Reading Charts in Real Time

[Don4 10]

Well this time it auctually turned out to be a plus. Look out for Thales trade.

 

 

Thanks

Don

[thalestrader 14]

  thalestrader said:

Hi Folks,

 

Just looked at the EJ and saw a couple of interesting things. Unfortunate timing for what otherwise looks to be a decent short opportunity. Trade at your own risk. Sell stop would be the high 132.6x's - low 132.7x's depending upon your market maker and your own entry rules.

 

Look at where today's rally struck its high (4 hour) and the view of price action since on the 1 hour.

 

Have a good night, and thank you all for keeping the thread alive while I feel half dead.

 

Best Wishes,

 

Thales

 

Hi Folks,

 

EJ short triggered with a 132.73 entry. No excuse for anyone here not to be in this (this particular opportunity was posted at least an hour or more ago) and be in it right now with a stop loss at break even. Why break even? Because the short triggered, price dropped, rallied back to kiss the breakdown point good bye, and dropped to a new low. Allow price no more free kisses.

 

Targets are +50 and +100.

 

You'll have to look up the 15 minute yourself or someone can post it. I'm wiped out as it is and my wife still expects me to eat something before I go back to bed.

 

Best Wishes,

 

Thales

[thalestrader 14]

  BlowFish said:

Had been stalking that for a couple of days but missed the break....there is always a pullback (if one presents itself).

 

Would you have considered a short on the prod down a couple of days ago?

 

I think I answered that here. If I misunderstood the question let me know and I'll try again.

 

  thalestrader said:

Hi Blowfish,

 

I didn't sell that poke down. I had a sell stop at 1.0370, but it didn't get that low. I think a short at a higher level, perhaps below 1.0415, would have been reasonable to attempt, as I thought price might decline to test that 1.0375 level. I just didn't set the order myself. I guess I may have had a "looking for long" bias at work, as I had been waiting for the decline back to that level since missing the short opportunity on 11/27.

 

Best Wishes,

 

Thales

 

Best Wishes,

 

Thales

[thalestrader 14]

  thalestrader said:

EJ short triggered with a 132.73 entry ...with a stop loss at break even. Why break even? Because the short triggered, price dropped, rallied back to kiss the breakdown point good bye, and dropped to a new low. Allow price no more free kisses.

 

Do you see what I see ... remember ... no more free kisses

 

Best Wishes,

 

Thales

[Don4 10]

I beleive that this will work on any time frame!! Up to 4hrs. Sorry, Brown I do believe that trades are present on the Dailys but they are much harder to predict.

 

 

 

 

Thanks

Don

Edited December 4, 2009 by Don4

[Cory2679 11]

Hey everyone,

 

I'm going to be taking a little time off from trading.

 

Since I began working with this approach, I've done better than I ever have. Even though I haven't traded too awfully consistently, I had a solid 50% return my first week of sim trading (the week prior to my first post on this thread), struggled a bit going live the next week, and I'm up 44.5 ticks this week (mostly between Sunday night and Monday morning). I'm not trying to brag or anything like that...I just want to share my experience.

 

I feel like this approach really fits me. I feel like it's what I've been searching for...I feel like I've picked it up pretty well and sort of have a knack for it...

 

Up to this point, all of my "education" concerning this method has been strictly from reading this thread. So at this point in time, I'm going to essentially clear my mind and start from scratch. I'm going to begin the "course" that Thales set out in the following post:

 

  thalestrader said:

If I were to train a new trader, I would do it very much as I taught my daughter. While it wasn't formalized before we started, this is more or less the path we took:

 

I'm looking at it like this - the trading performance and education up to this point with this approach was essentially a test run, and I like the approach and want to move forward with it...and I want to do it right. I want to take 100% full advantage of what I've discovered here, rather than rush into it. So I'm not doing this in spite of my performance, but because of it.

 

I have in my possession all five books mentioned in Thales's post. They're short reads so it won't take too much of my time to go through them, especially if I devote my entire day to it.

 

SO, I'm beginning the Thales "course" tomorrow. I'll begin by reading Nicolas Darvas's How I made 2,000,000 in the Stock Market.

 

Cheers!

