Reading Charts in Real Time

[forrestang 10]

Blue line would be entry if the HL remains intact.

 

Purple lines are just S/R levels picked at some point.

 

I am calling off the E/U trade, just my personal preference, it still may shape up to be a great long bouncing off of support?

 

My G/U, I sat through quite a bit of heat with that uncomfortable decline(dropping below what I anticipated to be the HL), and because of it I am not willing to sit through any more retracements beyond my entry on this trade. My stop is BE, targets will remain were they are, and the chips will unfold as they may.

 

-----EDIT (14:16EST)-----------

P1 just hit

 

Adding 2nd chart, stop for 2nd half still at BE, will adjust with a natural swing that comes into play.

Edited November 12, 2009 by forrestang

[thalestrader 14]

Hi Folks,

 

Last trade on the USDCAD did make it to each of the three PT's, though we were shaken out, and then failed to act on a new long entry. Price has now pulled back to prior resistance, and seems to finding support there. Here is the current view from the four hour and daily chart.

 

Entry here on a stop above 1.0540, with a stop loss below 1.0520. Targets are approx. +500, +900, +1500. One could also wait for a break above the 11/01 high (entry above 1.0840).

 

Best Wishes,

 

Thales

[daedalus 10]

I am finally really starting to get the hang of this a bit better and working into a fairly consistent management approach. I've had 14 trades today and have yet to have a losing trade (i've had 2 pars). I currently have two open positions but one is at par so the worst I can walk away with is one loss. As you can see, some of my exits are premature by a ways, and some are perfect where any other decision results in a par at best and a loss at worst.

 

What i'm finding personally is that its paramount to take profit when its on the table. Simply trying to attain a 1 Risk : 2 Profit factor isn't attainable (ok, its doable, but its not as effecient due to the offset in additional losses and pars).

 

Some of my trades go 2:1 but a lot of them don't, but if I get a quick decisive push in my favor i'm gonna take profit off the table. Because more often than not a solid profit quickly backfills to our entry price and it makes reducing risk difficult, getting to par (and just getting taken out) a typical experience.

 

Obviously everyone is going to manage differently, but I feel like (as with anything) the entries are EASY. What you do after you're in dictates the profitable traders from the unprofitable.

 

My two open positions:

 

Cheers!

[daedalus 10]

Isn't it funny how the trades were sure are gonna work never do and the ones were worried about always pay off? lol.

 

Ended up getting par on the trade I was at par on:

 

And got my 270% profit (and other textbook exit for a burst in favor) out of the trade I was sure was gonna stop out for a loss.

 

Its a funny little profession we work in. Remember kids - ANYTHING CAN HAPPEN. 14/14 on the day. I'm astounded to say the least.

[thalestrader 14]

... the entries are EASY. What you do after you're in dictates the profitable traders from the unprofitable.

 

I agree. Two traders, both trading identical approaches, often have vastly different results because of the different manner in which each manages his or her exits.

 

Excellent work, daedalus, thank you for sharing!

 

Best Wishes,

 

Thales

[forrestang 10]

I am finally really starting to get the hang of this a bit better and working into a fairly consistent management approach. I've had 14 trades today and have yet to have a losing trade (i've had 2 pars).

 

Cheers!

 

I am having a hard time seeing what it is you are doing?

[thalestrader 14]

I am having a hard time seeing what it is you are doing?

 

daedalus is doing the same thing you are, Forrest. However, something tells me this is not his first go-around with this approach, as he acting at a much more "micro" level and his H/L/HL's and vice versa are sometimes far more subtle than what I usually post here using time based charts. In some cases, the entire sequence for daedalus plays out in just two bars. Fortunately, he is using candlesticks, which, if you know how to read a candle, should enable you to see the subtlety of his reading of price action.

 

Best Wishes,

 

Thales

[Gabe2004 10]

I am having a hard time seeing what it is you are doing?

 

I can see some of the L, H, HL setups but some I have no idea what was the reason for the trade?

 

Gabe

[forrestang 10]

I can see some of the L, H, HL setups but some I have no idea what was the reason for the trade?

 

Gabe

 

daedalus is doing the same thing you are, Forrest. However, something tells me this is not his first go-around with this approach, as he acting at a much more "micro" level and his H/L/HL's and vice versa are sometimes far more subtle than what I usually post here using time based charts.

 

I see the H/L/HL's sequence in the trades. I should have explained, but like Gabe mentioned I'm wondering what the reason behind the trade was?

 

It is probably just that the screen shot is so tight that we can't see what's going on around at the areas a trade was initiated. And given so many trades I can understand why as it would be rather tedious to give detailed explanations on each trade.

 

So I suppose I am just wondering if the trade was taken soley based on swings, or if there was a big picture context in place for the trade?

