Reading Charts in Real Time

[brownsfan019 17]

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.

 

My profit target(s) are typically very achievable in my eyes - so I basically let the trade go and either it works or doesn't. I just don't like watching decent sized moves turn into losers and if you are swinging for the fences, that will happen a lot.

 

If a trade has some profit but then retraces, then my entry was wrong and I have to move on to the next trade setup. Basically I view it as a failure.

 

And I'm horrible at trailing exits (I love to lock in that profit) so that's not an option either for me.

[thalestrader 14]

Duplicate post deleted

[thalestrader 14]

So do we call it the Forrest Range BO trade?

 

Best Wishes,

 

Thales

 

Before & After - Here is the EURJPY shot posted last night as the breakout was occurring and the seocnd chart shows the subsequent price action.

 

Best Wishes,

 

Thales

[Dinerotrader 10]

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.

 

Brownsfan,

Really enjoy your comments here. I know you can't explain too much of your strategy but if you can post some "real time" trades based on candles here after you are done with your real money trades I would be greatful.

 

I frequently circle back to trying to use candles in my setups but keep on giving up on them because either they give me so many false reversal patterns or when price is at S/R and a good reversal occurs they don't produce a candle that I would have traded from. Something real time would be helpful if you end up with some spare time some day.

Thanks.

[brownsfan019 17]

Brownsfan,

Really enjoy your comments here. I know you can't explain too much of your strategy but if you can post some "real time" trades based on candles here after you are done with your real money trades I would be greatful.

 

I frequently circle back to trying to use candles in my setups but keep on giving up on them because either they give me so many false reversal patterns or when price is at S/R and a good reversal occurs they don't produce a candle that I would have traded from. Something real time would be helpful if you end up with some spare time some day.

Thanks.

 

I'll see what I can do dinero. If you search the p/l thread, there's been a few that have identified where I entered. From there, you could piece it together.

 

I've said this often on this forum and I will repeat here - candlestick patterns by themselves are useless. You need some other confirmation to aid in using candlesticks. Also, the lower the timeframe the less reliable candlestick patterns are IMO. In other words, if you just buy any hammer you find, it will fail more than win. But give me a hammer @ strong support level(s) with maybe an oscillator or keltner channel, and we can talk.

 

As for deciphering candlestick patterns, just about any candlestick could be a 'pattern'. Again, you need more stuff w/ it but on intraday charts you have to remain flexible in your definitions of candlestick patterns. Most of Nison's work on this area revolved around daily charts when he wasn't being a referral whore. There's a reason they seem to work easier/stronger on daily charts - the longer the timeframe, the stronger the candlestick pattern by itself.

[brownsfan019 17]

Here's a great example from today's ZS chart that I posted in the p/l thread. There's a gorgeous candlestick pattern there at the HOD. Now if you had some resistance there on your charts that could be a valid short.

 

[Dinerotrader 10]

Here's a great example from today's ZS chart that I posted in the p/l thread. There's a gorgeous candlestick pattern there at the HOD. Now if you had some resistance there on your charts that could be a valid short.

 

I saw that on the P/L thread. I spent a few hours marking up some charts around that reversal. I tried a few different VBC charts of various contract sizes and some tick charts. I have a hard time lately using time charts lately since, IMO , it appears that they conceal so much of the price action and its associated volume.

 

Should I just use one scale on a chart (i.e. VBC 1000 contracts) to look for candles or do you think it is useful to watch several types/scales for a good reversal candle pattern near S/R?

[Dinerotrader 10]

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

 

If you can catch the right breakout downward you would possibly hold if for months if there is no retracement to your breakeven position. Whenever I see huge reversals from predictable S/R, I always wonder what it would be like to try to enter at some key reversal points and try to hold the position for a long term period. I'd like to experiement with some of those long term positions after I get these intraday setups making money.

 

Does anyone take longer positions based on these large scale charts?

 

[brownsfan019 17]

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

 

If you can catch the right breakout downward you would possibly hold if for months if there is no retracement to your breakeven position. Whenever I see huge reversals from predictable S/R, I always wonder what it would be like to try to enter at some key reversal points and try to hold the position for a long term period. I'd like to experiement with some of those long term positions after I get these intraday setups making money.

 

Does anyone take longer positions based on these large scale charts?

 

 

 

Nice chart Dinero, looks good.

 

IMO you should perfect one way of trading (intraday or swing) before 'experimenting' with other setups. There's not much use in having a whole bunch of ideas that kind of work vs. 1 solid, reliable setup. If the goal is to make money, then you need to perfect that 1 strategy. From there you have to decide if you want to daytrade or swing and start there.

