Reading Charts in Real Time

[thalestrader 14]

This GBPUSD is identical to the scenario that played out in the USDCAD ...That was also a long entry. I did not take that entry. But it did reach what I would have set as PT1.

 

This trade would have had 1/2 at PT1 for +28 and the stop on the second would have just moved from BE to +14

 

Best Wishes,

 

Thales

[fxThunder 10]

Well,

 

All was going well in my gbpusd short. I exit manually at targets due to some price discrepancies between spot and futures and I just prefer to manage my trades that way.

 

Have adsl and 3g as backup. Price got within a few ticks of T1 and as I was preparing to exit adsl went down. Switched to 3g - had connectivity but could not connect to internet or my broker, Seems like we had an area wide failure of sorts.

 

Phone lines also had issues so could not get through to the broker. By the time I got back online price had retraced to halfway between my initial stop and entry - a loss of about 15 ticks.

 

I exited immediately and will probably sit out the rest of the session due to huge feelings of frustration.

 

One of those things, I guess.

 

eNQ

[thalestrader 14]

This trade would have had 1/2 at PT1 for +28 and the stop on the second would have just moved from BE to +14

 

Best Wishes,

 

Thales

 

 

Second 1/2 would have been stopped at +14, so total trade = 21 or 1.3R

 

Best Wishes,

 

Thales

[thalestrader 14]

Weekend Reading

 

I have one other source that I will recommend, though I am very hesitant to do so. I will post it later today. I want to wait because I know that this book can do more harm than good, especially if one reads the entire book. The authors did, however, publish a free .pdf pamphlet containing hwat I consider to be the only important technical aspects of the whole book. I do not possess that .pdf myself, but I know a few of my friends do have it. I will email them, and once one of them sends me the .pdf file, I will upload it here. That will be this weeks' "Weekend Reading" installment.

 

It is with fear and trembling that I recommend Frost's & Prechter's Elliot Wave Principle. Elliot Wave theory can be very dangerous in the hands of human creatures, as we are creatures who seek control and certainty. If you choose to read Elliot Wave, focus on the wave patterns, and do not allow yourself to get sucked in to the near "mysticism" of Elliot Wave that many folks do. All you need to know is the difference between impulsive vs. corrective price action, and how price displays itself during terminal movements. I use the fib stuff also, but only in conjunction with real S/R.

 

I do not want to see folks posting wave counts here. This is not about using Elliot Wave to predict the end of Western civilization as we know it. Read this material as a guide to recognize certain variations in price action, not as a mystical guide to the universe.

 

I also want to thank my currency trading friend, who I know reads this thread but refuses to participate in it, for sharing this .pdf booklet with us.

 

I hope I do not come to regret sharing this here. Do not allow yourself to be seduced by the author's promise of the ability to forecast. Do not start counting waves. Do not rush out to buy the complete book. This is as far as you should have to go with this material.

 

I hesitate even to press the "submit reply" button.

 

Well, here it goes.

 

Best Wishes,

 

Thales

Elliot Wave Basics.pdf

[daedalus 10]

I will not allow myself to succumb to the evil ways of the Elliot Wave!

 

 

 

Thanks for posting it Thales.

[Dinerotrader 10]

It is with fear and trembling that I recommend Frost's & Prechter's Elliot Wave Principle. Elliot Wave theory can be very dangerous in the hands of human creatures, as we are creatures who seek control and certainty.

 

I hesitate even to press the "submit reply" button.

 

Thales

 

You certainly know how to get everyone interested. You're like the club leader of a 10 year old group of boys that got his hands on a porno to share with the group.:rofl:

 

I haven't heard many well known trading ideas mentioned in the market wizard books but Elliot Waves have been mentioned several times so I already have it on my list of things to get some familiarity with. I will take your words of caution seriously.

 

Thanks for the reading and to your currency friend. Too bad we can't get him posting with the group.

[thalestrader 14]

Second 1/2 would have been stopped at +14, so total trade = 21 or 1.3R

 

Best Wishes,

 

Thales

 

And here is a case where being too aggressive with the stop would have cost me a trip to PT2. Price pulled back to within 2 ticks of entry and then rallied strongly right to he secon PT.

