Reading Charts in Real Time

[forrestang 10]

 

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.

 

Just about this thread, I appreciate that it is the ONLY thread that deals with the 'hard right edge.' Which is what trading is about. Not saying dead charts are useless or anything, as explaining things on them are sometimes necessary, but showing someone what the right edge looks like prior to a trade is an awesome perspective.

 

And that most trades posted are kind of swing/position trades lends itself well to be able to show someone your 'right edge read.'

 

So I am appreciative of all those that have put themselves out there showing what they see on their 'right edge read,' irrespective of whether that trade was a winner or loser.

[BlowFish 10]

 

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.

 

 

I think O'Neil was one of the first books I got long long time ago, certainly wont be the most recent edition. I did download a copy to the kindle last time I went for a break the charts where not so clear (not sure how to zoom only usually read stuff on it).

 

I did re-read the extract you posted from pretcher though was loath to. The concepts there (apart from the wave count stuff) like 'wedging' shortening of thrust, moves and corrections and all that good stuff have been written about by old timers like Livermore, Dunnigan, Gann, and more recently by people like Murphy and Edwards & Magee.

 

Anyway unless someone can tell me how to zoom on a kindle (increasing the font dosen't seem to zoom pictures) I'll pick up a new edition of O'Neil, you have been very clear how important you found it while I thought I understood his concepts perhaps I don't!!!

 

Anyway thank's for taking the time to answer in detail and post those charts, I'll try to ask better questions in future

[jonbig04 10]

The 6E is volatile! It's had like a 60ES equivalent range today. Anyway this chart isn't educational or helpful, but I took my first 6E trade today and it was wild so I thought I would share.

 

[brownsfan019 17]

JB - if you like that, check out the CL oil contract.

[Gabe2004 10]

The 6E is volatile! It's had like a 60ES equivalent range today. Anyway this chart isn't educational or helpful, but I took my first 6E trade today and it was wild so I thought I would share.

 

 

You let a 50 pip profit turn into nothing.

That is a NONO

I think you should have kept something.

Gabe

 

PS. didn't see your comment in the chart. Didn't mean to beat you down. It was more for myself because I used to do things like that. (sometimes I still do)

[jonbig04 10]

JB - if you like that, check out the CL oil contract.

hehe, maybe I will! Thanks.

[Dinerotrader 10]

JB - if you like that, check out the CL oil contract.

 

Great, now you went and let the cat out of the bag to everyone.

[jonbig04 10]

You let a 50 pip profit turn into nothing.

That is a NONO

I think you should have kept something.

Gabe

 

PS. didn't see your comment in the chart. Didn't mean to beat you down. It was more for myself because I used to do things like that. (sometimes I still do)

 

I don't want to jack this thread at all, Thales is showing us all such great stuff and this is a hot topic so I will keep this brief. In my book, trailing stops are a no-no. I used to scale out at strategic points, then one day a mentor challenged me to compare my results to all in- all out and I did. All in/out was by far the most profitable, though it did also show the biggest drawdowns.

 

The real reason I was scaling out was because it was emotionally difficult for me to watch a large gain turn into a loss. For me, it was impossible for me to let my winners run on a consistent basis while scaling or trailing. It just never worked. The only purpose they served was to make me feel better on the inside lol.

 

Since then I've been all in/out, though I'm sure I will start scaling again one day just for pure peace of mind. But for now, what feels good emotionally isn't a priority.

 

I challenge you to go back to all your trades and look- see what would have happened if you had been all in/out. My guess is that you will be surprised. I've met a few people who's scaling strategy works out better than all in/out, but in my experience the vast majority (including me) all in/out is the most profitable, but perhaps the most mentally difficult.

[Kiwi 16]

Agreed. Its a choice and the choice depends on what your goals are and they include how you feel.

 

I learned this testing systems years ago. One of the few really good eod systems I bought waited with a $1500 stop until a substantial profit existed before it even started to tighten. It usually exited on a reversal signal. I added different capture processes but it never helped to tighten early. However, optimum profit is rarely the key goal for a discretionary trader.

 

Whichever approach one takes ... the 100%, must do, important thing is "Do the same thing EVERY time."

 

The thing that kills you is either trying to optimize the trade or reacting to the last trade(s). Following your !@####@! rules

 

 

I don't want to jack this thread at all, Thales is showing us all such great stuff and this is a hot topic so I will keep this brief. In my book, trailing stops are a no-no. I used to scale out at strategic points, then one day a mentor challenged me to compare my results to all in- all out and I did. All in/out was by far the most profitable, though it did also show the biggest drawdowns.

 

The real reason I was scaling out was because it was emotionally difficult for me to watch a large gain turn into a loss. For me, it was impossible for me to let my winners run on a consistent basis while scaling or trailing. It just never worked. The only purpose they served was to make me feel better on the inside lol.

