[Maelstrom]

Hello all,

My purpose with this thread is to detail my trading strategy and methods, and hopefully, help anyone who may be struggling to find a suitable and most importantly, profitable, way to trade.

I am mainly a daytrader, but a long-term daytrader, if that makes any sense. I take 1, maybe 2 trades a day, and look for gains of 60-100+ per trade on the YM. I have been posting my trades on my other thread "YM Daytrading", and try to post the entries and exits beforehand or as close to realtime as possible, and will continue to do so there.

I trade using support and resistance, simple candle/chart patterns, and no indicators. I will glance at volume from time to time, but I honestly have never seen anything useful enough in it to make it something I routinely watch. I know lots of traders use it with great success (don't flame me), and have all the respect in the world for those that use it well.

My frustration for many years was in determining WHAT is significant in price action. Why does support hold here, but it doesn't there? Why will price breakout now, but not an hour ago? Sound familiar? I have gone through 100s of indicators, training seminars, advisory services, and blown out numerous accounts. I have micro-traded, trying to catch every nip and tuck of the market, traded stocks, options, forex, futures, etc, spent 1000's of hours looking at charts, felt the elation of coming up with "THE SYSTEM", and felt the dark feeling of it failing and going back to square one.

For this thread, I would like to go into the details of my method, including in no particular order:

1. Using a sensible "timeframe" to see significant levels
2. How to confirm valid swings vs. noise
3. Validating support and resistance levels and how they can be used
4. Determining sensible (and profitable) entries, and most importantly exits

I would love for this to be a great discussion and discovery thread for all who contribute. I will try to be as clear and definitive in what I do as I can, and encourage everyone to jump in and offer ideas, suggestions, or new ways of looking at things. I am always learning, and that will never change.

Lastly, because I have read many boards and seen many things, I will state a few things now: I am not selling anything, not now or ever. The way I trade will be layed out, it is not rocket science, and there are no hidden indicators, EA's, or offers of "THE SECRET" for a bargain price of $97.99.

I am the first one to say, often times, I am as wrong as anyone can be. No market gurus here. The reason I am starting this thread is because I well know the feeling of despair, stupidity, worthlessness, <insert your word here> that trading can cause. I told myself a long time ago, if I could reach some level of success in this, I would pay it forward someday.


M

[Maelstrom]

I thought it would be worthwhile to go over the type of charts I use for trading.

All types of options out there for charting - time-based, tick, range, renko, P&F, etc. - pick your flavor. But for me, the most useful type of chart I have used has been range bars.

For me, price is what matters. Time really has very little impact on my trading, other than the obvious market close if I am day trading, and there are of course well known "reversal times" during the day (30 mins after open, lunchtime, etc).

With a range bar, if price is hesitating and chopping, the current bar simply stays just that - as the current bar. With time charts, a new bar will print regardless of the price action. Now, there is a tremendous amount of usefulness in seeing that chop in time-based bars for many traders and methods - it simply does not fit into what I see or do.

Where I think a time-based chart is useful in is showing momentum.... small range bars/chop, then a jump and long bars moving in a particular direction. Now that I am writing this, I guess the best way to describe what I look for is the market's directional "intention" versus the speed of the move in that direction. I will expand on this later.

YM 20 range chart and a 30 min chart attached to compare.

[Maelstrom]

Just thought I would show the clean look of another market with range bars. Trades are indicated with arrows, diamonds exit points. As a disclaimer, I DO NOT currently trade the ES, but I am considering using it as the instrument to focus on for this thread, since I have YM shown on my other thread.

[Maelstrom]

Ok, at the core of my trading is what I call market intention.

I guess it is similar to momentum, but it is more focused on directional movement/range versus the actual speed of the move.

What I am looking for is 3 or more consecutive bars closing in the direction of a move. For an upmove, as an example, I need 3 closed green bars. For a downward intention, 3 or more red bars. This is very similar to a candlestick formation known as "Three White Soldiers". More information on this formation is available at http://www.candlesticker.com/Cs63.asp

Attached is a chart of YM illustrating these....more to come.

M

[Maelstrom]

Ok, this is embarrassing, as I consider myself a pretty techie guy, but is there a way to embed images from a file into the body of a post versus it being an attachment?

Thanks!

[Maelstrom]

Ok, they say a picture is worth a thousand words....so here you go. This is the basic things I am looking for. There are a few more points for congestion times, support and resistance points, etc, but I will get to those.

Tried to make it as clear as possible, but, any questions, put them out there. I will expand more in coming posts.

M

[SIUYA]

no questions yet, but I am liking the simplicity of it all and at first look it would get you in at many of the same levels as anything else similar (breakouts etc) , but without too much complication....simple setup, alert and trigger.....I look forward to your expansion on it.

[pa18]

Hi M,

Thanks for sharing your ideas.

I love pure price and how it shows on renko, which I'm playing with now.

But I like to experiment with range bars again.

Do you (or anyone else) know of any reliable range bars indicator for MT4?

Thanks again,
Pete