 

It happens. I was perhaps a bit too anxious to show MidK that not every trade needs to be for +.5R. Like I said, my best results over time have been with moving my stop to BE once PT1 is printed, and then wait for TP2, trailing at natural stops along the way should any be forthcoming.

 

Best Wishes,

 

Thales

[Gabe2004 10]

Weekend Reading

 

 

 

It is with fear and trembling that I recommend Frost's & Prechter's Elliot Wave Principle. Elliot Wave theory can be very dangerous in the hands of human creatures, as we are creatures who seek control and certainty. If you choose to read Elliot Wave, focus on the wave patterns, and do not allow yourself to get sucked in to the near "mysticism" of Elliot Wave that many folks do. All you need to know is the difference between impulsive vs. corrective price action, and how price displays itself during terminal movements. I use the fib stuff also, but only in conjunction with real S/R.

 

I do not want to see folks posting wave counts here. This is not about using Elliot Wave to predict the end of Western civilization as we know it. Read this material as a guide to recognize certain variations in price action, not as a mystical guide to the universe.

 

I also want to thank my currency trading friend, who I know reads this thread but refuses to participate in it, for sharing this .pdf booklet with us.

 

I hope I do not come to regret sharing this here. Do not allow yourself to be seduced by the author's promise of the ability to forecast. Do not start counting waves. Do not rush out to buy the complete book. This is as far as you should have to go with this material.

 

I hesitate even to press the "submit reply" button.

 

Well, here it goes.

 

Best Wishes,

 

Thales

 

No offence Thales, but EW to me is in the same category as modern art.

Below is an example.

Critics will try and tell us with very fancy words (words that I would probably understand individually but as a sequence coming out of the mouth or pen of a critic, they make no sense to me at all.) that the attached file/picture is a piece of art.

To me it is a smear job that required neither talent nor time to do.

 

From what I have read and heard about EW there is never a way to interpret charts corectly but THE EXPERTS in the field of EW will always find an excuse to explain why it failed when it did or use a particular case to prove that it works.

 

Gabe

Edited November 13, 2009 by Gabe2004

[thalestrader 14]

I'm not trading, but here goes the GBPUSD again.

 

Best Wishes,

 

Thales

[thalestrader 14]

I'm not trading, but here goes the GBPUSD again.

 

I'm thinking at best this would have been a break even effort, and at worst I would likely have taken a -6 tick loss.

 

Best Wishes,

 

Thales

[Kiwi 16]

And I apologized for posting an indicator ...

 

I take it back ... Prechter !!!!

 

 

More seriously, the (only) good thing about Elliot wave is thinking about the complexities of wave shapes as price chops merrily along its path. Working through the potential for profit is useful.

 

I looked at your post on a descending triangular running out of energy ... and note that the three little indians I raised the other day is very similar. As MK pointed out it is 3 small pokes forward after stronger movement - and is frequently followed by failure of the move, at least for a while.

[Kiwi 16]

And I apologized for posting an indicator ...

 

I take it back ... Prechter !!!!

 

 

More seriously, the (only) good thing about Elliot wave is thinking about the complexities of wave shapes as price chops merrily along its path. Working through the potential for profit is useful.

 

I looked at your post on a descending triangular running out of energy ... and note that the three little indians I raised the other day is very similar. As MK pointed out it is 3 small pokes forward after stronger movement - and is frequently followed by failure of the move, at least for a while.

 

Just rereading my own post; the comment about the 3 little indians wasn't meant to take anything away from what you were posting thales ... really to add another way of seeing the same weakness displaying itself. I think its an example where the composite man is watching the market, sees it trying to go further, but failing to be convincing and the CM then goes "well what can't make it up seems destined to go down, lets jump it and see if it falls."

 

 

 

On a vaguely serious note, being keenly aware of my love for a couple of mas, normally EMAs, here is a proposition to you. Thales, it's time you added two SMAs to your charts. They would have kept you out of that silly GBPUSD trade - long only when price is doing its stuff over the mas

 

 

 

 

But, more seriously, I've been thinking about systems based on these ideas and one thing did come up that thread followers may find useful. A number of ways of dealing with the problem that occurs when T1 - Entry isn't greater than Entry - S. This initial trade is a good one IMO if you can get a T1-E that covers E-S plus slippage and costs and T1 is hit more than 66% of the time. If that occurs you get a profit factor of 2 and an expectancy of

(2*.66-1*.33)/1= a dollar returned for each dollar invested.

