thalestrader

Hi Folks, Looks like this thread is withering on the vine, but I'll give it one last go to see if anyone else is interested in keeping this going for Brownie. I had no stock trades today. I was out in the morning, and jumped on the short side this afternoon. Short the ES for +4.25 points and short the 6E for +11 ticks. My daughter traded this morning while I was out, and she grabbed 100 ticks or so on an EURJPY short. She goes to bed tonight with closed equity of $78.86, up $11.70 from yesterday's $67.16. Not bad for having started with just $25 less than three weeks ago. Best Wishes, Thales

Well this is not real time, but it is the same situation as the ES trade I posted last week on a different thread here at TL. I know there are those who deny that gaps exits, either because there is continuous trade through the globex session or because they "imagine" and "slide" price at the open back to the rpior day's close. However, I have had too much success over the years by paying attention to gaps between prior day session close and the current session open. Today the ES gapped down. I was not in this morning, so I did not make this trade. My entry would have been a sell stop one tick below the first five minute low with my stop loss 1 tick above the high. The assumption would be that the market would close at he opposite end of its daily range in the direction of the gap. By the time I got to my desk, price had rallied off the low, and that rally had fizzled at 887.25-888.50. I entered short at 885 and ended up covering at 880.75. The exit was not my best, but I tried to play cute with the stop and got burned. It happens.

I have a friend who "finds" Ross Hooks everywhere, much to his and his equity's detriment. Here is 1-2-3 "Ross Hook" that occurred on the EURUSD at what has shown itself to be an important S/R level in recent trade. Almost any "set up" becomes remarkably easy and successful when it is applied while in agreement with support and resistance. The 1-2-3 is nice because price tests S/R and shows the validity of that level, prior to requiring a trader "fade" the move that is reversing.

It is called passive income, and it makes perfect sense. I think TRO is an Introdicing Broker for MT forex, so he benefits from having folks sign up to trade with MT and designating him as their IB. TRO is a business person. If I were smart enough to write a book from which I could live off the proceeds, or if I had the ability to convince a forex dealer to let me be an IB, I'd do it too. I'd still trade too, because I find it extremely enjoyable. But that doesn't mean I would walk away from an opportunity to develop a stream of income that did not depend upon my active, daily, ever present labor to generate. From what I have seen of TRO's work and his posts here and elsewhere, he seems to have a decent and genuine interest in helping folks succeed at this business. It is not his only interest, but so what. He stands head and shoulders above the parasites and leaches who peddle software, trading systems, trading courses, dvd's, cd's, etc. or otherwsie troll internet forums looking for followers whom they can "mentor" and "teach." Most folks who are attracted to trading have some notion that trading for a living will offer them freedom. TRO happens to be one of the view who has figured out that the true path to such freedom is developing a passive source of income, and he is trying to accomplish it without taking advantage of folks. If my assessment is correct, then I'd have to say that TRO is fairly laudable, in my book. Best Wishes, Thales

Sorry about that - here are the two charts I referenced.

I trade on stops a tick above a pivot high resistance and a tick below a pivot low support. I am primarily a breakout trader. I am rarely the victim of the fakeouts you cite as being the "usual". I would suggest that you search some of DBphoenix's posts on identifying support and resistance. Not all pivots are significant enough to offer a tradeable opportunity. Here's a hint: Think Highs and lows, higher highs and higher lows, lower highs and lower lows. Here is the EURUSD chart I posted last night along with the EURUSD now. As you can see, price broke below the black ine, easily reached the first profit target, and reversed within ticks of the second target. Not a large profit, but a profit nonetheless. And the key to hitting the big ones is to be in as any of the moves as you can identify, because all big moves start out small. All big moves start with a chipping away of support and resistance. If I'm not mistaken, you were the same one who said that price never signals the big moves before they happen, to which I responded that my experience has led me to believe the oppposite is true. You may have found a decent book to read, but there is a big difference between reading a book and reading price. I mean no disrespect to Brook's or his book, but his book is a book of "set-ups." I have not read his book, but I have read his recent article in Futures magazine. Such set-ups, in my opinion, strike me as an attempted short cut to trading success. Instead of learning his set-ups, you should first learn to read support and resistance in the market. Only then will you really be able to enjoy the success deploying Brook's set-ups might offer. Then again, if you learn to read support and resistance properly, you will likely find that you do not need an arsenal of such "set-ups." Best Wishes, Thales

