[Beachtrader]

Originally Posted by Cory2679 »

Price has come within 0.1 tick of stopping me out of the same trade, but hasn't yet! (my stop is on the same place on the chart as yours, but must be very slightly higher)

That'd be so funny if somehow this turned around got to profit after that. Somehow I doubt it, though!

It took me out by 0.3 of a pip. The level I placed my stop at was 91.135 plus 2 pip spread (plus 0.5 for the landlord so 91.16) and it went to 91.143 plus spread or 91.163. It's certainly not moving very fast one way or the other is it?!

[Cory2679]

Originally Posted by thalestrader »

Looks like it would have been a decent short. Who knew? Anyone? Not me.

Unfortunately, not me. It was getting late and I was more focused on getting out at BE than what price may have been indicating.

Originally Posted by Beachtrader »

It's certainly not moving very fast one way or the other is it?!

No!!

I have to leave, so I'm going to just take the whole position out at my new, slightly more conservative PT1 or at my current SL.

[Cory2679]

Originally Posted by Cory2679 »

...I'm going to just take the whole position out at my new, slightly more conservative PT1 or at my current SL.

Well, stopped out of that one.

I am SOOO frustrated with myself so far this week. I am currently slightly DOWN for the week.

I'm not sure what my problem is. Maybe it's just simply the fact that it's only two days and isn't significant. I'm pretty close to BE for the week, anyway.

I honestly don't feel like my lack of success this week has anything to do with trading real money vs. demo money. I'm not sure what it is.

But yesterday, during the time I watch, even in hindsight I don't really have any "regrets." There just weren't any really good moves during that time.

I guess I could have done a little better today, though.



Oh well, I guess I'll just move on to tomorrow...I just hate this knot in my chest that I'm going to have for the rest of the day. I don't really feel like there's anything I need to do as a result of these couple of days to improve myself, other than come back tomorrow ready to go. If there was something, I'd do it...it'd make me feel better at least...it'd make me feel like I was being productive with my trading.

I don't know how in the world I could do as well as Thales's daughter when she started. That was amazing. I mean, I didn't expect to, but I couldn't help but hope to!!

-Cory

[thalestrader]

Originally Posted by zt379 »

I'm finding PT1's are being reached consistently.
Managing the trade in terms of PT2 and PT3 is an issue for me.
At these times they often conflict with seeing contrary trades...
Is it more a matter of determining what's been referred to as the "degree" of a move?
ie: the contrary trade we see may be a retrace trade within the larger move we are in.

PT1's are frequently hit, and PT2's far less often, and when I do use a PT3, it is nonetheless rarely achieved during the lifetime of the swings I tend to trade.

Let's take a look at scale of swings and degree of trend. Consider this week+ long rally in the Pound:



As I say in the chart text, depending upon the size of swings you wish to trade, there are many, many sequences, long and short, presented by price during the course of this overall uptrend.

You need to select the scale of swing you wish to trade, and then stick to it. I tend to trade what I think of as three different scales of swing. You do not want to mix them. If you look at the two long entries I had earlier, each was managed according to the swing that created the opportunity. If you are going to mix degrees, you want to use the larger to govern the smaller, rather than what many traders do - which is manage the larger using the smaller. That usually leads to unsatisfactory results. Let me use a friend of mine as an example.

My friend Mark is a generation older than I, and he therefore has lived long enough to have sense enough to value his time more than I value mine; or perhaps I need a level of activity that he finds ridiculous. At any rate, he trades far less often than I.

He trades the 6B, 6E, 6J, and as well as Notes and Bonds. He trades identically to me - S/R, watching for long and short sequences, etc. The only difference is that he trades for much larger swings than I. He does not trade with fixed targets. He uses a trailing stop that he keeps 10 ticks below the 61.8% retracement of the last swing low to current rally high for longs, and vice versa for shorts. Last week, he was stopped out of a short 6B for a profit. I do not know what his profit was but I think it was between 100-150 ticks and he was in it for a couple of days or so.

