Reading Charts in Real Time

[thalestrader 14]

If they want Euros, let them buy Euros!

 

(but if they're buying Euros, so am I)

 

If they are feeling generous, then I am willing to take 4912, 4932, and 4958

 

Best Wishes,

 

Thales

[Kiwi 16]

A while back Thales posted an elliott document.

 

But the important thing in that post was that he showed how he tries to get in at the end of wave 2 and having taken a partial profit, hold for a longer run.

 

My peewee system should do that too. In the hsi version it doesn't quite and gets quite a few "bad" trades but overall it works sufficiently well that I left it alone. I'm now doing one for forex and those who know me know that it bases the start of the trend on price crossing over a couple of ma and staying there for a few bars, thus dragging the mas over as an elliott 12 will do.

 

It's a trend progression system which requires more an more complex retracements before an entry will occur after the first one (the first pullback in a new trend is both the easiest and most profitable -- so further pullbacks need to be better qualified). When trading thales 123b's it would pay not just to consider where support and resistance are but also how old the current trend is (and thus how close to probable failure it is).

 

 

 

 

And here is the funny thing and the point of my post. I set my 4hr charts up to run from Globex open (because London midnight and Globex open are the 2 times most likely to be used by the most traders as midnight and thus the start of a new day (all gobex futures contracts start their day when globex reopens each afternoon)).

 

I was thinking about doing some discretionary trading but decided I wanted no emas on the chart. So, how shall I decide that trend is up or down for the 15m I asked? I'll use 4 hour bar breaks and S&R and trade in the direction of the 4 hour bar breaks or off really nice 4H S&R patterns... ok ... looks pretty good and progressing hs and ls seem to agree as do retests. So I wondered how it compared with the mas that I was using to build FxPeewee - and here was a surprise. Most of the time the mas and 4 hour bar breaks signal a trend change within 4-5 15M bars of each other - and the first one to signal is right. Why? Because the mas respond faster to a slowly rising price pattern ... but the 4 hour bar break responds faster to an impulsive pattern.

 

My point for discretionary traders using Thales 15m system? Trade in the direction that 4 hour bars are breaking. You will get better follow through and fewer failures IMHO

 

Here is a picture (not cherry picked ... its the last days of my development data set for usd.jpy and I've circled some failures that would have been saved although some entries wouldn't have been taken unless you'd decided that it was 4H timeframe bounce off s&r.

 

 

.

[thalestrader 14]

A while back Thales posted an elliott document.

 

But the important thing in that post was that he showed how he tries to get in at the end of wave 2 and having taken a partial profit, hold for a longer run .... So, how shall I decide that trend is up or down for the 15m...? I'll use 4 hour bar breaks and S&R and trade in the direction of the 4 hour bar breaks or off really nice 4H S&R patterns... My point for discretionary traders using Thales 15m system? Trade in the direction that 4 hour bars are breaking. You will get better follow through and fewer failures IMHO

 

 

Two Questions:

 

1) Would this have "filtered out" the current long on the EURJPY that I posted?

 

2) Why do I feel that seeking criteria to avoid taking losing trades, i.e. "failures," is a misplaced effort?

 

Best Wishes,

 

Thales

[thalestrader 14]

PT1 is 132.25, PT2 132.50

 

Done & Done.

 

Best Wishes,

 

Thales

[thalestrader 14]

A while back Thales posted an elliott document.

 

But the important thing in that post was that he showed how he tries to get in at the end of wave 2 and having taken a partial profit, hold for a longer run.

 

This was a nice example from tonight.

 

Best Wishes,

 

Thales

[MidKnight 12]

Hiya,

 

I'm open to this idea for short on GJ because of the large move down on Friday and now it has tested what I would consider the immediate R. Looking for at least a move down to the bottom of the range.

 

EDIT: 2021 EST, already exited for a -12 loss.

Edited November 23, 2009 by MidKnight

[thalestrader 14]

Hiya,

 

I'm open to this idea for short on GJ because of the large move down on Friday and now it has tested what I would consider the immediate R. Looking for at least a move down to the bottom of the range.

