Reading Charts in Real Time

[Gabe2004 10]

I thing GJ has hit a temporary resistance, hence the 2 shorts.

You can see a brief short that I scalped on the way up.

 

Gabe

[forrestang 10]

I thing GJ has hit a temporary resistance, hence the 2 shorts.

You can see a brief short that I scalped on the way up.

 

Gabe

Maybe I should exit the other half of my long?

 

ON another note, what made you short such a furious move updwards?

[thalestrader 14]

I thing GJ has hit a temporary resistance, hence the 2 shorts.

You can see a brief short that I scalped on the way up.

 

Gabe

 

149.00 looks like the next real potential resistance.

 

And I'd like to second Forrest's question: Why look to short against such a strong rally?

 

Best Wishes,

 

Thales

[brownsfan019 17]

Yes, Brownie, that is exactly how I traded them. In fact, I think it safe to say that 99% of my stock day trades are the exact same situation. HOG turned tail quickly and stopped me out after having spent very little time in positive territory basis my long entry. I basically stopped myself out of LM and AN for no other reason than I had an appointment out of the office and so I was done for the day. LM has managed to tack on another 75 pennies or more since I exited, and even AN has managed to chop a bit higher than my exit.

 

I am still having difficulty with my screenhunter files.

 

Best Wishes,

 

Thales

 

Thales - did you scrap the EMA pullback system? I can't remember verbatim right now, but I believe you had a 20EMA and played pullbacks to that.

[Gabe2004 10]

149.00 looks like the next real potential resistance.

 

And I'd like to second Forrest's question: Why look to short against such a strong rally?

 

Best Wishes,

 

Thales

 

Greed and hope.

Actually I saw a resistance area @ 148.26

Also there were no news to explain the move in a thin market time.

 

Gabe

Edited October 16, 2009 by Gabe2004

[forrestang 10]

Greed and hope.

Actually I saw a resistance area @ 148.26

Also there were no news to explain the move in a thin market time.

 

Gabe

 

As always your honesty is refreshing!

[thalestrader 14]

Thales - did you scrap the EMA pullback system? I can't remember verbatim right now, but I believe you had a 20EMA and played pullbacks to that.

 

Hi Brownie,

 

If you look back to my early posts here at TL, you'll see that I did not always keep the 20 ema on the chart. I still find it useful and still use it depending upon how the market is acting. I am not sure why it is as useful as it is other than that so many folks have come to use it over the years [the 20 ema and the ADX >20 constitue a "set-up" that Linda Raschke (there's that name again) calls "The Holy Grail."].

 

Trading in the direction of the gap has been my primary means of trade selection for day trading stocks.

 

Best Wishes,

 

Thales

[Gabe2004 10]

Closed 1 of my 2 positions and moved my stop to a positive level on the other 1.

 

Gabe

[Gabe2004 10]

Close 1/3 of the 2nd position just below the point I closed the 1st position but was too slow to close the other 2/3 s,

Actually I moved my stop slightly up (6 pips) but I should have not given back more than 15 of the best level.

As it is, I gave back 45 pips off the lowest level around 22:05 EST.

Overall I should not complain. I made 108 pips on 6 units.(18 pips/unit)

 

Gabe

[forrestang 10]

Close 1/3 of the 2nd position just below the point I closed the 1st position but was too slow to close the other 2/3 s,

Actually I moved my stop slightly up (6 pips) but I should have not given back more than 15 of the best level.

As it is, I gave back 45 pips off the lowest level around 22:05 EST.

Overall I should not complain. I made 108 pips on 6 units.(18 pips/unit)

 

Gabe

I did something similar tonight.

 

First was not taking the E/J trade that was literally yelling at me to take the trade....Oops.

 

Second was the G/U, first PO was hit, moved stop to BE at that point. Then I saw that little consolidation area, and put my stop below it. My rules tell me to put the stop to BE like I did after P1 is hit, but then WAIT for a swing to develop to move stop beyond BE. Well, guess what, stopped out to the tic before going on to hit my P2. That's what I get for moving my stop from BE too fast. Oh well, still made money, but there was more on the table.

 

My G/J is right in front of my P2 though, so that's a guaranteed nicely profitable trade!!!!

 

This has been an awesome week for us After Hour, Thales' type, B.O. traders, I hope you guys all took advantage!!!

 

Happy and successful trading to us all!!!!

 

Forrest

Edited October 16, 2009 by forrestang

[Gabe2004 10]

This has been an awesome week for us After Hour, Thales' type, B.O. traders, I hope you guys all took advantage!!!

 

Happy and successful trading to us all!!!!

 

Forrest

 

I have to say that I owe my recent success and apparent "turning of the corner" to Thales, but I would not characterise my trading as a BO but rather a reactionary method which in many cases is counter trend.

 

This is because I find that most of the opportunities - for me atleast - are showing up during retracements from SR zones/lines.