 

Since then I've been all in/out, though I'm sure I will start scaling again one day just for pure peace of mind. But for now, what feels good emotionally isn't a priority.

 

I challenge you to go back to all your trades and look- see what would have happened if you had been all in/out. My guess is that you will be surprised. I've met a few people who's scaling strategy works out better than all in/out, but in my experience the vast majority (including me) all in/out is the most profitable, but perhaps the most mentally difficult.

[jonbig04 10]

Agreed. Its a choice and the choice depends on what your goals are and they include how you feel.

 

I learned this testing systems years ago. One of the few really good eod systems I bought waited with a $1500 stop until a substantial profit existed before it even started to tighten. It usually exited on a reversal signal. I added different capture processes but it never helped to tighten early. However, optimum profit is rarely the key goal for a discretionary trader.

 

Whichever approach one takes ... the 100%, must do, important thing is "Do the same thing EVERY time."

 

The thing that kills you is either trying to optimize the trade or reacting to the last trade(s). Following your !@####@! rules

 

 

Agreed 100%.

 

One thing I've been doing from the very beginning is religiously following my rules. Of course in the beginning my rules were horrible and I wasn't profitable as a result, but as my rules have gotten better, I have gotten better. Hopefully as my rules improve now I will get more and more profitable. One day I will yield to the mental ease of scaling out, but giving in to my mind wasn't something I wanted to get into the habit of doing.

[forrestang 10]

 

I challenge you to go back to all your trades and look- see what would have happened if you had been all in/out. My guess is that you will be surprised..

 

I couldn't agree with you more! If it weren't for the psychological barrier of trading the way I have observed in your journal, everyone would be doing it. I do think the 'lofty' targets and all in/out is an excellent approach, it's just hard for a lot to deal with watching a big winning trade evaporate into a BE or a loss.

 

Like you mentioned when I look back at all my trades, if I would have held tight, I'd probably be unhappier short term, but overall thrilled at the results at the end of each month.

[MidKnight 12]

The 6E is volatile! It's had like a 60ES equivalent range today

 

Hi John,

 

It's going to be as this is pretty much one of the most volatile regular reports released in currency land aside from maybe interest rates. The number was a big surprise too, so that helps exaggerate things

 

With kind regards,

MK

[MidKnight 12]

The markets are imperfect. I am imperfect. Can I assume I am so good that a single entry and exit are perfect enough? Maybe. Can I accept the volatility of my equity curve and the risk of ruin with a single entry/exit approach? If I accept I am imperfect, maybe I can smooth out the volatility in my equity curve, reduce the risk of ruin and manage risk more effectively (risk from an overall style point of view) by allowing myself both multiple entries and exits. I accept my imperfection and do not need to squeeze out every point on a trade. My goal is to make money trading, not perfectly enter at the low and perfectly exit at the high. I accept the market is imperfect, after all, it is made up of many imperfect people. The market is grey, not black and white.

 

That is my point of view, I'm not trying to change anyone who is into all in/out type of trading.

 

With kind regards,

MK

[thalestrader 14]

One day I will yield to the mental ease of scaling out, but giving in to my mind wasn't something I wanted to get into the habit of doing.

 

 

I also would not wish to change your mind, Jon, or anyone's for that matter. I would simply offer that someone viewing your trade management of this particular trade might wonder at the fact that you risked and lost 50 ticks open profit in the hope of gaining only an additional 15 ticks. Knowing that you do not enter a trade unless you feel that your analysis allows for a reasoable expection of a 1:1 risk/reward, then some might wonder if it might be prudent, rather than "giving into your mind," if one were to adjust one's stop from time to time to a point commensurate with the hoped for additional gain.

 

Again, I am not criticizing your trade management. I'm just offering another perspective. While I do believe there are certain aspects of trading, and life itself, for that matter, that do yield to right and wrong distinctions, this is not one of them. Thank you for sharing this trade with us.

 

Best Wishes,

 

Thales

[jonbig04 10]

I also would not wish to change your mind, Jon, or anyone's for that matter. I would simply offer that someone viewing your trade management of this particular trade might wonder at the fact that you risked and lost 50 ticks open profit in the hope of gaining only an additional 15 ticks. Knowing that you do not enter a trade unless you feel that your analysis allows for a reasoable expection of a 1:1 risk/reward, then some might wonder if it might be prudent, rather than "giving into your mind," if one were to adjust one's stop from time to time to a point commensurate with the hoped for additional gain.

 

Again, I am not criticizing your trade management. I'm just offering another perspective. While I do believe there are certain aspects of trading, and life itself, for that matter, that do yield to right and wrong distinctions, this is not one of them. Thank you for sharing this trade with us.