I think that if you look at the ES chart, you'll see it is sufficiently marked to see what I was seeing: Price gapped open lower, rallied back to resistance (as DB points out in his post). From there, price declined back to the LOD, ultimately making a choppy push to a lower low that reversed relatively quickly to trade back above the first 5 minute low. Price formed a line, from which it broke to the upside, and a logical profit target was resistance at 892-894. Basically, all I meant was that price shows where there is resistance and where there is support. If a rally fails at resistance, you can expect a test of the nearest support. If a decline fails to push lower at support, you can expect a rally to test the nearest resistance. I do not really know if a particular resistance or support will hold or break. But price does show you where these points are, and when price gets there, the market will make a decision. I do know that much. Since I know that there are only two possible outcomes, I can be ready for either, and what's more: price already has placed a road map before us telling us what to expect depending upon which of the two outcomes come to pass. Here is another example on the current 15 minute EURUSD: If EURUSD trades below the back line, price will have printed a High, a low, a lower high and a lower low. I would sell a break of that line. If price breaks and holds below that black line, I'd expect it to reach at least the first blue line. Will it? Maybe. Maybe not. I do not know. But, I would expect it to reach that line. If it breaks and holds below that blue line, I'd expect price to reach the next blue line, and so on. Will the EURUSD break that low? I do not know. That black line was a minor support level, and therefore, it may have marked the end of a rather shallow pullback and the rally in the EURUSD may be set to resume to retest and possibly take out today's high. If it does break below that line, will it at least reach the first profit target? Probably, but maybe not. Does price always do what it has led me to believe it is about to do? No. That is why I always trade with a hard stop in the market against my position. Best Wishes, Thales

Hi Folks, No stock trades for me today. I did win 5.52 points on an es trade and 30 ticks on an 6E trade. I posted the charts (after the fact) over in the Brooks price action thread. My daughter took a long trade on the EURUSD about the same time I went long the 6E. She did better than I, however. She manaaged to squeeze just ocer 46 ticks out of her position. She goes to bed tonight with the microlot account at $67.16, up $4.62 from last week's closed equity of $62.54. Best Wishes, Thales

I'll take a stab at an answer here, though I am not the most qualified to do so. Suppose that an expert advisor, .efs, .eld, etc. were programmed to signal a long trade whenever price retraced a fib% after making a new high. On one bar, price retraces 23.6% of the move, which is the minimum amout required to issue a signal. A green up arrow is printed beneath that price bar by the program to signal a long trade set up. Then, on the next bar, rather than price resuming the rally, it continues to decline, and reaches a 38% retrace of the move. This is within the parameters of the program to signal a long entry. The green arrow that had been printed under the prior bar now moves, i.e. repaints to the subsequent bar. Is this a new signal? Or is it the same signal just from a new level? Does it matter? I don't know how to answer that, as I do not use any such programs. To continue with the example, price continues to fall, and it hits the 62% retracement on the next bar, and the signal again repaints from the prior bar to the present bar. On the next bar, price retraces 86%, the maximum retrace allowed by the program to still issue a buy signal. The program repaints the buy signal on that bar. Price continues to fall, retraces 110% of the move, thus invalidating all the signals that had previously been painted on the chart. Often, there is no sign left on the chart by the program that it had issued what amounts to four losing long trade signals in a row. Sure makes back-testing tricky for the user, but it probably makes it much easier for the unscupulous software seller or systems vendor to cherry pick examples for their sales literature and web sites. None of this is meant as a criticism of The Rumpled One. From what I have seen of his work, he has some fine indicators for those inclined to use them. Best Wishes, Thales

My experience leads me to hold a contrary opinion: Price nearly always telegraphs where it is likely heading, regardless of the extent of that move. Best Wishes, Thales

Two trades based on price action only. I have not read the Brooks Book, but I imagine from the title that it is price based trading and not indicator based. ES long at 888.25 sell limit 893.50 +21 ticks 6E long @ 1.3944 sell limit 1.3977 +30 ticks Best Wishes, Thales

Here is an EURJPY short from last night. I use range bars for these screenshots, but I typically identify opportunities using a 15 minute bar chart. +37 ticks at first target and +112 ticks at second target (assuming the trade was held for targets with initial stops).

I did, I did, I did squeeze the stop too tight.