 

So, here is the idea: if T1 isn't far enough away then set your entry limit back from the break (so price has to retrace to hit your entry). You have to get a few extra pips to allow for the fact that every losing trade will retrace that far and a percentage of winners won't - but if you do it well then this is a valid tactic. I will add a picture to show what I mean (from the bottom zone of the above GBPUSD chart):

 

 

[johnjohn1hew 10]

This is just my opinion and i want to add a different perspective than the last couple of posts. I think that you can just eyeball price action to discover the broad trend and the possible upcoming price movement.

 

If the trade is not completely obvious, then don't enter. You don't need to trade every single movement that a chart presents. If your reward is not equal to or greater than your risk, don't enter. If you doubt anything, then don't enter. These are all mental parameters that keep you out of more trouble than you can handle. To stick to these rules is the test.

 

I think the beauty of this approach is its simplicity and yet its vigorous demands on the trader to have patience and self-control.

 

Here's a quote i want to share:

“What we do upon some great occasion will probably depend on what we already are; and what we are will be the result of previous years of self-discipline.” - H.P. Liddon

[Kiwi 16]

I agree with the principle of "just eyeballing price action" to discover the broad trend but there is an issue - our minds are not simple or logical. Because they are not then under emotional stress, impatience, fear, etc they will increasingly distort perception of reality. It surprises me how frequently people see something one way at trade entry (or exit) and totally differently 4 hours later.

 

Henry Liddon was born at a time before we had the opportunity to understand how our brains really work.

 

FWIW, I would recommend the book "Stumbling On Happiness" which isn't really about stumbling or happiness as an introduction to the traders mental tools. Prepare to be a little disappointed if you hold views such as those of the philosophers of the "character" generation.

 

 

PS. I do agree with most of what you say john. I am just aware of how little control of our brains' actions we really have.

[MidKnight 12]

One of the hardest things for me, even now, is that once I am in a trade, I often times fail to see that price is showing me the move is over and ready to reverse. I get so intent on focuing upon my PT's and my BE stop, that I miss the real SL, or even a Stop&Reverse.

 

Here is another view of the USDCAD. I do not know, had I been watching, if I would have taken the long entry that I show, but I do believe that had I been short from your entry, I would have been out at that long entry. First PT on that long would have been right around your short entry, and price now looks as though it might be setting up another short. However, the USDCAD is right in the middle of a prior chop zone, so unless is breaks back above 1.0468, I am not too interested in anything it has to say to me.

 

On the GBPUSD, your short entry created a Low (undercutting the previous low stopping point and thus entering you into a short position). Price immediately reversed and rallied to a new High. This, by the way, should be the only time an initial stop loss is hit for a full -R loss, i.e. when price immediately reverses from entry and takes you out. This is a "worst case stop" and this is, indeed, the worst case. Once price took you out, especially as it made a new high in the process, you could have looked for a pulback into a HL, and then traded from the long side.

 

Of course, this all smacks of "Monday Morning Quarterbacking," but I thought that it was worth bringing up that if what gets you into a trade is a H-L-LH sequence, then price presenting you with its counter-part (L-H-HL) ought to get you out, if not get you reversed.

 

In other words, do not be married to a trade or your profit targets if price gives you indications that it has changed its mind. While it is wrong to cut your profits short at the slightest reaction, e.g. in the case of the USDCAD short the rally into the point I marked with an "H". But, having reacted so, and having started to move down again, it would be prudent to move your stop loss down to what would essentially be a long entry and thus signal a potential reversal.

