Reading Charts in Real Time

[Mr_black 10]

Perhaps I should underline this: I do not critizise the MA on your chart. But the obvious success of your efforts comes from your understanding of price action, not from picking the right moveing average.

 

Please excuse any irritation my comments may have caused.

MA's are like a mirror with delayed reflection for PA:2c:

[Marko23 10]

MA's are like a mirror with delayed reflection for PA:2c:

 

You look at them as a smoothed picture or sum of the past -- what it is from it's very definition.

 

If so, what indication of the future gives it to you that cannot be read from the price?

Edited January 31, 2010 by Marko23

[forrestang 10]

and you can access a download link to Market Wizards for the Wienstein and Baldwin interviews at this link:

 

4shared.com - free file sharing and storage - download

 

Did I get the wrong link? I just looked at both the table of contents and used the search function but didn't see either of those two names. It's late and I could be mis-reading the suggested reading.

[Marko23 10]

One aspect about patrader's approach that recurred to me this morning:

when you enter near the apex of a wedge, you enter in an area of low volatility; you enter "in mild times" so to say.

 

Price may not develop a rebound but one should be able to cut a loss short.

[DugDug 10]

Marko23 - good point about an entry whereby - even if you are wrong the loss is not likely to run away from you, and hurt too much....

[Gabe2004 10]

I picked.

 

Thank you,

 

Thales

 

I made you some more to choose from.

 

Gabe

[thalestrader 14]

Lately, I've been feeling better about trade management, and have begun to stop fretting over the possible future outcome of each of my trades ... at the very least it has allowed me to focus on not worrying about every trade being a winner, because I am at least a bit confident that I have a pretty solid way of management..

 

I received a PM relating to this issue. This question did not come from Forrest but from someone who lurks this thread (no problem, lurkers welcome!). But please, folks, if you read this thread and you do not post, that is fine. For years I was but a serial lurker. But if you have a question about the material in this thread, please ask it here in the thread, as you are probably not the only one with the question.

 

Anyway, the question asked about ptting together a trading plan. This trader had decided to include in his plan a proposal to quit for the day after two losses. I do this as well. But I realize I may not have been as clear as a might. You see, I take a lot of losses and break even trades. Very, very small losses. When I say I quit after two losses, I mean I quit after two more or less full stop losses or their equivalent. I have tried to move the topic of money management here in this thread toward position sizing and the use of R-multiples, but the subject has not gained very much traction.

 

Basically, if you are risking, for example, 2% of equity/trade, that is your R-unit size. If you take a trade with a 1R risk, and your profit target is three times as many ticks as you stop loss, then you have a 3R profit target. This means you are risking 2% on the trade, and if the trade runs to full stop, your loss is limited to 2%. If the trade proceeds to your profit target, then you will have made a 6% profit.

 

My trades areall sized to the R-unit. So if you see me post a trade that has a 40 tick risk, and the result of the trade is I pull the rord for an 8 tick loss, my loss on that trade is not 1R, it is only 20%of my initial risk, or .2R. So, if I am trading, and I have three such small losses, I am not done for the day, as I am not down by even 1R.

 

If, however, I take a full stop of -1R, and then three more losses of-.3, -.5, and -.4,, my losses for the day would be -2.2R, and I am done. Once I am down that much, I start to lose my discipline, so I discipline myself to stop trading to preserve whatever shred of it I have left.

 

So, yes, I quit after two losses. But it is two losses construed as two risk units. I had assumed folks wouldn't think I'd quit for the day after two -7 or -5 tick losses, as my initial stops were, say, -20 ticks and -40 ticks on each trade respectively. If my total risk on the two trades was initially -60, but my actuakl loss was inly -12, I am still well below a -1R loss for the day, let alone a -2R loss which would trigger my "kill switch."

 

And yes, -2R days happen.

 

I hope that clears things up.

 

Best Wishes,

 

Thales

[thalestrader 14]

Did I get the wrong link? I just looked at both the table of contents and used the search function but didn't see either of those two names. It's late and I could be mis-reading the suggested reading.

 

Sorry Forrest and Folks, that was Stock Market Wizards.

 

Try the .pdf below. Mark Weinstein's interview starts on page 156, and and Tom Baldwin's starts on page 178.

 

I also think Larry Hite's interview is very good as well. You will find that on page 87.

 

Best Wishes,

 

Thales

Jack Schwager - Market Wizards.pdf

[idaxtrader 10]

Thank you very much for the link to the first market wizards. I have been looking for that in e book form for years and could never locate it. Know I can put it on my droid and read insprational stories when I'm on the train or bus. Thanks again!!!!