I may have squeezed the stop too tight too quick. Paper trade net $1900 demodollars. Almost hit the first profit target, as price came within 4 ticks; but my dad always tells me that "almost" only counts in horseshoes and hand grenades. Best Wishes, Thales

I may be wrong, but I believe that the term "repainting" in the context of trading refers to those instances in which an indicator which prints or "paints" trading signals on a chart in real time will move the signal to subsequent paint bars, in effect, repainting itself on the price chart. Problems with interpreting such signals sometimes occur when, for example, a signal to go long is given and a position is entered in accordance with that signal. Price then continues to decline, and another long signal is given on ensuing price bars. Best Wishes, Thales

While not visible on a range chart, the last little rally fizzled at 133.87, and price subsequently made a new session los, so stop loss is no3 133.88.

The little rally fizzled at 133.98, and price has made a new low, so stop loss is now 133.99 Take Profits are still open targets.

If I were in this trade for real, I'd move the stop loss on the whole position to 134.31. I did decide to "paper trade" this in an FXCM MT4 demo account I've been playing with for the last week. As you will see, the fill on the "short" was 134.06. This is because I decided to paper trade it after the trade had triggered, so I entered at the market and a bounce resulted in a fill 5 ticks better than I would likely have enjoyed if I had decided to enter on a stop order earlier. You will also see that the stop loss on the whole position is now 134.31, and that the profit limit orders are each for 1/2 of the position. Again, this is a demo account, and not a real trade. As I said in the previous post, I am a spectator on this one. Best Wishes, Thales

Here is a potential short opportunity on the EURJPY with entry, stop losses, and profit targets. I would usually have an entry at 134.01, but on a Sunday afternoon I'd might want to see a few more ticks of a break before placeing my chips in the center of the table. Later tonight, once Tokyo opens, then I'd be back to a one tick under/over entry. Full disclosure: I'm not trading this, and neither is my daughter. We're just spectators right now, and not speculators. This is purely for entertainment purposes only. Best Wishes, Thales

Is that an hourly chart? Thank You, Thales

Though I disagree with your comments concerning the posting of real-time trades, this point is well taken. I will henceforth leave this alone. Thank you, Thales

There are five threads over at ET with a combined 5135 pages (and counting) devoted to this method. Having not subjected myself to reading the full 5135 pages, I cannot say for certain that there is not one real time example where both technical analysis and a specific trading action were simultaneously posted, but if such a real time example exists, I have not found it. If one does exist, it still does not excuse the OP and his cohorts from having ignored repeated request by myself and others that they show how their method is applied in real time. I doubt that Jack Hershey (aka Mr. Black) or Spydertrader or any of their followers will ever post real time analysis with a concurrent tradable action. I hope I am wrong, because if they were to do so, then folks could begin to discuss and debate the merits or demerits of the method intelligently. Here is an excellent mini-essay on Jack Hershey and his method: http://www.tradersnarrative.com/jack-hersheys-incomprehensible-method-971.html The author of that essay cites a caution from Curtis Faith's Way of the Turtle that would be very instructive for any newcomer to the trading world (or those not so new but nonetheless still struggling) to type, print out, and tape to his or her computer monitor: "One sure sign of a Pseudo-expert is writing that is unclear and difficult to follow. Unclear writing comes from unclear thinking. A true expert will be able to explain complicated ideas in ways that are clear and easy to understand." All the information that is posted here by the OP can be found at the beginning of the ET threads. If there is to be no real progress to communicate the application in real time of this method here at TL, then perhaps he will at least explain his motives for bringing it here. I know this post will likely be reported. I know that it may be deleted. I would hope that James refrains from doing so. TL participants need to press on with the request that the OP demonstrate the method he represents in real time. If he does so, then we will have a wonderful opportunity to discuss, debate, and possibly learn something that might be put to real use (I will always maintain an open mind in the face of real-life, practical examples; but I also maintain a healthy skepticism in the face of nothing other than pedantic pronouncements of self-professed absolutes). If he does not provide such examples, then we will have protected all but the most desperate from being fooled into wasting precious time and money learning a method of dubious practical value. Best Wishes, Thales Moderated Message: Thales is expressing an opinion and I do not see the need to moderate this post despite being reported several times. Until further disputes escalate, this post will remain as it is. Thank you. - Soultrader -

