Reading Charts in Real Time

[TradeRunner 10]

Hi Traderunner,

 

Here's a few notes of my own for you.

 

Best Wishes,

 

Thales

 

Hi Thales

 

Thanks for your comments.

 

TradeRunner

[Cory2679 11]

Hey guys,

 

I'm here today, but half way. I had to send a bank statement, credit card statement, passport, and social security card to FXCM, and explain that I am actually a US resident, not a UK resident. I think it's all straight now! My deposit of $48.81 triggered all that. Plus, I had to catch up with some friends. I'll be back full force on Monday, 7:30am to between 2-4pm EST.

 

a short on the EURUSD after all that ...?

 

Question about this trade...

 

Of course it's visually very obvious, hitting resistance, and was very profitable.

 

The only question I have is...isn't it a less probable trade to fade an impulsive move like that? It was moving SUPER strong to the upside.

 

I can see why maybe someone would just be waiting for a move like that to turn around, and there it gave an obvious opportunity to get in.

 

I'd just be hesistant to fade an upmove like that...

 

-Cory

 

EDIT: For further clarification, this is the concept I'm referring to:

 

...when you get a large move in either direction with obvious momentum behind it, do not fade that move. Wait for a chopy pullback and then a push to a new high that stalls and presents a clear 123 going the other way.

Edited January 8, 2010 by Cory2679

[thalestrader 14]

Hi folks,

 

I got a PM today fasking about which pairs to trade. I get that one alot, so I thought I'd post the response here as well:

 

 

 

I would think that the EURUSD, GBPUSD, and USDJPY should offer sufficient opportunity for you. My daughter came to prefer the EURJPY, and when she trades, she is mostly trading that pair. The other three pairs I mentioned have the added benefit that each has a corresponding, fairly liquid futures contract associated with them (6E, 6B, and 6J respectively), and I would think that your goal should be to "graduate" at some point from trading only with a bucket shop to trading listed futures.

 

Best Wishes,

 

Thales

Edited January 8, 2010 by thalestrader
typo

[thalestrader 14]

Question about this trade...

 

Of course it's visually very obvious, hitting resistance, and was very profitable.

 

The only question I have is...isn't it a less probable trade to fade an impulsive move like that? It was moving SUPER strong to the upside.

 

That short was very obvious, and, if you re-read my posts, I initially was not going to trade it at all, but then I did do so, but with a small 30K (3 mini lot) position in my daughter's account.

 

I wish now (wouldashouldacoulda) that I had sold a handful of 6E, but at the time I saw what you saw; and though it was an obvious opportunity (which does not assure it will be profitable, only that it has a 123 at resistance) I too did not want to fade that rocket ship. As you can see, that short move was but a pullback, and the rocket has refueled to at least circle the atmosphere once again, and perhaps to break out into space.

 

By the way, I know I have said this more than once: For every rule or guideline I cite, I have a bushel or two or four of trades where I broke with one or more, and not always happily (ever after).

 

Best Wishes,

 

Thales

[rigel 10]

Excellent trade, EmNQ, Congratulations!

 

Best Wishes,

 

Thales

 

EmNQ

Do not trade this instrument but am curious, is 1pt equivalent to $20,

Also how did you determine the target??

[thalestrader 14]

EmNQ

Do not trade this instrument but am curious, is 1pt equivalent to $20,

Also how did you determine the target??

 

The futures for the GBPUSD (symbol 6B) trades at $6.25/tick. If you are trading it through a spot forex bucket shop, then you can basically trade it in almost any increment, from as low as 10 cents/tick(pip) to hundreds of dollars/tick (pip)

 

Also how did you determine the target??

 

I'm not EmNQ, but I'm going to go out on a limb here and say that he selected his target by identifying resistance at that level, and then checking for nearby fib related levels, in this case, a 2.618 expansion of the chop zone created yesterday, which coincided with the 61.8% retracement of the decline from the 1/4 high to yesterday's low.

 

That's how I did it for my second profit target (which was right in the area of EmNQ's).

 

Best Wishes,

 

Thales

[fxThunder 10]

EmNQ

Do not trade this instrument but am curious, is 1pt equivalent to $20,

Also how did you determine the target??

 

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

[thalestrader 14]

I'm currently looking to go long at the high of the US session on EJ.

 

You should be long now.

 

Best Wishes,

 

Thales

[thalestrader 14]

I wish I had snapped this earlier when first drew the channel or crude. It had a nice rally, followed by a choppy decline confined to the boundaries of the channel. The horizontal blue lines represent levels that would have been tradable on a break (long/short). The little "triangle" is just a small chop zone out of which you would expect price to break the channel in the direction of the thrust out of the triangle).

 

As it is, it is but a hindsight contribution to what should have been a real time post.

 

But it is a good technical chart, so I thought I'd share it with you good folks.

 

Best Wishes,

 

Thales

[motion100 10]

I got triggered long but am now out at b/e. No pace to any move and considering time of day/week i'd rather be on the side line.

 

Have a good weekend all

 

Steve

[india quant 10]

USDJPY

either side trigger (confusing) :missy:

[thalestrader 14]

One thing about oil and gas, as far as price is concrned, they are very well -behaved instruments.

 

Best Wishes,

 

Thales

[thalestrader 14]

One thing about oil and gas, as far as price is concrned, they are very well -behaved instruments.

 

 

This is what happens when you give a kid a crayon ...

 

 

Best Wishes,

 

Thales

[Dinerotrader 10]

This is a great example of what I mean when I say that the market cycles between periods or range expansion and range contraction (and I am not taking credit for the observation).

 

 

Thales

 

This chart was extremely interesting to me.

 

How far can you use range expansion and contraction in your trading?

Do you use it mostly to set profit target expectations?