 

Gabe

[thalestrader 14]

I have to say that I owe my recent success and apparent "turning of the corner" to Thales, but I would not characterise my trading as a BO but rather a reactionary method which in many cases is counter trend.

 

There is more than one technical approach that will enable you to take profits out of the market. But none of them will work for you if you don't get your emotions under control. The corner you turned is a psychological one, and not a technical one. You are now letting your profits run while keeping your losses manageable. And you are doing very well at it. Keep it up and keep sharing your charts!

 

Best Wishes,

 

Thales

[Gabe2004 10]

Some trades over night and this morning.

172 pips. 19 pips/unit on average.

 

Gabe

[Gabe2004 10]

NO REASON TRADE.

If anything I should have gone long but really it was best to do nothing.

I was bored :crap: lost 21 pips per unit (3 units)

Gabe

[Gabe2004 10]

It is interesting to see how price settles in a certain area over time.....

 

Gabe

[Dinerotrader 10]

Looking at the GBP/USD in 3 different time charts - 15 min, hourly, daily

Just curious of your thoughts on trading opportunities after seeing these charts. Here are a couple of my own thoughts.

 

15 min chart

An interesting pattern recurring. It would seen like a breakout to the upside above the prior high would be reasonable. Maybe a trend line break to the down side would also be a reasonable trade considering how tight that trend has been lately.

Hourly

We finally broke out of that trading range.

Daily

I am not sure if this is just too large a time scale to really give you much edge. Looking at it, I would interpret that we are back in the summer trading range which has a lot of reversals from S/R at either end of the range.

[Dinerotrader 10]

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

Gabe

 

Here is a question I would have PM'd Thales:

 

How do you make screen time the most productive? It is often suggested that you need to spend a lot of time watching price but you can certainly do a lot of that and end up with very little learning occuring. Just curious of Thales' as well as everyone elses thoughts on this.

My own thoughts would be to that you need to try to guess at interpreting price movement and make a prediction/"anticipatory conjecture" of where it will move based on your interpretation. Then I suppose, you would evaluate how correct you are by watching price and if you were incorrect, you try to determine what you missed or chalk it up to random price movement ()

 

Let me know your thoughts.

[Gabe2004 10]

Here is a question I would have PM'd Thales:

 

How do you make screen time the most productive? It is often suggested that you need to spend a lot of time watching price but you can certainly do a lot of that and end up with very little learning occuring. Just curious of Thales' as well as everyone elses thoughts on this.

My own thoughts would be to that you need to try to guess at interpreting price movement and make a prediction/"anticipatory conjecture" of where it will move based on your interpretation. Then I suppose, you would evaluate how correct you are by watching price and if you were incorrect, you try to determine what you missed or chalk it up to random price movement ()

 

Let me know your thoughts.

 

I think that using a simulator like NinjaTrader would be most beneficial and will allow you to gain valueable screen time in an accelerated fashion, while giving you feedback by the realistic results you can obtain from real life like trading.

 

Gabe

Edited October 16, 2009 by Gabe2004

[Dinerotrader 10]

I think that using a simulator like NinjaTrader would be most beneficial and will allow you to gain valueable screen time in an accelerated fashion, while giving you feedback by the realistic results you can obtain from real life like trading.

Gabe

 

But what do you think you should be doing while using the simulator on Ninja in order to improve you trading skills?

[Gabe2004 10]

But what do you think you should be doing while using the simulator on Ninja in order to improve you trading skills?

 

 

The same as you would do in live feed trading (even if it is sim only).

Apply your trading plan to what you see.

 

Gabe

[forrestang 10]

But what do you think you should be doing while using the simulator on Ninja in order to improve you trading skills?

 

IMO, which is something I think about, would be to take note of HOW you feel win you win or loose.

 

When you win several times does it drive you past 'confidence' and straight to Euphoria making you take trades you normally would not?

 

When you loose several times consecutively, does it shake your confidence to the point of trading for revenge, or so scared that you block information out that might normally be useful, and pass on good trades costing you money?

 

I think the biggest breakthrough I've had with my trading was all mental. Technique is one thing, but my head has always been screwed up. There are some people that believe there are only a few ways to successfully trade, but the reality might be there are a million ways to trade, but only a few who can mentally deal with trading.

 

I think you probably can trade, as anyone can put on a winning trade, but its harder to deal with wins and particularly losses. I think you asked an excellent question so we'll see what Thales has to say.

 

If I can throw a question out there that I would pm Thales(as I still have a long way to go towards conquering this), it would be:

 

"How do you deal with consecutive loosing trades and your confidence begins to falter? Do you constantly tell yourself it is just part of trading, no different than any business that has to pay for upgrades or maintenance to their equipment? How long did it take you to ACTUALLY ACCEPT the reality? I'm sure we all say or pay lip service to the idea, but what types of things did you do before you actually BELIEVED that is just the reality of the situation?"

