What Really Works for Technical Traders

[Do Or Die 10]

Hi Phantom,

 

Do you use time stops?

[phantom 16]

Hi Phantom,

 

Do you use time stops?

 

No, just good, old fashioned hard stops as mentioned previously.

[phantom 16]

Hi Phantom,

 

Do you use time stops?

 

I have used time stops in the distant past. Problem was, I would take myself out of a trade, and then come back later to find that I would have been profitable if I would have left the trade alone.

 

Price rejection is a powerful ally in the hands of the well-informed. I would much rather hide my stop behind evidence of price rejection and then let the natural market forces do their thing rather than place a clock on my trades.

 

Impatience will eat your lunch in this game.

 

 

Luv,

Phantom

[kuokam 10]

I have used time stops in the distant past. Problem was, I would take myself out of a trade, and then come back later to find that I would have been profitable if I would have left the trade alone.

 

Price rejection is a powerful ally in the hands of the well-informed. I would much rather hide my stop behind evidence of price rejection and then let the natural market forces do their thing rather than place a clock on my trades.

 

Impatience will eat your lunch in this game.

 

 

Luv,

Phantom

 

Hi Phantom, you described the price rejection very well, thank you. But I seem to miss where you talked of the acceptance thereof. Are there good signs of price acceptance, or is it just that non rejection is acceptance?

Again, my apologies if the question has already been answered, you know I am still working on my English.

 

Kuokam

[phantom 16]

Hi Phantom, you described the price rejection very well, thank you. But I seem to miss where you talked of the acceptance thereof. Are there good signs of price acceptance, or is it just that non rejection is acceptance?

 

Kuokam

 

You are correct; I haven't discussed price acceptance. Right now I want to continue with trade management while we are on the topic, so we'll revisit price acceptance at some other time.

 

But I will give you this: look for consolidation zones with continuation breakouts at prior points of price rejection...

 

 

Luv,

Phantom

[kuokam 10]

Fantastic information presented here Phantom, really appreciate your generosity and persistence.

 

However the focus so far has been on taking entries - but experienced traders know we only make money on the exits, and skill is required to deal with all the psychological and financial dramas that may occur on the journey from entry to exit!

 

Can you please tell us more about your trade management and exit strategies? Not necessarily expecting codified rules here, but your general approach to (for example) scaling out, reducing risk, and spotting signs to take the money and run.

 

Hi Wing. Although still a learner, I would respectfully disagree.To me trade exit issue can be more easily adressed than entry: If the initial stop is not hit, you just trail it to BE first and then to subsequent technically determined zones (S/R, main fib ratio or great round number) untill it gets hit then you are out with a reasonable profit. At least, this is the way I see it and try to make it work. So far okay for me.

 

Now tell me, how do you manage to exit profitably if you enter poorly like when you buy the tip of a rally, just to see the hole thing plumet? Or when your limit order gets hit in a false breakout that strongly reverses?

 

Best,

Kuokam

[phantom 16]

Hi Wing. Although still a learner, I would respectfully disagree.To me trade exit issue can be more easily adressed than entry: If the initial stop is not hit, you just trail it to BE first and then to subsequent technically determined zones (S/R, main fib ratio or great round number) untill it gets hit then you are out with a reasonable profit. At least, this is the way I see it and try to make it work. So far okay for me.

 

Now tell me, how do you manage to exit profitably if you enter poorly like when you buy the tip of a rally, just to see the hole thing plumet? Or when your limit order gets hit in a false breakout that strongly reverses?

 

Best,

Kuokam

 

Kuokam,

 

Let me stop you right here, right now.

I must say, I totally agree with Wingnuts' statement, and if you have patience, you'll know why.

 

I do not try for break-even on my first stop movement, but you are jumping the gun here.

 

 

Luv, Phantom

Edited July 24, 2011 by phantom

[kuokam 10]

Kuokam,

 

Let me stop you right here, right now.

I must say, I totally agree with Wingnuts' statement, and if you have patience, you'll know why.

 

I do not try for break-even on my first stop movement, but you are jumping the gun here.

 

 

Luv, Phantom

 

Then I will very respectfully disagree with you as well. I am not ready to learn that I can enter a trade any how and turn it profitable.

[phantom 16]

Now tell me, how do you manage to exit profitably if you enter poorly like when you buy the tip of a rally, just to see the hole thing plumet? Or when your limit order gets hit in a false breakout that strongly reverses?

