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quantumtrader

Wholesale Trading

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This is my first thread here on Traders Laboratory and I just want to get it out there that I think this is a great resource for any trader to use and contribute to.

 

To give everyone a little background I am in the process of building a trading system with as the least number of indicators as possible. Now I do not want people to start arguing whether price is a indicator or not, whether trend-lines are indicators, whether support&resistance is a indicator, all I am using at the moment is support and resistance and the naked chart.

 

The pros have a different idea of where value is in the market or where they would enter a buy or sell depending on market conditions. A good example I keep hearing is that professional traders enter long below the support or short above resistance.

 

My question is quiet simple, do any of you trade in a similar matter with pure price chart no matter what time frame and support and resistance as a guide?

 

Cheers

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Absolutely. I try to keep my charts as clear as reasonably possible and this is important for me. However, there are two caveats. Firstly I have analysed the market already so I have context. Secondly I watch the market and order flow realtime.

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My question is quiet simple, do any of you trade in a similar matter with pure price chart no matter what time frame and support and resistance as a guide?

 

I do not trade pure price chart. if that means that I use no other indicators. I do use other lower study indicators. But for my base chart (price chart) all I use is price levels. Nothing else.

 

Sometimes the price peaks after breaking resistance, sometimes it doesn't. It depends on whether the price closes over resistance or not. If the price breaks resistance, even by a lot, but fails to close over, that's a sign of weakness. Peaks and valleys often have a price bar with a long tail on the bar or candle. There is also the situation where price hits resistance multiple times, but the high never goes over.

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If you are interested in Price Action then Point and Figure or RENKO can be a good option to consider there are many scripts for Meta Trader 4 platform that you can find to create Pure Price Chart and can create Support/Resistances to make a trading decision.

 

To me price charts are better options for a impatience trader like me :-D I use it on MT4 with Renko and happy with it. :)

 

Hope it helps.

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I trade intra-day with clean charts, except for the Volume in the lower frame of the charts. I watch simultaneously a daily chart and a 5 min. chart of the stock I´m trading, with an eye on the market.

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I agree with the previous two posters. Renko charts give you a very clean indication of trend, support/resistance and congestion. Volume is also extremely useful if you're simply looking at a naked chart. There's a thread here that focuses on volume price analysis that you may find helpful. I'd add one more element, and ties in with the comment on doing your homework before the session starts, and that is to also take a look at your markets on a higher time frame. Going to a daily or even weekly chart will help you gauge the markets trendiness or degree of consolidation, and that will make it easier for you to decide whether you'll take breakouts of S/R or fade them. I'll be looking forward to hearing how you progress with your strategy.

Good luck.

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When I'm trading on a 'non-indicator' chart, I like to look for the 2nd leg of a move. Taking a 2 minute chart for example, on the TF maybe, if a down swing fails to make a new low, and then the price moves higher, breaking what could be considered the 2 point, on your typical, 1,2,3 bottom I'll look for a 1/3 to 2/3 pullback (approximately) after that move, and then look to take a long trade from there. The idea is to catch a 2nd move that approximates the first move. You see this in your typical stair stepping trend but sometimes you don't get a trend but you do get a couple good legs where the 2nd one becomes a reliable a predictable price move. These are some of my favorite trades. The trick is knowing when the in between pullback move ends.

 

I do use an indicator for this idea, but only as a 'marker' for where I want to see this reaction pull back to, and then bounce off of. Of course it's the bounce that I'm interested in. I then use one of 2 measurement techniques to project my target where I exit part of my position and trail the rest. I do this in the opposite direction too. It doesn't have to be a 2 minute chart either. That's just an example. You can find a few good trades like this on most sessions using a 15 minute ES chart, for example. YM and NQ also work well with this technique.

 

Like what was stated above, you have to put it in context to the bigger view of what's happening in the market and look for your best setups. In fact, on some markets this same technique works well breaking out of sideways choppy action. Look for the second leg. I like the reversals that give that good first leg because the 2nd leg becomes very clear and the risk:reward ratio is very favorable. The stop goes right beyond what I identify as the end of the so-called reaction move. And since the reaction is only 1/3 to 2/3, and I'm looking for the 2nd leg to approximate the first, the r to r is good.

 

I view these types of trades as 'trades of opportunity' and fit them into my trade session outside of my regular trade system or tradeplan. My tradeplan allows for these types of trades, in other words, and I'm always on the lookout for them. It takes a little practice and it makes sense to learn how to get good at identifying these setups and trying it on paper for a while before trying it with real money.

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