Reading Charts in Real Time

[richbois 10]

Today on the DAX was a Buy day for me. We therefore needed a decline,

 

DAX decline to the previous day low and failed to go lower, therefore establishing the Buy Day Low and a rally started. PH the previous day High capped the rally so far

[daedalus 10]

^^ How do you cross apply the MTP software with this analysis?

[richbois 10]

^^ How do you cross apply the MTP software with this analysis?

 

first I must say that i dont you the MTP software the way they teach.

 

I use it for patern recognition and reversal bars.

 

In this case you had the previous day low as the most important clue. that is a gold making clue.

 

we had 2 ABC waves and if you took the 1st ABC as wave A and 2nd as C then wC = 227% of wA at 6254 area

 

if you took last ABC waves C= 227% of A at that same area

 

You also had the DP on 15 min just above

 

so for me (that believe in TTT) PL "Previous Low" is key and worth at least a quicky trade (scalp) .

 

I would have entered at 6256 area with a stop below 6253.50

 

In my trades i never trade 1 lot so with 2 lots i would take profit on the 1st lot at 2R

and run the 2nd lot as long as i could using the ATR or something like that.

 

 

It is funny you ask but I was talking with a customer at that time and discussing the same trade.

 

I hope i explained it properly

[thalestrader 14]

first I must say that i dont use the MTP software the way they teach.

 

I know quite a few folks who bought MTP (myself included) who find it useful, but not in the manner in which it is market it to traders. I use it primarily for its position sizing calculator. When I am too lazy to draw the fibs myself, I will sometimes use the "one-click" DP painter to show some of the fib extensions I use, but I am so used to using a standard fib tool, I rarely bother to load MTP on a chart any longer.

 

Best Wishes,

 

Thales

[thalestrader 14]

A common about which question I get PM's concerns Trader Vic's three books. I have only read his first two books: Trader Vic 1 - Methods of a Wall Street Master and Trader Vic 2: Principles of Professional Speculation.

 

I have not read his book on commodities, and I cannot recommend it one way or the other.

 

If I were starting out, I would focus my attention on his first two books. Trader Vic 1 is excellent from cover to cover. Trader Vic 2's strength is Section 2 on technical analysis and section 4 on psychology/emotions. I did not find section 1 on fundamental analsyis or section 3 on option trading to be very helpful. In fact, I would not be surprised if those sections did not delay my ability to put his technical teaching into practice.

 

For a long time I read and re-read a few pages of Trader Vic every night before I would go to bed, and I recently renewed that practice. I manage to get something out of his pages each time I revisit them.

 

Best Wishes,

 

Thales

Edited April 19, 2010 by thalestrader

[am5001520887468 10]

Trader Vic on commodities is more an ad for his commodity basket product.

 

It rides the 'Trader Vic' brand but really shouldn't be included with the first two.

[Cory2679 11]

Check out the difference between my Ninja/Gain chart and my Oanda chart. These are both the 1 minute EUR/USD chart...

 

I've never seen such an extreme difference between the two.

 

This is frustrating...I can't wait to trade futures again!

 

[daedalus 10]

^^ That right there is the perfect illustration of why anyone who defends the superiority and transparency of spot forex over futures to not know what the hell they are talking about.

 

The whole "but my broker isn't making the market" argument goes straight out of the window.

[brownsfan019 17]

^^ That right there is the perfect illustration of why anyone who defends the superiority and transparency of spot forex over futures to not know what the hell they are talking about.

 

The whole "but my broker isn't making the market" argument goes straight out of the window.

 

I agree. Trading is hard enough as it is to then also have to be working against your broker to make money...

[MidKnight 12]

You guys assume the broker is at fault there but we just don't know that. Remember, interbank is not a centralized exchange and it is easily possible that the banks Oanda use are providing them with quotes near to what they are showing there. I'm not trying to defend them or anything, just putting it into perspective that we cannot just assume they are being dodgy with those quotes.

 

Spot FX brokers that follow an ECN model are the best way to go as you have the best chance of getting the best bid/offer from a variety of banks.

 

While I do agree the futures have benefits if you are trading in the USA timezone and you are only trading from 3 (EUR, GBP, JPY), maybe 4 (maybe add CAD) currencies. If you are not trading a USA timezone and/or are interested in any crossrates then the spot market is all you have.

 

As a minor aside, futures contracts are too big for many small traders making scaling out not an option for their method. Flexible position sizing in spot FX is another advantage IMHO.

 

Like everything in trading, its not a clear cut & dry answer for everyone's circumstances and needs.

[jashanno 10]

Check out the difference between my Ninja/Gain chart and my Oanda chart. These are both the 1 minute EUR/USD chart...

 

I've never seen such an extreme difference between the two.

 

This is frustrating...I can't wait to trade futures again!

 

 

I did the exact same thing and got the exact same results so i decided to not even bother. Instead I decided to start looking at the currencies on the CME and to my surprise they look awesome.

[thalestrader 14]

...While I do agree the futures have benefits if you are trading in the USA timezone and you are only trading from 3 (EUR, GBP, JPY), maybe 4 (maybe add CAD) currencies. If you are not trading a USA timezone and/or are interested in any crossrates then the spot market is all you have.

 

As a minor aside, futures contracts are too big for many small traders making scaling out not an option for their method. Flexible position sizing in spot FX is another advantage IMHO.

 

Like everything in trading, its not a clear cut & dry answer for everyone's circumstances and needs.

 

The only reason I can see to trade spot is flexible position size and better cross-rate liquidity. As for the majors, if you can trade futures size (which for the 6B is only $62,500/contract) then futures are markedly superior.

 

 

Best Wishes,

 

Thales

[Kiwi 16]

The only reason I can see to trade spot is flexible position size and better cross-rate liquidity. As for the majors, if you can trade futures size (which for the 6B is only $62,500/contract) then futures are markedly superior.

