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thalestrader

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This si the 6J futures contract, which trades inversely to the USDJPY pair. I am not trading this one, but I thought I'd post it as for some reason, this little long attempt feels right to me. However, I do try as much as possible to stay out when price is chopping and flailing about, so I will no place an order. Had price broken below the ow of the consolidation off the high and then presented this activity, I'df have traded it.

 

Best Wishes,

 

Thales

5aa70fb3d2ab1_2010-01-256J1.thumb.jpg.c5091b7313336d055686c70f3729fe49.jpg

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Do you ever look for any types of setups that occur early in the morning on futures Thales?

 

For example, this little short on the ES triggered at 7 AM EST. Now, I did not have myself ready and set to go at 7 AM this morning, but had I been logged on to my trading platform, I'd have happily shorted the ES given the level it had reached and how it acted once it got there, (I see a 1-2-3 H-L-LH - do you?)

 

attachment.php?attachmentid=18274&stc=1&d=1264424532

 

on the chart, the red rectangle = resistance zone, blue line defines entry, red line defines stop loss, and dotted green lines are profit targets. Except for the American afternoons after 2:30 PM EST or so and up to about an hour before the Tokyo open, if I'm paying attention and opportunity presents itself, I trade it.

 

Best Wishes,

 

Thales

5aa70fb3d7d23_2010-01-25ES1.thumb.jpg.f174614b84f47d0769639736407f0a75.jpg

Edited by thalestrader
added "PM" to 2:30 EST

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Once you start getting close to you PT, you have to start thinking in terms of how much are you willing to risk to get that extra 15, then 10, then 2 ticks?

 

 

PS - about the TP. I have got within 2 pips of my TP and watched it reverse. Its a toughie but if you stick to your rules it usually pays off over time. I have to have rules because if I do it discretionary it doesn't usually work for me.

 

I have done the same thing more often than I care to remember. And I agree that having rules, or at least strict guidelines is a must for the discretionary trader to keep his or her emotions in check.

 

From a risk standpoint, risking open trade equity is different from risking closed equity (I'd much rather give up a 2% open profit on a trade than 2% of the equity with which I started the day. But, equity is equity as well). My view has evolved to this point: While I am often correct in picking the right tick at which to place my profit target, there will be times that I am off several ticks. So, when price to within 10 ticks or less of my profit target, I will start to get more aggressive in managing the stop so as to keep as to maintain a decent risk reward profile. If I was willing to wisk 20 ticks initially to win a potential 40 ticks, and rice moves favorably by 38 ticks, am I willing to risk all of those 38 ticks to win just two more? I'm not, but that is me. I do not have a mechanical way of managing my stops at that point, but if I am within 2 ticks of a PT (t-2), and I am actively monitoring the trade, I might move my stop to t-10, maybe t-5, maybe t-15. It depends on how price has been moving during the course of the trade.

 

I'm not disagreeing with you, as I truly do not believe there to be a right or wrong on this issue. I'm just trying to be a bit more clear on why I think and act as I do on this matter.

 

Best Wishes,

 

Thales.

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Current look at the EURGBP. I have never traded this pair, and it just does not seem to move enough to warrant watching it on a a 15 minute chart to warrant trying to day trade it. However, on a long term basis, I would like to try long position type trade on it (I posted daily/weekly charts last week).

 

This is how it looks on the 60 minute to me - a potential short opportunity retracing some if not all of its recent rally.

 

Best Wishes,

 

Thales

5aa70fb3e20c5_2010-01-25EURGBPHourlySell1.thumb.jpg.947adf22fc031df9085ea6a570b4ce92.jpg

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I'm having to use Massive Crazy Clown Car Leverage to trade, and if I get two trades in a row wrong, that will probably end this account.

 

... now that is trading at the hard right edge! I didn't know you had a spot account - I thought you were emini's only. I would never have had you pegged as a closet bucket shop trader, jands.

 

Best Wishes,

 

Thales

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What do you do here? You are short off the above scenario at 1199.75, and you have taken a 3.25 point profit on 1/2 of your position off a 2.25 point risk.

 

attachment.php?attachmentid=18275&stc=1&d=1264428051

 

 

Best Wishes,

 

Thales

 

Maybe consider closing all of the position out once price printed that that HL?

 

At very worst you'd have that other half of position at BE at this point?

 

Possible SAR there with that possible HL, but is that swing worth any size to really bother with it.

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Maybe consider closing all of the position out once price printed that that HL?

 

At very worst you'd have that other half of position at BE at this point?

 

Possible SAR there with that possible HL, but is that swing worth any size to really bother with it.