 

 

Some trades just will not give the trader access to profits...

 

Suppose one does enter at the tip of a rally and the market does not exceed the entry point. Is it more important to hold the trade and attempt to "be right," or is it better to minimize the financial damage and cut your losses?

 

I choose the latter.

 

My initial risk stop takes care of this for me.

 

Furthermore, I can't imagine using a limit order in a breakout situation; I usually use stop orders to enter breakouts, or sometimes market orders, but the point is that if the market reverses in this scenario I will limit my loss with the risk stop loss I entered immediately after I was stopped into the market.

 

If the market does indeed reverse strongly, I may even reenter and take a NET profit from the series of trades.

 

Trade management is all about cutting your losses and letting your profits run (cliche, but true nonetheless).

 

 

Luv,

Phantom

[phantom 16]

I read a book not too long ago written by a world-renowned artist who claimed that she received a visitation from Lord Jesus Christ and he asked her to paint his portrait.

 

While she painted him, for a period of about 4 months, they conversed on a wide variety of topics covering everything from the Bible to the future of the world.

 

One of the key points that Jesus made was that we should express gratitude, even on a daily basis.

 

Now there are givers in this world, and there are also takers.

Mostly, the givers ask very little from the takers, save for a little gratitude.

But, the takers are not even capable of supplying even that.

 

Take this forum, for example.

 

I see a proportionately very small amount of givers on the site extending a helping hand to a multitude of takers, and in return, gratitude is withheld, but criticism abounds.

 

What is it about people, that they will take, take, take, without even saying "thank you?"

 

I know that this post has nothing to do with technical analysis, but it has everything to do with common courtesy. I feel that I need to "go to bat" for the givers on this site, who expend a lot of mental energy to give, with very little in return.

 

Take this thread for example. Well over 13000 views. Less than 72 "thank you" expressions. Are that many people really that indifferent to the trading knowledge being dispensed?

 

Take another example. Maelstrom's "Trading The Storm."

Well over 9000 views and only 5 people "liked" it?

 

What's wrong with this picture?

 

I can't speak for Maelstrom, or for anyone else who gives and gives and gives,

but I will say that if there isn't a lot more gratitude dispensed on this thread, I will assume that my lessons are falling on deaf ears and I will discontinue revealing anything else.

 

Thank you to everyone who HAS given the courtesy of showing gratitude for that which they have received. Blessings to you.

 

 

Phantom

[bobcollett 10]

Dear Phamtom

Dont despair. You have a 20 page thread.

Thats success.

Most threads die after page 3.

And there are a lot more people reading your words than you think.

More importantly, Mighty Mouse has not jumped on top of you, so you must make sense.

(MM is on holiday)

 

Traders are a very sceptical bunch. They have learned to be careful . All your posts will take time to be assimilated. You will see lots of thanks over the years.

Kind regards

bobc

[mslk 10]

I see a proportionately very small amount of givers on the site extending a helping hand to a multitude of takers, and in return, gratitude is withheld, but criticism abounds.

 

hey phantom,

 

first off, thank you for a wonderful thread. i have enjoyed reading all the posts and the learnings i've been able to take away. i speak for myself, but i am not in a position (trading expertise-wise) to 'give' yet, thus i don't. this may be true of other people learning to trade as well but believe me we all appreciate people like you. don't be discouraged, you have 21pages - this is a great thread! keep up the great work.

 

- mslk

[phantom 16]

i am not in a position (trading expertise-wise) to 'give' yet, thus i don't.

 

- mslk

 

Not true, mslk. You have given thanks time, and time again. These things are noted whether you realize this or not.

 

I appreciate you. I already know that you and bobc and certain others do NOT fit in the takers category.

 

I'm not asking for quid pro quo. I didn't join this forum because I wanted someone else's secrets to success; I joined because I wanted to help people avoid some of the mistakes I made when I had difficulty "figuring it out."

 

BTW, its not just about me...Its about every giver in this community.

 

What I'm saying is that most people want to be lurkers and take what they want, take more, and hide in the shadows, be invisible. Its taxing on ALL of the givers in this community, not just me.

 

(BTW, while I'm on the subject, thank you MMS and your cadre for all your hard work).

 

There are approx 100k traders that visit this forum? I can list the contributors and grateful receivers on a single sheet of paper. That's sad.

 

A little gratitude goes a long way.