[thalestrader 14]

Here is a question I would have PM'd Thales:

 

How do you make screen time the most productive? It is often suggested that you need to spend a lot of time watching price but you can certainly do a lot of that and end up with very little learning occuring.

 

Your screen time will be most productive by doing what you are supposed to do: identify S/R levels, and then observe how price behaves in and around those levels. As I've said elsewhere, price spends most of its time in the middle of nowhere, traveling between S/R levels. Over time you observe that price traces out the same actions over and over across markets and across time frames.

 

Do not be impatient. As price spends most of its time in the middle of nowhere, most of your screen time will be you waiting for price to arrive a significant level from which you may have the opportunity to trade.

 

I do not use market replay, so I cannot say how it can be used most effectively. I do print out my charts. Each week produces dozens of charts, and each night the last thing I do before I go to bed is to flip through a couple of dozen charts. I am looking at trades that worked, trades that didn't work, and I look for trades I would have or should have taken.

 

In the end, it is simply a matter of coming to recognize that price moves in repeatable and repeating pattens. The patterns that are significant are those where price rests between making higher highs and higher lows (uptrend) and where price rests while making lower lows and lower highs (downtrend). While most consider me to be a breakout trader, and while nearly all of my entries involve buying a breakout above resistance or shroting a break down below support, the majority of those trades are done with the context of a trend of some degree. The trend is indeed your friend. I am constantly perplexed when I see folks try to short fierce rallies or buy precipitous declines (though at the same time I am quite thankful for such folks, as there actions feed the rally or decline in my favor). I much rather buy breakouts to new rally highs or short break downs to new decline lows. If you print your charts and study them, you will very quickly learn to see why I prefer to trade in that manner.

 

Best Wishes,

 

Thales

[thalestrader 14]

I think the biggest breakthrough I've had with my trading was all mental ... If I can throw a question out there that I would pm Thales(as I still have a long way to go towards conquering this), it would be:

 

"How do you deal with consecutive losing trades and your confidence begins to falter? Do you constantly tell yourself it is just part of trading, no different than any business that has to pay for upgrades or maintenance to their equipment? How long did it take you to ACTUALLY ACCEPT the reality? I'm sure we all say or pay lip service to the idea, but what types of things did you do before you actually BELIEVED that is just the reality of the situation?"

 

I agree with you that the most important aspect for a trader to conquer is his emotions: Without emotional control, there can be no success. As Wyckoff admonished in his Studies in Tape Reading, there must be "calmness before, during, and after the trade." Of course, that is often easier said than done.

 

When I lose, I tend to get reckless. I guess I become what folks refer to as a "revenge trader." I will try to get it all back on one trade. I have known myself to increase my position size beyond all good sense in order to recoup what I had lost on earlier trades. I have a friend who also has known himself to act similarly. He instituted a practice that I myself adopted after my last bout of reckless loss chasing: I quit after two consecutive losing trades.

 

Lose twice in a row, and I log off my trading platform. If I am particular angry, I will turn off my computer, and I go play with my children or hang out with my wife or read a novel or anything that does not involve anything trading related. I usually am not all that upset any more, so I will often continue to watch the market. But I will not place another live trade until the next day (for stocks) or until the next major session open (for currency futures et al).

 

When I day trade stocks, it is not unusual for me to have three to five entry orders in at the same time. I usually will cancel any outstanding unfilled entry orders once I have opened three positions. If two of the three positions result in a loss, the third must close profitably or I am done for the day.

 

I know myself enough to know that I must quit after two losses. If I do not, and I get that third loss, I am likely to get losses 4-10 as well before the day is out. If I stop after two, I can start the next trading session fresh and without any thought of the previous session's losses.

 

You need to find what works for you.

 

γνῶθι σεαυτόν - Know thyself.

[thalestrader 14]

Some trades over night and this morning.

172 pips. 19 pips/unit on average.

 

Gabe

 

Excellent!

 

And how does that compare to your typical results from, say, four to six weeks ago?

 

Best Wishes,

 

Thales

[Gabe2004 10]

Excellent!

 

And how does that compare to your typical results from, say, four to six weeks ago?

 

Best Wishes,

 

Thales

 

 

Actually because of my NO REASON TRADE I got down to 112 pips for the day and it reduced my average to just over 11 pips per unit, but this is still 4x as good as it was in late September (this is on a 100 trade moving average - a trade could be a partial exit of a position).

Another thing that I a paying attention to is the size of my trade.

I used to double up after a loss and even if I was uncertain about the odds of my trade I would go in with my standard size.

No more (or atleast I am trying). When in doubt I reduce my position size to a minimum. I have doubled up only twice in recent days. Once when I was profitable and once when I was not but I was convinced that my setup was valid but I may have entered too early. Both cases worked out in my favour.

Overall there is a definite improvement in my trading but I would have to wait about 4 months to be certain since I had twice in the past positive runs lasting 3 months after which I gave back all my profits and then some.

The difference now is that I have a trading plan and I am fully devoted to my success in this field.

 

Gabe