 

Best Wishes,

 

Thales

 

Hiya Thales :yes sir:

 

I'm in the process of re-adjusting my sleep schedule so I can devote more concentrated attentions to the FX markets. I'm aiming to be available on and off for the Tokyo session right through to about 10am EST to be there for the start of the USA session. The main focus will be from Europe through to early USA. This means I'll be getting to bed around the 0430-0500 time. Takes a bit of re-organizing - thank god for espresso! :missy:

 

In my preliminary study, it seems that very often the S/R tests yielding solid directional moves are news related, or very near prior to the news release. Because of this, if one is committing to FX, I really think one needs to be available up until shortly after the USA releases their morning data.

 

Cheers for the comments on my Friday trades. Yes, I saw the structure you noted on the USD/CAD and was very keen to exit there, but I also know that if I had exited there and then the market kept diving - I would have been cursing myself for giving up good location all night. I didn't consider getting long there, but did consider getting flat. The reason why I didn't consider getting long was because I didn't have any obvious 240m S/R there.

 

Since I feel a bit battered from the past weeks trading, I'm trying to focus these trades only around the 240m S/R - over complicating thing? Unnecessary focus?. At the very least, this should filter out the pairs to focus on and hopefully add some increase odds in my favour. I'll keep ya posted on that, as it is at the top of my study agenda for tonight and tomorrow night while adapting to the new sleep routine.

 

On the GBP/USD trade, I actually stopped it out before hitting the stop. Not a lot saved, but it all counts I suppose. Took a 0.79R loss on it. It just reversed too hard for what I would have considered to be some sort of indecision at the breaking point.

 

Gabe brings up a good question about your consideration of S/R zones. In reviewing this thread in its entirety and matching up your trades with my 240m or even the 15m view, I noticed that often you were trading right into S/R. I had originally thought that maybe you just take the setup based on some sort of feel/look and then decide to manage it as it plays out. Imagine my shock when to read elliot wave and geometry! :shocked:

 

And here is a case where being too aggressive with the stop would have cost me a trip to PT2. Price pulled back to within 2 ticks of entry and then rallied strongly right to he secon PT.

 

It happens. I was perhaps a bit too anxious to show MidK that not every trade needs to be for +.5R. Like I said, my best results over time have been with moving my stop to BE once PT1 is printed, and then wait for TP2, trailing at natural stops along the way should any be forthcoming.

 

Best Wishes,

 

Thales

 

This what I was trying to allude to in my response. I'm trying to gather data from my own results if that is actually true. How often will I get a PT2 hit? How often will I get a runner past PT2? Is this better than doing the PT1, PT2 etc thing? You know what I mean. I can study this with hindsight, but it will likely mismatch my real-time results. This is the difficulty with studying discretionary methods (and the beauty of this thread). With hindsight, my mind distorts how good I can assess opportunity in real-time.

 

On a totally separate note. Despite being frustrated and angry a little this week, it might be starting to free me from some overly perfectionist tendencies. I used to strive for exact timing and taking very little heat on trades. It's an unrealistic expectation for my skill level and most importantly, it isn't required in order to make money from the markets. It's disappointing to have been trading for this long and still struggle with this aspect as if I'm a total newbie. Tackling this issue head-on and in real-time while exploring a new type of trading might be just what I need to shake this belief up.

 

Have a nice weekend.

 

With kind regards,

MK

[thalestrader 14]

I was hesitant to post the EW stuff because 1) I do believe it is dangerous, as many foks will be seduced by what its purported ability to predict where price will go and when it will get there. I do not use it to predict. I simply acknowledge that EW theory does accurately describe certain repeating structures exhibited by price as it moves through the middle of nowhere on its way to support and resistance levels. I also hesitated becasue 2) EW, because of the "predictive" claims made by proponents. is controversial. I decided to go ahead and post it because I do find those aspects that I find accurate and descripitive of actual phenomena useful.

 

No offence Thales, but EW to me is in the same category as modern art .... From what I have read and heard about EW there is never a way to interpret charts corectly but THE EXPERTS in the field of EW will always find an excuse to explain why it failed when it did or use a particular case to prove that it works.

 

No one is going to make you read it, Gabe, much less use it. If you read my post carefully, you will see that I cautioned against granting the theory the forecasting and predictive powers that those peddlers of price precognition impute to it. However, I will not reject out of hand that which I found to be useful simply because others have sought to distort and misrepresent its value for personal gain. I have found certain aspects of EW useful, specifically EW describes a few common, repeating structures of price action that are easily recognizable that help me identify potential opportunities. If you find it useful great. If not, that's great too. I am a big advocate of human freedom.

