thalestrader

Hi folks, No trades today from any members of the Thales household. I am attaching a screenshot of my daughter's account showing the same balance as was posted last night, lest anyone think I was, perhaps, concealing a losing day (she will have losing days, and soon enough, no doubt). It is summer vacation, and I don't want to see her spend all of it in front of a computer screen, so today was play day. Of course, she took her Stikky Stock Charts book with her when she went out with her friends today to read while in the car. My wife took them to a movie (it was raining here) and then to Borders, where my seven year old bought her own copy of Stikky Stock Charts with her own money (I have reimbursed her, after all, her sister didn't have to buy her copy). I might have to open another microlot account before too long! Best Wishes, Thales

Hi Folks, Two trades for me today: Long LNC +$0.62 and Long MEE +$0.08 for +70 pennies/share traded. My daughter identified two opportunities at once today, long EURJPY and long USDJPY. She chose the dollaryen (because she had not traded that pair yet) and closed out the day with the microlot account at $55.96, up $4.53 from Friday's $51.43. Best Wishes, Thales

Hi there, Use MACD or Price Oscillator and set it to 3 slow, 10 fast, witha 16 period smoothing. Best Wishes, Thales

I share your opinion. People do nonetheless behave in repeatable though of course not always predictable patterns, especially when an agenda is at stake. First they put you on ignore, then they report your posts, and only then do they throw in the towel. An open and free discussion, but apparently some are permitted to be more open and free than others.

I'll leave it to others to judge who is and is not sly. I see nothing wrong in any of my posts, most especially the one you single out as being somehow inappropriate. I do wish you well, Thales

Thank you for sharing, Mr. Hershey. So, can we count on you posting some of these tradable opportunities throughout this week in real time and before entry has already been made and profits have been taken? Specifically, if volume leads price, the we would love to learn how we can use that information to allow us to anticipate the price move and profit from it like good speculators should. We really need to learn how you enter the market, and how you decide at what price to enter. Thank you, Thales

Rather than demonstrate the accuracy of what you assert, you choose instead an ad hominem attack to discredit me by implying I have made an unreasonable demand. All you had to say was that you are unable to prove the assertion. You can always make the claim that it is a priori and not a posteriori knowledge. Then we could debate the existence of a priori knowledge, and the character of opinion. Best Wishes, Thales

Thank you my Good Tams, However, I have a woefully incomplete understanding as to what I am looking at here. I see price bars from an unidentified market in the top pane. I see a volume histogram in the bottom pane. I do not know what it is I am looking at in the middle pane. Is that a different time frame from the one in the top? You ask if I see the result - well I see things, and I assume you are proposing, presumably, that I should be reaching a cause and effect conclusion. Yet you have not provided a complete picture. Would you please provide to us a screen capture of the whole chart, inlcuding indtrument, price and time scale, etc. Also, as I am not at your level of intelligence, wisdom, and understanding, might we also have a few details as to what it is we are looking at in the above example. Thank you again for your help, Thales

Bingo! How about Spydie and Blackie come by here this week and post some real time charts with real time analysis that provides: 1) Specific entry points and entry method, i.e. specific entry price and whether it is to be executed on a stop, limit, or MIT. 2) Placement of inital stop loss 3) A real time, before the fact explanation for the basis of the trade. 4) Update a trailing stop or otherwise communicate in real time a take profit level. It would likely not be enough ever to convince me that price, rather than volume, is the primary indicator of where a market is going. However, it would then allow a discussion that can debate the merits of their approach. Right now, all that either has provided is after the fact annotated charts and assertions, implied or explicit, that they are correct and profitable. I've posted dozens of trades with charts here at TL in real time with entry, stop loss, and result - in real time, before the entry has triggered. All of these have had a clear explanation and basis. There is no need to learn a secret language or a new vocabulary. Nearly all of those trades have resulted in a profit. The few losses were small relative to the gains. My opinion is that any approach to speculation that is profitable, repeatable, and teachable should be communicable at the hard right edge of the chart. So let's see some real time volume fractal trend sequence completion trading here in real time. I can't wait - James ought to sell tickets to this one! Best Wishes, Thales

You reply to all posts except those asking you to demonstrate how you have come to such a conclusion. If you cannot demonstrate it to be so, then you ought to preface your statements with the locution, "in my opinion ...".

