy for my liking.

 

Watching the same short.. Hoping a new set of lower highs develop for a tighter stop.

 

EDIT: Your wish is my command! Although this could go both ways.. The RR on the long isn't as good.

Edited December 31, 2009 by ziebarf

[fxThunder 10]

I now have bracket orders for a breakout either side on EU.

[fxThunder 10]

The short on the EU just triggered.

 

EDIT:

moved stop to 1.4416 - last swing high

Edited December 31, 2009 by fxThunder

[Marko23 10]

I love logging in here and seeing folks posting their trades based on what we've put together here in this thread.

 

What is really neat is that many folks are starting to see the same opportunities as they unfold. This shows that this approach has a degree of objectivity to it that allows multiple traders to see the same things.

 

It also shows that this really can be communicated to one another, which means it can also be taught and learned, and that the hard part is the discipline necessary to put it to work and the emotional discipline to manage your trades properly.

 

Best Wishes,

 

Thales

 

Congratulations, this is a very favorable end-of-year balance!

It ist so difficult to transport a chain of ideas without loss from one mind to another, especially in trading with its thousands of methods, indicators etc.

[fxThunder 10]

EU short stop to breakeven now

[Cory2679 11]

Sorry it's a little late...GU short...

[fxThunder 10]

EU got within a few ticks from my profit target and stalled. Lesson learnt from yesterday. Price got close enough and I closed my trade manually - not going to fight for a few ticks...

[Cory2679 11]

Sorry it's a little late...GU short...

 

Update: Stop moved tighter.

[Dinerotrader 10]

I haven't seen any stocks here for real time trades for a while so here is one I just bought a few seconds ago on the breakout.

 

[Cory2679 11]

Update: Stop moved tighter.

 

Update 2: PT1 hit, stop moved to BE.

[thalestrader 14]

Hi Folks,

 

I am very impressed with the analysis and trades I have seen posted here over the last few days.

 

Thank you for helping me with this thread!

 

Best Wishes,

 

Thales

[Cory2679 11]

Update 2: PT1 hit, stop moved to BE.

 

Update 3: Stop moved tighter.

 

EDIT: I had made a mistake on my original image post, so I posted a new one, and now I realize the new one does not make obvious why I moved my stop, so I've now attached a 1 minute. Price was moving pretty impulsivly against me and I was looking for a solid natural area on the chart to where I could move my stop.

Edited December 31, 2009 by Cory2679
mistake on image markings

[fxThunder 10]

Hi Folks,

 

I am very impressed with the analysis and trades I have seen posted here over the last few days.

 

Thank you for helping me with this thread!

 

Best Wishes,

 

Thales

 

Hi Thales

 

Personally I believe thanks is really owed to you for showing the way here to many (myself included).

 

As a mentor and teacher you have done a sterling job!

 

Cheers,

 

eNQ

Edited December 31, 2009 by fxThunder
typo

[fxThunder 10]

As an aside, I also took the GU short that Cory is currently managing and am including screenshot with trendlines included.

 

I use these quite extensively to assist my trading and initially thought I should rather not show them in my screenshots but decided to post this GU example anyway as it does show quite clearly how they assist me in identifying areas to look for setups.

 

I do not want to get into an extensive discussion about the the merits of trendlines and their usage and would rather not show them if it in any form takes this thread off track.

 

Cheers,

eNQ

[fxThunder 10]

I was also watching this structure on the UJ but could not get a good spread in IB to go long this. I was looking at a long in the 92.40 area.

[Cory2679 11]

Update 3: Stop moved tighter.

 

Trade finished. 1st Half = +36.4 ticks, 2nd Half = +8.4 ticks (AVG = +22.4).

 

That's it for me. I have somewhere I have to be soon.

 

Happy New Year!

[fxThunder 10]

GU long trade. Hoping for a retest of days highs

[fxThunder 10]

Tightening stop on GU long trade,

[fxThunder 10]

Stopped out on GU long - last trade for this week.

 

Happy new year!

 

cheers,

eNQ

[DaKine 10]

I was also looking for a short here on the EU but was waiting for a w5 before I took it... Got short last time into a w4 and got stopped so I was waiting... In hindsight I guess the wave count in yellow was correct but I was basing my analysis off of the wave count in white... Thales is the 1,2 in yellow valid to you?

 

Thanks for your help...

 

[thalestrader 14]

Lets talk Chop Zones, and bear with me while I do so by way of (gasp, sigh, growls of disgust) Elliot Wave.

 

For so many reasons I have minimized the EW discussion here. Before I get to your question, DaKine, about your count today on the 6E, I want to make a couple of points.

 

First, the approach I have presented here is a very forgiving approach. It stands on its own without the extra props of Elliot Wave, fibs, etc. I happen to find EW and fibs both useful, but do not alow either to trump basic S/R and price action itself.

 

Second, I do not always see clear EW counts. I do not even look for them. I use them only when they are so clear that even an Elliot Wave Guru could find the right count the first time. So if you do not see a clear five wave pattern or three wave pattern, do not worry about it. The main thing is which way is price impulsing or thrusting and where is is price chopping about and over lapping.

