S&P Trading Technique

[ant]

Robert,

Here are my suggestions... Study Wyckoff. A lot of what you read today about technical analysis is based on Wyckoff's work in the 1920's or so. Another great book on swing trading is "New Blueprints for Gains in Stocks & Grains & One Way Formula for Trading in Stocks & Commodities" by William Dunnigan written in the 1940's.

Amazon.com: New Blueprints for Gains in Stocks and Grains: Books: William Dunnigan

I also recommend reading some free newsletters from Robert Krausz (one of Schwager's Market Wizards) available at the link below. Specifically the stuff on swings and determining the main trend.

Fibonacci Trader - The first Multiple Time Frame Software for Traders

Over the years, I've read many books on TA published over the past couple of decades, and except for Market Profile, there is very little out there that is original. My suggestion is to go to the source.

Hope this helps.

[Robert]

Thank you very much ant. I have heard alot of great things about Wycoff and I totally agree with you on sticking with the source. The stock operators of the early the 1920's were the original thinkers of trading philosophy.

I will take a look at William Dunnigan's book, a little pricey but will give it a shot. Can you also recommend any market profile books? I did a quick search on amazon but only found two different versions; one by Steidlmayer and one by Dalton. Should I pick up both? Thank you

[ant]

Robert, I would only pick up Mind over Markets by Dalton. It's the best book out there on Market Profile - it's excellent, well-written, and inexpensive. I'm looking forward to Dalton's next book coming out Feb. 2007.

Buy from Warehouse SUPER Sale and get the $10 coupon.

[Robert]

Thank you ant. I will start studying Market Profile. I checked with the CBOT website and found some good online recordings on Market Profile. At first glance it seems fairly complicated. It may take some time to fully understand the concept used in market profile.

[uncle_vito]

I am a newbie on traderslaboratory but have been trading for about 15 years. I keep experimenting with new trading ideas.


I have been thinking about a straddle on the S&P 500 index (SPX). Any advice. Seems like bid/ask spreads could greatly limit profitability of trades.

Any advice on S&P Straddles?

Thanks

Vito

[Soultrader]

	Quote:	uncle_vito
	I am a newbie on traderslaboratory but have been trading for about 15 years. I keep experimenting with new trading ideas. I have been thinking about a straddle on the S&P 500 index (SPX). Any advice. Seems like bid/ask spreads could greatly limit profitability of trades. Any advice on S&P Straddles? Thanks Vito

I have always been interested in this strategy as well. Just not familiar enough with options. Anyone know?

[stalor455]

I would like to know how to learn to trade by price action, the best trader I've ever seen uses nothing but candle sticks, price & volume. I'm convinced it is the way the sucessful traders do, but not sure where to look for educational info or what I need to focus on or read. I've watched time/sales as suggested above, but...... Any suggestions on what to read, learn or focus on is appreciated..Thnx

[luke24.5]

	Quote:	stalor455
	I would like to know how to learn to trade by price action, the best trader I've ever seen uses nothing but candle sticks, price & volume. I'm convinced it is the way the sucessful traders do, but not sure where to look for educational info or what I need to focus on or read. I've watched time/sales as suggested above, but...... Any suggestions on what to read, learn or focus on is appreciated..Thnx

What you're asking is how to learn to interpret Market Generated Data. You mentioned using candles, price and volume. That's three basic studies.

1. Candles: Study basic pattern formations. Check the book review forum at this site.

2.Price: Not all prices are equal. Study a volume @ price histogram. Mark the Highest volume (Mode) which defines perceived value. Define H vol and L vol points (Chartex.com is free). Then study action on a simulator.

3. Volume:Tom Williams Master the Markets is a good start, then study Market Profile which combines Price, Vol & Time.

[mister ed]

	Quote:	Soultrader
	I can not give you an exact time it may take for you to learn the markets based on pure price action. I can give you an example from my own experience though. I learned trading while working at my old job at the office. Because I was unable to install any trading platforms, I would simply visit sites like futuresource.com | Futures & Commodities Quotes, Charts, News & Analysis to get delayed quotes and a 15 minute delayed candlestick chart. Obviously these charts do not have advanced technical analysis so the only thing I was able to look at was a candlestick chart. Absolutely no volume or any other technical indicator. The only way for me to update the charts and quotes was by refreshing my browser. So I would reload my browser every 15 minutes to obtain fresh information. This went on for approximately 4-5 months and in the meantime I began to try to predict price. Since it was a browser based chart, I could not see the actual price movement. All I could see was where price would be in the next 15 minutes. This pain in the butt method actually helped me learn price action immensley. I began to write down trades or predicitons on where price would be in the next 15 minutes. I started to realize that prices will move from one level to the next once support/resistance is broken. So I began to look for key support and resistance levels using a 5 minute, 15 minute, and 60 minute chart. I also noticed how overnight S/R levels acted as key pivots for the trading day. Eventually I worked on this skill set to study market profile and came up with my own trading style based on pivots and MP. I no longer use a 5 minute, 15 minute, and 60 minute chart. I use a 233 TICK chart and a daily chart for most of my trading. I have also applied more advanced pivot point trading techniques into my arsenal. But initially, I was kind of forced to learn the markets just by observing price. I am sure you have the luxury of real-time data. Start by taking all your indicators off. Apply a candlestick chart and a time of sales and just sit there and watch it all day. Enough absorption by your mind and you should start to recognize patterns. Force your brain into autopilot. Trading should be as easy as driving a car. First year drivers are usually reckless. In Japan, cab drivers are the best drivers. Why? Experience in a dense city. Commit at least 3 or more months understanding market action based on price. Trust me this will all pay out in the end. Good luck.

Off the top of my head I dont think I have ever read a better piece of advice on learning to trade - thanks James.

[stalor455]

Thanks for the help. What is a 233 tick chart & how do you set it? I use Esignal, but not familiar with a 233 tick ch I chart 15 min & use nyse & nasd $vold $add $trin $tick in that order, breadth is king,, add/dec queen. I haven't read a lot about those indicators on the board. My 2 cents is price will always follow the breadth $vold candles, those indicators have worked well for me. Great board guys thnx for the help and input..Steve