 

Prechter !!!!

 

 

More seriously, the (only) good thing about Elliot wave is thinking about the complexities of wave shapes as price chops merrily along its path. Working through the potential for profit is useful.

 

I looked at your post on a descending triangular running out of energy ... and note that the three little indians I raised the other day is very similar. As MK pointed out it is 3 small pokes forward after stronger movement - and is frequently followed by failure of the move, at least for a while.

 

Yes, the "Three little indians," and "three drives to a top (bottom), and "three domed houses," are all phrases describing the structure known in EW theory as an ending diagonal This is a pattern that I see every day on some time frame of the markets I am watching. You will find it every day in stocks, indices, currencies, metals, oil, grains. The fact that it is described in EW theory should not minimize the value of this pattern and the ability to recognize it.

 

I had originally thought that maybe you just take the setup based on some sort of feel/look and then decide to manage it as it plays out. Imagine my shock when to read elliot wave and geometry!

 

Geometry, no, but EW ... yes. In fact, here is another shocker: You could even say that in addition to EW I am also influenced by Gann. Gann once said that the most profitable place to enter a trade is after the first reaction off of an important high or low. Not an earth shaking concept, by any means. But if you thnk about what I am doing with respect to the H-L-LH and L-H-HL, I am looking to enter a position after the first reaction off of what may be an important support (bottom) or resistance (top).

 

And here is another suprise: Why do I usually play for two targets? Well, for that answer you need to look at EW. Let's take a short trade as an example. Price rallies into a high, and it then starts a decline. We call the stopping point of that decline a Low. Now, if price breaks the previous high, I am a buyer. I love buying higher highs. I like to buy high and sell higher. But, if price rallies off of that reaction low and stalls prior to making a higher high, we thus have a potential lower high. The initial high may prove to be an important resistance level. The first decline into the low is the first move down from that important resistance level, and the rally into the lower high is, you guessed, our first reaction from an initial break down from a potentially important top. We sell short if it breaks to a lower low.

 

In EW terms, the price movement down from that H to the L is potentially a wave 1. The rally from the L into the LH is potentially a wave 2. If this is going to be an impulsive move, we should see a decline into a wave 3 low, where I will have my first profit target. Wave 3 would be followed by a wave 4 rally, and wave 4 will resolve into a wave 5 decline into a lower low where I have my PT2.

 

Sorry if you find this shocking, but I have said many, many times that I am not at all an original trader. I have simply taken the few useful pieces of a whole bunch of useless "mind manure" excreted by the others's egos, and I use what is valuable and useful, and I have thrown away the rest. S/R is where price is going. Everything else helps me navigate the treacherous middle of nowhere.

 

Below I have attached four pictures:

 

1 & 2: These are two diagrams from the EW pamphlet that I have found useful Again, I do not count the waves, etc and so on. It is enough just to recognize what is going on. If you find them useful, great. If not, that's great too.

 

3: I have attached a copy of yesterday's EURJPY chart showing what I describe here with respect to trading for PT's and how EW relates to what I do. This is the trade I am for which I am on the hunt. This is the price movement I am trying to capture and from which I am trying to profit. The size of that initial price movement determines the size of the targets. I use S/R to identify target zones and EW & Fibs to plan actual limit orders.

 

4: Here is a copy of one of yesterday's GBPUSD trades. If you go back through this thread, take a look at how often and fairly precise my profit targets are when price does move to and through them (though I do have many trades that reach only the first target and a few that reach neither). I say this not to make myself look smart, but to indicate that perhaps there is indeed some value to material that many dismiss out of hand.

 

I do not want to turn this into an EW thread, as I am not an EW ideologue, and I am not going to answer questions about the theory. You can choose to use it or reject. Either way you should still be able to figure out and learn how to do what I have been trying to show here in this thread.