 

My inclination would be to hold short with a break even stop. What you say about the swing is important. The short sequence at the highs that gave the sell indication was very "small," but taken as the first sell indication at the end of the larger rally from Friday's lows occuring at what I think all would agre was a recognizable resistance zone, then it was very "large." The swing you refer to is larger than the short sequence, but small compared to the overall trend. Big picture says the down trend is still governing price action, so I'd hold the short and ignore any long indications, at least until price fills the gap, and preferable tests last week's lows.

 

Best Wishes,

 

Thales

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... now that is trading at the hard right edge! I didn't know you had a spot account - I thought you were emini's only. I would never have had you pegged as a closet bucket shop trader, jands.

 

Best Wishes,

 

Thales

 

We all have skeletons in our closet:doh:

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es experiment, attempt to use this method to aid in other ideas. if these are off topic let me know.

 

No problem, though in order to include all of us, a few words explaining the "other ideas" would be appropriate, right?

 

Best Wishes,

 

Thales

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Current look at the EURGBP...

This is how it looks on the 60 minute to me - a potential short opportunity retracing some if not all of its recent rally.

 

All in all a fairly choppy and sloppy day; however, the EURGBP has made steady progress towards its firt profit target.

 

Best Wishes,

 

Thales

5aa70fb40212d_2010-01-25EURGBP1.thumb.jpg.c710823eece965d29d47fbca60b386e2.jpg

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All in all a fairly choppy and sloppy day; however, the EURGBP has made steady progress towards its firt profit target.

 

Best Wishes,

 

Thales

 

Thales, a question on exiting prior to the initial stop. I am attaching a picture of a trade, and possible stop management scenarios.

 

And this is something you've mentioned before in the thread a long time ago. And you said something to the effect of, "if price barely nics my entry, and immediately turns around to the tic and heads the other direction, I am getting out with a loss."

 

There are two scenarios, and good for my question too as they happened back to back today.

 

Looking back this First Red Arrow was not a super great trade for various reasons, but my question is about trade management. The entry was 1802.00, priced moved to 1801.50, so 2 tics and that was the depth of the move before moving back towards the most recent swing high.

 

I wound up taking a stop of 1805, where the initial stop was up at 1809.25.

 

Looking at this Second Red Arrow, the entry was 1801.25, but unlike the last trade that moved only 2 tics before riding way back up, this one immediately moved down to and past the 1.27 extension and close to P1. Before coming back to the BE stop.

 

Would you say this is a common characteristic of how price acts when you exit premature to you initial stop? Are these two scenarios I've described common? Do you have a mechanical way to pull the chord early when price doesn't IMMEDIATELY move more than 1 or 2 tics in your favor, or a set amount you must see price move before committing to a trade?

 

attachment.php?attachmentid=18283&stc=1&d=1264440580

exitearly.jpg.16fd8c500e348c977c26b91230ada984.jpg

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No problem, though in order to include all of us, a few words explaining the "other ideas" would be appropriate, right?

 

Best Wishes,

 

Thales

 

fair enough.

other ideas= volume at price/market profile for support resistance levels.

applying current understanding of the price volume relationship on the 5 min es traverses as discussed in other threads.

When I first saw your methods I thought it might be a way to add confirmation to the areas of uncertainty which cause an inability to take live trades. My plan is to use what I know about the 5min es traverses and when appropriate use a 500 tick chart for entries. This morning I was unsure of the dominant side of the market so was using strength of delta(buy-sell volume) to enter on pullbacks or breakouts of your patterns on the 500 tick chart. Original thoughts on profit taking will be based on volume/pace levels. If low, scalping a point or 2 would be in order. If strong pace, holding until PV tells me it's time to exit.

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Would you say this is a common characteristic of how price acts when you exit premature to you initial stop? Are these two scenarios I've described common? Do you have a mechanical way to pull the chord early when price doesn't IMMEDIATELY move more than 1 or 2 tics in your favor, or a set amount you must see price move before committing to a trade?

 

No more mechanical tha I described here in the past: I match various fib levels up S/R levels. The 1.27 is typically a BE point for me, though depending upon the size of the swing that got me into the trae and the depth of the pullback prior to the trade triggering, I will sometimes use the 1.38 or 1.618 as my BE level.

 

As far as "common," I guess I would say that it is common for me to exit quickly if price just stops me in a by a tick or two and then pops up 5 or 6 ticks. I would also say that if price moves immediately in my favor, then more often than not it hits the 1.27 before coming back to break even (if it comes back at all).

