Reading Charts in Real Time

[Dinerotrader 10]

Another go at it - worse results.

I am done for now.

It is obvious that I am doing something wrong.

Gabe

 

You charts to so far zoomed out that I cannot even see your entry/exit play out. It also might help if your S/R lines were not dashed lines.

 

You might have already said but what is your entry and exit strategy for these trades?

Are you watching more than one chart scale?

[forrestang 10]

For this next two questions, please see the chart. The left is a 24 hour 15 min for some type of larger view and context.

 

Question3: As shown on the pic at point 2, there is a bit of bigger picture context in that the level was tested 3 times, and also is the RTH high. Does this seem like a trade that makes sense in terms of ES trading? Also do the green targets above make sense? Or would you say this breakout point is a bad location due to the various overhead resistance points?

 

Stop at BE.

 

 

--------EDIT----------

Out at Profit Target!!! I got a crappy fill 2 tics beyond my order which should have been 81.00 Exit at what seemed to be resistance at 86. Looks like it's going higher though.

Edited October 22, 2009 by forrestang

[Gabe2004 10]

You charts to so far zoomed out that I cannot even see your entry/exit play out. It also might help if your S/R lines were not dashed lines.

 

You might have already said but what is your entry and exit strategy for these trades?

Are you watching more than one chart scale?

 

The white line connect the entry and the exit.

The prior to the last chart are more zoomed in.

 

Orange Triangle = Mrkt Short or Sell (cover Long)

Cyan Triangle = Mrkt Long or Buy (cover Short)

Orange Square = Lmt/Stp Short or Sell

Cyan Square = Lmt/Stp Long or Buy

Pink Square = Cyan Square Cancelled

Green Circle = Target Hit

Purple Circle = Stop Loss Hit

 

I was watching the 15 min only.

I enter on a Stop about 1.5x the spread , above/below a Doji or a small bar (relative to the prior bar) if it is at a prior SR line/zone.

Looking back at my trades today I was entering out of anticipation that price will GO BACK to the SR line/zone but price was not AT an SR line/zone.

 

I will look at higher timeframes. maybe that will make the entries more decisive.

 

Gabe

[thalestrader 14]

Here are a few questions about the ES for Thales or anyone who has an opinion.

 

Question1: The gap today was minimal to non-existant. Does this usually invalidate the type of trading you like to do on the ES? If the gap is filled, do you take trades in the direction of the fill, or opposite, just more explanation on that please?

 

I am primarily interested in gaps that open above a prior high or below a prior low.

 

For this next two questions, please see the chart. The left is a 24 hour 15 min for some type of larger view and context.

 

Question2: As shown on the pic at point 1, there was really no big picture context at that level, but there where two tests to speak of. Is this a trade you would be interested in?

 

I was not in this morning, but I may have been tempted to take that as a short (I presume that is what you are asking). However, I may have hesitated to go short there as we had a L-H-HL-HH in place for the day session, and price had ye to rally back to 1082 (Tuesday's low) which I would have anticipated (test previos support to see if it holds as resistance). I would have preferred to sell a break after price first rallied to a potentially significant resistance level.

 

Question3: As shown on the pic at point 2, there is a bit of bigger picture context in that the level was tested 3 times, and also is the RTH high. Does this seem like a trade that makes sense in terms of ES trading? Also do the green targets above make sense? Or would you say this breakout point is a bad location due to the various overhead resistance points?

 

I presume you are looking at a possible long here. I like this much more than the short that you proposed, but I may have hesitated here as well to see how price acted at 1082. Your targets look fine, as do higher targets at 91quarter, 95quarter, and 98half.

 

Best Wishes,

 

Thales

[forrestang 10]

I'm looking at the G/J now, and I'm showing on a 1hr to show where I got these levels from.

 

Price is butting itself up against some resistance now. But there is still that swing high slightly above that I find annoying. I would really like to see at least one more rejection of that 152 level(blue) before the BO.

 

Also the red line where my ISL would be just happens to be the 50% retracement from that big major swing high, shown by the double headed arrow. So the potential for a reversal is there IMO.

 

Opinions?

[thalestrader 14]

Something I've found interesting when in a channel like that, for indication into which way it may break is a series of HLs or LHs.

 

So do we call it the Forrest Range BO trade?

 

Best Wishes,

 

Thales

[forrestang 10]

So do we call it the Forrest Range BO trade?

 

Best Wishes,

 

Thales

 

------------------------:rofl:

[thalestrader 14]

So do we call it the Forrest Range BO trade?

 

Best Wishes,

 

Thales

 

This should be no worse than a break even trade at this point.

 

Best Wishes,

 

Thales

[forrestang 10]

This should be no worse than a break even trade at this point.