 

Best Wishes,

 

Thales

[thalestrader 14]

On a vaguely serious note, being keenly aware of my love for a couple of mas, normally EMAs, here is a proposition to you. Thales, it's time you added two SMAs to your charts. They would have kept you out of that silly GBPUSD trade - long only when price is doing its stuff over the mas

 

Kiwi,

 

You will never convince me to add anything of the sort to my charts. I would also bet that my best short trades have initiated when price was above your MA's and my best long trades have initiated when price was below your MA's.

 

You and I have discussed a certain trading system in private, a system that is laden with indicators. My currency trading friend basically trades that system. For years I showed him exactly what I do, how I do it, told him to look for S/R, highs and lows. But he kept playing with this indicator and that indicator. Then he happened upon that particular system, and for some reason everything clicked for him. He has been pulling down four and five figure profits weekly since adopting that system to his trading. It is not my place to brow beat him into abandoning his water wings as he swims in the deep end of the pool. In fact, I am very, very happy for him and the success that he is now enjoying.

 

Now, if you ask me, the difference between what I do and what he does is that he adds 27 of his favorite indicators to do what I do without any. I assume that his indicators would sometimes keep him from entering what might otherwise have been losing efforts, but, in my opinion, they more often had him miss the most favorable entry for winning efforts. For example, he uses a band of ema's, and in accordance with his system, he would only take a long entry if price were above the upper band, and vice versa for shorts.

 

Over the last few months of him reading this thread, I finally have him looking to take entries based upon what price is doing in relation to S/R only, rather than what it is doing in relation to moving averages. I even have him almost weened from his precious CCI (though he sometimes slips and sends me a chart showing the full complement of his systems's indicators, including the CCI). If he ever were to start to slump, I'd be the first to tell him to put his water wings back on.

 

Now, with you as with him (and anyone, for that matter), if these indicators help you, or if you at least believe that they help you, then by all means keep them. I am not opposed to anyone using indicators here in this thread so long as an explanation is made as to how he or she uses that indicator to make trading decisions. For example, I really appreciated daedalus's posts this week where he shared the indicator he uses and how he uses it to make trading decisions.

 

I am likewise not opposed to anyone posting trades based upon some approach different from what I am doing, so long as a chart is posted along with an explanation as to how the trader came by his or her decisions.

 

After all, when I started the thread, I named it "Reading Charts in Real Time," and not "The Thales Chart Method Thread." For example, I really appreciated when ehorn shared his an example of his approach using the daily chart of SKF. I would welcome him back here anytime he wished to share and update an ongoing trade using his method, so long as he explained his trading decisions as he did on his SKF example.

 

All this to say that while I have an open mind, using MA's is not something that I would wish to add to my own decison making process.

 

Best Wishes,

 

Thales

Edited November 14, 2009 by thalestrader

[thalestrader 14]

If the trade is not completely obvious, then don't enter. You don't need to trade every single movement that a chart presents. If your reward is not equal to or greater than your risk, don't enter. If you doubt anything, then don't enter. These are all mental parameters that keep you out of more trouble than you can handle. To stick to these rules is the test.

 

Excellent contribution to the spirit of this thread. Thank you.

 

Best Wishes,

 

Thales

[daedalus 10]

I just thought I would comment on the indicator discussion because I really do agree that more is not more. The most efficient and powerful design will always be the one in which nothing else can be subtracted from it without an adverse effect in outcome.

 

I was browsing through another trading forum where people were all trading the same holy grail method using a bunch of indicators, and some of their trades were awesome, but like usual a lot of them were bad entries and getting people chopped around. Below are a couple of screen shots of their trade examples. Note the patterns that is printed up on a LOT of the good winning entries... is EXACTLY what thales has been instructing in this thread.

 

I think far too often we find ourselves looking at the trees (indicators) and we just can't see the forest (price).

 

If these guys want to use their indicators for confirmation - fine but they should realize (and they don't) that the power of their winning setups is not because of or due to the indicators but rather the underlying price behavior or L, H, HL and H, L, LH.

 

Indicators can be helpful in my opinion but ONLY when we respect them for what they are and use them in a useful way (ie not as entry triggers). In my opinion a useful way to use an indicator is limited to identifying areas for a trade (MA's used for S/R, Bolinger/Keltners for S/R, and Oscillator for Trend Exhaustion, or Using them to give us pointers on holding or folding trades). But we MUST respect the underlying truth that the indicator works because of price and tells us what price has already told us, and thus we must respect price first and foremost as the ultimate truth teller.

