Reading Charts in Real Time

[DugDug 10]

Just as a small contribution for the FESX50 - DJ Euro stoxx 50

Thought process is pretty random/non systemised as I am largely discretionary (I have tried to automate things to no real good result), but still based on price action. This is also longer term trade for me, but it does show the thoughts, the turn of when I look to start taking longs rather than shorts as trades.

 

The intraday patterns are similar but at present selling at resistance zones as the tend is still down to flat.(To job around and buy back as the market seems to be flatter, hence running the trade further does not seem worth it), with the proviso that this bigger pattern is forming, and if it does what I think, then shorts stop and longs begin.

 

I believe

-- an ABC pattern could occur in the 5 min, and coincide with an ABC in the 1 hour chart.

--- ABC patterns are corrective, hence if forming within a bearish to flat pattern, once the ABC has formed any reversal is actually bullish.

--- the longer term daily pattern while bullish with bearish intermediate overtones as the pullback in equities has shown, has started to give a good support level, and hence a low risk stop level....being the recent daily lows.

 

Aim: buy a small amount on an ABC correction, stop at lows, pyramid in at a break of the B point, and possibly again at the A point on the 5 min chart. These would have a stop around the 2780 level, confirming that the pattern has failed for me. So rough risk around 40 points. Or if the ABC fails to complete, and the C forms a higher low near here, go harder at buying a break of the B point, and a break of the A point.

 

Take profit target....largely gut feel, but if it runs I just let it go. (the problem with this is that sometimes I get out way to early or late, but it works for me)

 

I hope this is of some help or generator of ideas to anyone (plus I hope the picture is clear enough) if not I will chop it up and paste three separate ones)

Edited January 28, 2010 by DugDug

[Marko23 10]

Just as a small contribution for the FESX50 - DJ Euro stoxx 50

...

 

I see DCs all over your charts.

 

A DC10 or DC12 can find some, but not all of the 1-2-3 setups:

 

[DugDug 10]

what is a DC10, DC12? Donchian channels?

 

If so... I use a selection of a few just as a guide to show highs and lows, eg daily donchian 25, DC 12 for the 5 minute, the hourly I use 3 (for no real reason) just as I want to get a feel of the moves, rather than any exact levels.

As I mentioned for me trying to focus on the exact levels just does not work..... I fall into a mind f....k.

So I just look at the bigger picture, narrow it down and then look to get on board a few trade ideas.

I did some testing with DC and turtle trading etc; overall I found if you use DC10, or 12 or 25 dd not make much of a difference, except to change the overall PL returns.... which was not really the point in trying to optimise returns..

 

In my case these are just visual guides, as to the actual highs and lows, and yet still allow me to focus on the close line which i find easier just to see clearly.

[jonbig04 10]

Ouch.

 

Click for full size - Uploaded with plasq's Skitch

[DugDug 10]

I have gone slightly early for a small trade, as I find it gives me focus for the plan.

I bought 1 at 85, and will pyramid if it starts going my way.

 

update: now comes the painful wait and see, as I went a touch early. ( a problem of late)

two points: never add to a looser, so even if it goes down,....avoid the temptation to add to the long until it turns.

 

cut at 2765, loosing 20 points.(probably near the lows....doh) as I did not expect it to be such a strong fall, and yesterdays low taken out. Which makes this an outside day.

( I really have no idea if that means anything other than I just dont need to be here.)

 

Will look to renter if rally shows any promise again, as my longer term idea remains the same.

Edited January 28, 2010 by DugDug

[Marko23 10]

what is a DC10, DC12? Donchian channels?

 

If so...

 

Yes, DC10 is a Donchian Channel with parameter 10.

It can help to distinguish different degrees.

 

EUR/USD found its target

Edited January 28, 2010 by Marko23

[DugDug 10]

Re-entered +1 @ 2767 , stop at 2965, to go at it again on a little break up of the last few bars.

Really not sure why I am trying to pick the bottom, so have cut for even, at 2767.

time to stop, as I am an idiot today.

 

Let this be a lesson, of what not to do.