 

As for your chart - you could argue a great place to be looking to short based on past resistance and/or time for a breakout as the 3rd time is the charm. If it was me and I really believed in this area, I'd be willing to go both ways and see what happens. As long as it doesn't chop (and it can) eventually you'll be on the right side.... but I'm a reversal guy so I'd be licking my chops to short.

[forrestang 10]

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

 

Awesome Chart and observation for this thread!

 

I agree w/BrownsFan, if I were looking at this big picture like you posted, my bias would be either way. And it seems like an obvious way to expect the current trend to happen. It will either reverse or breakout, nonetheless the future big picture resolutions seems clear.

[brownsfan019 17]

I saw that on the P/L thread. I spent a few hours marking up some charts around that reversal. I tried a few different VBC charts of various contract sizes and some tick charts. I have a hard time lately using time charts lately since, IMO , it appears that they conceal so much of the price action and its associated volume.

 

Should I just use one scale on a chart (i.e. VBC 1000 contracts) to look for candles or do you think it is useful to watch several types/scales for a good reversal candle pattern near S/R?

 

Personally I use one chart scale and that's it. I'm watching 3 bonds, 1 currency, 3 oil, 2 gold, 4 indexes and 2 grain charts so I have to keep it simple. As for what kind of chart setting, that's up to you and your personal preference. There's a lot to be said of minute, volume and tick charts.

[Dinerotrader 10]

IMO you should perfect one way of trading (intraday or swing) before 'experimenting' with other setups. There's not much use in having a whole bunch of ideas that kind of work vs. 1 solid, reliable setup. If the goal is to make money, then you need to perfect that 1 strategy. From there you have to decide if you want to daytrade or swing and start there.

 

Right now I am working with several strategies, all intraday. Everything I work with is based on S/R so I am mostly in the mode right now of watching price action at S/R on daily charts as well as tick and VBC charts. Besides just taking a guess at a breakout or reversal at S/R I am hoping to identify something to give some statistical advantage to that guess. I guess this where some introduce moving averages, various indicators, candles, and price action patterns.

I have been trying to spend some time looking at how price reacts to very small scale S/R on a 1 tick charts to see if I can find some clues that take place before a breakout or reversal.

 

Anyway, I am working a lot on this stuff. We'll see if I can get to workable plan in 2009.

 

Thanks for your comments.

[forrestang 10]

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.

 

Here the G/J from friday still had that nice little pattern, making one think BO and it had quite a nice one to the downside. I didn't trade this but just more info nonetheless.

 

Attached are big picture views and the entry chart.

[brownsfan019 17]

Right now I am working with several strategies, all intraday. Everything I work with is based on S/R so I am mostly in the mode right now of watching price action at S/R on daily charts as well as tick and VBC charts. Besides just taking a guess at a breakout or reversal at S/R I am hoping to identify something to give some statistical advantage to that guess. I guess this where some introduce moving averages, various indicators, candles, and price action patterns.

I have been trying to spend some time looking at how price reacts to very small scale S/R on a 1 tick charts to see if I can find some clues that take place before a breakout or reversal.

 

Anyway, I am working a lot on this stuff. We'll see if I can get to workable plan in 2009.

 

Thanks for your comments.

 

Sounds good, I think you are on the right path. How you define S/R can come in so many shapes and sizes, so play around with some things and see what you think. For example, in one p/l post bathrobe made a vault of cash when he said he bought a pullback to the previous week high. I have never looked at previous week high, but talk about some potential S/R - the entire previous week could not crack it.

 

Point being so many ways to define S/R and then finding how you want to trade it. My suggestion is when you are playing w/ these S/R levels to consider only looking for a few trades on the 1st or 2nd test of your levels. In other words, if a level has been hit 5 times during the day, not so sure how important is by the 6th time. But if you identify strong areas, the 1st or 2nd test should provide some movements whether reversal or breakout.

[brownsfan019 17]

Here the G/J from friday still had that nice little pattern, making one think BO and it had quite a nice one to the downside. I didn't trade this but just more info nonetheless.

 

Attached are big picture views and the entry chart.

 

Personally I like that first one. That's clear as day to me. Sometimes you guys draw lines from so far away that I question some of them. That's just me, and my

 

That first chart is simple, clear and easy IMO. Very nice easy trade.

 

Here's how I would have seen the 2nd one:

 

[forrestang 10]

Personally I like that first one. That's clear as day to me. Sometimes you guys draw lines from so far away that I question some of them. That's just me, and my

 

That first chart is simple, clear and easy IMO. Very nice easy trade.