 

Best Wishes,

 

Thales

 

 

Take a look at this G/J trade I am in. It's up 49 pips from the entry so far, about 35 pips from the first target(if anyone took this trade I reduced the first target by a few pips).

 

Would you be sure that this trade is no worse than BE as well?

 

BTW... this was a "Forrest BO Range" Trade.

 

[thalestrader 14]

Take a look at this G/J trade I am in. It's up 49 pips from the entry so far ...

Would you be sure that this trade is no worse than BE as well?

 

Unless it is an overnight trade where it is open while I sleep, I will not allow a 50 +/- tick profit to turn into a loss. I'd probably put a stop on 1/2 at +15 or +20 or +30 or whatever and have a stop on the remainng position at BE.

 

Best Wishes,

 

Thales

[forrestang 10]

 

I presume you are looking at a possible long here. I like this much more than the short that you proposed, but I may have hesitated here as well to see how price acted at 1082. Your targets look fine, as do higher targets at 91quarter, 95quarter, and 98half.

 

 

So to be clear, u're saying that you may have EXITED after the entry?

 

As the entry occurred before 1082. Here is the picture again:

 

[thalestrader 14]

So to be clear, u're saying that you may have EXITED after the entry?

 

As the entry occurred before 1082.

 

What I am saying is that I would have likely entered on a buy stop at 82quarter and not taken the more aggressive entry that you took. There is nothing wrong with your entry, so long as you are consistent. I try to enter at a point where I feel price has to go my way. Of course, price doesn't have to do anything of the sort.

 

Best Wishes,

 

Thales

[forrestang 10]

I'm looking at the G/J now, and I'm showing on a 1hr to show where I got these levels from.

 

Price is butting itself up against some resistance now. But there is still that swing high slightly above that I find annoying. I would really like to see at least one more rejection of that 152 level(blue) before the BO.

 

Also the red line where my ISL would be just happens to be the 50% retracement from that big major swing high, shown by the double headed arrow. So the potential for a reversal is there IMO.

 

Opinions?

 

Stop now below swing low, so no more risk involved. Will do final update after trade is closed to avoid too many posts

[thalestrader 14]

This should be no worse than a break even trade at this point.

 

Best Wishes,

 

Thales

 

From +34 after entry price declined to +2 and then rallied to +41. I'd have my stop at +25 now.

 

Best Wishes,

 

Thales

[forrestang 10]

Stop now below swing low, so no more risk involved. Will do final update after trade is closed to avoid too many posts

TARGET HIT!!!!

 

Here is the final update on the G/J. I was more active in this trade than usual, as I let a lot of really winning trades turn into not so winning trades. As suggested I moved half of my position into a quicker stop to get some profit, although I didn't pull it at the best point. Not a bad average though, about 70Pips per lot I traded.

 

This was one of the trades I think the proper BO point was identified, as this thing rallied 60 pips within a half hour of breaking the level. When the BO is nailed like this, I think I would like to take out some as soon as that initial wave of momentum dies when the move out is so strong like last night.

 

I didn't want to let it roll on me, so I took my first half out kinda early. I also adjusted my P2, you can see why on the second chart I attached. But 2nd Target hit so I'm happy.

 

Also you can kind of see that price pattern we discussed yesterday when price enters into a bit of a range, shown on first chart.

 

QUESTION:

Has anyone come up with a hard fast way to take profits? I'd be interested in hearing ideas.

 

My thoughts are basically for trading 2 lots. Which is pretty much been, hold solid on Initial Stop till P1 is hit, then move 2nd half to BE after P1 is hit. And both stops are adjusted just beyond swing points as they develop.

 

I'm also figuring out how to add common sense in the mix as Thales suggested, like not letting a trade that moves 40-50 pips in your favor turn into any type of loss, which is something I've done many times.

 

Forrest

[Gabe2004 10]

Just when I thought that I am close to cracking the nut and after giving advice to newbies I slipped.

I lost 1/3 of my account. It is a small account so the amount is small but the impact is large.

I was hesitating wether to post this or not. After all, this is a big hit to my ego but I thought that to be fair to everyone - and to myself - I had to post the above fact.

 

I did everything that I promised myself not to do.

1. Went against the trend (minor issue as sometimes going against the trend is warrented)

2. Moved my stops away so as not to be hit and feel the pain of a loss.

3.Trasffered more money into my small account - just in case I needed to get deeper in the hole.

4. Added to a loser. (definately a no no)

5. Increased my margin ratio to allow me to add more positions (ouch).

6. Did not follow my plan (greed and fear cicked in).

 

At one point I regained consciousness and closed all the trades and took back the extra cash that I have transffered earlier.

 

As it stands now I am better off with the loss that I took for two reasons:

1. price continued to go against me.

2. I feel better now that the stress is gone and I can start to think again.

 

I am not happy about the loss but I did the right thing. A late but not too late.

