Keeping it simple

This is a discussion on Keeping it simple within the Discretionary Trading forums, part of the Methods category; the Thai stock market (SET 50 Futures) rose abruptly on today's Open, then crashed mid-morning back to the opening level. ...

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Old May 2, 2012, 6:06am   #16
 
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Joined Jun 2007
Re: Keeping it simple

the Thai stock market (SET 50 Futures) rose abruptly on today's Open, then crashed mid-morning back to the opening level.
I just showed the chart to my 3 year old daughter and asked her if it will go up or down.
She said down, so that's good enough for me to take a Short...I'll report later :-)
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Old Jul 12, 2012, 9:51pm   #17
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Re: Keeping it simple

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Originally Posted by rathcoole_exile View Post
the Thai stock market (SET 50 Futures) rose abruptly on today's Open, then crashed mid-morning back to the opening level.
I just showed the chart to my 3 year old daughter and asked her if it will go up or down.
She said down, so that's good enough for me to take a Short...I'll report later :-)
How did she do calling the direction?
I have a 1 year old but it's a struggle making sense of whether she's saying up or down for now.
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Old Jul 23, 2012, 5:31pm   #18
hgh
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Re: Keeping it simple

risk management is more important than picking trades,when the storm comes, early on I would have stretches of profitable trades and wipe all my gains with one bad trade.
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Old Jul 28, 2012, 12:21pm   #19
Joined Apr 2009
Re: Keeping it simple

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Originally Posted by jfink View Post
I've been trading in my spare time for several years and so far without consistent results. Over time I've tried many differnt methods from moving averages to many of the popular indicators (i.e. stochastics, RSI, momentum, etc.).

I can't help but think it really just boils to identifying support and resistence and placing your trades and stops off of these levels.

Could it really be as simple as nothing more than a chart of the price action and volume, no more no less? I think I've been making this more difficult than it needs to be.

Any thoughts?
Hi. Jfink. I have spent 5 years working at a prop trading firm and can categorically tell you that none of our trades are based on systems that incorporate conventional technical indicators. S/R is all that needed to be able trade and beat the markets consistently. It is not simple though.
The following difficulties are forever present; Firstly, not all S/R levels are created equally. The key to drawing effective S/R levels is in being able identify price levels that have the most psychological impact on market participants.
Being able to identify where a large number of market participants who are long/short will want to take profits, losses or close at break even, being able to identify where a large number or market participants who are not currently in the market are likely to want to get into the market and being able to identify where market participants who are already long/short would likely add to positions are a few of the aspects that critical in calculating the S/R levels that are actually worth trading off. Having a good understanding of where the most stop and limit orders are is also critical to trading S/R effectively.
The following points are all learnable through experience but are not really something that can be incorporated into a rigid system because they are forever changing with the flow of the market.
Furthermore, once you understand how to identify the S/R levels that are worth trading off you still need to overcome the common pitfalls of losing traders; poor money management, a lack of confidence, too much confidence, not trading off a plan, not keeping records, not having patience, having unrealistic expectations of how much money you could make, having a false belief that you can predict market direction, constantly changing your approach because you do not understand the expectancy of an edge. Etc. these are just some of the many things that mean no trading methodology is ever simple or easy. I trade exclusively from S/R levels and have a video blog that I make every day that highlights my trading plans for the day and the levels that I consider important.. It is completely free and invite you to send me a private message if you would like a link to it. Best of luck with your trading.
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Thanks! The following members like this post: rathcoole_exile
Old Jul 28, 2012, 12:30pm   #20
Joined Jul 2012
Re: Keeping it simple

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Originally Posted by hgh View Post
risk management is more important than picking trades,when the storm comes, early on I would have stretches of profitable trades and wipe all my gains with one bad trade.
Both are important. In trading, every small little things that are part of a bigger profit making plan are important. They all work together.
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Old Aug 7, 2012, 8:35am   #21
 
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Re: Keeping it simple

Quote:
Originally Posted by jfink View Post
I've been trading in my spare time for several years and so far without consistent results. Over time I've tried many differnt methods from moving averages to many of the popular indicators (i.e. stochastics, RSI, momentum, etc.).

I can't help but think it really just boils to identifying support and resistence and placing your trades and stops off of these levels.

Could it really be as simple as nothing more than a chart of the price action and volume, no more no less? I think I've been making this more difficult than it needs to be.

Any thoughts?
Hey man I am pretty much in the same boat as you are. I have been researching trading for over a year with not much success. I use a reletively simple strategy; 50sma and price action on daily bars but I think the main delema for me is psychologically losing money. Any thoughts?
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Old Aug 7, 2012, 9:09am   #22
 
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Joined Feb 2012
Re: Keeping it simple

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Originally Posted by Mps721 View Post
Hey man I am pretty much in the same boat as you are. I have been researching trading for over a year with not much success. I use a reletively simple strategy; 50sma and price action on daily bars but I think the main delema for me is psychologically losing money. Any thoughts?
re - psychologically losing money

you just have to learn to take small losers if you cannot do that you will fail. The quicker you realise this and implement it the better. Of course there are a few traders out there who are profitable with average loser bigger than average winner however they are in the minority.