[ziebarf 10]

Went long on the EJ @ 132.82, stop 132.74

 

Got PT1 @ 132.88 put stop on breakeven..

 

PT2 at 133.11

 

I was originally looking for a long on the EU, but the pattern was better on the EJ. Thats the beauty of a multi-market approach I suppose

[hunnybunny 10]

Took an EJ short and moved SL to BE. Stopped out at BE

[ziebarf 10]

Have to go for the weekend, moved PT2 down for an early close.

 

 

Have a good weekend guys.

[BlowFish 10]

  thalestrader said:

I think I answered that here. If I misunderstood the question let me know and I'll try again.

 

 

 

Best Wishes,

 

Thales

 

Probably missed your reply, apologies.

[BlowFish 10]

  Cory2679 said:

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

 

Since I began working with this approach, I've done better than I ever have...............!

 

Congratulations! Don't forget a careful review of this thread there are some good words of wisdom amongst the charts.

[Gabe2004 10]

  Gabe2004 said:

Potential EJ Short.

 

Gabe

 

This traded ended as a loser but by monitoring it and moving the stops down, the loss should not have been too large.

The rightmost red line was also an area of a long setup.

 

Gabe

[thalestrader 14]

Hi Folks,

 

Remember that this morning is NFP at 8:30 am EST.

 

Best Wishes,

 

Thales

[BlowFish 10]

  thalestrader said:

Hi Folks,

 

Remember that this morning is NFP at 8:30 am EST.

 

Best Wishes,

 

Thales

 

Thanks. I had forgotten, good news! Guess I'll do my chores now and grab an early lunch to get back for that.

[BlowFish 10]

  thalestrader said:

Hi Blowfish,

 

I didn't sell that poke down. I had a sell stop at 1.0370, but it didn't get that low. I think a short at a higher level, perhaps below 1.0415, would have been reasonable to attempt, as I thought price might decline to test that 1.0375 level. I just didn't set the order myself. I guess I may have had a "looking for long" bias at work, as I had been waiting for the decline back to that level since missing the short opportunity on 11/27.

 

Best Wishes,

 

Thales

 

Forgive me for flogging a dead horse but can you confirm you meant 1.0370(marked with the cyan line)? thats a good deal lower than the support established over the last month. I too favoured the long side until the prod bellow (it was quite decisive) though price was quickly rejected giving plenty of opportunity to get long.

[BlowFish 10]

Incidentally there was plenty of room to get out of the short without too much hardhsip. (assuming you triggered from recent action shown on the 15min)

[thalestrader 14]

  BlowFish said:

Forgive me for flogging a dead horse but can you confirm you meant 1.0370(marked with the cyan line)? thats a good deal lower than the support established over the last month. I too favoured the long side until the prod bellow (it was quite decisive) though price was quickly rejected giving plenty of opportunity to get long.

 

Yes, that is exactly what I meant - that was the level at which I was ready to try a short.

 

 

  BlowFish said:

Incidentally there was plenty of room to get out of the short without too much hardhsip. (assuming you triggered from recent action shown on the 15min)

 

As I said, I think a short attempt at the level you suggest was reasonable. I just didn't trade it myself. I certainly can find no reason to criticize someone who would have traded that short.

 

One thing I look at is whether price is moving impulsively, with little overlapping price action, or whether price is chopping around, with lots of overlapping price action.

The rally from the 10/14 to 11/01 was what I consider to be impulsive. The price action since that time has been characterized by choppy, overlapping waves. As such, I was willing to allow the chop to pull back to the level I mentioned while still considering the overall trend to be more bull than bear.

 

Best Wishes,

 

Thales

[BlowFish 10]

Thanks I think here is an interesting lesson here I don't wan't to put words in your mouth but it seems that you would not trade to the short side unless the recent fairly major support is well and truly broken. I can understand that as it keeps you clear of tests and prods looking for stops and such. And of course support that has developed over a month is likely to be a wider zone than support that has developed over an hour or two.

 

A trade from higher ground(provided there was sufficient room to make target above support) would be a different matter. Presumably you would consider that counter trend so would want to see a good indication that shorter term resistance there was developing.

 

I realise this might be over thinking things (a trait that is often not helpful) but I am trying to get a better handle on the contextual cues that you might be acting on (even if sub consciously).

