Reading Charts in Real Time

[thalestrader 14]

1131.50-1133.00 was my initial resistance target for the high. A 123 from those levels would get me short. A break and hold on a retest above those levels might get me lightly long.

 

The red rectangle shows the 1131.50-1133.00 range. Price has printed 1131.50 high so far. I will short a 123 from these levels, and I would also be willing to short a "test, test, break" of support that might become visible on a 5 minute chart (you can search the thread for examples of what I mean [or ask Forest]).

 

Best Wishes,

 

Thales

[daedalus 10]

Got in this morning, now i'm getting out. Half hour workdays are ok with me I suppose. Did I knock it out of the park? Nope... but I did better than yesterday and managed the trades much better. Nothing huge, but i'll take what I can get.

 

I personally like getting my work done as early and quickly as I can (if the trades are there) and then punching out to sim the rest of the day when I want, or going out and living life. Too many years spent in front of these screens and i'm not getting any younger ya know?

 

Both trades were on the 89t OEC feeds this morning. 14 ticks, 2 winners.

 

Good luck with the rest of the day gents! Remember - there is more to life than charts!

[Cory2679 11]

to follow up on my post just before - I am considering this long on GU

 

(with attachment this time...)

 

I am currently in this trade. I've moved my stop tighter.

[thalestrader 14]

I am currently in this trade. I've moved my stop tighter.

 

I have no idea what is going to happen or how this is going to play out, Cory. But one thing I would keep in mind is always be aware, i.e. beware of becoming so wed to your long trade that you miss a short, and vice versa. I'm not saying this is going to go short. But now that you are in the trade, pull up a naked chart of the GU, and see what you see when you do nt have your entry, stop loss, and profit targets staring back at you.

 

Best Wishes,

 

Thales

[thalestrader 14]

... But one thing I would keep in mind is always be aware, i.e. beware of becoming so wed to your long trade that you miss a short, and vice versa ...

 

Again, I am very unoriginal, and all the best ideas in this thread have usually come from someone else:

 

If you buy into the idea that resistance becomes support when broken (which we all do right?) then isn't there always a potential long lurking wherever there is a short? (hope that doesn't sound facetious it's not meant to).

 

Best Wishes,

 

Thales

[fxThunder 10]

I am currently in this trade. I've moved my stop tighter.

 

I am also in this trade - not feeling well today so will probably keep a low profile..

 

What has happened to all the other contributors? They surely can't all still be on holiday...

[thalestrader 14]

The red rectangle shows the 1131.50-1133.00 range. Price has printed 1131.50 high so far. I will short a 123 from these levels, and I would also be willing to short a "test, test, break" of support that might become visible on a 5 minute chart (you can search the thread for examples of what I mean [or ask Forest]).

 

Close enough ... if you get the resistance levels right, why not sell when price responds as anticipated?

 

Sorry for the late screen shot, but it took me a bit of time to figure where I wanted my TP's, and then to annotate the chart, etc.

 

Best Wishes,

 

Thales

Edited January 5, 2010 by thalestrader
corrected chart to show actual short entry

[thalestrader 14]

I have no idea what is going to happen or how this is going to play out, Cory. But one thing I would keep in mind is always be aware, i.e. beware of becoming so wed to your long trade that you miss a short, and vice versa. I'm not saying this is going to go short. But now that you are in the trade, pull up a naked chart of the GU, and see what you see when you do nt have your entry, stop loss, and profit targets staring back at you.

 

Best Wishes,

 

Thales

 

Short GBPUSD

 

Best Wishes,

 

Thales

[thalestrader 14]

Short GBPUSD

 

Best Wishes,

 

Thales

 

Sometimes you have to get out of the trees (bars) in order to see the forest (not The Forrest).

 

Best Wishes,

Thales

[fxThunder 10]

Stopped on the GU long - also tried to go long into R. Second mistake for the day.

 

Two strikes and I am out - will return to trading tomorrow....

 

Cheers,

eNQ

[Cory2679 11]

Well, today has been horrendous.

 

I took the GU long, and got stopped out for a loss. Then I reversed my position, and made up for all but $0.75 of my loss.

 

HOWEVER...this is why I am SOO angry right now...

 

As you can see on my GU short chart, my profit target was actually hit and would have filled, and would have not only made up for 100% of the loss, but would have made me net $10+ for the day.

 

BUT, here's what I did...when price was approaching the PT, I was thinking "Gee, it'd really be nice to have my account top $300 on this trade." So I eliminated my limit order and had my finger on the trigger to pull out once my account topped $300.

