Reading Charts in Real Time

[forrestang 10]

I posted that chart and then wasn't by a computer for a little while. I posted where things are at right now below. Since this is such a large time frame I wouldn't trade off of it but it seems to big me big picture ideas on price on a smaller level. Since it has bounced off of of that level so many times it would seem statistics are on your side in playing a reversals. You would hope price action will tell you more about what is likely to happen once it arrives in that area. Being at the top of this range, I would probably lean towards playing reversals when lower lows are made. At this stage my instinct is to also comtemplate the fundamentals of what drove the price down back on Sept. 25-27 and consider if there is any reasons we should see a move back up to that point. Those are my thoughts.

 

In my analysis last night preparing to enter trades. I wound up buying the G/J (breakeven) and shorting the G/U. The G/U was awesome! Notice that DT it put in. Shorted that baby for a nice clip.

 

But in my preperation, I almost bought the E/J. Only thing that kept me out was seeing that my entry would have been right below what I deemed to be a good resistance. So I passed on it and was unsure if it would B.O.?

 

So basically, my entry was right before the BIG resistance level you outlined, and target was a swing up to the level with about 40 and 60 pips respectively.

 

Well it did break it, then even retraced back to it to the tic before going on to hit both of the targets I had planned on if I would have traded it.

 

Here's what I thought of it:

[Dinerotrader 10]

Given price bounced right off that prior R level, I would try to play breakout at this point. We'll watch and see.

 

[ZenMachine 10]

QQQQ has been testing 41.48 four times since late yesterday, while coiling up tighter.

 

I placed a buy stop at 41.49. Stop loss will be 42.32 or 42.36, with profit target 42.60.

 

-z

[Gabe2004 10]

QQQQ has been testing 41.48 four times since late yesterday, while coiling up tighter.

 

I placed a buy stop at 41.49. Stop loss will be 42.32 or 42.36, with profit target 42.60.

 

-z

 

I guess you meant 42.48 and 42.49 ..............

 

Gabe

[ZenMachine 10]

I guess you meant 42.48 and 42.49 ..............

 

Gabe

 

You are right, Gabe.

 

Thanks for the correction.

 

Update:

 

I got in before the session closed, but the quick move I was anticipating up to my profit target did not happen.

I stayed in and revised the target to 43.00, stop loss to 42.31.

 

-z

[thalestrader 14]

Hi Folks,

 

I am slowly chipping away at the PM's that have been piling up. I will answer everyone and every one. Some of the response may be short, but hopefull to the point.

 

Best Wishes,

 

Thales

[Gabe2004 10]

Hi Folks,

 

I am slowly chipping away at the PM's that have been piling up. I will answer everyone and every one. Some of the response may be short, but hopefull to the point.

 

Best Wishes,

 

Thales

 

I would like to suggest that all questions be posted in the forum so that all of us can learn from the answers.

 

Gabe

[Kiwi 16]

Thales asked me to post a couple of charts on the thread. These are two charts of the same day last week viewed by two different systematizations of my trading style. The first was taking trades this day and took both these trades - the second for 172 points (an unusually high amount for this strategy).

 

The second I've been working on over the weekend and it is trading a longer timeframe and somewhat different state recognition system to the first.

 

There is NO support and resistance in my strategies although it is extremely relevant to hsi, these systems are based on entering when there is the possibility of a trend and a good entry followed by a mechanism to take sufficient profit when the market behaviour they await occurs. Both are shown on the timeframe of the first so the arrows on the second don't line up with bars properly (they are mapped from a different chart). Blue and Red arrows are entries; Black are profitable exits; Greenish are losing exits.

 

 

 

.

 

 

[thalestrader 14]

Black are profitable exits

 

Hi Kiwi,

 

Thank you for posting your charts. Are your exits determined by your system, or do you use your own discretion? I presume the entry is mechanical. Does the system also generate an initial stop loss and a profit target. Or is it a trailing stop, etc.

 

In hindsight, it is easy to see where I would have bought (if only we could trade in hindsight). Your system had an earlier, and thus a more favorable entry than I would have had. I hope you continue to share your charts with us.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi Folks,

 

I just logged in to the forex account and I saw the EURUSD trading up to this trendline.

I am not trading it, though a short entry for me would have been a sell stop around 1.4728. Price touched the trend line around 1.4742, and many who trade using these trendlines would no doubt have sold up there. I do not take these trades often, and when I do, I tend to wait a bit for my entry. Again, I am not in the trade, but I am just showing the chart. Let's call the entry 1.4728, and the stop loss would be 1.4743 (-15) (depending upon the brokers feed), with a first profit target at 1.4678 for about a 2.5+ R/R.

 

 

Best Wishes,

 

Thales

[thalestrader 14]

I was looking for one more week of consolidation before the Pound would resume its decline. It looks like the Pound may be ready to break to new lows (for the current downtrend off the early August highs. If the GBPUSD does break below the 1.5750 level, that should be good for about 400 ticks or so before the next consolidation.

 

Best Wishes,

 

Thales

[thalestrader 14]

I am not in the trade, but I am just showing the chart. Let's call the entry 1.4728, and the stop loss would be 1.4743 (-15) (depending upon the brokers feed), with a first profit target at 1.4678 for about a 2.5+ R/R.

 

EURUSD is moving as anticipated. Though there has been no real bounce attempt to provide a lower stop, I'd have my stop at or near break even at this point.