 

Please excuse my hack job notations done in MS Paint! :rofl:

[Kiwi 16]

Sorry for mentioning indicators thales.

 

The thread is about a particular approach to extracting the money from the market and the purer it can be kept the more successful I think it can be.

Edited November 14, 2009 by Kiwi

[thalestrader 14]

Sorry for mentioning indicators thales.

 

The thread is about a particular approach to extracting the money from the market and the purer it can be kept the more successful I think it can be.

 

 

Kiwi,

 

Really, there is nothing about which you need to apologize. I am not one to censor things (though the Brooks post above threw me for a bit of a loop as it seems ill-conceived and old out of place, if not a bit suspicious). I find your participation here valuable (and I'm sure others have as well), and I would not want to to start "filtering" your posts.

 

Just to show you how open minded I am willing to be, I have attached a current chart of the EURJPY, In your honor, I have added an 89 ema. I have colored it white, but its there for you, nonetheless.

 

Enjoy the weekend!

 

Best Wishes,

 

Thales

[thalestrader 14]

On the mas, I point out that I said "on a _vaguely_ more serious note"

 

The funny thing is that I 100% agree with the idea that you can see more with your eyes than with any summary of the information - at the best of times.

 

Because that is all an indicator is, a summary of the information. A price bar summarizes information (ohl and c for 15 minutes. A 15 sma on a 1m chart summarizes information (the average of the closes over 15m ... some probable perception of value). A stochastic summarizes information (how close is the high to the high of the x bar range (smoothed or smoothed twice = summarized a little more).

 

I also agree with daedelus - and note that much of the criticism of various indicators is on the "lagging" issue and it comes because people treat them as the triggers for entry. As opposed to summarizing information to perhaps perceive value.

 

I am not suggesting that we use mas in this thread. But it is interesting that using mas chosen to do what you want them to do you can get into those trades. If you use overshooting mas like hulls you will be surprised how often they capture the elliott wave 1,2 events.

 

Seeing its Sunday and a time of philosophical contemplation, what I would observe again is that "you can see more with your eyes than with any summary of the information - at the best of times." Denise Shull and Steenbarger show how, for most people, trading is not "at the best of times" and it is amazing to see (even in this thread) how that plays out in both trade choices and in exits. Summaries and filters are attempts to simplify what the mind is having to do at times of pressure and perhaps that is one of the things that drives there attraction. The attraction for me is that they ease the task of programming something difficult to do with ones computer and "easy" to do with ones eyes. :missy:

 

Not that I am suggesting that the thread introduce indicators. Thread purity is well worth pursuing especially when one is trying to teach a strategy. So, no more mention of mas (or even Mr Brooks who is really a ma driven price action trader) from me.

 

 

Again, I recommend the book "Stumbling on Happiness" for Sunday reading for any trader curious about his or her own mind. I also recommend the videos you can find at TED Ideas worth spreading (TED: Ideas worth spreading)

 

Additionally, I wanted to restore your original post by quoting it here. If you object to it, let me know, and I'll ask James to delete it. I think it a good post and I would hope you allow me to let it stand.

 

Best Wishes,

 

Thales

[daedalus 10]

Just to show you how open minded I am willing to be, I have attached a current chart of the EURJPY, In your honor, I have added an 89 ema. I have colored it white, but its there for you, nonetheless.

 

Enjoy the weekend!

 

Best Wishes,

 

Thales

 

:rofl: That has to be one of the funniest "trader jokes" i've heard in awhile. :haha:

[Kiwi 16]

Yes daedalus; although I think he would have got more value from a white 80 sma.

 

Yes, the original post is fine. I just pulled it because, after a post breakfast swim, I wondered if it wasn't really in keeping with the thread's goals.

[forrestang 10]

 

Just to show you how open minded I am willing to be, I have attached a current chart of the EURJPY, In your honor, I have added an 89 ema. I have colored it white, but its there for you, nonetheless.

 

Enjoy the weekend!

 

Best Wishes,

 

Thales

:haha:........................:rofl: