Reading Charts in Real Time

[Dinerotrader 10]

We'll see how this "3 pushes down" performs at this big support level.

 

[thalestrader 14]

Hi Folks,

 

A family emergency called me away suddenly, but the crisis has passed.

 

What a day I missed. The first chart I see is crude, and it shows that it has retraced every penny of the February rally.

 

That is what I call a trend day down!

 

Best Wishes,

 

Thales

[patrader 10]

15m and 240m CL charts

[thalestrader 14]

I shared this over at Jonbig's blog as well. He observed that both recent lows in crude were 72.42/3 level. ... this is the 240 minute crude, which shows the 72.4x level is likely line in the sand between current levels and much lower crude prices, as not only did it act as suport on 2/1 and this afternoon, but it was the 12/14/09 low as well.

 

 

Best Wishes,

 

Thales

[MidKnight 12]

Both major and immediate trends are down so any shorts are going to scale-out in 1/4ths. I'd consider it a gift it the market rallied back up to the market R zone, but the market rarely gives me a gift. I'll also be alert for shorts testing the 1.5820/40 area. No significant longs until we probe below that major weekly low of 1.5707. Any longs down there will be scaled out in halves. Anything else outside of those zones must be very obvious and is treated as all in/out with conservative targets.

[thalestrader 14]

Current view of the US Dollar index shows that the Buck cleared nearby reistance easily. Next stop is the area between 80.40 and 82.00 (I could try to pick a tick, but why bother). I did not trade today other than a small loss on an ES long. My guess, if guesses are allowed, is that the long dollar, long Yen, short the world has a day or two more before a pause. I do think this is looking a lot like 2008 which means, as MK has implied in his recent posts, that 6E(EURUSD) and 6B (GBPUSD) should be viewed as long scalps/short swings.

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Current view of the 240 minute ES with targets. The target around 1050 almost feels like a given at this point. I'd be more inclined to short a bounce off of it than to buy that bounce (presuming it bounces at all. My favorite target is about 1018.75. Below that is 1007.25, though if 1018.75 fails I'd be looking for 998.50 or so (not shown).

 

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi Folks,

 

I've taken advantage of a slow quiet night in the markets to go back and read some Linda Raschke material. The following is a list of trading rules that she was given when she was a floor trader trading options on the Pacific Exchange in the early 80's. I think it is a good list, so I thought I'd share this here (Again, this is from Linda Raschke, not me).

 

I especially like the last one: "Assimilate into your very bones a set of trading rules that works for you."

 

Best Wishes,

 

Thales

 

 

 

Time Tested Classic Trading Rules

for the Modern Trader to Live By

 

This is a list of classic trading rules that was given to me while on the trading floor in 1984. A senior trader collected these rules from classic trading literature throughout the twentieth century. They obviously withstand the age-old test of time.

 

I'm sure most everybody knows these truisms in their hearts, but this list is nicely edited and makes a good read.

 

1. Plan your trades. Trade your plan.

2. Keep records of your trading results.

3. Keep a positive attitude, no matter how much you lose.

4. Don't take the market home.

5. Continually set higher trading goals.

6. Successful traders buy into bad news and sell into good news.

7. Successful traders are not afraid to buy high and sell low.

8. Successful traders have a well-scheduled planned time for studying the markets.

9. Successful traders isolate themselves from the opinions of others.

10. Continually strive for patience, perseverance, determination, and rational action.

11. Limit your losses - use stops!

12. Never cancel a stop loss order after you have placed it!

13. Place the stop at the time you make your trade.

14. Never get into the market because you are anxious because of waiting.

15. Avoid getting in or out of the market too often.

16. Losses make the trader studious - not profits. Take advantage of every loss to improve your knowledge of market action.

17. The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.

18. Always discipline yourself by following a pre-determined set of rules.

19. Remember that a bear market will give back in one month what a bull market has taken three months to build.

20. Don't ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.

21. You must have a program, you must know your program, and you must follow your program.

22. Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.

23. Split your profits right down the middle and never risk more than 50% of them again in the market.

24. The key to successful trading is knowing yourself and your stress point.

25. The difference between winners and losers isn't so much native ability as it is discipline exercised in avoiding mistakes.

26. In trading as in fencing there are the quick and the dead.

27. Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.

28. Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.