 

Just be aware that it has basically tested the lower end of its range by making a slightly lower low than the prior day low and reversing impulsively higher. If I were to try that short, I'd want to go to break even quickly, probably at about a +5, and certainly with a 146.74 print.

 

Best Wishes,

 

Thales

[MidKnight 12]

Just be aware that it has basically tested the lower end of its range by making a slightly lower low than the prior day low and reversing impulsively higher. If I were to try that short, I'd want to go to break even quickly, probably at about a +5, and certainly with a 146.74 print.

 

Best Wishes,

 

Thales

 

Yes, I was aware of it but figured if it gave a LH and broke a L then it would continue for some down towards the range low again. It turns out this thinking was wrong.

[Kiwi 16]

Two Questions:

 

1) Would this have "filtered out" the current long on the EURJPY that I posted?

 

2) Why do I feel that seeking criteria to avoid taking losing trades, i.e. "failures," is a misplaced effort?

 

Best Wishes,

 

Thales

 

 

 

1. No, it wouldn't for the discretionary application because you had a S&R setup on 4H driving longs in that zone.

 

2. "Avoiding taking losing trades" is something you do automatically as does every experienced successful trader. You can see when the structure is poor and you simply don't take trades that someone who doesn't yet get it would take. In my case I'm automating so things so "seeing context" is a process of figuring out how to get the computer to trade when you would perceive context as right and skip when wrong, more often than not.

 

The picture shows how 4 hour forms a slightly higher bottom on Friday and then retests on open ... going far enough into the support zone (highlighted yellow) to justify taking the risk of the 15m trade. Note that unless you can build that perception into a program it wouldn't go long until something trend or break orientated "told it" that trading long was valid. In this case, because the labeled waves involve such short pullbacks on 15m it wouldn't have turned until the "wave 5."

 

This illustrates the advantage that human's have in reading S&R patterns over machines

 

I note though that Wave 1 through 4 all fall into the Chop Zone (shown in blue highlight) that a less experienced user might have defined as price swings repeatedly fell within the larger swing on Friday. If one had taken that view then you would have waited for "wave 5" which broke out of the chop zone before entering anyway.

 

.

[thalestrader 14]

In my case I'm automating so things so "seeing context" is a process of figuring out how to get the computer to trade when you would perceive context as right and skip when wrong, more often than not.

 

Automating ... I misunderstood your last post.

 

Best Wishes,

 

Thales

[thalestrader 14]

If they are feeling generous, then I am willing to take 4912, 4932, and 4958

 

There goes 1.4912.

 

Best Wishes,

 

Thales

[MidKnight 12]

Not a great start to the week. Already 3 trades and am in the hole -14.5 pips total. All the entries were valid as in they were breakouts but the context was wrong in all of them. Bottom line, context wrong = trade probably loser. This is the key to this style, IMHO. I didn't see anything right at the open like Thales did, and then as the market was selling the buck there was R too close for me to jump on.

[thalestrader 14]

I am willing to take 4912, 4932, and 4958

 

There goes 4932. Two down, one to go ... now if only the Eagles could get in gear for me the way the Euro has.

 

Best Wishes,

 

Thales

[MidKnight 12]

There goes 4932. Two down, one to go ... now if only the Eagles could get in gear for me the way the Euro has.

 

Best Wishes,

 

Thales

 

Hi Thales,

 

How come you would have been interested in a long with so much overheard potential R close by?

 

With kind regards,

MK

[thalestrader 14]

How come you would have been interested in a long with so much overheard potential R close by?

 

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 think 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).

 

Hi Midk,

 

Take a look at the view of the EURUSD on the 240 minute in the context of the above goal of entering after the first correction off of an important S/R level.

 

In addition to what you see there, I would say that I am a big fan of buying high and selling higher.

 

Best Wishes,

 

Thales

[MidKnight 12]

Thanks for the reply Thales. Looks a bit different on my charts from IB data. For example, I don't have that same HL pattern you have on the 240m chart or that large gap you are anchoring off. I get the general point though.