 

Once it started to reverse, out of disgust with myself, I just pulled out. I didn't want a trade that had already hit my PT to reverse back and get BE (and be substantially down for the day).

 

I'm SOOO mad right now. The best thing I can do is step away. At least I didn't do too much damage.

 

:crap::crap::crap::crap:

 

-Cory

[thalestrader 14]

I'm not sure if you have run across this or not in the past.

 

One solution to this problem is to attempt to take the other side. If looking for a short attempt to build the case for a long. Because your mind is designed with a bias to confirm your current idea this is a useful step.

 

Thanks, Kiwi! I like that a lot! Very helpful.

 

-Cory

 

 

"it's deja vu all over again"

 

 

Best Wishes,

 

Thales

[india quant 10]

gbpusd

now playing out the double bottom

[thalestrader 14]

Stopped on the GU long - also tried to go long into R. Second mistake for the day.

 

Two strikes and I am out - will return to trading tomorrow....

 

Hi EmNQ,

 

First off, nice trading. You respected your stop losses, and you are respecting your loss limit. You can fix minor mistakes such as you made today, but you cannot fix broken discipline without some pain. This is just a day at work. Each day will have a different result, but through discipline, the aggregate of days should have a positive outcome.

 

I have a few questions and coments, if you don't mind.

 

Can I ask you how many pairs you are trying to trade? I would suggest you keep it to two or three, certainly no more than four, while you are learning. Until some of the mechanics of trading and identifying the opportunities according to this approach becomes more habitual, spreading your attention too thin can only lead to mistakes and missed opportunities (and you will trade all the mistakes and miss all the profitable opportunities - trust me, I did it for years; but you don't have to do so). Right now, you have to "think" about everything. After a while, you will find yourself entering trade ordes and almost being surprised when the audible alerts you that you've been filled because you almost don't remember having set the entry order.

 

Can I ask you how you prepare for the trading day? At the very least, you should keep and study what I call an S/R chart where you place horizontal lines at important pivot points (price pivots, not artificial floor pivots).

 

It is not a bad idea to write a cheat sheet in the beginning. For example:

 

if price trades back to 1.606x level, I will look for a 123 short. Any longs need to be initiated at least 15 ticks below 1.606x so as to allow a "rip cord cushion".

 

I do it myself. Some days my trades look nothing like my scenarios; but many other days, these little scripts play out as though price action were a movie and I was the screenwriter and the director. At the very least, it will make you aware of the significant levels that occurred the day before, the week before, etc.

 

I would also suggest that you also consider employing Kiwi's suggestion: If you are coming up with a bunch of long scenarios, ask yourself to argue for the short side. It is very easy to become so convinced of our analysis that we "see" only opportunities that support our analysis (even those that are not there) and we fail to see those oppotunities that conflict with our analysis, yet would be clear as day if viewed without the bias of prior interpretation.

 

My good friend the currency trader has a fistful of post-it notes that he has stuck around his monitor like a Lion's Mane. When he makes a mistake, he writes out a reminder, and sticks it there, e.g. Stop! Am I buying resistance or selling support?

 

Mistakes happen. I still make my share, that's for sure. Keep smiling, and come back tomorrow.

 

Best Wishes,

 

Thales

[thalestrader 14]

Well, today has been horrendous.

 

Hi Cory,

 

Take heart that you were able to stop and reverse out of a dead trade into a fresh trade. That alone is an ability that I see lacking in many long timers.

 

But discipline, discipline, discipline! Trade your plan. As you yourself see now, it is ok to have a losing trade (or two or three or four or however many). If you have a sound plan, which you do, and a sound approach, which you do, then apply both with discipline and the profits will take care of themselves. I promise you that they will. Control the desire to seek revenge (I'll get it all back on this one trade) and greed (wouldn't it be nice to finish today with $X.00 in my account).

 

Trade your plan, and a year from now your account will have a balance that will make you laugh that you risked letting a good trade go bad for the sake of a $300 balance.

 

Best Wishes,

 

Thales

[thalestrader 14]

gbpusd

now playing out the double bottom

 

Hi india quant,

 

Mind letting us in on how you are trading this or planning to trade this? Did you buy on a limit, are you waiting for a break above a certain level, etc.?

 

Thank you for sharing with us.

 

Best Wishes,

 

Thales

[fxThunder 10]

Hi EmNQ,

 

First off, nice trading. You respected your stop losses, and you are respecting your loss limit. You can fix minor mistakes such as you made today, but you cannot fix broken discipline without some pain. This is just a day at work. Each day will have a different result, but through discipline, the aggregate of days should have a positive outcome.

