Reading Charts in Real Time

[thalestrader 14]

Hi Folks,

 

I did not have time to log in and post this EURJPY chart when I snapped off the first pic (I was late for a meeting with my accountant and attorney, and the attorney starts charging whether I am there or not).

 

Anyhow, here is a short on the EURJPY at 134.30, with half profits at +50 and half at +100.

 

Best Wishes,

 

Thales

[forrestang 10]

Hi Folks,

 

I did not have time to log in and post this EURJPY chart when I snapped off the first pic (I was late for a meeting with my accountant and attorney, and the attorney starts charging whether I am there or not).

 

Anyhow, here is a short on the EURJPY at 134.30, with half profits at +50 and half at +100.

 

Best Wishes,

 

Thales

 

I papered that one. Althoguht my targets where 34.10 and 33.90 why where you looking for such generous targets? Was it just due to the momentum, or did you set it up that way to start?

 

Excellent trade!!!!

[thalestrader 14]

I papered that one. Althoguht my targets where 34.10 and 33.90 why where you looking for such generous targets? Was it just due to the momentum, or did you set it up that way to start?

 

Excellent trade!!!!

 

I often use +50 and +100 when I cannot be here to babysit the position. And if you look at the four hour chart, you will likely see that given the velocity and pattern of the recent decline, the targets were justified. Of course, I had no idea that the targets would be filled before I arrived back from my meetings, however.

 

Best Wishes,

 

Thales

[hunnybunny 10]

Trying to get back on the horse again.

I have to work on my STAYING POWER

got out of a trade after almost 2 1/2 hours just to see it go even more my way (in a big move).

I moved my stop once but I was confident that the trade will work out well (famous last words ).

 

Gabe

 

Great to see you back in the saddle, Gabe! It took a big man to post what you did about getting derailed

[forrestang 10]

Interesting looks at some charts I'm getting in, let's see how they pan out.

[forrestang 10]

Holy smokes!!

 

As I was posting this, trade triggered, P1 on G/J was hit nicely.

 

Price is just in front of P1 on E/J. Since I moved the stop on my E/J to BE, and it is right in front of my P1, I'm considering pulling a "Gabe" and cashing out half of the E/J. That's not a joke as I've had a not so good week so far

 

As of now all remaining positions are right in front of BE.

 

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

Aweee man. All of E/J stopped a few pips better than BE. And G/J came up and tagged that stop better than BE too. In hindsight, I wished I'd have managed that one differently.

Edited October 29, 2009 by forrestang

[Gabe2004 10]

I'm considering pulling a "Gabe" and cashing out half of the E/J.

 

 

:rofl:

 

Thanks for the compliment/coined term.

 

Gabe

[forrestang 10]

I have a general question about the nature of a break that occurs at a resistance level with regards to intra-day trading of various futures.

 

Since it is a breakout, doesn't that usually imply that there will be some extreme change in market conditions/sentiment, i.e. many people that had some assumption about the market holding at some level where wrong(with their stops), and possibly others have also decided to jump ship at that point as well...... I.e. at certain points there are many stops and entries waiting there that eventually triggers more stops to both exit and initiate positions after the BO.

 

Which I assume is the point where we see moves like this? I threw volume up there just to show the change in dynamic of buying and selling.

 

If you look through any chart, you'll see moves coming out of various levels and swing points that show that straight vertical type of movement in price.

 

Based on all of the above, would it make sense to not require large stops? Is there a specific criteria in pace that one can look for to see if a trade after being triggered is worth holding, or cashing out quickly and just waiting for the next break?

[BrianNC 10]

I often use +50 and +100 when I cannot be here to babysit the position. And if you look at the four hour chart, you will likely see that given the velocity and pattern of the recent decline, the targets were justified. Of course, I had no idea that the targets would be filled before I arrived back from my meetings, however.

 

Best Wishes,

 

Thales

 

Thales, what month do you use for the currency pairs charts in NT? I went in and added the symbols, but the charts plot like they are old contracts.

[brownsfan019 17]

I have a general question about the nature of a break that occurs at a resistance level with regards to intra-day trading of various futures.

 

Since it is a breakout, doesn't that usually imply that there will be some extreme change in market conditions/sentiment, i.e. many people that had some assumption about the market holding at some level where wrong(with their stops), and possibly others have also decided to jump ship at that point as well...... I.e. at certain points there are many stops and entries waiting there that eventually triggers more stops to both exit and initiate positions after the BO.

 

Which I assume is the point where we see moves like this? I threw volume up there just to show the change in dynamic of buying and selling.

 

If you look through any chart, you'll see moves coming out of various levels and swing points that show that straight vertical type of movement in price.

 

Based on all of the above, would it make sense to not require large stops? Is there a specific criteria in pace that one can look for to see if a trade after being triggered is worth holding, or cashing out quickly and just waiting for the next break?