 

 

Best Wishes,

 

Thales

 

Actually make that "flexible position size and better liquidity." If you look at IB with 1/2 point spreads on the majors during european (and I assume us) hours then the forex offering can be better on the usd pairs as well.

[thalestrader 14]

Current look at the 6E ...

 

 

 

Best Wishes,

 

Thales

[Dinerotrader 10]

Current look at the 6E ...

 

 

Best Wishes,

 

Thales

 

Good to see you back Thales.

[thalestrader 14]

Current look at the 6E ...

 

 

 

Best Wishes,

 

Thales

 

Long I am ...

 

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Long I am ...

 

PT1 filled, holding 1/2 for PT2 with a BE stop ...

 

 

 

Best Wishes,

 

Thales

[Dinerotrader 10]

Way to come back strong. Oil and Gold got that same up move with different setups. I took the one on Gold.

 

[thalestrader 14]

PT1 filled, holding 1/2 for PT2 with a BE stop ...

 

PT1 & PT2 filled, with the stop loss having been adjusted to the pullback low prior to the rally that took price to the second PT ...

 

 

Best Wishes,

 

Thales

[thalestrader 14]

Way to come back strong. Oil and Gold got that same up move with different setups. I took the one on Gold.

 

 

Here is a look at a 5 minute GC (time frame is really irrelevant) showing a 2B long opportunity this morning just before your long entry on the TL break. You posted a GC chart earlier in the week on another thread that had a very clear 2B short opportunity. That pattern is very common across instruments, and it is a good one to practice seeing. Even if you do not take the more aggressive 2B entry, it should put you on alert for a more conservative entry (e.g. 123 with or w/o a TL break).

 

 

 

 

Best Wishes,

 

Thales

[jashanno 10]

What is your criteria for taking the 2b trades?

 

I would guess you are looking for them off of support and resistance?

 

One thing I like about 2b trades is the risk/reward is usually huge and you know if you are wrong really fast.

 

What I don't like about them is that if I am not careful I find myself fading the trend way too much. My approach is usually to think counter trend as price approaches support/resistance and then to go with the (hopefully new) trend once I am in a position.

[Dinerotrader 10]

Here is a look at a 5 minute GC (time frame is really irrelevant) showing a 2B long opportunity this morning just before your long entry on the TL break. You posted a GC chart earlier in the week on another thread that had a very clear 2B short opportunity. That pattern is very common across instruments, and it is a good one to practice seeing. Even if you do not take the more aggressive 2B entry, it should put you on alert for a more conservative entry (e.g. 123 with or w/o a TL break).

 

 

 

Best Wishes,

 

Thales

 

Natural gas has been serving up some monster moves from these also but on an every other day basis. The big hammer candle just before the break was what I am starting to label the gambler's "tell". I like the TL break but the hammer just adds that extra umph. to my odds of success.

[thalestrader 14]

What is your criteria for taking the 2b trades?

 

I would guess you are looking for them off of support and resistance?

 

One thing I like about 2b trades is the risk/reward is usually huge and you know if you are wrong really fast.

 

What I don't like about them is that if I am not careful I find myself fading the trend way too much. My approach is usually to think counter trend as price approaches support/resistance and then to go with the (hopefully new) trend once I am in a position.

 

I don't have criteria beyond what you find in Trader Vic's two books. I will say this, however - I only five a 2B two whacks. If I'm whipped out, and then the 2B presents itself again, I'll have a go at it. If I'm whipped out a second time at the same level, I wait for a 123 or otherwise sit out until the next opportunity at a different level.

 

I do think that certain patterns conducive to a 2B occurring are identifiable. If you use Elliot Wave at all, it is not unusual for wave 5 to end with a 2B reversal after a test of the wave 3 extreme. Linda Raschke has a set up she teaches that is basically a 2B, but I do not recall off the top of my head what it is she calls it. I do recall that she usually uses 3/10 oscillator divergence to "confirm" these entries. The problem with that is two-fold: 1) an oscillator will not always exhibit divergence at a low or high, and 2) by the time the indicator prints the divergence, you may have missed the optimal low risk/high reward entry point.

 

The best way to look for a 2B entry is simply to watch the price DOM as the market tests the prior extreme.

 

Best Wishes,

 

Thales

Edited April 23, 2010 by thalestrader
typo

[snowbird 10]

 

The best way to look for a 2B entry is simply to watch the price DOM as the market tests the prior extreme.

 

 

What type of action are you watching for on the DOM during the test of the wave 3 extreme (or whatever S/R level you are watching), and how would what you are watching for differ between a reversal versus continuation of the trend?

 

snowbird

[Marko23 10]

Hi folks,

 

during my vacation a new method for improvement of my trading performance came to my mind.

I tried it out during the last 8 days and it revealed strange habits during trading hours I was not aware of.

 

This is my setup for trading on a one monitor system; it does not work for an n-screen trader's ego shooter.

 

- I make all my standard charts of exactly same size and stack them one over the other.

There are four for me: FDAX 15m and 60m, FGBL 15m and 60m and no currencies during the experiment.

 

- I setup SnagIt to make a screen shot of this main area of the monitor every 60 seconds with automatic file numbering.

For every trading day I use a different directory for the image files. I use *.gif output files.

SnagIt resides in the system tray and does everything in the background.

 

For a 10 hour session you get about 600 screenshots.

 

On the weekend you reserve two quiet hours and take one of the directories of the last five days

and replay the screenshots with an image viewer. I use IrfanView for that purpose.

A paint program is inappropiate.

 

Then you wonder about what you really had before your eyes during your trading hours.

Edited April 24, 2010 by Marko23