 

BF,

Actually, both of those charts where showing the same thing. One is a 15min chart, the other chart is the 4Hour chart.

 

What I was showing was that price had just come from big picture resistance on the 4 hour chart(2nd chart), and the actual entry was in the 1st chart(the 15min) down through that SUPPORT level that was culminating in that downside wedge..... where price was making LHs into a relatively flat bottom.

 

I was just showing that 4hr chart for some context in the overall big picture of what was going on, and why it might be reasonable to expect some downside continuation.

 

Here's how I would have seen the 2nd one:

 

But...... with your point in the long you said you would have taken, here is a picture of how price was breaking through some resistance. This is how I see that one on the 15 min chart.

[brownsfan019 17]

BF,

Actually, both of those charts where showing the same thing. One is a 15min chart, the other chart is the 4Hour chart.

 

What I was showing was that price had just come from big picture resistance on the 4 hour chart(2nd chart), and the actual entry was in the 1st chart(the 15min) down through that SUPPORT level that was culminating in that downside wedge..... where price was making LHs into a relatively flat bottom.

 

I was just showing that 4hr chart for some context in the overall big picture of what was going on, and why it might be reasonable to expect some downside continuation.

 

 

 

But...... with your point in the long you said you would have taken, here is a picture of how price was breaking through some resistance. This is how I see that one on the 15 min chart.

 

Interesting observation - both charts are tradable, regardless of the timeframe.

 

Nice charts and annotations.

[Dinerotrader 10]

Here is the EURJPY on a daily chart. At this scale I am not sure how helpful it is unless you were going to take some long term positions. If a reversal starts to occur maybe it would be wise to start learning towards looking for breakouts to the downside.

 

Well, here was that end to the upward trend and a beautiful reversal drop. I had all the levels noted on the chart before it happened but I wasn't watching the chart much today so I missed it. Look how predictably price found support at that last retracement in the uptrend. That was about as simple as price action gets using S/R.

 

Maybe you just get good at some of these once a week/month set ups and make all your money on 12 trades a year!

 

[Gabe2004 10]

BF,

Actually, both of those charts where showing the same thing. One is a 15min chart, the other chart is the 4Hour chart.

 

What I was showing was that price had just come from big picture resistance on the 4 hour chart(2nd chart), and the actual entry was in the 1st chart(the 15min) down through that SUPPORT level that was culminating in that downside wedge..... where price was making LHs into a relatively flat bottom.

 

I was just showing that 4hr chart for some context in the overall big picture of what was going on, and why it might be reasonable to expect some downside continuation.

 

 

 

But...... with your point in the long you said you would have taken, here is a picture of how price was breaking through some resistance. This is how I see that one on the 15 min chart.

 

In the chart, I think you meant NICE HLs and not NICE LHs ???

 

Gabe

[forrestang 10]

In the chart, I think you meant NICE HLs and not NICE LHs ???

 

Gabe

 

Yes, thank you for the correction.

[thalestrader 14]

Hi Folks,

 

A little long on the EURJPY: Buy stop 137.04, Stop loss 136.79 for a 25 tick risk. If price trades at 137.14 I'd move stop to break even. At 137.22 I'd move stop to 137.14. I'd take soe profits at 137.40 and 137.75.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi Folks,

 

A little long on the EURJPY: Buy stop 137.04, Stop loss 136.79 for a 25 tick risk. If price trades at 137.14 I'd move stop to break even. At 137.22 I'd move stop to 137.14. I'd take soe profits at 137.40 and 137.75.

 

Best Wishes,

 

Thales

 

Time to say "uncle" on this one. FXCM let us out at 137.07 +3 ticks

 

Best Wishes,

 

Thales

[thalestrader 14]

A little long on the EURJPY: Buy stop 137.04, Stop loss 136.79 for a 25 tick risk. If price trades at 137.14 I'd move stop to break even. At 137.22 I'd move stop to 137.14. I'd take some profits at 137.40 and 137.75.

 

Time to say "uncle" on this one. FXCM let us out at 137.07 +3 ticks

 

If we were still long, we would move our stop to break even as price traded at and above 137.14.

 

Best Wishes,

 

Thales

[forrestang 10]

Let's see if the G/J declines ugly like or if it will yield a nice breakout.

[thalestrader 14]

At 137.22 I'd move stop to 137.14.

 

Stop would now be at 137.14, which would capture +10 ticks profit were the trade still open.

 

Best Wishes,

 

Thales