 

Forrest - I don't think intraday futures trading requires large stops depending on how you enter and how you manage your trades. I typically will risk 1 to make 2 on my trades (if not more) but it also depends on how you time your trades.

 

For example, looking at your NQ chart, here's what I see:

 

 

 

So yes, if you wait for the break or have a sell stop considerably below, you probably would need a healthy sized stop there. If you enter on a test of your R level, then your risk is rather small compared to the profit potential (in this example at least).

 

From there it's just a matter of backtesting your S/R levels to see if they react like this most of the time. Nothing will nail reversal perfectly but if you can keep your risk in check, keep your profits at least twice as big as your losses and find a reliable place to be entering these trades, you don't need huge stops.

[Dinerotrader 10]

Based on all of the above, would it make sense to not require large stops? Is there a specific criteria in pace that one can look for to see if a trade after being triggered is worth holding, or cashing out quickly and just waiting for the next break?

 

Let me start this off with a big "In My Opinion".....

 

I am considering this idea also. It seems like the best traders learn to trade their prime setups, learn to wait for them, and get out when the subsequent price action demonstates that the entry does not meet their "prime trade" requirements. If you find you only need a few of those large fast breakouts to make your money stick with that.

 

I see the following

 

Advantages

- You can add more contracts and keep your stops tighter if you are only looking for a breakout in which there is a real "change" happening which forces price to really move. If you try to stay in all breakouts that waffle around, your stop has to be larger, and consequently your position size can't be as large because you now are risking much more with a wider stop.

- Another advantage I see is that you can put your stop entry a few more ticks out from the breakout level. Since you are looking for that large/quick move, you don't need as much perfection to your entry. Consequently, you also don't get sucked into as many false breakouts this way since your stop order is a little farther away than "stop poachers" can reach with false breakouts.

 

Disadvantages

- You do have to be willing to get out of more trades that don't start moving when they breakout. However, you can exit many of those with minimal losses or small gains.

 

 

After playing a lot of breakouts, you should start to get a feel for how much "waffling" is okay to stick around for and when to just cut the trade loose and watch for another setup. It also appears to me that if price is at a larger scale S/R like on daily/weekly chart you can expect more of those big moves.

 

Those are a few thoughts from someone more novice than yourself but I have been thinking a lot about this also so I thought trying to write it out would help me crystalize my thoughts.

[Soultrader 12]

Let me start this off with a big "In My Opinion".....

 

I am considering this idea also. It seems like the best traders learn to trade their prime setups, learn to wait for them, and get out when the subsequent price action demonstates that the entry does not meet their "prime trade" requirements. If you find you only need a few of those large fast breakouts to make your money stick with that.

 

Depends on the type of trader since high frequency types Ive seen would definitely not apply here. But personally I approach trading in a very similar manner, waiting for setups I am familiar based on support and resistance analysis. I only watch price levels that I am focused on any dont even bother with anything in between. The exit is rather different as I dont consider myself experienced enough to know when price demonstrates that I am wrong. Stops are usually my protective measure but I also minimize my risk right away by scaling out and then moving my stop to b/e. The remaining portion I will try to let it ride to my next predetermined level. The only problem with this approach is that I am never able to stay in a decent trend. On a contrary, trades that often offer high probability of success in my trading are breakout failures. I do not trade breakouts after being burned like a hundred million times but instead have developed into a type where I often watch for failures. Moves that fail tend to reverse rapidly and fast money is often made through such setups.

 

My thoughts on stop placements is such that every setup requires a different parameter. A fixed pt or dollar amount stop I think is not suitable as it does not take into consideration the setup and structure of the market. Stops based on swing highs/lows and S&R are the types I am most comfortable with. If I am late getting into a move, I wont even chase it as my risk becomes too high. As I scale out always, entry timing is extremely important to any successful trade I may take. I could be wrong in terms of direction, but scaling out has turned a minus trade into a slightly positive trade. This probably means my analysis is not spot on but able to survive through money management and exit strategies that I am good at.

 

Its interesting to reflect on my own journey... in the initial phases I was so into strategies, setups, market internals, etc... trying to find technical tools and setups that could provide profits. Nowadays I dont even bother learning a new strategy but focus primarily on risk and money management as well as keeping my own emotions in check. I really think that trading taps into the hidden self in which one really needs to admit and accept all of their bad habits, negative faults in order to build a successful trading style around it.

[thalestrader 14]

Thales, what month do you use for the currency pairs charts in NT? I went in and added the symbols, but the charts plot like they are old contracts.

 

I use the current front month which is Dec. Currency futures are on the same cycle as the ES - H,M,U,Z

 

Best Wishes,

 

Thales

[brownsfan019 17]

 

My thoughts on stop placements is such that every setup requires a different parameter. A fixed pt or dollar amount stop I think is not suitable as it does not take into consideration the setup and structure of the market. Stops based on swing highs/lows and S&R are the types I am most comfortable with.