29. Accept failure as a step towards victory.

30. Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker! Don't let ego and greed inhibit clear thinking and hard work.

31. One cannot do anything about yesterday. When one door closes, another door opens. The greater opportunity always lies through the open door.

32. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this he is safe. When he ignores this, he is lost and doomed.

33. It's much easier to put on a trade than to take it off.

34. If a market doesn't do what you think it should do, get out.

35. Beware of large positions that can control your emotions. Don't be overly aggressive with the market. Treat it gently by allowing your equity to grow steadily rather than in bursts.

36. Never add to a losing position.

37. Beware of trying to pick tops or bottoms.

38. You must believe in yourself and your judgement if you expect to make a living at this game.

39. In a narrow market there is no sense in trying to anticipate what the next big movement is going to be - up or down.

40. A loss never bothers me after I take it. I forget it overnight. But being wrong and not taking the loss - that is what does the damage to the pocket book and to the soul.

41. Never volunteer advice and never brag of your winnings.

42. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss.

43. Standing aside is a position.

44. It is better to be more interested in the market's reaction to new information than in the piece of news itself.

45. If you don't know who you are, the markets are an expensive place to find out.

46. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word - Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.

47. Except in unusual circumstances, get in the habit of taking your profit too soon. Don't torment yourself if a trade continues winning without you. Chances are it won't continue long. If it does, console yourself by thinking of all the times when liquidating early reserved gains that you would have otherwise lost.

48. When the ship starts to sink, don't pray - jump!

49. Lose your opinion - not your money.

50. Assimilate into your very bones a set of trading rules that works for you.

[johnjohn1hew 10]

Some trading principles I picked up from an AHG posting:

 

#1) Discipline at all times. Your most important rule, make no mistake, nothing surpasses this.

 

#2) The Monster. Never ever average down, ever. Scaling in but not surpassing your original intended size and/or risk is ok. Make sure you know the difference.

 

#3) Homework. Make sure you do your homework. Before the day begins you should have identified

any major pivots, trendlines on anchor and daily charts. Especially the anchor chart.

 

#4) Non optimal AHG days. Be extremely careful in days like FOMC, OEX or Holidays where the market is open.

 

#5) Reversals. Do not call reversals unless a reversal formation forms and confirms around a major pivot or trendline support/resistance. Tattoo this on your forehead.

 

#6) The trend is your friend and lack of trend your enemy. Do not ever go against the trend unless you have concrete reasons for doing so. ie. Major Pivot, Major Reversal Confirmed Formation. Learn to stay on the sidelines when the trend is not apparent ie. Choppy

 

#7) Risk vs Reward. When trading you must deal with commissions, slippage, bad luck, bad calls. In order to compensate for this your reward must surpass your risk on all trades in AHG, no exceptions.

 

#8) Control losses, and allow winners to run, this is imperative for consistent profitable trading.

 

#9) Under no circumstances must you allow big losses, ever. Take your small losses like a responsible trader. It's not about accuracy. it's not about being right, it's about making money. Do not be afraid of small losses.

 

#10) React to price, don't predict, let price guide you, don't ever try to guide price.

 

#11) No bias. Begin the day with absolutely no bias, completely neutral. Ignore news, yesterday news or what your momma told you.

 

#12) Enter wisely: New trades should be initiated in critical areas of support or resistance, this prevents noise from interfering with your price action analysis. It also eliminates, somewhat, the possibility of questioning the play - it should work or it wont, no second guessing.

 

#13) Overleverage. This is completely unacceptable. Trade a size that is adequate to your trading capital. You must survive to trade another day to make it. No setup is worthy of overleverage, not even one. We fill our glasses with drops not splashes. You want to grow, do it slowly, preservation of capital above all.

 

#14) Patience. It really is a virtue in trading. Patience for waiting for your best setups and patience for letting them reach your well planned targets. This is the cure for overtrading., If you could wait 8 hours a day to get paid little money at your past or present job you can surely do so in daytrading.

 

#15) Winning attitude. A positive mental attitude is essential to succeeding over the long haul, and my definition of a winning attitude is a positive expectancy from our efforts. Take a moment before the trading day begins to see yourself making all the right decisions, waiting for the market to come to you, striking at the correct moment, etc. It's a good way to increase your focus and get into the 'zone'.