 

I have a few questions and coments, if you don't mind.

 

Can I ask you how many pairs you are trying to trade? I would suggest you keep it to two or three, certainly no more than four, while you are learning. Until some of the mechanics of trading and identifying the opportunities according to this approach becomes more habitual, spreading your attention too thin can only lead to mistakes and missed opportunities (and you will trade all the mistakes and miss all the profitable opportunities - trust me, I did it for years; but you don't have to do so). Right now, you have to "think" about everything. After a while, you will find yourself entering trade ordes and almost being surprised when the audible alerts you that you've been filled because you almost don't remember having set the entry order.

 

Can I ask you how you prepare for the trading day? At the very least, you should keep and study what I call an S/R chart where you place horizontal lines at important pivot points (price pivots, not artificial floor pivots).

 

It is not a bad idea to write a cheat sheet in the beginning. For example:

 

if price trades back to 1.606x level, I will look for a 123 short. Any longs need to be initiated at least 15 ticks below 1.606x so as to allow a "rip cord cushion".

 

I do it myself. Some days my trades look nothing like my scenarios; but many other days, these little scripts play out as though price action were a movie and I was the screenwriter and the director. At the very least, it will make you aware of the significant levels that occurred the day before, the week before, etc.

 

I would also suggest that you also consider employing Kiwi's suggestion: If you are coming up with a bunch of long scenarios, ask yourself to argue for the short side. It is very easy to become so convinced of our analysis that we "see" only opportunities that support our analysis (even those that are not there) and we fail to see those oppotunities that conflict with our analysis, yet would be clear as day if viewed without the bias of prior interpretation.

 

My good friend the currency trader has a fistful of post-it notes that he has stuck around his monitor like a Lion's Mane. When he makes a mistake, he writes out a reminder, and sticks it there, e.g. Stop! Am I buying resistance or selling support?

 

Mistakes happen. I still make my share, that's for sure. Keep smiling, and come back tomorrow.

 

Best Wishes,

 

Thales

 

Hi Thales,

 

Thanks for your comments. I am certainly not emotionally beatup or discouraged by 2 trading mistakes. The mistakes were made because I did not do my daily prep to check for S/R etc - (my excuse for this is that I have a kidney infection and am not feeling well at all .)

 

I am currently focussing on 3 pairs only GBPUSD, EURUSD and USDJPY, I mainly trade the GU.

 

I am going to take all your other suggestions to heart and will certainly create a cheat sheet as well - would have saved me from today's mistakes..

 

Again, I really appreciate your encouragement and support to all of us in this thread!

 

Cheers,

eNQ

[Cory2679 11]

Well, I had jumped back in to the GU short on the pullback.

 

I just pulled out and my end result for the day is up a net of $5.85. (I made $31.32 yesterday).

 

I realize I'm in a very dangerous state of mind and that was probably something of a revenge trade to get at least even or better for the day (I was down $0.75).

 

I swear, at this point, I have have shut down FXCM. No more trading today.

 

Obviously trading real money has affected me a little. But it's not the money itself. I mean, we're talking about 10's of dollars. It's more that this is now my "official" track record, so to speak.

 

Anyways, time to reflect and start fresh tomorrow. I'm pretty disappointed with myself today. :embarassed: Live and learn (and re-learn, and then re-learn again).

 

-Cory

[thalestrader 14]

Close enough ... if you get the resistance levels right, why not sell when price responds as anticipated?

 

 

New stop loss in red ...

 

Best Wishes,

 

Thales

[thalestrader 14]

Short GBPUSD

 

Profit target 1 ...

 

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Well, I had jumped back in to the GU short on the pullback ...

 

Nothing wrong with that, so long as that is part of your plan, i.e. so long as it is one of your defined trade opportunities. Is it?

 

I realize I'm in a very dangerous state of mind and that was probably something of a revenge trade ... Obviously trading real money has affected me a little.

 

Yes. And if you have the mechanics down and you know what your defined trading opportunities are, then all the demo trading in the world will not prepare you for the winning and losing of real money and the seductive pull of the draw (the desire not to lose).

 

Be patient. Trade only when price presents a defined opportunity. Trade according to plan.

 

Best Wishes,

 

Thales

[thalestrader 14]

Ok folks,

 

This day has lasted 90 minutes longer than I wished. My stock trades are all closed, and I am short the ES and the GBPUSD (using the 6B - I should have done this is the micro account also, but i didn't). Stop loss is break even on both. My son and I are going out to race our r/c cars. I think it is too cold, but he is only four, and he thinks I'm just being funny.

