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ItalianSharp

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Posts posted by ItalianSharp

  4. Posted

    Does anyone know how to get this indicator to work for FOREX?

     

    It does a great job with emini futures, but I get an error message if I try to use it for spot currencies. Anyone has any clue on what changes should be made to the ELD?

     

    Thanks in advance for anyone who can help.

     

    IS

  5. Posted

    Pappo

     

    Volume never lies.

     

    However, we must associate higher volume to much higher daily ranges.

     

    For instance, back in 2005-6 ES average daily range used to be around 10-12 pts if I am not mistaken. A tight range means bid/ask levels are somewhat stable and there are flowing orders in both directions that pretty much even each other out, making the range a tight one.

     

    In 2008, ES average daily range increased dramatically. We've seen 100pt-range days a few times this year.

     

    It's normal to have big volume spikes and more participation in a wide-range day simply because the market trades at many different levels; each trading level may represent an opportunity for either buyers and/or sellers, so the more levels the more interesting it gets.

     

    There were times a couple of years ago when ES couldn't cover 100pts within a single month. This year it's been able to do it in one single session!

     

    This should answer one part of your question.

     

    However, if volume is much higher, why are the levels thinner?

     

    Simply because all that big volume is spread out over a huge range.

     

    In fact, it'd be correct to compare total volume vs daily range and come up with a number like "average volume per ES pt"

     

    For example, day 1 has a range of 10 ES pts with a 1M volume. Average volume per ES pt would be 100K.

     

    Day 2 has a range of 100 ES pts with a 5M volume. Average volume per ES pt would be 50K.

     

    Although day 2 produced amazing volume, it also produced an amazing range.

     

    Hope this answers your question.

  7. Posted

    Nice topic.

     

    I agree with everything that you guys have written above.

     

    Something I would like to add that wasn't mentioned:

     

    Trading is just like any other business and we are the entrepreneurs of that business. Hence, we must set realistic goals to keep the business going and growing consistently.

     

    I believe setting goals is a crucial aspect of discipline.

     

    If we set goals too high, we may never meet our expectations and we may take it as a failure, pushing ourselves over the limit and taking unnecessary risks.

     

    If we set goals too low, we may not have the necessary drive to reach them because they are too easy, so we may end up feeling a bit unmotivated.

     

    Setting realistic goals is crucial to maintain growth, discipline and emotional balance.

     

    If you are a 1-contract YM daytrader, it would be unrealistic to set a $1K daily goal as well as it would be too little to set a $50 daily goal.

     

    Finding the right balance can tremendously help us keep our head straight.

  8. Posted

    I think you should place your stops MANY ticks above/below the prior swing point.

     

    There are different scenarios that may occur:

     

    1) The swing point isn't breached and your position is safe

     

    2) Stop running occurs and your stop should be safe unless it's placed 1-2 ticks above/below the swing point.

     

    3) Your stop is hit and that means the breakout might be for real.

     

    I agree that waiting for the interval to close might be the better option...but we just never know how far it'll close...that's the problem.

     

    In extremely volatile days, waiting for the close may turn out very costly.

  11. Posted

    This is where being a human trader in the game each day has it's advantages over a computer program. How long would it take for a computer program to realize that a 3 or 5 minute chart is just not working in the current environment? ;)

     

    Very good observation.

     

    In fact, during periods of high volatility most of traders tend to experience periods of large drawdowns.

     

    This is due to indicators being off, mathematical/statistical systems needing days to adjust, etc...

     

    The advantages of discretionary trading is that you have very little delay in adjusting to new market conditions.

     

    Give me high volatility any given day!!!

  13. Posted

    Wow, when I read this post for the first time I thought it was a joke...no offense, I seriously had a nice laugh and figured to congratulate with you for starting this funny thread...

     

    But then, reading your replies to other posters, I knew you were for real!!!

     

    You should immediately stop trading real cash. Invest your money into some trading education first...probably the best idea would be to get yourself a mentor for a few weeks until you learn the ABCs of trading.