Though I am no longer going to particpate in the discussion on this thread, I feel that I owe you an explanation of my prior port to which you have repsonded. I was only trying to make a point about the usefulness or lack of usefulness to trading of various abstract concepts. I appreciate your comments, and in the end your account may very well be correct. But to me, such accounts are far too academic and abstract and removed from the reality of trading to have any practical application. Respectfully, Thales

So the idea is that if you folks say it enough times the masses will start to believe it? Looking at Thursday's price action with volume data one could more easily conclude that volume follows price. For example, when price finally broke below the line in which it traded for most of the day, volume increased. Volume was timid and indecisive until price signaled its direction out of the line. After all, are we to believe that bulk of the volume trade during the 15:25 EDT bar (based on Ninjatrader's time stamp) occurred prior to the price break, and price dropped in response to that increase in volume? Or did price break, and volume swelled as price continued to move down from the now broken support? In the end, the real question is how do you trade it? See my charts attached here: If I were not already in a short position, I would have traded that break with a sell stop at 896 and a stop loss at 899.25. I would have had a profit target somewhere just above 891.25 support. Anyone, including my nine year old daughter, can look at the chart, read my explanation as to how I would have traded that break, and duplicate it in the future. This is emphatically not the case with the contributions made by you and your friends to this thread. I've attached my charts - one with volume one without. If one looks at the volume bars, it seems to me that volume follows price, and not the other way around. Volume, in addition to simple number of contracts, represents the level of activity by people. The history of the world shows that people are many followers and few leaders. People are always looking for someone or something to follow. As I said before, anyone can put "I sold here" and "I covered here" on a dead chart 72 hours after the closing bell and look, or I should say, try to look like a genius. This is not to say that there cannot be usefulness in such annotations on a dead chart, so long as explanations are clear, and all relevant and necessary information is provided. However, yet again, here is another proponent of a view, to wit, the view that "volume leads price, always," who claims to have made a wonderfully profitable trade, selling at almost the HOD and covering at the LOD, but without any explanation of 1) why he entered, 2) at what price he entered, 3) was entry a market, limit, or stop order and why? I do believe that it is possible to sell the HOD and buy the LOD occasionally. But to make such claims and not detail how the feat was accomplished has a bad odor to it. Many folks on July 2 no doubt sold market on open, and their doing so had nothing whatsoever to do with any thing other than that price itself was pointing to lower prices. But that is not given as the reason in your post or that of your friends. I am not even doubting you and your friends made the trade. But no one here could look at what you did and duplicate the trade in the future on the basis upon which you claim to have made it, because there has been no basis given. I really do not believe I am being unreasonable. If you folks are for real, then why not share the minimum required for intelligent and respectful human communication? I participate here at TL because it has always seemed, for the most part, like a forum of seriously interested folks, with very little of the guru speak and fraud that one sees over at other forums, most notoriously notable, ET. I have apparently stirred the nest and we have attracted the the attention of the minions of a few gurus who have a near cult-like following (see how many who have rushed to defend the manifesto are new to TL, and who have a mere handful or even fewer posts here). In the interest of preserving the character of TL, and hoping that this contagion maybe contained, rather than spread throughout the forum, I will no longer participate in this thread. And I reiterate: People are always looking for someone or something to follow. Best Wishes, Thales

First of all, johnjohn, let me say that if anything that follows strikes you as offensive or combative or in any manner an attack on you or your post, please know that such is not my intention. I do appreciate your posts, including the one quoted here. Let us assume that your description of the phenomona is accurate. This still begs the question as to how does one convert this information into action, i.e. how does one use it to place trades? George Lane, who did know a thing or two about auction markets, argued that price rises due to the the activity of "inspired buyers," i.e. short sellers covering, and not because of a search for value by buyers and sellers agreeing that current price is too low. In my opinion, the concept, "value," is itself devoid of value to the speculator; and volume, as an indicator of future price movement on any time frame shorter than one composed of daily data, has so little value as to warrant the speculator's dilligent inattention. Only one person has articulated a trading strategy in this thread that actually uses volume information to support trading decisions: Blowfish and his use of volume on 15 second charts looking for potential reversals to scalp. And, if I am not mistaken, price, specifically price action around support and resistance actually trigger and guide Blowfish's trades. If volume leads price, always, as has been asserted here, then someone should be able and willing to demonstrate how volume caused them to buy or sell, price be damned. Thus far, no one has even come close. Respectfully, Thales