 

For today thus far closed trades are ES -7 ticks, 6B +40 on 1/2 position, so a +20 worst case with a break even stop on the second half. For the day the worst case is a +13 tick day overall. Next profit target on the remaining 6B is 1.5912 (1.5922 if I were trading the spot). ES profit targets are 25.50 and 22.50.

 

I'll check back in later.

 

Best Wishes,

 

Thales

[Cory2679 11]

Nothing wrong with that, so long as that is part of your plan, i.e. so long as it is one of your defined trade opportunities. Is it?

 

Re-entering like that probably wasn't by itself a bad idea (after all, you were short at the time). It was more about my motives behind it, my frame of mind, what I was thinking, etc.

 

And if you have the mechanics down and you know what your defined trading opportunities are, then all the demo trading in the world will not prepare you for the winning and losing of real money and the seductive pull of the draw (the desire not to lose).

 

Agreed. And because of this, I really think I'm exactly where I need to be right now in my trading "growth"...trading a small live account.

 

Moving forward tomorrow, today's lessons should be fresh in my mind and hopefully I won't make the same mistakes I did today. At least I got through today without doing any damage to my account.

 

Well, I'm outta here for the day!

Edited January 5, 2010 by Cory2679
typo

[TradeRunner 10]

A better day today. (Yesterday was a real struggle)

 

8 Trades: 4 win, 3 loss, 1BE

[thalestrader 14]

A better day today. (Yesterday was a real struggle)

 

8 Trades: 4 win, 3 loss, 1BE

 

So you are +15 ticks after the two days?

 

15 trades

 

5 wins @ +30 = +150 ticks

 

9 losses @ -15 = -135 ticks

 

1 BE

 

I know it doesn't look like much, especially when you consider that close to half your profits (if not more) are eaten away by commissions/fees. But this really shows how powerful money management can be in determining profitability. Your winners are twice your losers. You have a 33% win rate yet you are net profitable, albeit only slightly once commissions/fees are considered, but net profitable nonetheless. That is the beginning of something very good for you.

 

Now, two things to consider:

 

1) Your decision to to BE at +16 cost you a +30 winner while not preventing any of your -15 tick lossers. Also, you were stopped out to the tick on that trade. So, if you goal is to trim your losers, it would appear that the "move to BE" at 15 might not be as effective as you'd like. Of course, two days do not make a trend, or a mechanical system. But you want to keep your records, and this is one thing you should track: How often does your moving the stop prevent a ful -15 tick stop versus costing you a +30 tick winner? Over time, the rule must prevent 3 losses minimum for every one win it costs you or the rule will damage your results.

 

2) You are getting in on the right trades. Right now you are also seeing some situations as opportunities that I would consider marginal, and some I just do not see at all. As you practice this, you too will get better at identifying what I call the 80/20 trades where there is a high probability for profit from those that are more 20/80. So your rule of mechancially moving your stop to breakeven at +30 is intended to do for you what your lack of experience with this particular approach is preventing you from doing - reduce the number of losing trades and thus increase your winning percentage. Over time, this will take care of itself without using arbitrary rules.

 

3) Finally, there is no substitute for trading based upon the natural ebb and flow of price. I do think that a mechancial -15 tick stop/+30 tick profit will work on the more liquid currency pairs/futures. And I think you are in the process of proving just that. But, when I brought this up months ago, it was meant as an exercise, and hence its mechanical nature. I don't want to stop you from doing what you are doing, because I think it is working for you (in spite of yesterday's discouragement). But do consider support and resistance as well.

 

You do want to take into consideration the location of S/R relative to where you are trading and where your profit targets are. For example, if you are going long and your buy stop is only 5 ticks below a prior high or worse, only 5 ticks or so below a prior break down level, then you might want to pass on that trade and wait for the next opportunity. Similarly, if your 30 tick take profit level is three ticks below yesterdays' low, do not assume that you will get there. Keep you 30 tick take profit order, but be prepared to exit if price gets close and starts to retrace, eespecially if it does so strongly. A +15 or +20 is better than watching price race all the way back to break even and beyond on you.

 

So I think your mechanical approach is fine,and it should help a great deal in managing the emotional aspects of this. But you do need to learn to respect S/R levels as you trade.

 

By the way, I think you did a wonderful thing by coming back today and keeping up the effort in the face of what I'm sure was a discouraging day for you yesterday. If I wore a hat, I'd take it off to you.

 

Best WIshes,

 

Thales

Edited January 5, 2010 by thalestrader
typo