 

I have to re-evaluate my actions but I will keep posting here unless someone thinks that I should do this in a separate thread.

 

Gabe

 

:doh: :crap:

 

And on a more positive note

[Dinerotrader 10]

I was hesitating wether to post this or not. After all, this is a big hit to my ego but I thought that to be fair to everyone - and to myself - I had to post the above fact.

Gabe

 

Thanks for posting this. The beauty of this forum is we all know that same exact feeling of hurt ego when we get on a roll and then screw up. Your experience is a great reminder to us all (and of course yourself) to stick to the rules and control risk. We all need that reminder. Read some of the market wizard books. That always gets me fired up after I get down on things. Take care.

Edited October 23, 2009 by Dinerotrader

[forrestang 10]

Disclaimer: I hope this doesn't come off as me thinking I am a "know it all" as that is not my intention. I suck too! My from one newb to another(I'm learning too)

 

I was hesitating wether to post this or not. After all, this is a big hit to my ego but I thought that to be fair to everyone - and to myself - I had to post the above fact.

The title of your post is appropriate for my thoughts.

 

This is a big deal that you post it. I've said it before, nobody wants to be wrong, especially being wrong in front of a whole room full of people. Which is why it's probably hard to post real time trades for some(which is completely understandable). From the minute you post the trade before it triggers, you're opening yourself up to the possibility of not just being wrong, but everyone else seeing that you are wrong.

 

IMO, posting some of our real time trades might be a way not only to get feedback and learn from each other, but also a sign that we understand losses are inevitable, we don't know what is going to happen next, and mainly ACCEPTING the idea that losses WILL happen.

 

So I say all that to say just that you posted this, and especially that you post trades before they trigger from time to time is probably a sign that you will eventually be a winner because you are in some way accepting the things that come with trading

 

 

I did everything that I promised myself not to do.

1. Went against the trend (minor issue as sometimes going against the trend is warrented)

2. Moved my stops away so as not to be hit and feel the pain of a loss.

3.Trasffered more money into my small account - just in case I needed to get deeper in the hole.

4. Added to a loser. (definately a no no)

5. Increased my margin ratio to allow me to add more positions (ouch).

6. Did not follow my plan (greed and fear cicked in).

I see cutting your profits too soon isn't on this list, did you forget it, or have you worked it out(congrats if you did)?

 

I'm sure most of your problems are mental ones. You know this, in speaking w/you outside of TL, you even seem to know what all your problems are.

 

Some stuff from Douglas's Book, plus my comments(in sub bullets) and how they may apply to you:

[brownsfan019 17]

 

QUESTION:

Has anyone come up with a hard fast way to take profits? I'd be interested in hearing ideas.

 

Forrest - I am right with you on this question. There are some posts around here talking about this very topic. My suggestion is to experiment with a few things but realize in the end that you will never get perfect exits. Some days you will want to hold for the huge move and others you will get killed doing that. You just have to decide what kind of trader are you:

a) you want the big trending moves and will hold a trade for that big move

b) you want regular profits even if that means you 'miss' out on some others

I have opted for option b. I want to extract $ out of the market daily and to do that I realize that you have to be content with achievable profits and deal with it.

 

It's easier said than done, but IMO the first thing you need to establish is what kind of trader do you want to be. From there, you can model profit targets that make sense from that information.

[forrestang 10]

So do we call it the Forrest Range BO trade?

 

Best Wishes,

 

Thales

 

Not trading either of these, and have not investigating to see if these would be meaningful breakouts based on big picture S/R, as I usually dont FX in the day time.

 

But here are two more examples of the PA. Didn't check to see if the BOs would be meaningful though, or if R:R makes sense, or if there is room to move to a profit target.

Edited October 23, 2009 by forrestang
Added picture w/o the clock on G/J

[forrestang 10]

Forrest - I am right with you on this question. There are some posts around here talking about this very topic. My suggestion is to experiment with a few things but realize in the end that you will never get perfect exits. Some days you will want to hold for the huge move and others you will get killed doing that. You just have to decide what kind of trader are you:

a) you want the big trending moves and will hold a trade for that big move

b) you want regular profits even if that means you 'miss' out on some others

I have opted for option b. I want to extract $ out of the market daily and to do that I realize that you have to be content with achievable profits and deal with it.

 

It's easier said than done, but IMO the first thing you need to establish is what kind of trader do you want to be. From there, you can model profit targets that make sense from that information.

 

At what point do you decide when to not let a trade turn into any type of lose?

 

I think that is something that I haven't given as much thought to as much as other things.

[thalestrader 14]

Just when I thought that I am close to cracking the nut and after giving advice to newbies I slipped.

I lost 1/3 of my account. It is a small account so the amount is small but the impact is large.