 

#16) Determination: Pick a strategy, study it, analyze it, and apply it. Don't go switching your trading plan every week in hopes of reaching perfection, you'll become a master of none and end up nowhere and frustrated.

[jonbig04 10]

*This is a sim trade on CL*

 

But I thought it was applicable. I can't load a 5 min chart for some reason, so I'm using bigger waves on a smaller chart.

 

Click for full size - Uploaded with plasq's Skitch

[jonbig04 10]

*This is a sim trade on CL*

 

But I thought it was applicable. I can't load a 5 min chart for some reason, so I'm using bigger waves on a smaller chart.

 

Click for full size - Uploaded with plasq's Skitch

 

Got filled by a tick and then stopped out lol. Sim owned.

[Marko23 10]

EUR/USD at 2nd target and five waves down

[MidKnight 12]

The markets are sorta idle at the moment so I wonder if I can toss a question at you? In talking about trading off various degrees, I think I have seen you mention that it is a mistake to enter off the smaller degree and manage it from the smaller degree (or was it manage from the larger degree?) with the intent of trading for the larger degree. You said something like most do that way and it is a mistake. I wonder if you could elaborate on that thinking?

 

Cheers,

MK

 

Sorry, Midk, I didn't see your post. I will elaborate, but it will have to wait until my morning.

 

Best Wishes,

 

Thales

 

No rush sir :yes sir: , I'm not trying to be demanding, just a reminder if at some point we could talk about this.

 

With kind regards,

MK

 

PS: I hope whatever the family crisis was, all is good now!

[DugDug 10]

MidKnight

this is also relevant to me at present.....in my thoughts about trend trading and profit taking.

My thoughts are largely coming from the angle at present....

 

If you chose a direction to go at from a larger time frame (LTF) and then trade it from the smaller time frame (STF), you still have to make sure that the STF entries and exits match. (This is still key)

 

By using the LTF I am thinking its best to ONLY look for STF plays that head in the direction of the LTF trend. (yes you loose flexibility, however you maintain focus) To do so means you clearly need to define what the trend for the LTF is, and apply the appropriate STF strategies, eg, swings highs, breakdowns, sell rallies OR swing lows, breakouts, buy dips.

 

Each STF strategy can then be pyramided into the LTF period.

eg; if a LTF strategy is to get short, there will be intraday STF signals, that you can run....these may get you in early for the LTF..... however this is the old sell 3, TP on 2, run 1 scenario.

 

clearly this is all suiting my preferences, history and biases.... but I hope this helps.

 

(I must say I picked a really sh...ty time to try something different as this falling mkt is normally the bread and butter....of sell and forget (walk away) my focus has not been on it.... at least I have not been bullish):doh::crap: there will always be plenty of opportunities!

[thalestrader 14]

Current view of the 240 minute ES with targets. The target around 1050 almost feels like a given at this point. I'd be more inclined to short a bounce off of it than to buy that bounce ...

 

Looking for a short anytime now ... it will either be a short sequence ont he 15 minute or a new break low, but I am looking for a short on the ES that should have a first profit target in the high 1020's with lower targets should I please.

 

Note that the blue and red lines do not represent actual orders yet. We do not yet have a short sequence, and I am just tracking the potential for one. Also, the chart shown here is the 15 minute, not the 240 minute from the above quoted post.

 

http://www.traderslaboratory.com/forums/attachment.php?attachmentid=18936&stc=1&d=1265374789

 

Best Wishes,

 

Thales

[thalestrader 14]

Looking for a short anytime now ... it will either be a short sequence on the 15 minute or a new break low ...

 

Still looking ... I put a sell stop below the spike low on the NFP announcement, but canceled it with the new bounce/rally high. I apparently was so convinced of my opinion that the direction would be down, that I did not see this as a long sequence. Usually I at least see the possibility, and then choose to do nothing. This time, I did not even let myself "see" this as a long. Though I did not lose anything this time, it is still a clear violation of Rule Number 49 - "Lose your opinion, not your money."

 

 

Best Wishes,

 

Thales

[Cory2679 11]

I apparently was so convinced of my opinion that the direction would be down, that I did not see this as a long sequence.

 

I had something similar happen to me just now. I saw this clear long sequence on the EUR/USD, but didn't consider it for a trade because of what I thought I knew about the fundamental/economic situation...I expected further declines. (I wasn't up for the initial entry, but I considered an entry when it gave the opportunity).