 

I would caution that while this approach works in all liquid markets, each has its own character. For example, the ES is better traed after a breakout level has tested and hels at least twice and over several minutes (the more the better it seems at times). Whereas the currencies often break a level and move directly to the next anticipated S/R level.

 

I don't know if i answered your questions or not, Forrest, because I am not quite sure I understood them. I hopt that helps.

 

Best Wishes,

 

Thales

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My plan is to use what I know about the 5min es traverses and when appropriate use a 500 tick chart for entries ... Original thoughts on profit taking will be based on volume/pace levels. If low, scalping a point or 2 would be in order. If strong pace, holding until PV tells me it's time to exit.

 

Sounds good ... I look forward to seeing your trade examples and watching you develop your own take on the two approaches and the manner in which you combine them. Not all of us here are as familiar with the P/V material that you use, so when you post a chart, if you could include some "P/V" for the non "P/V'er" it would be very much appreciated.

 

Best Wishes,

 

Thales

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While I find volume useful for swing trading stocks based on daily chart information, I have not found it useful for day trading. As for spot currencies, I am not sure you can even get accurate data on volume, as you are only going to get the volume traded at your market maker (at least I assume so, unless someone has put together an aggregate feed that taps into the multitude of bucket shops). I myself do not use volume at all for day trading any instrument. However, I'd be interested in seeing how others apply volume to making trading decisions in real time (entering, managing, exiting a trade).

 

Best Wishes,

 

Thales

 

I use it! But I don't "analyze it". I just use it to signal a rise in activity, which may or may not be important. Many times the highest bar before a reversal to the downside, and the lowest bar before a reversal to the upside, are printed on large volume. I could probably just use price expansion, but I like the unequivocal high volume bar on the bottom of the screen.

 

I should mention that though there always seems to be high volume at S/R, it doesn't signal whether that S/R is going to hold or not (at least not for me). For me, it just reaffirms my belief that many others are watching that level too, which is of course what S/R is all about. I have never been able to use volume to give me any sort of directional edge.

 

I also use it for breakouts. Once again, I could probably just use price expansion, but as long as I keep volume in the context of what price is doing, it's helpful for me.

 

For example, in a breakout the the upside I look for what I call climactic volume (as is in completely larger than anything else around), along with price rising higher and higher. To me this signals all kinds of new demand entering the market and hopefully could mean me catching a runner.

 

Just my 2 cents.

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Nearly six hours to make 40 ticks! What a day this has been. I did not get in on the long 6B,a nd the 6E and 6J have gone nowhere. If it weren't for Lorillard (an old Darvas favorite, by the way) I'd have not had anythin from my stock trades. As it is, thanks to Brownie, I've been sim trading crude on Ninjatrader like it were video game.

 

Anyway, the one bright spot in currencies for me today was this hourly sell on the EURGBP.

 

Best Wishes,

 

Thales

5aa70fb42639e_2010-01-25EURGBP2.thumb.jpg.52e00c5c89117126d5e881eaec3d68b3.jpg

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This is a very useful observation. It is confirmed by a rule from Neely, which basically says

 

"If it channels, it is most probably corrective."

 

Your hint, to short from the top, is great; thanks, that never came to me.

 

Been away for a bit and was tempted to simply skip the 25+(!) pages in the last few days. This little exchange between Marko and TT made me glad I didn't. Simple observations like this have quite profound implications :)

 

Conventional wisdom would have you avoid shorting an up sloping channel. This used to be a favourite trade and one that I would even short into the up momentum just outside the channel (it will often prod out before moving back just as fast) provided there was somewhere sensible to place a stop.

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Nearly six hours to make 40 ticks! What a day this has been. I did not get in on the long 6B,a nd the 6E and 6J have gone nowhere. If it weren't for Lorillard (an old Darvas favorite, by the way) I'd have not had anythin from my stock trades. As it is, thanks to Brownie, I've been sim trading crude on Ninjatrader like it were video game.

 

Anyway, the one bright spot in currencies for me today was this hourly sell on the EURGBP.

 

Best Wishes,

 

Thales

 

 

What a clean trade thales, very nice.

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Been away for a bit and was tempted to simply skip the 25+(!) pages in the last few days. This little exchange between Marko and TT made me glad I didn't. Simple observations like this have quite profound implications :)

 

Conventional wisdom would have you avoid shorting an up sloping channel. This used to be a favourite trade and one that I would even short into the up momentum just outside the channel (it will often prod out before moving back just as fast) provided there was somewhere sensible to place a stop.

 

Thanks for supporting Thales' hint.

 

Currently these wedges fascinate me. I overlooked them far too often.

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