[thalestrader 14]

  BlowFish said:

Thanks I think here is an interesting lesson here I don't wan't to put words in your mouth but it seems that you would not trade to the short side unless the recent fairly major support is well and truly broken. I can understand that as it keeps you clear of tests and prods looking for stops and such. And of course support that has developed over a month is likely to be a wider zone than support that has developed over an hour or two.

 

I would would have probably treated this the same way if the same patterns presented itself on a 15 minute chart. And for what its worth, I found in the past that the 6C and I did not get along on the 15 minute, and so I would only trade it if I saw something on a larger scale. Hence, I would treat the USDCAD spot pair the same. I am not at all interested in trying to day trade using a 15 minute trading chart unless it is at a significant S/R visible on a 240 minute or higher time frame.

 

 

  BlowFish said:

A trade from higher ground(provided there was sufficient room to make target above support) would be a different matter. Presumably you would consider that counter trend so would want to see a good indication that shorter term resistance there was developing.

 

Right. But again, probably not on this pair.

 

Best Wishes,

 

Thales

[thalestrader 14]

  BlowFish said:

I realise this might be over thinking things (a trait that is often not helpful) but I am trying to get a better handle on the contextual cues that you might be acting on (even if sub consciously).

 

I cannot tell you how much of the "contextual cues" I use comes from two sources:

 

William O'Neil's How to Make Money in Stocks and the technical chapters of Frost and Prechter's Elliot Wave Theory. Nothing I can say or post will be able to replace the benefit you will get from reading and studying the material and then following along here to see how and where I may be applying it.

 

One thing I have said here and elsewhere at TL in the past is that S/R is not all that matters. What is as important is 1) how does price get there, and 2) what does it do once it arrives.

 

Let me give you an example of how I use something I learned from studying O'Neil. You can read the notes on the charts. Each basically has the same information, presented somewhat differently.

 

Best Wishes,

 

Thales

[thalestrader 14]

  daedalus said:

Remember folks - NO ONE DAY SHOULD MAKE OR BREAK YOU OR YOUR ACCOUNT. If you start drawing down hit the panic button and walk. Its only ONE day in your CAREER!

 

Absolutely! Excellent post, Daedalus.

 

I wish I could trade with the cool emotionless calm that others apparently are able to muster (most notably here at TL the example of DbPhoenix, who strikes me as the Dr. Spock of the trading world - and I mean that in a most complimentary way).

 

If I lose twice consecutively, I stop trading. I will still watch the markets, but the trading platform is put away until the next day. I have lost more money "trying to get it back" than the money I initially lost in the first place. Discipline easily goes out the window. I am no longer waiting for my trades. I over trade. I switch down to tick charts and try to finesse a few ticks, doubling and tripling my usual size just "to get back to even."

 

Even never comes. Ever. I finally learned that I have a two loss limit.

 

Best Wishes,

 

Thales

[forrestang 10]

  thalestrader said:

Absolutely! Excellent post, Daedalus.

 

I wish I could trade with the cool emotionless calm that others apparently are able to muster (most notably here at TL the example of DbPhoenix, who strikes me as the Dr. Spock of the trading world - and I mean that in a most complimentary way).

 

If I lose twice consecutively, I stop trading. I will still watch the markets, but the trading platform is put away until the next day. I have lost more money "trying to get it back" than the money I initially lost in the first place. Discipline easily goes out the window. I am no longer waiting for my trades. I over trade. I switch down to tick charts and try to finesse a few ticks, doubling and tripling my usual size just "to get back to even."

 

Even never comes. Ever. I finally learned that I have a two loss limit.

 

Best Wishes,

 

Thales

 

Has this thread made you a better trader, explaining what you do? I realize you've been doing this for a looong time so you've surely been proficient at what you do for a while, but did this thread make you better?

 

By better I don't jst necessarily mean better in terms of the amount of 'time' this thread has been active, but is there anything special you've learned from your postings here?

[thalestrader 14]

  forrestang said:

Has this thread made you a better trader, explaining what you do? ... is there anything special you've learned from your postings here?