[Gabe2004 10]

Some more versions by popular demand.

 

Gabe

Edited January 31, 2010 by Gabe2004

[thalestrader 14]

Some more versions by popular demand.

 

Gabe

 

I like that better than the "battlefield" version.

 

Best Wishes,

 

Thales

[thalestrader 14]

This was a great series of posts from EMNQ on Friday that I had missed:

 

For Jonbig and Forrest - ES short setup...

 

Edit: potential target = lod 1082 area

 

 

ES target area indicated...

 

 

and last update... ES target reached

 

 

Here is a 1 minute ES that shows where price was at the corresponding time stamps of his posts.

 

 

Whether he traded it or not, there is no arguing with that being an excellent and accurate read of price action publicly demonstrated in real time.

 

Great series of posts EMNQ!

 

My only criticism is that I would have liked to have seen the blue entry, red stop loss, and green target lines included in the pics as well. I probably missed the posts in real time because if I do not see trade lines I tend to scroll on by and come back later when I see what I have missed. But nonetheless a good series of posts.

 

Best Wishes,

 

Thales

[jonbig04 10]

My apologies EMNQ! I didn't even see your posts. Great stuff.

[thalestrader 14]

Thank you very much for the link ...

 

No problem. I'm an old school reader myself and I prefer actually to hold the hard copy in my hand. But having an electronic copy handy is nice to have.

 

Best Wishes,

 

Thales

[thalestrader 14]

Current look at the monthly USDJPY shows price falling back after trying to poke through that descending upper trend line, I still think this looks as though it is in the final stages of the down trend, and a break and hold above that trendline should auger a multi-month rally in the Buck against the Yen.

 

Best Wishes,

 

Thales

[thalestrader 14]

Current look at the monthly EURJPY has a different picture. Price has broken below a nearly 12 month long sideways range, and has what Mike Reed calls a "Slinky Set Up," where price falls hard, bounces, and rolls over like a slinky going down a set of stairs. A sizable decline from here, perhaps after price rallies to kiss the lower range good bye, seems likely.

 

Best Wishes,

 

Thales

[thalestrader 14]

Currrent look at the EURUSD: The March and April '09 highs may provide a pause in this sell off, but the fact that so much has been retraced so quickly implies that one should be on the alert for a test of the October, 2008 lows.

 

Best Wishes,

 

Thales

[MidKnight 12]

I know this thread is predominantly about real-time trades, but instead I would like to post my start of day game plans.

 

Any shorts initiated in the R zone will be held with bigger targets and scale out less aggressively (using 1/4ths). Any longs in the zone on the 240m chart will scale out with 2 targets. Anything outside of those zones is strictly scalps with all in/all out. Ideal play for me is to short rallies into the R zone.

[Gabe2004 10]

I guess you did not like the animated avatar and tried to have only the stationary part.

It looks fuzzy so here is a clear one.

When you convert a .gif file to .jpg the resolution drops (sometimes) and the picture becomes fuzzy.

It botherd me more than you probably.

Since I haven't found an ATTACHMENT option in the PM section I had to clutter this thread once more.

 

Gabe

[thalestrader 14]

I guess you did not like the animated avatar and tried to have only the stationary part.

 

I liked the animated ones, but every time I would try to read the thread, I felt a stroke coming on, so I went to the stationary avatar. Thanks for your help.

 

Best Wishes,

 

Thales

[forrestang 10]

Could you imagine being on the hook to guys like you and MidK and Forrest if I had accepted a payment for what I share? No offense, but you guys can be rather demanding, don't you think? But that's ok, because I choose to continue.

:haha:

 

LOL, I just noticed this earlier today. Luckily for you, most of the questions I think are just about answered.

[thalestrader 14]

Here comes the EURUSD ... maybe ...

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Here comes the EURUSD ... maybe ...

 

 

Came and went? Or just getting warmed up? EU's has taken quite a beating since December. It almost deserves a chance to stand up and catch its breath before taking the knock out punch.

 

 

Best Wishes,

 

Thales

Edited February 1, 2010 by thalestrader

[thalestrader 14]

I know this thread is predominantly about real-time trades, but instead I would like to post my start of day game plans

 

Sounds real-time to me ... I look at monthly charts at the beginning of each month to re-introduce myself to the larger picture. Prep work is an integral part of making decisions to risk your money in real time. Post away, MIdK!

 

Best Wishes,

 

Thales

[thalestrader 14]

Current look at the 6J (JPYUSD futures) which trade inversely to the USDJPY spot pair ...

 

Best Wishes,

 

Thales