Hi Friend Diablo272, Great points! I would also add that it is easier on the wallet to lose $300 repeatedly over several years than to blow a $3k grubstake inside of a few months. While you say, "the opposite is true," I imagine what you mean is that "the opposite is also true." In which case, you and I are in complete agreement. My point was not that a micro account would make you a better trader. My point was that for the new and typically underfunded trader, a small account offers an opportunity to learn your craft using real money (rather than sim or demo trading, which, in my opinion, is useful only to learn how to use a particular platform, and teaches nothing about trading) while risking, say $3.00/trade instead of $300/trade. And this, of course, is what will determine whether a particular trader ever becomes consistently profitable or remains consistenly a loser to at best marginally profitable trader. Best Wishes, Thales

Hi Abe, Very good points indeed (and I mean that about your entire post and not just the part I quoted above). I was answering another poster's question concerning the relationship between futures price and spot price, and I did not intend to come across as a futures cheerleader. I too think forex offers a great opportunity, especially for the beginner. I have no problem with the bucket shop business model. My daughter is learning to trade using forex microlots. I think folks coming to this forum who are considering trying to learn to trade would be fortunate to stumble across your post and to give a small micro or mini account a try. After all, if you cannot double a $25 microlot account without blowing it up, you will likely not be able to double a $2500 or $25000 futures account without first blowing it up. Best Wishes, Thales

Thank you both for the kind words. I do not allow her free range to read the forum, but I do let her read the posts such yours. This morning she and I went over some of her charts and her trades (I mowed the lawn first thing, and when I came in, she was her computer studying her charts in Ninjatrader!). I hadn't been following along very closely during the trading day (and I was not even with her most of Monday and Tuesday), and even I was surprised at how well she identifies key levels and trade opportunities. She also has made some other good observations. For example, she noted that on two of her trades, profits of close to 100 ticks were ultimately stopped out for 49 and 63 ticks respectively, and a few 60 tick profits were stopped out for 20-25 tick profits. Many of those trades had reversed against her at prior support/resistance levels. She asked if it would not be better to take profits at those levels and then re-enter if that level would subsequently break. This observation led me to decide on the following change for this coming week: I am going to let her add an additional lot if she already has a profitable position. She will have the option to scale in an additional lot after the first reaction against her trade completes and price resumes its movement in favor of her trade. This will allow her to take a profit if her trade reaches an S/R level, while still maintaining a postion should that S/R level fail and price continue in her favor. (If the balance falls below $50, she will again be limited to 1 microlot until the equity recovers above $50.) She is on quite a run so far, and it will be interesting for me to see how she responds to her first drawdown. Time will tell, as equity curves, like price, move in waves. At some point the tide will go out and she will have to trade through it. I have feeling though, that she'll be fine. She is very competitive, which is good. But the money means nothing to her, it is just a way of keeping score, which is also good. Best Wishes, Thales

I used to trade the 6E(EURUSD future) and 6B (GBPUSD future) quite bit. Many of my trading opportunities occurred early (betwen 6am and 8am EST). So, often times I would be in a position during an 8:30 am EST news release. It was not uncommon for the spot FX price to swing 50, 100, 150 ticks in the seconds and minutes after the news, while the price of my futures contract barely wiggled. In other words, while the Futures and Spot price will track one another, they will not always move lock step. The futures may sell at a premium or discount to the spot - do not think it is always or even most commonly at a premium to the spot market. I am a breakout trader, so to speak, and breakouts on the futures tend to be more reliable than breakouts on spot (this does not mean that false breakouts do not occur on futures, of course they do). Usually, the spot breaks out, and if the move is sustained, the futures will follow. Often, the spot breaks out from S/R and quickly reverses, while a look at the futures chart wil show that the futures never did chip away at the corresponding S/R level. I should add that this was my experience when I primarily traded futures only. I have only recently started paying much attention to the currency markets again as result of my daughter's interest. I do not know if the spot still tends to lead on breakouts or not, though if I had to bet based upon what I've noticed the last month or so, I'd have to say that most of the time, spot will break before futures, though, as in everything, not always. Best Wishes, Thales

I think bucket shops prosper for the same reason any broker, whether that broker buckets your trades or whether that broker routes your trades, prospers: The broker does not beat you, you beat yourself. (Many would be surprised, I think, at how many futures brokers routinely take the other side of customer orders. But read any broker's disclosure forms, and they all tell you that they will at times take the other side of your trade and as such will profit if you lose.) Perhaps day trading stocks has accustomed me to trading with spreads that are at times discouragingly wide while fluctuating maddeningly (though the spreads since decimalization are much tighter than under the old invisible 1/8th system, and trading more liquid stocks usually results in true 1 penny spreads with excellent fills). But watching what my nine year old daughter has accomplished this week with a micro account at the "notorius" FXCM has convinced me that the would-be forex speculator can win, and win big, so long as he or she trades according to price action, places stops sensibly above resistance and below support, cuts losses short, and lets profits run. The only complaint she made this week, and I would have to agree with her, is this: FXCM will not let you place a stop or limit order within 5 ticks of the current price. So, if you decide to move your stop 5 ticks or closer to current price, you need to sit there and be ready to take yourself out of (or get into) your position with a market order (or wait until price moves farther than 5 ticks from where you want your order). As she is not a news trader, trying to benefit from the unpredictable and wild swings that occur when economic data is released, she has not been affected by the typical retail forex trader's complaints about extremely wide spreads or requotes. Unfortunatley, most folks who are attracted to retail fx seem drawn like a bug to an electronic bug zapper to trading news events rather than price action. I do not have any other retail FX experience (other than an old Refco Account which has been confiscated by Refco's creditors), but from what I gather, most if not all bucket shops place restrictions on how close to the market a customer can place a resting order (stop or limit). This strikes me as an unfair and undue hindrance to the customer, and I'd like to see the NFA do something about that practice. As far as MT4, FXCM does offer it, and I think it requires a $2K minimum initial balance, but I think the leverage is 1:200, and not the 1:400 offered with microlots. In other words, the smallest tradable unit, I believe, is 1 mini lot (10K) which is the equivalent of 10 micro lots (1K). Anyone interested should go directly to FXCM to verify any of this, of course. I did download an MT4 demo account for my daughter and I. I would never have her "auto trader" so I do not know if we'd ever go the MT4 route, as we would have no need of expert advisors. It does seem to be an indicator trader's dream platform, however, if you are so inclined. Best Wishes, Thales