     

    Don't even do the simulator stuff at this stage. It'd be worthless because you have no trading plan and it sounds like you are a very emotional trader.

     

    Just forget you ever started trading and start from scratch again. Reset your brain to zero and re-program yourself.

     

    I had the best laugh when you stated that you have no idea how pivot points are calculated yet they are very important. LOL

     

    My advice is:

     

    - stop trading immediately

     

    - invest the money you save from trading into education

     

    - get yourself a mentor whose trading style is similar to the way you'd like to trade

     

    - if you have no money for mentoring, look for someone in this forum who trades in a similar fashion as the way you trade and then bust his balls all day long.

     

    Good luck and stay positive, the road is long but if you are determined enough you'll see the light one day.

  14. Posted

    Well, I'm going to buck the trend here and say I was disappointed with this book. As I read through I kept waiting and waiting for the author to talk about tape reading, but he never did! The book starts off with an autobiography of how he started and leads on to various tech analysis setups which can be found in any good trading book and he talks about volume which is great. However, there were NO techniques on reading the tape (time and sales). None. There was not even one single screenshot in the whole book of Time and Sales.

     

    If I wanted a general tech analysis book or a book on price and volume, I would have sought that out, I wanted a book on tape reading, and this book does not deliver even 1% of the topic of tape reading. A big disappointment. I am still wondering why the book was called Techniques of Tape Reading, I am amazed.

     

    I must back you on everything you said. I read this book a few months ago and didn't find it helpful at all as far as Tape Reading is concerned.

  16. Posted

    The 233 tick is just a personal preference. Regarding key levels.... this is entirely up to you to judge. What determines a key price level is based upon what you consider a significant level of support and resistance. I use alot of pivots, previous day high/low, and market profile levels.

     

    I think he meant to ask: How many contracts are you looking for on the tape to determine whether a level is important or not?

  17. Posted

    I believe going all in at once is a bit unwise given the nature of the markets, which will almost always allow you to get in at a better price.

     

    Let's say you want to go long 3 contracts in YM.

     

    You get in with one contract at 13000. You keep the remaining 2 just in case you can get a better price within your stop loss range.

     

    In this case, if you lose straightaway you only lose on 1 contract.

     

    If you win straightaway, you'll win on 1 contract...yet it'll be a very easy and almost stress-free trade because it went your direction immediately. And I like that even if it's only a 1-contract position!

  18. Posted

    Although I strongly believe the advantages by far outnumber the disadvantages, here are a few cons to discretionary trading:

     

    1. You must be accountable for each of your losses. There is nobody else to blame but yourself when you make a mistake. Hence, ego sometimes is a big enemy to discretionary trading.

     

    2. You must always be on top of your game. Your mind must be sharp at all times the same way a professional athlete must be in top shape whenever he's called out to perform. When you are not mentally fit to trade it's usually reflected in your P&L. And like a professional athlete, you must accept defeat and move on.

     

    3. Discretionary trading is a lot more stressful than automated trading. You are the one who is in control of everything, from entry to exit. There is nothing automated in discretionary trading.

     

    4. If you are sick or not fit to trade, you must take a day off; which means you are not going to make any money because nobody is trading for you.

     

    5. If you get on a losing streak, emotions may become a factor and force you to make mistakes. Confidence is fundamental for discretionary traders. The moment you start to second guess yourself you are utterly lost.

     

    These are only a few of the several disadvantages to discretionary trading.

     

    I think it all comes down to your type of personality and what fits you best. I started off with mechanical trading and used to get very frustrated at my system. I felt I needed to feel more responsible for what's going on with my money and ever since I chose the discretionary path I've not looked back.

     

    Discretionary trading is definitely my trading niche. It's a lot more fun and you learn an awful lot more about the markets simply because your focus must be 110% all the times, whereas with mechanical trading you are more focused on abiding by the rules often times overlooking what the market is trying to tell you.