[thalestrader 14]

Here are links to two posts by bakrob99 from a now closed thread that might be of interest:

 

http://www.traderslaboratory.com/forums/f229/idea-850-two-1-tick-trades-6862.html#post76559

 

http://www.traderslaboratory.com/forums/f229/idea-850-two-1-tick-trades-6862.html#post77616

 

Best Wishes,

 

Thales

[thalestrader 14]

I have pirated this post from Db's "Support and Resistance: Trading in Foresight," thread. This is an excellent post from an excellent thread. I think that Forrest does a good job of applying himself to working up a trading plan - knowing ahead of time where he will be looking to buy and sell. As I have said, you should not trade the approach I have shared here in isolation from S/R considerations. I hope Db does not mind me "borrowing" his post.

 

To Everyone Who's Interested In Learning This and Nobody In Particular:

 

"Accountability" is not about here's a trade I took this morning (or last night or yesterday) and posting the (alleged) results of these (alleged) trades, whether one does it every day or only occasionally, whether the results were positive or negative, regardless of how "good" the trade "felt" or "looked" or "seemed".

 

True accountability is about posting a plan for the coming trading session, whenever that might be, trading that plan, then reviewing the results according to whether or not the plan was followed and, if the plan was followed and the results were negative, if the plan needs to be revised. If one doesn't do this, he can expect to have to deal with impatience, overtrading, revenge trading, and a variety of other "emotional issues" that plague traders who have no trading plan (preferably one that is consistently profitable).

 

The trading plan can be as simple as (1) here's resistance and here's what I plan to do if and when we get there and (2) here's support and here's what I plan to do if and when we get there. The only reason not to follow the plan is, if and when price reaches one of these levels, the trader is not ready to assume the risk. If he is not ready to assume the risk, then the trade is off, and he can later determine why he was not ready to take the risk.

 

To ignore this process and instead wait for the trading session to begin so that one can determine how it all feels and seems and looks accomplishes nothing but to extend and flatten the learning curve so that one can spend (waste?) years learning what should otherwise take months.

 

Thank you, Db.

 

Best Wishes,

 

Thales

[daedalus 10]

First - I have so many trades because i'm trading MUCH faster charts that you guys on the 15 min timeframes, and i'm trading 3 currency pairs (EC, JY, BP).

 

I should clear it up further in the interest of sharing with you all as much as you all have with me, i'm using a value chart to signal when swings are at extremes, then i'm just waiting for HL, LH patterns for entries. EVERY single entry uses the same criteria. I'm also managing my exits and pars off the value chart - when it gets to the opposing extreme i'm getting to par or exiting (if price is not already at my predefined targets). Its just an indicator i've used for years and am comfortable with.

 

I've been playing around with qualifications for what is a valid "area" on the chart to look for trades. A lot of you guys are using prior S/R zones and I think that works fine (obviously it does) but for me personally, it requires a lot more looking back historically and leaving a lot of lines on your charts. I just don't like that. I'm such an @nal retentive personality I want things to be exact - and in trading they rarely are so it becomes counter-productive for me personally to trade based solely off of prior S/R.

 

But whether we are using S/R, trendline established swings, bollinger bands, or some kind of oscillator - each one of us is looking for the same thing - an area on the chart where a reaction is probable.

 

Also, i'm allowing my LH and HL failures to also be double top/bottom failures. As long as price has made an initial move, retraced off of that move, gone back for continuation and failed i'm happy.

 

Heres an example of two of my trades I outlined:

 

Simplistic? You bet. Thats the point. Cheers!

[Kiwi 16]

Thanks for the pointer to the value charts. I looked it up and quite liked the logic they used to build their "oscillator."

 

I found a ninja version of it plus a ts version and cludged up a Sierra Chart version. I think it will combine nicely with the poor automatic read of prior S&R quite well for autotrading.

 

Here's my version (Sorry for the indicator chat Thales but for autotrading it's hard to get a good "view" of S&R).

 

 

[forrestang 10]

 

Lately, since I've been more interactive with managing my trade, my P2 has become more a mattter of ceremony than anything else, in that I'm not getting much out of my 2nd half of my trades lately.

 

I am looking over my FX Journal, and my P/L - R:R profile in particular...... and splitting my trades into 2 lots is really hurting me.

 

The frequency in which my P2 actually hits is extremely rare. I usually am stopped at BE prior to my P2 being hit. My P2s are reachable, and quite often they are hit, but my management is slowing down progress.

 

Most times my P1 is at a 1:1 with my ISL. Now, splitting this trade into halves means that if I am stopped out, it's really mathmatically close to a 2:1 if you factor in the frequency in which my P2 is hit. I seldom get immediately taken out for a FULL stop, but when it does happen, it virtually takes two winning trades(in which I split halves) just to get back to where I started.

 

Just looking over this, my profits literally would just about have doubled if I only traded towards 1 target, at least until I figure out how to manage my open positions better.

 

Obviously there are a multitude of ways to manage a position, and I don't think anyone can just say "do this and do that and profits shall reign down upon the!"

 

So I'm just posting this as something I was looking at today.