Great! How much does it cost to get the explanation as to how you are trading that information? Thank you! Thales

Hi Brownie, Check Blowfish's post #45 in this thread - he posted some good charts there. Best Wishes, Thales

You may be right. I finished today with a net loss of 32 pennies/share traded. My daughter, on the hand, managed to finish with a 36.9 tick profit on a short EURJPY trade. She finishes her first full week +1 day of live trading with a closed equity of $51.43, up $3.69 from yesterday and up $26.43 since last Friday on the starting capital of $25. Did I mention that she is nine years old?! I'll post a screen shot of the account balance once I figure out why my screen hunter software will not save a picture today. I have not been able to save one chart today. Best Wishes, Thales

I agree. In my post above, I said the following: I've attached a 15 minute chart, where I note the same formation you outlined. I would right now be long from 133.29, and it now looks as though that stop loss at 133.11 would be the right place to exit the position if price does retrace that far. As to chart patterns, I use particular chart patterns support trading decisions once the pattern completes. As in this case, however, I would not allow a developing but incomplete pattern to prevent me from taking a trade opposite that which the chart pattern suggests. I would still be comfortable staying long here with a stop at 133.11, even though I'd be 15 ticks in the red at the moment. Actual HH's and HL's have to trump the mere potential for LH's and LL's. Best Wishes, Thales

One way to start trading is to identify a potential opportunity and trade it. This mess from the EURJPY sure looks to me as though it should resolve to the downside. However, looking at current price action, it is a long trade opportunity that looks most likely. I took two shots - one with a wider stop and one with a relatively close stop. I'm not real comfortable with that close stop - as I said, PA on this pair has been a mess today. At any rate, I'd have a buy stop at 134.29 (I see that I have typed 134.35 as the buy stop on the chart - that is incorrect. I'd correct it now but I have to run. Sorry about that error). Best Wishes, Thales

Hi Folks, I had a long trade in LM that imploded and as price crashed through my stop loss, and had fills on as few as 2 or 3 shares at various prices on the way down as my position was unwound. Bizarre. At any rate, I finish with the unusual tally of 43.78 pennies/share traded as a result of the staggered and fractional unwinding of my LM trade. My daughter finished + 23.9 ticks on a long GBPUSD trade. She should still be in it with a stop loss at about +50 ticks, but when she was changing her stop loss, she mistyped the new stop level and was stopped out prematurely. Closed trade equity as of this moment is $47.74, up $2.39 from yesterday's closed balance. She's very happy with herself, as am I. Best Wishes, Thales

I did not short LM, but I may end up wishing that I had (its down a dime from where I would have shorted it as I type). Your chart looks excellent! That is where I would have shorted it. My initial stop loss would be at about 24.25.

And here is why you always trade with a stop loss in the market: I was long LM from soon after the open, and at one point I was up nearly 2 dollars (about a 1.70 or so). My stop loss was just beneath a recent pulback low, when the bottom fell out of the stock. My 1.70 profit was reduced to a mere 36 pennies when I got filled on my stop loss. Now, the question is, do I short it using a sell stop at 23.85, or do I let it be?

For example, here is a trendline drawn on a 5 minute chart of BP. Buy point was 47.11-.15 depending upon slippage (I was filled at .12 with a .11 buy stop). You can see here that price has broken above the trendline, and has now returned for a retest. I do not know if price will then continue higher, and if so, by how much. I am long at 47.12 with a stop loss at 46.96. If price trades above 47.18, which was the high before the throwback, then my stop loss will be raised to a penny beow the low of this throwback. If price does not continue higher and instead reverses lower, I have my stop loss. The correctnes of that trendline does not depend upon the outcome of this trade. Win or lose, this is an excellent trade. Best Wishes, Thales

"[L]et the market develop its own stop or 'signal' to get out." - Wyckoff, Studies in Tape Reading, Chapter IV, "Trading Rules." I have neither seen nor heard better advice from anyone with respect to stop loss selection other than Wyckoff's advice to let the market develop its own stop, what I call "natural stops," or "natural stopping points." I posted the attached chart of a GBPUSD trad opportunity on another thread here at TL. Here it is after the completion of the trade. Best Wishes, Thales