A day or so later, he initiated a long right around (probably just below) 1.6100. He has been trailing his stop ever since. So while I have had many trades on the 6B over the last 7-10 days, mostly longs, but some shorts as well, he has simply been moving his stop every 12-24 hours. Where I see a short, he doesn't see anything about which to get alarmed. Here is what his trailing stops look like (I am somewhat guessing here, but I think I am pretty close to how he manages his positions).



You see, if Mark calls me when he is in a long trade and I say I'm short, he wishes me well and hopes I get to my target. Why? Because he knows he is trading a degree of movement so much larger than I, that I can make an 80 tick profit on a short without the stop on his long ever getting threatened. If he were to adjust his stop based upon my short opportunity, he's have been stopped out of his trade less than a day after entry. However, if I were to get long now based upon my own scale of swing/degree if trend, I might be well served to take heed of his stop in planning my trade.

Once you decide what scale you are trading,then you need to become proficient at identifying changes in the trend related to that scale. This seems to be the most difficult aspect of this approach. I would suggest that you use fib's to help you initially. If a swing up off a low retraces 1/3-2/3 and then resumes the rally, those two swings are of like scale, and can be counted as two separate swings. If, on the other hand, a swing up off a low retraces less than a third, then that retracement should be considered part of the swing off the low, and not a separate swing. This is so even if the swing up is one "bar" and the retracement a new "bar" Price moves as a flow, and not as discreet packages called bars.

The key value to fibs is not that they are some "magical" or "mystical" system of numbers that price "obeys." What they do do is that they provide you with a sense of proportion with respect to price movements, and how the various wiggles of all sizes fit in with one another. And that really is all. S/R is still the paramount consideration. But S/R is rarely so nice as to "pick a tick" for us to key off of, but instead presents us with zones. Fibs help us to choose a proportionately appropriate level within that zone for us to watch. After a while, you will not need a fib tool at all. I rarely use it myself except to annotate charts to illustrate what I am doing for others. Otherwise, I can basically look at a swing, and by free hand draw in the 1/3, 1/2, ans 2/3's retracement levels and the 1, 1.27, 1.618. 2.618, and 4.23 expansion levels. Now, I am not always right to the tick, but I very often am. That comes from watching a lot of charts over a long period of time. I think the main source of confusion here with this approach is that it really does come down to being able to recognize degrees of price movement while not confusing or, as our thread friend Marko says, "mixing" them. As Blowfish said, it would have been nice if this discussion had been introduced earlier in the thread. My assumption was that this is the easy part. Apparently I was wrong.

I hope that helps.

Best Wishes,

Thales

[TradeRunner]

Monday: No trades taken
Tuesday: 1 trade (+32)

[thalestrader]

Originally Posted by TradeRunner »

Monday: No trades taken
Tuesday: 1 trade (+32)

Excellent! Too bad we don't know ahead of time which trades are going to be runners and which trades are just range travels, right?

Great job, TradeRunner!

Best Wishes,

Thales

[Kiwi]

Originally Posted by thalestrader »

Looking at the EURUSD, you can see the change in character of the swings from choppy uptrend to sideways chop zone. A break either way out of the zone would have been a reasonable entry, i.e. long above or short below. Someone should have been able to make 100 ticks last night without too much emotional effort as the decline looks to have been very easy to sit through.

Best Wishes,

Thales

What percentage of breaks out of the chop zone are this strongly directional?
If the answer was high I suspect you'd want to drop down a to 5m or 1m to find a 123 to anchor your trade after the breakout??

[jonbig04]

Originally Posted by thalestrader »

I guarantee you are not the only one reading this thread who trades the ES, and I would encourage whatever contributions you wish to share here with respect to your ES trades.

Besides, its all charts ... if this S/R stuff works, it had better work regardless of the market so long as that market is liquid and freely traded, right?


Best Wishes,

Thales

That's true! I always tell people if the whole world collapsed into anarchy I could still trade various goods as long as I had access to recent prices, some graph paper, and a pencil. Of course I'm not sure if that would actually work haha, but that is how fundamental I believe S/R to be.