 

Best Wishes,

 

Thales

 

 

Good point Thales. I've often thought about that when my target is 1 tick away, "how much am I risking for this 1 tick?". But you are right, in that I did risk 50 ticks for an additional 15.

 

Unfortunately for my PnL, but fortunately for the discussion, this trade also provided us with an example of trailing. I did in effect trail my stop when I moved it to BE. I can't recall if my stop was 8 or 10 ticks, but in order to protect that I moved my stop to BE. Price then rallied to 1 tick above BE, stopping me out and costing me the 65 ticks. This is an example of why, for a long time, I didn't even move the stop to BE. That one little trail to BE cost me 65 ticks.

 

But we could go nuts talking about this, as was mentioned, there is no right way. I just know that for me all in/out is more profitable, so that's what I stick to.

[thalestrader 14]

I just know that for me all in/out is more profitable, so that's what I stick to.

 

 

And it is well that you should. I wouldn't want to see you trade any other way.

 

Best Wishes,

 

Thales

[thalestrader 14]

Weekend Reading

 

 

Whichever approach one takes ... the 100%, must do, important thing is "Do the same thing EVERY time."

 

The thing that kills you is either trying to optimize the trade or reacting to the last trade(s). Following your !@####@! rules

 

 

Hi Folks,

 

This weekend I offer an old Ed Seykota interview from an old issue of S&C magazine, and a link to an old Time Magazine interview with Nicolas Darvas.

 

Business: Nicolas Darvas Pas de Dough - TIME

 

A favorite of mine form Ed Seykota is when he tells us that "I have many rules and some higher laws. Some of the rules are: Trade with the long-term trend. Cut your losses. Let your profits ride. Bet as much as you can handle and no more."

 

And from Darvas, "I have no ego in the stock market," he says. "If I make a mistake I admit it immediately and get out fast."

 

 

Listen to Kiwi: Follow your rules!

 

Have a wonderful weekend!

 

Best Wishes,

 

Thales

ed-seykota-of-technical-tools.pdf

[thalestrader 14]

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.

 

If you were to ask me, I'd have to say this is a pretty special thread, as far as internet forums go. I know that just the act of posting a potential trade causes some folks to experience the same "fear of loss" due to having made their judgment public as they experience form actually being in the trade itself.

 

Best Wishes,

 

Thales

[BlowFish 10]

The 6E is volatile! It's had like a 60ES equivalent range today. Anyway this chart isn't educational or helpful, but I took my first 6E trade today and it was wild so I thought I would share.

 

 

If that was the plan then good job anyway! EDIT: I see from subsequent posts it was so good job.

 

This comment is easy to make with hindsight......After the entry bar there was a 3 bar correction, I would have been inclined to move the stop above that. Also there was a 1 2 3 against your position just after that. Each are perfectly valid.

Edited December 5, 2009 by BlowFish

[Don4 10]

Hello Thales! Wouldnt it be far simplier (cant spell) to trade your system off of the hourly charts? Just wondering!

 

 

 

Thanks

Don

Edited December 5, 2009 by Don4

[Marko23 10]

The principles discussed in this thread apply also to German Bund Future; a 10y treasury future; 1 tick or 0.01 point is 10€.

 

An inner Darvas box is formed by points 1, 1a, 2, 2a .

An outer Darvas box is formed by levels 4 and 5 .

 

When one goes short at 3, the intension is to cross level 4. Therefore the stop has to be at level 5 not at 3a, which belongs to the inner box.

 

After crossing 4, the stop moves to level 3a.

 

One had to start on Tuesday for "U.S. numbers" on Friday.

Edited December 5, 2009 by Marko23
Hint for Friday down

[Don4 10]

The principles discussed in this thread apply also to German Bund Future; a 10y treasury future; 1 tick or 0.01 point is 10€.

 

An inner Darvas box is formed by points 1, 1a, 2, 2a .

An outer Darvas box is formed by levels 4 and 5 .

 

When one goes short at 3, the intension is to cross level 4. Therefore the stop has to be at level 5 not at 3a, which belongs to the inner box.

 

After crossing 4, the stop moves to level 3a.

 

Could you post a 4hour chart or a Day chart.

 

Thanks

Don

Edited December 5, 2009 by Don4

[Marko23 10]

Could you post a 4hour chart or a Day chart.

 

Thanks

Don

 

Yes, will follow after the smaller time scale.

[Marko23 10]

The next smaller time scale offers similar opportunities.

 

If one trusts the top at 1a, 2a, one can enter a cascaded Short with the downtrend in the next higher time scale as the trader's friend.

 

In this situation, the stop for Short at 2b and Short at 3 is the level 1a, 2a.

 

The Short at 2b is one degree lower than the Short at 3.

[Marko23 10]

Could you post a 4hour chart or a Day chart.

 

Thanks

Don

 

This is the Day chart. All chart are for the March contract. That will be the front contract from next Tuesday.