Reading Charts in Real Time

[Kiwi 16]

Thales, we seem to be getting into semantics here on the issue of filters or not. I suspect each of us has slightly different meanings in mind when we use the words.

 

The one I like is Context because its what I see when deciding with discretion that is so much harder to program into a system. I see there being a mix of pre-trade context when saying "I'll take this" or "I won't" and post trade price behavior which might say "hold for longer" vs "scratch this trade." These seem to me to be things that can (but may not) come with time and experience and may vary a bit from market to market. They are also the things most likely to be unconscious choices in a skilled practitioner.

 

So where am I going with this pre-breakfast ramble. I will steal from daedalus's list:

 

 

Pre-entry Context

Quick and clean LH/HL made near the bottom of the move (to limit initial risk and get in before most of the move may be over) (but also suggests that pressure to be in is strong vs a lot of basing or a bigger pullback so joining the move will be more urgent)

Will break prior S/R (this also means longer term players will see it as a break of their S&R and will join in)

Entry isn't just before a prior S/R zone or multiple S&R zones (so we don't enter into the place where price is going to probably stop anyway) (note that this can also be a cheap entry just before a longer term break ... but its a tricky call)

 

Longer term trend Although trends bend they usually have 3 or more pushes that are longer than the retracements so if you are with the trend then the move you're grabbing is likely to be longer. Above or below a 50ema on a 4 hour chart is one measure.

A good clear run to longer term S&R This is a restatement of the above but what I mean is that price tends to push from one S&R to the next so if you can see S&R that will be important longer term then you are likely to be able to ride to it (where is the next old swing on a 4 hour chart?)

Risk Reward If you look at each S&R below for your short's exits and take a portion at each, what will your risk reward be? Is it good enough?

 

Compare the EJ chart above with the GU chart; you might also note that each was countertrend by my rules but one was close to its 50ema and the other had a good long range to get back to it (the rubber band of perceived value was stretched).

 

 

 

Post-entry Price Behaviour

Strong and clean impulse move (makes it easy to stay and suggest that there is more to go unless it is fast and hard into a significant prior S&R zone, then beware).

Short retracements after the break suggest that pressure to be in the down move is still strong and when they get longer pressure is abating.

 

.

 

 

Note to Gabe: Sorry, I was wrong; there is a contradiction in precise meaning and I've now used a dictionary. Coincide isn't the correct term because it means "corresponds exactly". Precede (hence resistance to the move) or Coincide/Follow (hence support for the move) would be better words for the problem version and the good version respectively.

 

Note to Thales: Sorry for introducing an ma. I try to see where others will perceive value and how they will see trend and find that an ma is an easy cheat for doing that. Perhaps I'll get past it one day but currently it keeps me on the right side of the crowd.

Edited November 11, 2009 by Kiwi
Added drawing. And note to Gabe.

[Gabe2004 10]

Potential short on GJ

 

Gabe

 

Too much resistance. Took a 15 pip loss.

Edited November 11, 2009 by Gabe2004

[thalestrader 14]

IIf the entry is AT PRIOR S/R but IT DOES NOT COINCIDE WITH A PRIOR S/R ZONE, is that a contradiction?

How can entry be at S/R but not COINCIDE with it?

I have a problem with the English form while I understand the concept you illustrated.

 

The concept I illustrated is the concept daedalus proposed. If you understand what I wrote, then you understand daedalus's post.

 

We each have our brains wired somewhat differently, and so for some folks, an explanation in one form may seem confusing or contradictory, while the same explanation is perfectly clear to another group of folks. The same concept explained in somewhat different form may baffle the first group, but be perfectly clear to the second group. That is ok. That's the way we humans are.

 

Don't sweat the small stuff, Gabe. You've come too far to derail yourself over this.

 

I'm pulling for you.

 

Best Wishes,

 

Thales

[thalestrader 14]

Thales, we seem to be getting into semantics here on the issue of filters or not. I suspect each of us has slightly different meanings in mind when we use the words ... The one I like is Context

 

That's fine, let's call it context rather than filter. In my experience, a search for "filters" invariably seems to lead many to use indicators.

 

You and I discussed in private a certain well-known system, and you told me that you rejected it because "you can do it simpler without all the darned indicators." I agree. I would like, as far as it is possible, to prevent such proliferation of indicators here.

 

Context refers to price and how it is behaving. I think daedalus's post (and yours as well) was a good one.

 

Filters often lead to something derived from price.

 

As these patterns we are discussing repeat, then presumably they repeat contextually as well.

 

Best Wishes,

 

Thales

[thalestrader 14]

What a move! Like usual, I stepped away from my computer before the big move. Once I saw it had made that huge move I switched to a 1 minute chart and looked for the 1-2-3 breakouts with much smaller targets ...]

 

Excellent, Dinero!

 

I too use a one minute similarly to the manner in which you used it. If you mind your stops and your risk level, it might pay to take half off at the smaler target and let the rest run for the larger target.

 

Best Wishes,

 

Thales

[thalestrader 14]

Too much resistance. Took a 15 pip loss.

 

What happened?

 

I thought you called that very well. What was your entry? What was your first profit target?

 

Look at the chart ... at the very least it should re-test that 149.83 low.

 

Best Wishes,

 

Thales

[Gabe2004 10]

What happened?

 

I thought you called that very well. What was your entry? What was your first profit target?