     

    IS

  19. Posted

    A lot of excellent responses here, so I'll just add to some of the themes already mentioned. It is my opinion that to be a viable opponent in the markets, traders will have to rely on the abilities that make human beings superior to computers. We all know that the human brain cannot compete against a computer when it comes to routine, raw number-crunching, analytical, information-based tasks (i.e., purely left-brained abilities), and this applies to trading strategies that can be programmed and automated. We currently live in an information age where there is an abundance of information and incredibly fast computers. This sets the stage for efficient automation. Computers are significantly faster, they can process vast amounts of information in significantly less time than humans, they don't get tired like people do, and they don't make errors. Generally speaking, if you are an individual trader with a trading strategy that can be described in a finite number of steps, a computer will be able to trade it more easily and better than you. I agree with ItalianSharp when (s)he wrote:

     

     

     

    So in my opinion, very few automated, systems traders will be able to compete with institutions that have the best minds, deepest pockets, fastest computers, best automated trading systems; in short, the best, and most abundant, resources. So what type of trader do I think will be able to compete with the institutions? Discretionary Traders. Specifically, traders that combine the analytical, problem-solving skills found in the left hemisphere of the brain with the human abilities carried out by the right-side of the brain. These right-brain abilities include seeing relationships and integrating those relationships into the big picture, pattern recognition, focusing on context, creatively combining ideas, understanding what your competitors are doing and how they may be feeling, and looking at the markets in new and different ways. The list goes on, but these are all examples of areas where human beings excel over computers and the focus of most discretionary traders, I think. Traders that use a holistic approach, combining left and right brain abilities, will be able to continue to compete in the financial markets against institutions with vast computing resources. Anyway, this is my current belief which has shaped my trading style and methodology.

     

    Soultrader, I think you started a thread on an important topic that will be discussed heavily by many traders as time goes on. I believe it's important to consider how we plan to adapt in a world that's becoming more and more automated.

     

    Recommendation: Read "A Whole New Mind" by Daniel Pink, an easy, enlightening read that discusses this subject in more detail. Dogpile mentioned this book in one of his posts.

     

    Thank you for expanding on my thoughts. You laid it out brilliantly.

     

    IS

  20. Posted

    Big institutions use highly sophisticated automated programs for their trading; they have the best and fastest connections to the markets; they have the best trading platforms. All this makes it nearly impossible for a private trader to compete with them on the same ground. Basically, if you go for the automated stuff, you'll always be one step behind the institutionals.

     

    However, I do believe private traders have a big edge over institutionals. This edge is CAPITAL and being able to liquidate positions at any given time with almost zero slippage.

     

    Discretionary trading is the way to go if you want to compete against those monster funds, banks, bots, whatever you wanna call them.

     

    You have to be good at it, but you can do it. And things will likely improve in the future because there will be more participants bringing more liquidity.

     

    Last but not least, markets will always be driven by fundamentals. Although there is an increasing tendency to automize everything, there will always be the need for human flexibility and interpretation of market conditions.

     

    IS

  21. Posted

    I believe this is one of the most powerful indicators you can use as a trader.

     

    I've always been interested in volume and tried to figure out an efficient way to use it but to no avail. Volume by itself only tells me how many participants and how much action there is at any given point.

     

    With volume delta you can literally see who's winning the battle in the trenches at key pivot points. I think it's a great tool for timing entries and exits and it helps enormously to manage the trade properly.

     

    Now I finally know what to make out of volume. :))

     

    Since I am an eSignal user, this indicator is only available for live data. This totally sucks because if you switch timeframe in your charts, the volume delta must be re-plotted from scratch.

     

    Is any other eSignal user aware of this problem and is there a solution to this?

     

    Are you TS users allowed to reload your charts and still see the volume delta bars from the beginning of the trading sessions or even previous days?

     

    IS

  22. Posted

    Let me give you my 2 cents here.

     

    First of all, any exit strategy should be correlated with a position sizing strategy.