[brownsfan019 17]

Dae or Kiwi - can one of you start a thread on the value chart? I'd like to take a peak to see if it can help w/ timing my exits as dae has done here.

 

Thanks

 

Edit - maybe this is it: http://www.traderslaboratory.com/forums/f56/ttm-ddf-value-chart-3388.html

[MidKnight 12]

I haven't posted this type of thing on trading forums before, but I do something like this every day. Recent posting made the comments about it being useful and true accountability. So, I'll be doing this for the next little while, let me know if it is excess clutter and I will cease.

 

 

Pairs near S/R:

EUR/GBP

EUR/USD

GBP/USD

USD/CAD

 

Steelblue is for Support

Red is for Resistance

(I read that somewhere in this thread

 

EUR/GBP

Looking for longs down here, especially on a probe lower.

 

EUR/USD

I've missed the longs so now watching to see how R gets handled around the 1.4900 area

 

GBP/USD

Up at R, but also reacting off S. I'll take a shot on the short side here if 15m gives good pattern once Europe opens.

 

USD/CAD

Looking to sell this test of the prior swing low.

 

With kind regards,

MK

[MidKnight 12]

Hi Midk,

 

.......<snip>.........

 

Best Wishes,

 

Thales

 

Thanks for taking the time to reply Thales.

 

The lack of precision with S/R with an exact price and instead more of an area always makes it hard for me to decide exactly where to place an order, and really, if one wants to be obsessed about S/R then they can always find a 'reasonable' S/R just around the corner. I've been trying to focus more on the main ones to prevent my charts from having vertical lines every few millimeters. As has been witnessed though, this hasn't worked so well so far. Also, when my PT1 for a 1R trade is not at the closest edge to where the trade was initiated but could be possible within the zone, I have tended to take those with the assumption that SR will at least go through the edge. I've been wrong about this a fair bit on FX.

 

If the market goes close to my PT but then bounces back I have had a tendency to do the wrong thing in my active index trading under this condition. I'd say more often than not, it did go on to hit my PT. I am torn with this one because while I would like to say "sure, that's obvious that it's not going to hit my PT, I'll bail out now" and walk away with a small profit. I know that I'm not good enough to do that with any consistency.

 

The idea of the markets being choppy lately, well yeah, but I tend to only recognize it with my 'night vision hindsight goggles' on, I don't recognize it like that in real-time most of the time. The only really choppy markets I have at the moment is EJ or GJ. I'd say the majors have been fine.

 

Thanks again for the reply.

 

With kind regards,

MK

[Dinerotrader 10]

The Euro is sure testing resistance quite a bit right now. Looks like a good risk reward trade set up for a long.

 

[MidKnight 12]

The night is young and already a fast loser on short gbp/usd. Both gbp/usd and usd/cad signaled me short at about the same time. What do ya do then as they are really opposite type of trades. Anyhow, at the time I took them both because knowing my 'skill', I would have picked the one that didn't work.

 

-22 on short gbp/usd.

[fxThunder 10]

The night is young and already a fast loser on short gbp/usd. Both gbp/usd and usd/cad signaled me short at about the same time. What do ya do then as they are really opposite type of trades. Anyhow, at the time I took them both because knowing my 'skill', I would have picked the one that didn't work.

 

-22 on short gbp/usd.

 

Hey MK, I actually took that trade as a long. Lots of S below ensured that I was not at all interested in shorting plus the gbp/usd had just broken to the upside out of a consolidation and I was looking for continuation of that.

 

eNQ

[fxThunder 10]

I also took this eur/usd long.

[MidKnight 12]

Hey MK, I actually took that trade as a long. Lots of S below ensured that I was not at all interested in shorting plus the gbp/usd had just broken to the upside out of a consolidation and I was looking for continuation of that.

 

eNQ

 

Hiya eNQ,

 

Maybe you are looking at a different area. Where I went short it was still within the 100pip range, but at the upper end of it. There was a DT (LH) and I shorted the break to a new low. Or are you referring to a different consolidation?

 

All my best,

MK

[MidKnight 12]

The night is young and already a fast loser on short gbp/usd. Both gbp/usd and usd/cad signaled me short at about the same time. What do ya do then as they are really opposite type of trades. Anyhow, at the time I took them both because knowing my 'skill', I would have picked the one that didn't work.

 

-22 on short gbp/usd.

 

Still short USD/CAD and have taken ~1R (30 pips) for 1/2 the position. Stop moved to BE.

[fxThunder 10]

Hiya eNQ,

 

Maybe you are looking at a different area. Where I went short it was still within the 100pip range, but at the upper end of it. There was a DT (LH) and I shorted the break to a new low. Or are you referring to a different consolidation?

 

All my best,

MK

 

I am looking at that exact area - there was a triangular consolidation below this area - when it broke out of that it started making hh's and hl's. Also the 240miin indicated that we were at good support - hence confluence to look for longs.

 

Cheers,

eNQ

[fxThunder 10]

MK,

 

This is the consolidation that I am reffering to:

 

Cheers,

eNQ