 

 

I am the same way - my stop sizes on each trade fluctuate with entry vs. S/R level I am playing. Sometimes it's 5 ticks and sometimes it's 15. Ideally it's on the lower end when I can, but that's not always possible.

[Dinerotrader 10]

Its interesting to reflect on my own journey... in the initial phases I was so into strategies, setups, market internals, etc... trying to find technical tools and setups that could provide profits. Nowadays I dont even bother learning a new strategy but focus primarily on risk and money management as well as keeping my own emotions in check. I really think that trading taps into the hidden self in which one really needs to admit and accept all of their bad habits, negative faults in order to build a successful trading style around it.

 

Great to have your comments here James. Can you elaborate more on how you "focus primarily on risk and money management". Do spend time looking to see how trades would have turned out had you managed them differently? It sounds like you manage a trade similar to Thales in that you use "natural" stops and scale out. Thales posted some specifics about his management style. Is there anything you do differently?

 

Being somewhat new to the daytrading world, it is easy to spend a LOT of time on strategy because gaining a statistical advantage at your entry point is very important. It is always helpful to see what risk and money management style traders have progressed to after lots of experience.

 

Thanks.

[forrestang 10]

Not trading any of these but I think they look interesting nonetheless if they trigger.

[forrestang 10]

Not trading any of these but I think they look interesting nonetheless if they trigger.

 

Of the ones in the picture, these two triggered an entry.

 

The U/C didn't really follow through, but in hindsight the short probably wasn't well advised based on the recent uptrend. This wasn't a full "With-Trend" type of entry.

 

The G/C moved just shy of 60 pips after BO, so plenty of room to take profit. This was more of a "With Trend" entry as you can see if you plot out the swings on a 1Hr chart for example.

Edited October 30, 2009 by forrestang

[thalestrader 14]

Hi Folks,

 

Current look at the EURJPY.

 

Best Wishes,

 

Thales

[thalestrader 14]

Hi Folks,

 

Current look at the EURJPY.

 

Best Wishes,

 

Thales

 

It still amazes me how long it took me to be able to do something that really is so easy that even a nine year old can do it well.

 

Best Wishes,

 

Thales

[forrestang 10]

It still amazes me how long it took me to be able to do something that really is so easy that even a nine year old can do it well.

 

Best Wishes,

 

Thales

 

As with the post I posted about the nature of a BO, what was it about this one that immediately moved so well? Is it just chance/coincidence that this BO you chose moved so fast so quickly, or was there something else to it?

 

What made you pick the BO point that you did, and not maybe an entry above at 134.62 or so?

 

Where you not worried about that 134.34 level to the left acting as support?

Edited October 30, 2009 by forrestang

[thalestrader 14]

As with the post I posted about the nature of a BO, what was it about this one that immediately moved so well? Is it just chance/coincidence that this BO you chose moved so fast so quickly, or was there something else to it?

 

What made you pick the BO point that you did, and not maybe an entry above at 134.62 or so?

 

Where you not worried about that 134.34 level to the left acting as support?

 

I do not know and I would not pretend to know what makes the market move as it does, e.g.in this case, why it moved so quickly.

 

My conjecture in this case would be that there was a lot of "air" between yesterday's Breakup point and this morning's Breakdown point, i.e. a lot of price levels where no trades really took place, and therefore no real opportunity for the market to test and develop S/R in that area. But, that is conjecture, isn't it.

 

I felt that with the range contracting and consolidating at the low of the day, that price would eventually (and soon) make a move one way or the other and the range would expand in the process. But that move could have been a reversal up as easily as the breakdown. And I really do not know how to determine by how much the range will expand, though using S/R you can reasonably anticipate where price may be heading as range expands.

 

I do not see the significance of the 134.34 level to which you allude. Could you post a chart that shows why that level was significant?

 

Best Wishes,

 

Thales

[forrestang 10]

I do not see the significance of the 134.34 level to which you allude. Could you post a chart that shows why that level was significant?

 

I guess I think I answered my own quesiton in the picture. I really was looking at a 1hr chart and this seemed to stand out a bit more to me.

[thalestrader 14]

I really do not know how to determine by how much the range will expand, though using S/R you can reasonably anticipate where price may be heading as range expands.

 

 

quid est demonstratum

[Dinerotrader 10]

I started marking up this chart to see what lower lows would have produced some false breakouts which of course depends on your money management.

 

I noticed that if you had waited for price to breakout not only from the last low but also past the trendline formed from the prior lows made you would have only take the 2 larger breakouts. I wonder if you could combine trend lines with this L,HL,LL breakout approach to gleen out the best setups. I have no idea, I just thought I would show you what I saw in the chart.

 

[Dinerotrader 10]

Look at the bright pink breakout. I wonder if your odds of a good breakout increase if you wait until a breakout occurs as usual, then retraces and bounces of the level that it just broke through as it did on the pink breakout. You'd miss quite a few BO that didn't complete this pattern but if this gave you more winners you could bet more on the setup. Just another thought.