I was hesitating whether to post this or not. After all, this is a big hit to my ego but I thought that to be fair to everyone - and to myself - I had to post the above fact.

 

I did everything that I promised myself not to do.

1. Went against the trend (minor issue as sometimes going against the trend is warranted)

2. Moved my stops away so as not to be hit and feel the pain of a loss.

3.Transferred more money into my small account - just in case I needed to get deeper in the hole.

4. Added to a loser. (definitely a no no)

5. Increased my margin ratio to allow me to add more positions (ouch).

6. Did not follow my plan (greed and fear clicked in).

 

At one point I regained consciousness and closed all the trades and took back the extra cash that I have transferred earlier.

 

As it stands now I am better off with the loss that I took for two reasons:

1. price continued to go against me.

2. I feel better now that the stress is gone and I can start to think again.

 

I am not happy about the loss but I did the right thing. A late but not too late.

 

I have to re-evaluate my actions but I will keep posting here unless someone thinks that I should do this in a separate thread.

 

Gabe

 

 

Hi Gabe,

 

One of the best posts I've read anywhere. It is printed and now holds a permanent place in my loose leaf notebook. You did just about everything you could do to insure your failure and yet you caught yourself and made the changes necessary to put you back on a proper course. Your courage in posting this here shows that you really are closer than you think you are to breaking through in positive manner. The following point you made is most important:

 

At one point I regained consciousness and closed all the trades and took back the extra cash that I have transferred earlier ... I feel better now that the stress is gone and I can start to think again.

 

As I read that I felt that same relief wash over me that I have felt on many occasssions. I cannot stress the importance of just getting out, hit the flatten button, close everything and eliminate your risk when you are feeling the fear and the anguish of being locked into a bad trade.

 

My father is fond of repeating a saying he heard years ago and that always echos in my head when I am in a trade that is making me uneasy: "I'd rather be out of the market wishing I was in rather than be in the market wishing I was out." He doesn't remember where or from whom he heard it, so I cannot credit it any further. But you did exactly the right thing, and I hope you remember that release and relief you felt when finally you were flat and your capital no longer in harm's way. When the pressure is too great, get out!

 

You should print your post out also, or better yet, re-write it by hand and tape it, tack it, or other wise pin it near your trading station. Make it the first and last thing you read during your trading session.

 

Thank you for sharing this with us.

 

Best Wishes,

 

Thales

Edited October 23, 2009 by thalestrader
I had to edit out Gabe's emoticons (those things drive me crazy)!

[Gabe2004 10]

I'd rather be out of the market wishing I was in, rather than be in the market wishing I was out.

 

I like this one and thanks for the encouraging words.

 

Gabe

[thalestrader 14]

I have to re-evaluate my actions but I will keep posting here unless someone thinks that I should do this in a separate thread.

 

Hi Gabe,

 

Your posts concerning these issues are always welcome here.

 

Best Wishes,

 

Thales

[thalestrader 14]

QUESTION:

Has anyone come up with a hard fast way to take profits? I'd be interested in hearing ideas.

 

My thoughts are basically for trading 2 lots. Which is pretty much been, hold solid on Initial Stop till P1 is hit, then move 2nd half to BE after P1 is hit. And both stops are adjusted just beyond swing points as they develop.

 

I'm also figuring out how to add common sense in the mix as Thales suggested, like not letting a trade that moves 40-50 pips in your favor turn into any type of loss, which is something I've done many times.

 

I almost always have two profit targets identified prior to placing my entry order.

 

I set one at a nearby S/R level that offers a profit equal to or greater than my initial risk.

 

The second target will be at the next S/R level.

 

If my first profit target is greater than my initial risk, I will nonetheless move my stop loss on the whole position to break even if price moves in my favor by an amount equal to or greater than my initial risk. For example, if my first profit target is +40 ticks, and my initial stop loss is -25 ticks, then once the trade moves +25 in my favor, I will usually move my stop loss to break even,

 

50 ticks is usually my maximum first target. If price goes +50 ticks on a day trade, you can be almost be certain that I have taken some profits. 100 ticks is usually my maximum second profit target. If price moves +100 from my entry, you almost be certain that I have closed more of the position.

 

You will see on some of my charts that have at times more than two targets (sometimes three, and usually no more than four). If you see more than two targets, that simply means that on that trade I am trading size sufficient to take profits at targets 1 & 2, and still have contracts enough to hold for targets 3 & possibly 4.

 

Remember this: You are day trading, and price will not move in your favor forever. Price moves in waves, and you want to ride the wave until it crashes into shore, but you do not want to be pulled back in by the undertow when the wave retraces back to sea. It is, in my opinion, folly to trade for a tick or four or eight. But it is just as detrimental to let your +30 tick open profit turn into -30 tick closed loss because you were hoping for +50 ticks.

 

Best Wishes,

 

Thales