 

Interesting questions. I would say that I have certainly become more conscious of how I have incoprated various ideas and concepts from certain sources into my trading (for example, my above post on William O'Neil and the wedge examples). My interchange with MidK has been especially helpful in that regard. There are certain things that I have come to take into account while making my trading decisions that, while not "subconscious," are nontheless habitual and not necessarily at the level of a "checklist". In other words, I note, for example, price consolidating, the shape of the consolidation, the nature of the rally or decline that preceded that consolidation. Based on that information, I decide whether I am getting ready for a short, a long, or possibly getting ready to trade whichever way the next break comes. I know I am looking at these things, but whereas at one time I would be consciously going through a "mental checklist," I no longer do so. I look out of habit for what I feel is important.

 

That being said, I am still of the mind that says that what I do is very easy to learn. What is dificult is the emotional control and intellectual discipline both to sit and learn it and then to apply it. My participation in this thread has made more plain to me than ever the central role that emotions play in the success or failure of a trader.

 

For example, I get many PM's from folks who are struggling. Here is a quote from one I received today (I am removing the Poster's ID out of respect for his/her privacy):

 

"Hey there, i just read a post you sent up in Dec 08 about the emotional side of trading. Something im struggling with massively. I've been through a few mentors and educators and they've given me a great deal of ideas - prob too many - and helped with analysis but i cant seem to get out of a destructive over trading habit amongst other things.

I was wondering if you knew of anyone that i might be able to trade with / along side of / chat with while im trading? Ive looked at FX and ES.. and had a horrible time of it..

 

Would really appreciate any help you might be able to give."

 

 

And here is my response, which, after having sent it, I thought should be shared here in the thread for all:

 

  thalestrader said:

The emotional side of trading is something with which I too continue to struggle. I post to a thread here at TL entitled "Reading Charts in Real Time," and the subject of emotional control comes up frequently.

 

I do not have anyone to whom I could refer you. But I invite you to participate in the "Reading Charts ..." thread. You might find the support and help you are looking for among the other participants of that thread, and it will not cost you anything but your time to find that out.

 

My only other advice would be this: Define your trade decision process, i.e. what many call their "set ups". Write down under what circumstances you will enter a position, how you will determine your stop loss, and how you will manage the trade (for example, some folks use pre-determined profit targets at which to exit, while others use a trailing stop method).

 

Once you define your trade decision process, then you must apply it and stick to it with absolute rigor. I just made a post myself about how when I am trading, I quit after two consecutive losses. If I do not quit, I know I will tend toward forcing trades, over trading, over leveraging, etc.

 

As Socrates advised, "Know thyself." I now know myself, and I set a trading regimen in place that protects my capital from the kind of "self" I know myself to be. You need to do the same, and no mentor or educator can do that for you.

 

I hope to see you in the "Reading Charts ..." thread. If not, I wish you all the best and much success.

 

Best Wishes,

 

Thales

 

I guess you might say, Forrest, that the more I learn about and from the good folks I have met through this thread, the more I learn about myself, both as a trader and as a human being.

 

Best Wishes,

 

Thales

[brownsfan019 17]

  thalestrader said:

Absolutely! Excellent post, Daedalus.

 

I wish I could trade with the cool emotionless calm that others apparently are able to muster (most notably here at TL the example of DbPhoenix, who strikes me as the Dr. Spock of the trading world - and I mean that in a most complimentary way).

 

 

You are making the assumption that someone who has never shown a blotter actually trades. Turns out it's very easy to keep a cool head when you have nothing to lose.

 

[BlowFish 10]

  brownsfan019 said:

You are making the assumption that someone who has never shown a blotter actually trades. Turns out it's very easy to keep a cool head when you have nothing to lose.

 

 

Probably not the place to take this but a blotter doesn't really prove much (though you have to wonder why any one would bother to fake it). Really the only thing you can use to judge what someone is saying is....what they are saying. There is a catch 22 there particularly for those with less experience of course.

 

To bring stuff back on track this is one of the good things about this thread. "Trading Charts in Real Time". You don't need blotters or what not you can see potential entries posted before hand (often way before they trigger). Usually a chart with the action that triggers them, and one of the real crux's of the matter (as I know you would agree Brown) which is management of the trade to exit. About the best you could hope to manage in a forum environment. Who cares whether it is real money sim or all fantasy....the trades speak for themselves.