March 14 -Gutted-

This is the first entry in your Blog that provides for comments. Therefore, this comment addresses the first entry in your Blog, i.e., the introductory entry.

What charting program and datafeed are you using?

That's odd. I checked all the options so that everybody should be able to view ànd post in my blog. Must have something to do with the 'uncategorized' blog category that I am unable to change.

Anyhow, I've been using CMC & It-finance.com in the past but I switched to Interactive Brokers recently because I was told they offered better spread. However, the charting functionality there doesn't offer much (apart from a bunch of indicators I don't want) and doesn' always load as quickly as I'd like. So I am using Bigcharts to export charts or review things at the end of the day. During the day I watch whatever I have on my quote panel and on the IB chart... it seems to work fine and I don't want a dozen applications running all at once anyway.

Why do you ask? Is something incorrect on the charts I posted?

It's impossible to say whether anything's incorrect or not. The bar display begins and ends without any context. Ditto the horizontal line. Therefore, there's little or nothing to hang one's responses on.

While no one can guarantee that your understanding of price movement and therefore your results will improve just because you obtain the necessary tools, I suspect that most everyone would guarantee that you will be very unlikely to improve your understanding and your results by using tools that are at best inadequate and at worst entirely inappropriate.

To begin with, get yourself a decent charting program. If you have IB, you can use it as a free datafeed for Sierra Charts, the basic version of which will cost you about $10/mo. With SC, you'll be able not only to track the day's price and volume data all the way down to the tick level, but you'll be able to replay the day -- or any other day for which you have collected data -- at any time and at any speed in order to determine where you went right or wrong.

You're going hunting and trying to bring down your prey by throwing the bullets at it, then complaining that you're not bringing anything home. Don't try to run with your shoelaces tied together. Get basic tools. Then stop trading until you've developed (a) a better understanding of price movement and (b) a consistently profitable trading strategy. If you are unable to accomplish (a), much less (b), then you're not trading; you're gambling.

Whilst I certainly appreciate the suggestion, could you - apart from the replay function - tell me what exactly makes Sierra Charts highly recommended? Are the charts you posted created from within that program? They do look simple and easy and you seem to be able to shift with the time parameters a lot.

I'll see if there's a demo or trial version available. I did notice on their site that the basic version does not include 'interactive brokers support'. Apparently I'll have to go for a higher level (and more expensive) service then hmm...

In the meantime, I'm curious about the tick chart remark. Are you saying you would recommend not trading without that? I've seen a lot of people post charts here and they all look different. It's like everybody uses different tools. Do you mean to say that what the charts from IB show isn't a good representation?

As for a plan, I posted that elsewhere and I have a set of rules which I apply during the day. Unfortunately there's always something unanticipated that occurs that kind of ruins the plan. Take Friday for example, the plan was to short, the setup looked perfect, but the markets were not open yet. Then price took a dive before I had the chance to do anything about it.

SC: the charts I post are for the most part from SC. Charts covering more than a year are from BigCharts.

Tick charts: price moves continuously, not by bars. Regardless of program, method, approach, system, software, it all comes down to this inescapable fact. If you focus on bars rather than price movement, you will be perpetually perplexed. See this post, below:

Jay's Journal

I'm getting an error message when trying to view Jay's journal. Apparently you need to a member of that site in order to view the page.

Would it be possible to copy the text here, please?

Surfing The Market

I have mentioned this elsewhere on the forums briefly but I thought I’d post it to help people reading my journal understand what it is exactly that I am on about with my style of trading. Hopefully some people can get an “aha” moment out of it to simplify their own trading methods.

When I first began trading I was looking for trend lines, ema’s, stochastic indicators, RSI’s indicators, volume, double tops/bottoms, head and shoulder patterns… the list went on. In fact for every pattern, Einstein would be sitting next to me saying it had an equal and opposite pattern that contradicted the message. Things were becoming increasingly frustrating and very complex.

This didn’t fit with who I am. I don’t like to concern myself with the small details, I like the overall picture and the details will figure themselves out. I had a mentor back in 2006 who said something to me that has stuck with me ever since. He said the market just moves in waves, that’s all. It was odd, I didn’t realise I needed this valuable lesson but it formed the basis for how I would look at the market forever.

Before I fully bought this idea of the market is simply waves, I had to look at it through a new pair of eyes. I removed every single indicator from my charts, volume, trend lines, ema’s etc. Nothing could remain on my screen. From there I spent quite a bit of time looking at the market in its purest form. After a while I found exactly what my mentor was saying. For every different time frame I could see the price moved in waves. Up and down. Pretty basic really but when you think about surfers, they will tell you every wave is different. Some rise quick and fall hard, others rise quickly and then slowly roll providing a good ride.

So looking at a weekly chart I could see smooth waves, a daily chart would show choppy waves and the further down you get, the more waves you had. In fact with my trading now I can see the 5 minute chart has nice rolling waves as opposed to the 2 minute chart that has quick and choppy waves. No waves are better than others, just some people see the quick choppy waves better and some people see the slow moving waves better.

After seeing this I began to think philosophically about this occurrence. Being someone that thinks in concepts I began to search for the reason that this occurs. Beyond the obvious supply and demand, I found answers outside the trading arena. I found in philosophy that for one thing to exist the opposite also had to exist. This is a big key to how I trade now. For high to exist, low has to exist. To know hot, we must also know cold. To be wet, we first must be dry. The list goes on and would take way too long to go through all of the examples I have come up with. No doubt it’s pretty self explanatory.

So how did this help me improve my trading outlook. I began to think in terms of what is certain in an uncertain market. For rising markets to exist, we must have falling markets. So I discovered that the one certainty which is guaranteed no matter what people could possibly say, a market must fall after it has risen. It must rise after it has fallen. So we know that this is our base to work from in trading. There are two key questions that arise from this base however, ‘when will it fall after rising’ and ‘how far will it fall after rising’.

Those two questions are the best questions I ever asked. So I began watching the market with just price, looking for what happens. Just like a wave in the ocean, there is an inbetween period of rise and fall. That is what I was looking for and what I now look for. Sometimes you pick up on the change too late and sometimes you’re too early, but with time, the pros don’t miss waves, they let them pass.

Now this brings me to my gripe with jumping on a market that has already moved a fair way, such as I see in breakout trading. I’m not saying breakout trading doesn’t work or any such thing, in fact it has to work for markets to go somewhere. What I am saying is that trading a breakout is like jumping on the wave in the middle. I’m not sure if it’s going to collapse on me right away or if it will continue for a long time to come. What I can be certain about in the market is that another wave will come.

However just because I see the turns better than the distance, there are probably traders out there that can judge with good odds how long a market will go down or up for. That just isn’t my talent. That is what makes my plan a guide as opposed to rules. I have areas that the market is most likely to be the turn of a wave, however the wave turns according to nature, not according to when I think it should turn. You can know the best time to be surfing the day before is at 6.34am yet on the day the best waves may come at 6.45am. You just have to be prepared at 6.20am and waiting to see when the best waves come in.
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Regards,

Jay