 

Best Wishes,

 

Thales

[Kiwi 16]

Hi Kiwi,

 

Thank you for posting your charts. Are your exits determined by your system, or do you use your own discretion? I presume the entry is mechanical. Does the system also generate an initial stop loss and a profit target. Or is it a trailing stop, etc.

 

In hindsight, it is easy to see where I would have bought (if only we could trade in hindsight). Your system had an earlier, and thus a more favorable entry than I would have had. I hope you continue to share your charts with us.

 

Best Wishes,

 

Thales

 

The whole thing is currently mechanical. The two use capture principles (I think thats more descriptive than exit) that are similar but different because they are designed to capture a different subset of market moves.

 

This should sound more scientific and precise than it is - I start with an objective and sometimes it changes as I discover things when the rubber meets the road. I have only been working on mechanical systems since the beginning of September. The previous 5 years were discretionary day trading but now that Sierra Chart has a set of features supporting full automation I thought I'd change to lower precision over a wider range of markets. I have been trading just one market but will probably set my systems free on 6-7 markets.

 

I'll post some more of the first system. The second is still a work in progress and might include discretionary non-exits in future as it seems to be good at getting a cheap position in a longer term multi-session moves.

[thalestrader 14]

EURUSD is moving as anticipated. Though there has been no real bounce attempt to provide a lower stop, I'd have my stop at or near break even at this point.

 

Best Wishes,

 

Thales

 

If I were short I'd move my stop down to 1.4709 for +19.

 

Best Wishes,

 

Thales

[thalestrader 14]

first profit target at 1.4678 for about a 2.5+ R/R.

 

Hi Folks,

 

So with that poke below 1.4678, half of the position would be closed at +40 ticks(pips) with half remaining with a stop loss at +19.

 

Best Wishes,

 

Thales

[thalestrader 14]

The whole thing is currently mechanical ... I'll post some more of the first system.

 

Hi Kiwi,

 

And you are auto-trading this system? Or does the system issue and alert, and you need manually to place your orders?

 

Best Wishes,

 

Thales

[Kiwi 16]

Fully Automatic.

 

It places the entry orders, adjusts the bracket, and then manages capture without my intervention.

 

My goal is to at most check the autopilot. I've decided that, except on interday holds, I won't fly the plane.

[Kiwi 16]

Today was unimpressive. The system missed the moderate move down. 3 wins, 1 loss for 44 points after slippage and commissions.

 

.

[ehorn 10]

...I have attached some analysis based on the principles of Price and Volume....

 

I have attached some commentary and an update to the sequences...

[forrestang 10]

IMO.... a few examples from my journal of a good looking setup. 1ES, 2NQ. The trade is only taken in RTH for this particular idea.

 

The 1st example is just ok, the 2nd better, 3rd example from today is the best example. In this one price breaking out above prior highlighted resistance occurred during AH, with a pullback just below, the actual BO occurring in first 5 minutes.

[forrestang 10]

Here's an awesome loser!

 

This is the type of risk definition Thales refers to as actually incurring MORE risk even though stop is smaller. So "sometimes less risky is more risky!"

 

Almost re-entered but never really got used to re-entries.

[ZenMachine 10]

I stayed in and revised the target to 43.00, stop loss to 42.31.

 

QQQQ went up at the open as I had hoped, but quickly came down to just above today's open.

Looking back, that resistance level (42.87) should've been my target, not 43.00.

 

I moved up stop loss to today's open.

 

-z

[thalestrader 14]

Hi Folks,

 

Here is a look at the current 6J (Yen futures). Buy point would be 163, though any long taken here would be in the middle of what one might presume to be a potential zone of resistance. That doesn't necessarily mean I wouldn't take it, but I would be quick to cut it loose and then watch for a re-entry. Also, 167 may be an important tick level where resistance could be had. All in all, I like the pattern for a long, but I would much prefer it if the breakout point were about 25 ticks higher, around 187-89. That is, a better opportunity would been presented had this morning's rally pushed up to the 187-89 level, and then pulled back into this little consolidation.

 

Best Wishes,

 

Thales

[thalestrader 14]

Buy point would be 163, though any long taken here would be in the middle of what one might presume to be a potential zone of resistance... I would much prefer it if the breakout point were about 25 ticks higher, around 187-89.

 

A buy stop at 162/3 would have been triggered, and price has gone no where. I extended the red rectangle that I had drawn last week to show how unfavorable an area for a long looks to me (you can go back and find other posts of the Yen on prior nights and you will see that zone and how it was identified).

 

Now that price has done some chipping, a (slightly) better entry might be a buy stop at 165. But, still you have that 167 just two ticks above that level. I really like this pattern, and a break out that carries up to and through 189 should result in a 100 +/- tick run or more; but I would have to say that given where price is, I would stand aside for now and wait for the breakout, a pullback, and then buy a new post-break high.

 

Best Wishes,

 

Thales

[thalestrader 14]

Today was unimpressive. The system missed the moderate move down. 3 wins, 1 loss for 44 points after slippage and commissions.

 

Hi Kiwi,

 

The HSI sure does look as though it would easily be traded using S/R levels. Do you do any discretionary trading at all, or are you solely focused on your automated system right now?

 

Thank you for sharing your charts with us.

 

Best Wishes,

 

Thales