 

Anyway, thank you for your kind comments.

 

I'm always glad to help your kind.

 

 

Luv,

Phantom

[IamJon 10]

Phantom,

 

Keep up the generosity. Just consider that very few aspiring traders become successful. And of those that become successful, how many are willing to lend a helping hand to those that are not? I understand there have been some adversarial posts. I wonder how many of those posters are successful traders? How many of them have been willing to share publicly what works for them? (or for that matter, what doesn't work for them). Also remember that this forum is more than likely funded by advertisement. It is TL's job to get as many to view the threads (the ads) as possible. This may bring a disproportionate number of views compared to those who are truly following the thread. Unfortunately, all I can offer of value is a few probing questions.

 

Let's get back to "What Really Works for Technical Traders"

 

Thanks,

 

J.

[Maelstrom 10]

Phantom,

 

I felt compelled to post a comment here regarding the lack of feedback, participation or even gratitude when one makes the effort to start a thread to help, or at least attempt to help, traders out there who may need a hand.

 

I questioned several times why I was posting a thread - often, it all seemed to be falling on deaf or uninterested ears for the most part. After some time, I realized it could be several things.....

 

Traders who know how to trade were visiting my thread just to read and perhaps check into someone else's trading (as I am guilty of doing with your thread)

 

Some people may not have a clue what I was talking about, and just chalked it all up to being too complicated or not for them

 

Wrong trading style to fit their temperament - not fast enough, too fast, wrong markets, too much risk, not enough gain....

 

Maybe people reviewing my thread just think I or my trading style is full of ****

 

It's an endless list.

 

But, when I started thinking all these things, I remembered why I started my thread. I don't need to convince anyone about how to trade, nor need followers for a subscription or teaching service, or really anything else at all. I started it for one reason - to help.

 

Whether I have done that or not, I am not quite sure. But I do know that several members have participated in my thread, and received many messages of thanks for my efforts. An overwhelming response? Far from it. But, I do feel good thinking (or deluding myself) that I may have helped a couple of people out there improve their trading. And that will do just fine.

 

I knew immediately from reading your first few posts that you are a very skilled trader, and that you have a lot to offer. Do the community a huge favor - keep offering it. You, as I, have no reason to do it other than because we want to.....that comes from inside, and THAT tells me you are much, much more than just a skilled trader.

 

I for one enjoy reading your thread, although our trading styles are different, and appreciate and applaud what you are doing. Keep it up - remember, what goes around, comes around.

 

Thanks,

M

[hgalek 10]

If it's any consolation, I signed up for an account just to properly view your thread and thank you for your insight.

 

Thanks for detailing your methodology- it's greatly appreciated on this end.

[Do Or Die 10]

Phantom,

 

I have a large number of trader friends; part of which comes from my experience of trading on a floor for 4 years. Just wanted to say your discussion style is great.

 

Most threads die after page 3.

 

Yes, my threads make a perfect example I have turned to writing articles rather than posting; it does not hurts if there are 1000 views and not a single comment or thanks.

[SIUYA 11]

Hi Phantom, Do or Die, Maelstrom - anyone else.....

I think a thread is judged by its participation, question asking and longetivity more than the number of thanks and likes it receives, and for that you guys do well.....the work you all do, and any general participant to most threads adds to the discussion - as this is a discussion website, not a blog for individual processes. Even the agitators have their place.

 

A bunch of thanks and likes is probably less educational than a good discussion and thought provoking Q and A session that we all learn from - give thanks on a website a value and they become worth more than just a passing repetitive gesture thankyou.....imagine if every post had many of them, they would be ignored.

 

Dont forget Phantom, if you sold it and gave it a value you might seemingly be more appreciated than not giving it a value and giving it away for free - the strange vagaries of humans and their assignment of value when it comes to pricing.

[Luca5 10]

Hi Phantom,

 

Just another lurker here coming out of the shadows to thank you for your awesome thread :-) Your methods and clear chart examples really helped me in gaining a better and oh so important understanding of price action (rejection/acceptance, psychology behind certain patterns etc).

 

It is not in my nature to post away on forums a lot especially since I am still a relatively new student to the craft (don't think I have much to contribute at this point apart from my hilariously ill timed trades). I am quite sure there are many more like me checking this thread multiple times a week to see if we can soak up some more of your insights. You are helping more people then you might think!