 

I have used the concept of the chop zone here in this thread. This is a good example of why I call it a chop zone, and not a "triangle" as many would do. A triangle, in EW terms, is always the last wave before the end of the current impulse, and therefore, it is always either a wave B or a wave 4. However, looking at price action today, I see what you saw, a triangle like formation out of which EW would ave me expecting an upward thrust before any tradable short would opportunity would occur. Well, price didn't do what EW would have us expect. So, if you were expecting an upthrust out of that formation, you would have missed the short. However, had you used the "chop zone" concept I have shared, where price makes both a HL and a LH in between a last real H and real L, then you should take your cue form that last H and L, and trade in the direction price breaks.

 

Is it 100%? No. But it is pretty darn close. Just go back through this thread and see if you can count more than one or two times out of how many chop zones I posted where trading it the way I have suggested would have resulted in a whip saw.

 

Now, as to your EW count:

 

I was also looking for a short here on the EU but was waiting for a w5 before I took it... Got short last time into a w4 and got stopped so I was waiting... In hindsight I guess the wave count in yellow was correct but I was basing my analysis off of the wave count in white... Thales is the 1,2 in yellow valid to you?

 

Thanks for your help...

 

 

Wave 3 cannot be the shortest wave in terms of extent, whereas your count has wave 3 as the shortest. Here is how I see it from the comfort of hindsight.

 

 

Yes, you shorted a wave four the other day and got stopped out. So what? As I said, this approach is very forgiving. Had you then shorted the very next opportunity, which I know you saw, and several others as well posted here in real time, then your small loss on your first short would have been made back with profit to spare to make for a positive day.

 

Do not get hung up on wave counts.

 

Focus on S/R and highs and lows and managing your risk and your emotions.

 

EW is a tool. It is not, at least in my view, an approach unto itself. The approach as I understand it is to trade in the direction price is indicating it is going to move by buying higher highs and selling lower lows. Every trade I make is based upon that and that alone. EW is a tool that remains in the tool box most of the time, but when I see an opporunity for which it is an appropriate tool, I'll bring it out, use it, wipe it down, and put it away until the next time it is the appropriate tool to use.

 

I hope that helps.

 

Best Wishes,

 

Thales

[Kiwi 16]

Happy New Year everyone.

 

Well, because system trading is boring I've decided to add a little discretionary trading to hold my interest. I plan to post here although the method is not Thales. I will however "read charts in real time" and post in real time.

 

I plan to trade off the hourly charts; trade EU, GJ and UJ. Later I may drop UJ and trade AE instead (or as well) but I want to get a better feel for how crosses (GJ) respect S&R vs majors (UJ) first.

 

I'll basically use two approaches to entry:

- wait for direction (thrust, over the mas etc etc) then buy either simple pullbacks if fresh or pullbacks that involve multiple tests (and stops being broken).

- buy the break out points when it looks good in the style of two threads from forex factory

. . . wmd's Trading With Deadly Accuracy Method and

. . . BRV's No Brainer Trades Method

 

Then I'll be using a similar exit to Thales. First off at a little over 1:1 and S&R. Second off at S&R normally but with a trailing stop if there seems to be a trend on the daily chart.

 

Nothing too sophisticated and I may drop the second entry method if I'm not getting good results ... but I have a hankering to try it so I might as well document the try in real time

 

 

My charts for each pair look like this. The reason for the 5m chart is that on the pullback entry style I sometimes will enter on the hourly break and will sometimes look for a short timeframe pullback first --- depending on the preceding 5m action. I'll probably post the second version to show the trade though as its simpler.

 

 

So, it's hourly bar break instead of 15m pattern break - which will often give similar entries to Thale's method. Or its just buy where I think it should stop - which will be interesting and probably wrong (in which case it will be abandoned fairly quickly).

 

 

.

[Kiwi 16]

One change. Dropping GBP.JPY in favour of GBP.USD and AUD.USD.

 

Why? Because the major currency movers trade the majors and thus S&R on GJ is a side effect of the real S&R; the S&R on GU and UJ.

[Marko23 10]

...

For so many reasons I have minimized the EW discussion here. ...

This complete post is a very suitable opening for 2010.

For many reasons I can confirm your findings from my own experience trading. EW is an ex post (hindsight) analyzing technique. If one reads EW literature carefully, every pattern needs a confirmation move to make the pattern reliable.

 

But as a trader, you cannot wait for this move to complete. If you wait, the trading opportunity is gone. Only as an analyst (or guru) you have the neccessary time to wait for pattern completion.

 

The reason for this is the fractal nature of prices movements. When price moves from one major level to another, it almost never moves in a straight line. The movement is broken into fractals, which are broken into fractals, which are broken into fractals ....

 

The breakup is driven by market forces and by chance. EW tries to guess the full move from the pieces of the puzzle (fractals) that are currently visible. This is in vain since chance is involved. Fractals always break a large move into smaller segments. They never construct a large move from known smaller pieces.

[Marko23 10]

Lets talk Chop Zones, and bear with me while I do so by way of (gasp, sigh, growls of disgust) Elliot Wave.

...

I have used the concept of the chop zone here in this thread. This is a good example of why I call it a chop zone, and not a "triangle" as many would do.

....

I hope that helps.

 

Best Wishes,

 

Thales

 

Yes it did help me several times, since I began reading this thread. Thanks a lot again.

 

When I first saw it here, I thought "well, he just feels a triangle". But your concept is much better since there is no need for all the tricky details of different types of triangles and their confirmation.

 

One simply waits until price leaves the outer boundaries of the chop zone. That's all, no magic involved.

Edited January 1, 2010 by Marko23
Typo