 

Would have been a BE effort anyway, but still. That's the first time I've ever done that.

 

It's funny...it's like the chart new before the news came out!

[thalestrader 14]

In talking about trading off various degrees, I think I have seen you mention that it is a mistake to enter off the smaller degree and manage it from the smaller degree (or was it manage from the larger degree?) with the intent of trading for the larger degree. You said something like most do that way and it is a mistake. I wonder if you could elaborate on that thinking?

 

I believe the points I would emphasize are these:

 

1) Be aware of the size of the swings you are using to get into the market. The ensuing moves, i.e. what you can reasonably expect by way of maximum favorable excursion (MFE) for the trade will be in proportion to those swings. Do not enter a short sequence visible on a 5 minute chart and expect profits the size you would expect on a similar sequence visible on a 60 minute chart.

 

2) If you are using a smaller degree to "anticipate" a higher degree break out, then accept that any profit may disappear to a loss if the larger degree breakout fails to materialize.

 

3) If you are taking a breakout of a sequence visible on a 15 minute chart, do not manage trailing stops on a lower degree, with the exception that if a lower degree adverse reversal appears soon after entry, and with very little MFE, then use the small degree to exit, but have a plan to re-enter in the original direction if the larger degree move you anticipated re-asserts itself.

 

If there were something else I had said to which you are referring, you will need to find the post. I remember the discussion, and I think I even remember the charts I used (6E/EURUSD at a double top discussing two back to back short sequences and showing various degrees of swing), but I do not remember where the post is. This has become quite a large thread, and at some point, I do intend to perhaps move/reiterate certain points either in a thread of their own, or utilizing TL's blog features to make it easier for us to reference the material.

 

Best Wishes,

 

Thales

[thalestrader 14]

...I did not see this as a long sequence...

 

But, as it is a long sequence, not doing anything fancy but throwing some fib expansions on to see where it might be heading without respect for chart points. Right now the trade, had I taken it, would be at BE. I would usually take profits at or close to a chart point corresponding to the 1.618, but in this case, I maybe would have used that as BE, and played for the higher points noted on the chart. All of thisis conjecture, because I am not in the trade.

 

Best Wishes,

 

Thales

[Cory2679 11]

GBP/USD possibly resuming downtrend?

 

(Break of the spike-low from the employment situation news.)

 

EDIT: Struggling to break through support. This isn't the best R/R situation, either.

 

EDIT2: Updated chart...moved SL...

 

EDIT3: Updated chart...PT1 hit, moved stop on second half...

Edited February 5, 2010 by Cory2679

[Cory2679 11]

GBP/USD possibly resuming downtrend?

 

(Break of the spike-low from the employment situation news.)

 

EDIT: Struggling to break through support. This isn't the best R/R situation, either.

 

EDIT2: Updated chart...moved SL...

 

EDIT3: Updated chart...PT1 hit, moved stop on second half...

 

Stopped on second half for +19.6...

[Cory2679 11]

Potential EUR/JPY long...

 

Similar sequence on the USD/JPY, as well.

[jonbig04 10]

But, as it is a long sequence, not doing anything fancy but throwing some fib expansions on to see where it might be heading without respect for chart points. Right now the trade, had I taken it, would be at BE. I would usually take profits at or close to a chart point corresponding to the 1.618, but in this case, I maybe would have used that as BE, and played for the higher points noted on the chart. All of thisis conjecture, because I am not in the trade.

 

Best Wishes,

 

Thales

 

Would you be concerned at all about the 67 area acting as R? I only ask because I personally will be looking for shorts around there.

[patrader 10]

240m CL chart(nice three push wedge)

Edited February 5, 2010 by patrader

[Cory2679 11]

BTW, to whoever might care, I'll be making an effort to post a lot more charts beginning next week. I'm in the process of finalizing a "game plan" which I'll share tomorrow, which includes posting all of my trades here.

 

Well, I actually posted my plan here, on the P/L thread, for anyone who's interested.

 

As far as this thread is concerned...

 

...I'm going to try my best to post all of my trades on the real-time charts thread, as close to real-time as possible/reasonable/convenient. I figure it's a good way to keep track of my trades, get feedback on my trading, and to help anyone who could benefit from my posts.