 

The good thing about the trade...

it was planned, idea was right as it works well in the past.

Key is to make sure once you get on board is to pyramid, with the trend (if it becomes one)

and let it run. loosing 20 points is nothing if you can run something for 100, and the second unit for say 80 points, the third unit 60 points. etc; Total 100+80+60=240.

 

Bad thing of the trade.

Went early, thinking I will pick the market perfectly.

Usually I wait and have patience.....but lately I have been way too eager.

 

Hats off to the guys who can post so many trades as they occur,

[Mr_black 10]

Enjoy

[Marko23 10]

Waiting for five (or the 3rd push down).

[patrader 10]

Waiting for five (or the 3rd push down).

[Marko23 10]

 

Thanks, Long from smaller degree.

Edited January 28, 2010 by Marko23
Added chart

[patrader 10]

ES Daily chart

[thalestrader 14]

Look at that chart of the ES. Anyone who saw that chart when I first posted could have used to make money. Now, in this case, the decline has not been of great extent, and for all we know, it may be over. ...

 

 

...or not ...

 

 

 

Best Wishes,

 

Thales

[Marko23 10]

EUR/USD at 1st target

 

EUR/USD touched 2nd target

 

I'll call it a day.

Edited January 28, 2010 by Marko23

[Cory2679 11]

Hey guys,

 

I think I'm going to be taking some time off from trading/posting. I need some time to reflect, read, review, collect my thoughts, etc. I feel like lately (this week) I've somewhat lost sight of the "forest" from focusing too much on the "trees."

 

I want to take this time off and decide exactly what I'm going to be doing when I resume trading this Monday.

 

Cory

 

Well, I decided to take the whole week "off." However, I have been lurking on this thread and doing some demo trading.

 

I'll be back to trading live and posting some charts this coming week. I've reset my $250 account (made a withdrawal).

 

I thought I'd share some of the things I've done/learned/re-learned while taking this time off (in no particular order):

 

• I reviewed the basics of this approach. I irrationally assumed that since I had a few mediocre days during the beginning of last week, I must be missing something. The conclusion that I came to is that I already understand the basics.
   
  
• I familiarized myself more with EW, and will be keeping it in the back of my mind.
   
  
• I familiarized myself with fib extensions for PT purposes...something I had not done up to this point (although I had used fib retracements for PT's before...using the 200% level to identify the 1:1 R/R, 300% for 2:1, etc.).
   
  
• I decided on a "default" for my money management, but it will somewhat depend on each individual situation.
   
  
• I need to make sure I don't miss an opportunity on one pair because I am too narrowly focused on another.
   
  
• I need to make sure I'm not "reaching" for a trade, just because I want some action.
   
  
• I'm making it a rule for myself that at the beginning of every day, before I begin trading, I'll mark areas of major S/R on my charts.
   
  
• I've decided that as a general rule, between the GU & EU, that I will sell the weaker & buy the stronger. BUT, there can be exceptions. This is an example that I demo traded today. I sold the EU, when it's now obvious that it would have been more profitable to sell the GU. I sold the EU because of the steady downtrend---I decided it was "weaker" (even though my gut was telling me to sell the GU). The conclusion that I've come to is that relative to the rest of the chart, the GU offered a much more favorable entry opportunity...even though you could possibly make the argument that the EU was overall "weaker." This may just be a matter of me not fully understanding the concept of "weak" vs. "strong."
  
   
  
• I'm going to be spending a lot more time at my computer...I have nothing more important to do...this is/should be my entire life right now. I've been on my computer until 5pm EST every day this week, and each day I get up an hour earlier (Mon: 10am, Tues: 9am, etc.) until I'm getting up at 6am each day. Next week, my plan is to get up at 6am each day, and stay on the computer until 11pm each night (I'll allow myself breaks, of course...and I won't work all day on the weekends). While I'm not actually trading (particularly between NY-Tokyo), I will find something productive to do to help myself continue to improve.
   
  
• I seriously need to forget about money and not focus on how I'm doing so far for the week, etc. I need to focus on trading, one day at a time, and do my best. That's how I'm going to succeed and continue to improve.
   