     

    If you are a YM 1-contract daytrader it'd be unrealistic to expect to make 50pts off any given trade. Just stick to your basic exit strategy and don't care what the market does next unless you get another entry signal.

     

    If you trade more than 1 contract, scaling out might be the best fit simply because you take profits at different levels...and if you are lucky enough to catch a decent trend, you can take out most of the move with a single trade.

     

    Last but not least, what are your volatility expectations at the time of your trade? Is the market move led by important news announcements? Are all the other markets moving in synch? How fast is the market moving?

     

    If you look back at the FOMC minutes of last Wednesday, after the initial 30min chop, all markets finally took a direction and produce a rare parabolic upmove.

     

    That would have been a good time to get greedy simply because FOMC minutes often produces those types of moves. If you are lucky and good enough to be on the right side, just sit back and enjoy your profits...place your stop at BE + some and let it ride...those are the times you can make a shitload amount of money with minimum effort.

     

    In summary:

     

    1. If you trade 1 contract, stick to your basic exit strategy and take whatever the market is willing to give you at that time.

     

    2. If you trade more than 1 contract, scaling out is a good compromise and will allow you to catch most of the trend moves.

     

    3. Always monitor volatility. If volatility is high and markets are pushing, let it ride.

     

    IS

  23. Posted

    First of all, I didn't recommend anyone to not trade today. I will never recommend anyone on a public forum, I am not the type of person to make those calls.

     

    I said it wouldn't be a bad idea just in case you are having a good week, which means you've reached your weekly goals or possibly exceeded them.

     

    What if you're having a bad week? It depends on whether you want to close the week on a good note or postpone everything to next Tuesday.

     

    I would personally monitor the markets and only trade high probability setups with half the size I normally use.

     

    Don't forget that we've just had Existing Home Sales an hour ago and the decent popup was likely due to the news.

     

    I'm curious to see what the afternoon session will produce.

     

    As you can see, although I am not trading I am still watching the markets. I am very happy with my recent trading results and I just decided to give myself a long weekend as a little treat for my good trading.

     

    Taking days off is one of the most regenerating things a daytrader can do.

     

    No recommendation, just a personal belief.

     

    Good trading

     

    IS

  24. Posted

    A common misconception. There's always a reason to create to not trade - no Mondays, Fridays, week of holiday, week before holiday, summer, spring, winter, fall, full moons, half moons...

     

    Point being that to take a day off simply b/c of some idea is not a good idea in my opinion. I've actually found that some of these days can provide quick and easy moves since many traders take the same approach. It doesn't take much to push something around.

     

    Now, if your research has shown that in the way you trade that certain day(s) of the week and/or certain days revolving around certain event(s), then by all means take it off. If you are just repeating what so many other retail traders have been taught, I would suggest doing your own research.

     

    Of course this Fri could very well end up being a flat/boring day, but you won't know unless you are there. It could also be a volatile day like today. Nobody out there knows. You could argue that with Monday being closed, many traders will be opening/closing positions for the long weekend. You could argue that many traders will be at home sleeping, so stay away. Or maybe that's a reason to be here... food for thought.

     

    I understand that this type of information is all over the web and taught to newbies in books, magazines, etc. But unless the volume is zero, you know there's some persons there trading. And money to be made.

     

    Thanks for spending time to post a reply.

     

    If you read my post carefully, I specified that it wouldn't be a bad idea to take a long weekend just in case you've had a good week.

     

    I know a few institutional traders who work in London and they will be taking the afternoon off. Same as many American traders.

     

    I don't care what retail traders do, honestly. And I don't remember reading this stuff in books. I was told by professional institutional traders.

     

    Let's just say that I like to be around when the pros are around, as simple as that. If you think trading thin markets may create opportunities, good for you. I rather not take any chance.

     

    I am not afraid to miss any good moves simply because markets will be there tomorrow. One good trade won't make a difference in my P&L, I am not that desperate yet.

     

    IS

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