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

 

This idea and the chart seem like a huge key to some of your subconscious trading decisions that I am surprised there isn't more discussion of it.

[Dinerotrader 10]

One thing about oil and gas, as far as price is concrned, they are very well -behaved instruments.

 

Best Wishes,

 

Thales

 

That is why they are the primary instruments I SIM trade right now as you can see on my p/l posts on the p/l thread. I am surprised you don't trade them more.

[Dinerotrader 10]

I know Thales isn't a fan of the cheapies but I liked this one enough buy the breakout. I bought in at 2.20. Maybe this is a good look at the range expansion/contraction. You can see the range contracting in cycles and I bought the breakout of the last range/wedge.

We'll see if it can maintain momentum. Stop is at 1.96.

 

[Dinerotrader 10]

NCS

 

Wow, 2 cheapy breakouts in 20 minutes or so. I marked the L, H, HL sequence which occured right at the trendline break, with volume, and above longer term support. Talk about a confluence of setup indicators. Stop is at $0.95

 

[TradeRunner 10]

Today's trading: 3 trades (-15)

[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]

Today's trading: 3 trades (-15)

 

I love your hindsight trades. Your actual trades? Not so much. Though this is sim, it should be treated as though it were real. I would suggest not trading in a chop zone, and not trading at all in the hours leading up to the NFP announcement. I hesitantly took the first of three hindsight trades. I was not initiating new position during the other two, but I closed my the last 15k of my 30k short at what would have been the long entry of your second hindsight trade.

 

Best Wishes,

 

Thales

[thalestrader 14]

UK weather chaos has given me a chance to catch up.

 

Here are my results from the 7th: 6 trades (+30)

 

That wasn't a bad day ... and take out what you call "the stupid trade of the day," and you'd have finished +45. And to tell you the truth, I'm not sure I'd call it a stupid trade, and I'll tell you why: I went short of the 6E on the break of that 123 top at 1.4410. I had a stop loss above the 3 point, and a profit target of 1.4290 for 120 ticks. If I had kept my trading platform open rather than closing it soon after that trade triggered, I would likely have been stopped at break even on your "stupid trade of the day," and I might even have reversed to long. Its hard to tell - this is a "wouldacouldashouldanot" that fortunately, I did not do. As a result, after a mere 30 some odd hours, my profit target was filled and I had my best 6E trade in over a month.

 

I do my best trading when I sleep - and I'm not kidding. I think I'd own an island right now if I would just have set my order, my stop loss, my take profit, and walked away until I was alerted that either the stop or the take profit had been filled.

 

 

 

 

Best Wishes,

 

Thales

[MidKnight 12]

I do my best trading when I sleep - and I'm not kidding. I think I'd own an island right now if I would just have set my order, my stop loss, my take profit, and walked away until I was alerted that either the stop or the take profit had been filled.

 

I couldn't agree more, Thales. Over the holidays I conducted a pretty solid review of my FX trade ideas (trade idea to me, means having the general context right) since coming back to FX land a couple months prior. To my astonishment it is my micro managing that is massively affecting the bottom line. My overbearing desire to book profits early because it looks like it might start moving against me soon and/or moving to BE before a test of my entry has happened.

 

I need to simplify more rather than make things more complex with excessive micro managing.

 

With kind regards,

MK

[jonbig04 10]

I couldn't agree more, Thales. Over the holidays I conducted a pretty solid review of my FX trade ideas (trade idea to me, means having the general context right) since coming back to FX land a couple months prior. To my astonishment it is my micro managing that is massively affecting the bottom line. My overbearing desire to book profits early because it looks like it might start moving against me soon and/or moving to BE before a test of my entry has happened.

 

I need to simplify more rather than make things more complex with excessive micro managing.

 

With kind regards,

MK

 

Exactly! This is what I discovered in my trading and is why when I place a trade I set my targets, move to BE if I can, and leave. I literally leave. I go walk my dog usually. During that time I make peace with the potential outcomes and come back to check on it a little later. If it's still sitting there (usually is) I recheck everything and leave again. Cook food, vaccum, etc. It's what works for me anyway.

[thalestrader 14]

Weekend Reading

 

"Position sizing (and psychology) account for 90% of the variability of your performance and you cannot neglect them." - Van Tharp

 

 

I do my best trading when I sleep - and I'm not kidding. I think I'd own an island right now if I would just have set my order, my stop loss, my take profit, and walked away until I was alerted that either the stop or the take profit had been filled.

 

I couldn't agree more, Thales. Over the holidays I conducted a pretty solid review of my FX trade ideas (trade idea to me, means having the general context right) since coming back to FX land a couple months prior. To my astonishment it is my micro managing that is massively affecting the bottom line. My overbearing desire to book profits early because it looks like it might start moving against me soon and/or moving to BE before a test of my entry has happened.

 

I need to simplify more rather than make things more complex with excessive micro managing.

 

With kind regards,

MK

 

Exactly! This is what I discovered in my trading and is why when I place a trade I set my targets, move to BE if I can, and leave. I literally leave. I go walk my dog usually. During that time I make peace with the potential outcomes and come back to check on it a little later. If it's still sitting there (usually is) I recheck everything and leave again. Cook food, vaccum, etc. It's what works for me anyway.

 

Hi Folks,

 

In addition to risk of ruin in general, the above comments allude to something I'd like to explore through the use of my new little micro account. Whenever I turn my attention to position sizing and my own psychology (neglect yours at your peril) I turn to my collection of Van Tharp writings. This particular article is a good start.

 

Best Wishes,

 

Thales

Expectancy and Golden Rules of Trading Van K. Tharp.pdf

[TradeRunner 10]

I love your hindsight trades. Your actual trades? Not so much.

 

Me to - I'm an expert hindsight trader