  
• I'll try to limit my whining/rambling on this thread (about my mediocre day/week, etc.).

That's all I can think of at the moment. Perhaps somebody found this useful.

 

See you next week!

 

-Cory

 

EDIT: One other thing I've been pondering is the whole idea about Thales saying that his best trades occur when he sets the orders at night and everything works its magic while he sleeps...and that his daughter takes very few trades for LOTS of ticks. This is something I will be keeping in the back of my mind when trading.

 

I have a feeling that the success of those trades that are left untouched doesn't have so much to do with the fact that they are left untouched (after all, active management helps minimize losses), but more to do with the fact that he or she feels comfortable leaving those trades untouched...meaning that the trades that they choose to leave untouched are much more probable situations compared to the average shorter-term daytrades that are actively managed. Just a thought.

Edited January 28, 2010 by Cory2679

[Mr_black 10]

5 Short Signals for last 3 day's

[forrestang 10]

Enjoy

 

5 Short Signals for last 3 day's

 

I too find tremendous value in Ross's material. But have always had trouble with stop placement because Ross has a weird way of managing a trade, at least the way he describes in his books. And I just can't see how that could work?

 

The Rh in concert with 1-2-3s on the bigger tf you posted seem logical, can you post your Rh ideas or trades in real time as they develop, I'd be interested in seeing someone elses take on that idea, particularly while the trade is developing. There are hooks or TTEs that dont immediately move in you favor that makes trade management a bit confusing.

[thalestrader 14]

Hi Folks,

 

A few ticks late to snap a pic and post this EURJPY long. I put the targets on that I would use. However, given where the EURJPY is with respect to its larger trading range, this may be an entry that offers an opportunity to play for much larger targets. Even if an over all downtrend from the 2007 highs is reasserting itself, it would not be unreasonable to try to play for, say, a 50% retracement of its most recent down leg as viewed on the 240 minute chart. My only reservation is that the decline looks to need one more low to look complete to me. Of course, given the extent of the decline, that low may be subsequent to a 1/3 - 2/3 retracement rather than preceding the retracment. But, again, it is that for which we use a stop loss, right? After all, if we knew for sure what price was going to do, there'd be no need for us to talk about it. We'd just buy low and sell high time after time.

 

 

 

Best Wishes,

 

Thales

[forrestang 10]

I do not mean to answer for patrader, but, I am assuming the "pa" stands for "price action" trader, though perhaps it means something else, e.g. Pennsylvania trader, etc. I know some would argue otherwise, but what does a "value range" have to do with S/R? What makes a stopping point made on diminishing volume any less relevant than one accompanied by a volume spike. People can go on about supply and demand and value, but in the end the only thing you need to consider is where did price stop when it was going up, and where did the decline stop on the way down.

 

 

 

Here is the ES chart with the resistance zone in red that I posted last night, and a new pic showing what has transpired since. I used no notion of a "value range" in determining where resistance would likely be found. I do not not even know, quite frankly, what is meant byy the phrase "value range." And I have not looked at volume in many years as consideration on any time frame less than a daily bar chart. You only need to look at where price has been, and where has it been stopped.

 

 

Pa trader has a very simple, yet I think incredibly clever approach to using these stopping points to trade. I may be wrong, but I would be surprised if volume or "value range" are considered at all. I see so many folks posting all these arcane and (in my opinion) misguided attempts to use anything to tell them how to make money in the markets except the one thing that will actually let them do so easily - PRICE itself!

 

Look at that chart of the ES. Anyone who saw that chart when I first posted could have used to make money. Now, in this case, the decline has not been of great extent, and for all we know, it may be over. But, if you sold price in the upper half of that range, you could close your position for a decent profit right now. Now, go look at most of the charts posted here at TL over the last 24 hours. How many of them could have made you any money? How many were posted a head of time so you know that the poster actually saw the opportunity before him or her? Outside of this thread, you will not find many, if any at all.