 

With kind regards,

MK

[TrueBalance 10]

Here's the EURJPY. Looking for a short. If price reaches 132.50 on momentum I would move the stop to BE.

[Kiwi 16]

I've been looking at Midknight's trades today and they're the same as your EJ trade TrueBalance.

 

Why can no one go with the flow of capital?

 

The problem with H L LH is that you will often get it against the trend in a good move. You see it on 15m, 4 hour, daily. It becomes

 

H L LH LL >>> liquidity has now been gained >> rocket like trend resumption

 

fueled by all the people who bet on reversal.

 

IMO (and this may be against the spirit of this thread) you need a good reason to go against the flow/momentum/trend/ whatever words you wish to use to describe continuation.

 

I was looking at USDCHF while discussing it and marked up what seem like good reasons. Tests and retests of S&R or a very strong single rejection would seem to me to be the minimum without some other good reason.

 

123break is a "go with the flow entry" but it seems to be being used to justify going against the longer term flows when I personally don't think it is a big enough reason by itself.

 

 

OK... RANT over.

 

 

[BlowFish 10]

You are right.

Most of those who posted did a half a$$ed job - including me. (pardon my French).

It is my resolution to follow your suggestion and starting tomorrow (Sunday) I will post atleast one marked chart per day.

 

Gabe

 

The only trade I posted last week was a sim trade (15 min eur) it moved rather quickly and I found it difficult to keep up (certainly with the comments on the sequence of charts). My live trades last week where from a 2 min DAX chart which dosen't leave much time for posting. I do have some charts I snapped but didn't post them up as It wasn't really real time (per the thread title). I might try and catch a sequence of charts and then annotate them as a completed trade at the end.

[BlowFish 10]

Ive been thinking on how I trade and how thales trades.

[ATTACH]15643[/ATTACH]

 

Your trade is the same as the 'traders trick entry' a la Joe Ross. Forget JR's naming of stuff (Ross Hook is really the only self indulgent one) it is very solid price action stuff rigorously defined and presented. The TTE is an early entry ahead of the break out of the main swing high/swing low, the thinking is that even if the BO fails the swing will likely be tested and cover the cost of the trade. My dax 'scalp' trades are pretty much just like yours Don (TTE). I have been more closely following Thales trades (both trigger and management) on 15 minute FX charts in sim. Personally I find it harder to wait for the BO proper, maybe because in years gone by I would have faded those.

 

You can download 'The Law of Charts' and 'Traders Trick Entry' for free, worthwhile imho and very similar to the stuff being discussed here. Price Action is Price Action after all.

[BlowFish 10]

Hi Thales,

 

How come you would have been interested in a long with so much overheard potential R close by?

 

With kind regards,

MK

 

The question I try to ask myself is will the resistance above net a decent profit if tested. The trade I posted end of last week was into strong (multi week) support but was tested hard and fast. I find it more difficult if there are layers of less well defined S/R.

[thalestrader 14]

If they want Euros, let them buy Euros!

 

(but if they're buying Euros, so am I)

 

If they are feeling generous, then I am willing to take 4912, 4932, and 4958

 

Here is the EURUSD as it looked when I turned in for the night and how I find it this morning - three for three on the posted targets.

 

Best Wishes,

 

Thales

[Cory2679 11]

Hey guys,

 

Currently have my eye on the GBP/USD (6B in this case). Watching for a potential entry on the 15 minute chart or 13 range chart to go short. It may have a bit further to go on the upside, though.

 

Cory

[Cory2679 11]

Also watching EUR/USD (6E...I only trade futures). Watching for a short on 15 minute chart. Don't see anything at the moment. I may take a short break and come back and see what they're doing.

[Cory2679 11]

Regarding the EUR/USD, I can see where I might have gone short earlier had I been on. Would have gotten in at 5 AM and gotten stopped out for a 4 tick loss at 7:45 AM (EST), had I not gotten out sooner, which I very well may have.