 

Just wanted to let you know it is much appreciated and I hope you will continue this thread. Same goes for Maelstrom and all the other active contributors to this forum. You guys rock!

[phantom 16]

Thank you all; you are all so right in your observations...

 

Back to work.

 

 

Phase two in the management of a trade, once I've entered and placed the initial risk stop, and most probably been tested, is to look for a place to build my position.

 

(It was pointed out previously that many times the market will not carry through enough to even give chance at a profit, let alone a chance at adding to the position).

 

To add additional contracts, I must witness a subsequent test, this being a hammer or doji on the larger time frames (10, 15, 20 minute).

 

Incidently, when a hammer or doji occurs on a larger time frame, one can clearly see a consolidation formation on a micro time frame.

 

Once the breakout of the subsequent test occurs, I am able to place my risk stop across that bar and move my original stop alongside it.

 

Notice how I did NOT move my original stop to break even at any time.

 

Too many times I tried the break even stop and was able to survive a loss, but the market faked me out and never reached my original stop placement location, only to move on in what would have been a sizable gain. Its akin to taking the 1 tic profit mentioned earlier in the thread.

 

I'm not saying its what you should do, especially if you trade the stock index markets, but its what I do.

 

In the case that the market moves a significant distance but hasn't provided a hammer? I'll lock in approx 50% of the profits. This is, of course, totally subjective.

 

Surviving tests of risk stops is, IMHO, the most difficult element in trading. This is exactly why I incorporated the use of hammer bars (price rejection) into my trade plan. I let these critters "do the work" for me. (The psychological work, in this case).

 

I've been experimenting with range bars lately. These wonderful little creatures really seem to do an excellent job of showing concise consolidations/tests while removing the time element from the equation completely.

 

(I think that time as a trading factor is an enemy to the trader. Time builds expectations into a trade that should not be a part of the trade).

 

Using range bars has given me a turn of successes in the energy markets that I was never able to achieve in the past. But that's another story for another time...

 

 

Luv,

Phantom

[mslk 10]

Thank you all; you are all so right in your observations...

Back to work.

 

good to hear! hey - just a simple question ... how much of your trading is automated and programmed into ninja and how much is manual? if its less than 100%, do you think you can ever get it to 100%?

 

- mslk

[phantom 16]

RE:How much of my trading is automated?

 

I haven't automated any of my trading. 100% manual.

 

 

Luv,

Phantom

[pat15 10]

phantom...you mentioned experimenting with range bars for energy trades ...as I wrote earlier I dont trade CL yet but look at it everyday ...sort of trying to see the moves and how it reacts to S/R levels ..it is very tempting for me but knowing my trading skills I stay away from it now ...

 

I would appreciate if you cud post some charts on trades you may have taken in this sector .. and also what timeframe you use for the range bars ... Lately I have been looking at 15m charts for CL ..with the indicators you have mentioned in your setups ..

 

Thank you

 

 

Pat

[phantom 16]

OK Pat.

 

Here are a couple of setups on the 30 range CL charts (ie 30 tix per bar)

 

 

and...

 

 

Each setup had a b/o of a consolidation channel followed by a failed test.

 

The problem with 15 minute bars in the CL is that when this market moves, it goes very rapidly. So 15 minute bars will have very large ranges that require a lot of risk to trade.

These bars only require $320 risk per car (1 tic on either side of the signal bar) which is pretty low considering the extensive ranges of the moves this market makes intraday.

 

Hope this helps.

 

 

Luv,

Phantom

[phantom 16]

"What do you use as a profitable exit signal for the initial entry, or after adding - for the total position?"

 

This is a question I received from one of my readers and I'd like to answer it here.

 

As previously stated, I place my risk stop behind the most recent price rejection bar and wait for one of two things to happen:

 

1. Another consolidation breakout - I move the risk stop/stops behind the new hammer/doji bar (I may or may not add to the position depending on the overall picture).

 

2. An extended range bar or "windfall profits" - I'll either bring my stop/stops fairly close to the current price to lock in profits or, depending on evidence of prior S/R, I'll take the money and run.

 

The real "cheese" in this game comes from building a position, be it whether you trade intraday or hold for days/weeks/months.

 

So I try to add to my initial entry at least once and maybe twice if possible. This is what makes the CL, NG and EC markets so good: they offer extensive breakout moves on a regular basis with opportunities for building size into the trade.

 

Thank you Chris for this question. Hope this helps.

 

 

Luv,

Phantom