 

Look at the chart ... at the very least it should re-test that 149.83 low.

 

Best Wishes,

 

Thales

 

:crap:

I was just looking at it.

I was called for dinner and the trade went against me a little so I decided to close it.

Do I feel stupid now.

My first profir target was hit without hitting my stops.(149.85)

 

Gabe

[thalestrader 14]

My first profir target was hit without hitting my stops.(149.85)

 

And what was your second profit target? Because I bet it breaks 149.76 and tags you second profit target as well.

 

Best Wishes,

 

Thales

[thalestrader 14]

I bet it breaks 149.76 and tags you second profit target as well.

 

Wait for it (for just a little bit, ok) ...

[thalestrader 14]

Wait for it (for just a little bit, ok) ...

 

I would gues your second PT is aorund 149.50, and it looks like 149.67 149.76 is a support zone.

 

Best Wishes,

 

Thales

[Gabe2004 10]

And what was your second profit target? Because I bet it breaks 149.76 and tags you second profit target as well.

 

Best Wishes,

 

Thales

 

Post 1027 has my targets.

149.85

149.60

149.35

149.10

 

4 targets eventhough I devide my trade into 3.

 

Gabe

[forrestang 10]

I didn't take any of the trades tonight, which I regret.

 

Tonight was a good night. The entries IMO weren't as nice and 'swingy,' but still good nonetheless.

 

E/J: Price came right up to good resistance at 134.70, and yielded a nice shorting opportunity. The entry was more of a springboard than a L-> LH-> Breakdown

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G/J: Price came up to a general bed of resistance here. Similiar type entry as above.

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G/U: The short might materialize nicely, but I wasn't interested as it looked like it was going to break to the upside IMO, particularly when it made a HH instead of breaking down first through the blue line

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[thalestrader 14]

I would gues your second PT is aorund 149.50, and it looks like 149.67 149.76 is a support zone.

 

Best Wishes,

 

Thales

 

Support indeed!

 

Best Wishes,

 

Thales

[Dinerotrader 10]

Watching the 6B right now for a breakdown.

 

.

 

Got 5 ticks out of the last move and now watching for the next one

 

Watching this one

 

Update: Everything just keeps going higher right now instead or breaking down. We watch and wait

Edited November 11, 2009 by Dinerotrader

[Kiwi 16]

I liked what you drew. So sim time

[Kiwi 16]

.............

[Dinerotrader 10]

Watching the 6B right now for a breakdown.

 

 

Got 5 ticks out of the last move and now watching for the next one

 

 

Watching this one

 

 

Update: Everything just keeps going higher right now instead or breaking down. We watch and wait

 

The 6J broke up and I almost got a good piece of it but I accidentally clicked the limit instead of the market order and it just flew past me. The 6E and the 6B might make there move soon but I need to sleep....

 

The 6B brokedown but there was too much support in that area.

[Kiwi 16]

hmmmm ..... is this a message or is it just that gbp and usd are not Asia zone movers?

 

[forrestang 10]

hmmmm ..... is this a message or is it just that gbp and usd are not Asia zone movers?

 

 

I think it's just tonight. I think I get more trades from the 'G' pairs then anything else. The G/J moved really well today, the G/U just stopped for whatever reason.

 

I'm digging your paint bars btw:)

[Kiwi 16]

I think it's just tonight. I think I get more trades from the 'G' pairs then anything else. The G/J moved really well today, the G/U just stopped for whatever reason.

 

I'm digging your paint bars btw:)

 

The paint bars here are just to let me know when my night is so I get a better feel for how this works.

 

The indicator in the bottom is just because I will try to automate some of this and I look at strong thrust as an indicator of strength and thus where price is likely to reject if it gets back there. Its just the sum of the 6 bar and the 13 bar highlow range divided by a long average bar range. So it tends to go high when you get a 6-10 bar strong run. A visual check is better but I'm trying to find out if the indicator is "close enough" to help with some software.

[am5001520887468 10]

Thales,

 

When you say your daughter finds 1-3 trades per day - could you tell us how many pairs and over which hours she's watching?

[MidKnight 12]

Hi guys & dolls,

 

Just a theory I'm entertaining for the next little while, USD/CAD could be going lower and continue to at least the next zone I have marked on this 240m chart. Here is the idea I'll be trading if it happens.

[MidKnight 12]

Hi guys & dolls,

 

Just a theory I'm entertaining for the next little while, USD/CAD could be going lower and continue to at least the next zone I have marked on this 240m chart. Here is the idea I'll be trading if it happens.

 

Chart says it all...............................

[Gabe2004 10]

Took another quick trade last nigh and made 30 pips after the initial loser of 15 pips.

Had I kept my original postion , the 3 first targets were met.(I did not draw the 4th target in the 2nd chart)

I have to trust myself - or what I see - more.

 

Gabe

 

PS I have added a 1min chart of my last trade from last night.

Orange triangle = Short entry.

Blue Triangle = short close (3/3)

[thalestrader 14]

Just a theory I'm entertaining for the next little while, USD/CAD could be going lower and continue to at least the next zone I have marked on this 240m chart. Here is the idea I'll be trading if it happens.

 

Very nice, MidK. That was very reasonable analysis, with a well structured traidng plan.

 

Congratulations!

 

Best Wishes,

 

Thales