 

Best Wishes,

 

Thales

 

Yah, I get your point. I was asking more on a practical approach. Clearly it seems his daily charts are based on a rejection, once a good rejection forms, that becomes a S/R level.

 

The lines on the 15m chart, I am wondering how he defines those S/R levels?

[thalestrader 14]

I still think the ES needs one more wave down before it gets any substantial rally, and this scenario would look very pretty. Of course, anything can happen, and this really is but a day dream.

 

 

Best Wishes,

 

Thales

[Mr_black 10]

Short opp...............

[brownsfan019 17]

 

[*]I'm going to be spending a lot more time at my computer...I have nothing more important to do...this is/should be my entire life right now. I've been on my computer until 5pm EST every day this week, and each day I get up an hour earlier (Mon: 10am, Tues: 9am, etc.) until I'm getting up at 6am each day. Next week, my plan is to get up at 6am each day, and stay on the computer until 11pm each night (I'll allow myself breaks, of course...and I won't work all day on the weekends). While I'm not actually trading (particularly between NY-Tokyo), I will find something productive to do to help myself continue to improve.

 

Cory - nice job on working on your rules and getting your house in order.

 

I will offer 1 piece of advice - working 6am-11pm is insane. Even planning to work that much is a recipe for disaster. Why? B/c trading is such a mental game and struggle that to endure for that long every day IMO is beyond practical for most humans, esp someone that is new and just trying to learn a method. If this was on autopilot and being run by software, that's a different story.

 

It's admirable that you want to work a lot of hours and I'm sure you've been taught that in order to be successful you must in turn work a tremendous amount of hours. But what you have proposed here will lead to 1 thing - you burning out on a regular basis; which in turn will probably cost you money.

 

I currently work from about 9am-230pm EST and by 230pm, my brain feels like it's been worked over and that I just went through a 12 round fight.

 

I know the goal looks great on paper and sitting here on a Thurs it looks very doable but I think you are setting yourself up for tremendous disappointment.

[thalestrader 14]

Operation Insane Rodeo Clown (OIRC)

 

 

I was wondering if you are still considering doing that 'set and forget' experiment? Even if you did it with a demo account it would probably still give worthwhile information both to you and to anyone you chose to share with (hopefully this thread)

 

Sure, Midk, thanks for the reminder. I have decided to open up the micro platform and take the long EURJPY. as per my post above: Long at 125.57, stop loss 125.07, profit target 129.45. I'm trading Jonbig style, all in/all out, though I will trail a stop at a point behind the 61.8% retracement of the entire move higher if the trade trends positive (I have a friend who does this to great effect, so I figured I'd pirate it for this experiment).

 

For the record, this is a small account. Very small. When I told my daughter a few weeks back that I was going to try to do what she had done, she told me that it wasn't fair that she had started with only $25 but I was starting with $300 (I know, it's hard to believe a nine year old would really say "Hey! That's not fair!"). My wife agreed (also hard to believe, right?), so I had to draw out the excess and start at my daughter's level. I had done a small trade or two, so my actual starting balance as of today was $26.90 I think.

 

For this trade, I'm trading at 2 dimes/pip, so my risk is $11.16 (how's that for crazy rodeo clown leverage?!) and my profit target, if achieved, will yield $86.22. I'm still thinking that I'm early and that the EURJPY needs one more push down into the 124.37 level or so, but hey, I have to start somewhere.

 

The money is not important, however. This is about keeping score by scoring ticks. So this trade has a 50 tick risk and a 388 tick profit target. I'll update here in the thread when 1) I adjust the stop loss and 2) When I get stopped out and 3) at the end of each week until I blow up.

 

Below is a screen shot of the open position window and the Ninjatrader chart I posted earlier.

 

Giddy Up!

 

 

Best Wishes,

 

Thales

[Cory2679 11]

I will offer 1 piece of advice - working 6am-11pm is insane...

 

Thanks for the advice, brownsfan. I really appreciate it. I will definitely consider what you said and think about next week's schedule over the weekend.

[Mr_black 10]

That was fun.....instead going down and trigger short sale price made HH totally changing my view .... I went Long for + 32 YM points:)