It's a bit like quitting smoking or dieting or whatever it is, until YOU decide you are going to cut your losers you cannot move forward. find your edge then cut your losers with good money management, only then can you move forward.
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Old Aug 7, 2012, 9:11am   #23
 
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Re: Keeping it simple

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Originally Posted by sweatyslouch View Post
Hi. Jfink. I have spent 5 years working at a prop trading firm and can categorically tell you that none of our trades are based on systems that incorporate conventional technical indicators. S/R is all that needed to be able trade and beat the markets consistently. It is not simple though.
The following difficulties are forever present; Firstly, not all S/R levels are created equally. The key to drawing effective S/R levels is in being able identify price levels that have the most psychological impact on market participants.
Being able to identify where a large number of market participants who are long/short will want to take profits, losses or close at break even, being able to identify where a large number or market participants who are not currently in the market are likely to want to get into the market and being able to identify where market participants who are already long/short would likely add to positions are a few of the aspects that critical in calculating the S/R levels that are actually worth trading off. Having a good understanding of where the most stop and limit orders are is also critical to trading S/R effectively.
The following points are all learnable through experience but are not really something that can be incorporated into a rigid system because they are forever changing with the flow of the market.
Furthermore, once you understand how to identify the S/R levels that are worth trading off you still need to overcome the common pitfalls of losing traders; poor money management, a lack of confidence, too much confidence, not trading off a plan, not keeping records, not having patience, having unrealistic expectations of how much money you could make, having a false belief that you can predict market direction, constantly changing your approach because you do not understand the expectancy of an edge. Etc. these are just some of the many things that mean no trading methodology is ever simple or easy. I trade exclusively from S/R levels and have a video blog that I make every day that highlights my trading plans for the day and the levels that I consider important.. It is completely free and invite you to send me a private message if you would like a link to it. Best of luck with your trading.
that's a great post Mr Slouch, agree with everything you have said.
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Old Dec 4, 2012, 3:16am   #24
 
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Re: Keeping it simple

jfink started this thread
Quote:
Originally Posted by Mps721 View Post
Hey man I am pretty much in the same boat as you are. I have been researching trading for over a year with not much success. I use a reletively simple strategy; 50sma and price action on daily bars but I think the main delema for me is psychologically losing money. Any thoughts?
It took me awhile to stop turning trades into investments. What helped me turn the corner was realizing that money management (how much to risk on a trade) and determining an exit plan upfront were more important than what trade I was taking. In the past I would spend all my time researching what trade to take and then "throw" some money at it. when it went against me, my only reaction was to find a reason why I should hold it as a long term investment. If it's wrong, just sell it and move on.
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Old Dec 4, 2012, 3:24am   #25
 
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Re: Keeping it simple

jfink started this thread
Quote:
Originally Posted by sweatyslouch View Post
Hi. Jfink. I have spent 5 years working at a prop trading firm and can categorically tell you that none of our trades are based on systems that incorporate conventional technical indicators. S/R is all that needed to be able trade and beat the markets consistently. It is not simple though.
The following difficulties are forever present; Firstly, not all S/R levels are created equally. The key to drawing effective S/R levels is in being able identify price levels that have the most psychological impact on market participants.
Being able to identify where a large number of market participants who are long/short will want to take profits, losses or close at break even, being able to identify where a large number or market participants who are not currently in the market are likely to want to get into the market and being able to identify where market participants who are already long/short would likely add to positions are a few of the aspects that critical in calculating the S/R levels that are actually worth trading off. Having a good understanding of where the most stop and limit orders are is also critical to trading S/R effectively.
The following points are all learnable through experience but are not really something that can be incorporated into a rigid system because they are forever changing with the flow of the market.
Furthermore, once you understand how to identify the S/R levels that are worth trading off you still need to overcome the common pitfalls of losing traders; poor money management, a lack of confidence, too much confidence, not trading off a plan, not keeping records, not having patience, having unrealistic expectations of how much money you could make, having a false belief that you can predict market direction, constantly changing your approach because you do not understand the expectancy of an edge. Etc. these are just some of the many things that mean no trading methodology is ever simple or easy. I trade exclusively from S/R levels and have a video blog that I make every day that highlights my trading plans for the day and the levels that I consider important.. It is completely free and invite you to send me a private message if you would like a link to it. Best of luck with your trading.
Great points. Do you use any time and sales information to gauge market strength or weakness when price approaches an S/R level?
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Old Dec 4, 2012, 3:27am   #26
 
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Re: Keeping it simple

jfink started this thread
Quote:
Originally Posted by sweatyslouch View Post
Hi. Jfink. I have spent 5 years working at a prop trading firm and can categorically tell you that none of our trades are based on systems that incorporate conventional technical indicators. S/R is all that needed to be able trade and beat the markets consistently. It is not simple though.
The following difficulties are forever present; Firstly, not all S/R levels are created equally. The key to drawing effective S/R levels is in being able identify price levels that have the most psychological impact on market participants.
Being able to identify where a large number of market participants who are long/short will want to take profits, losses or close at break even, being able to identify where a large number or market participants who are not currently in the market are likely to want to get into the market and being able to identify where market participants who are already long/short would likely add to positions are a few of the aspects that critical in calculating the S/R levels that are actually worth trading off. Having a good understanding of where the most stop and limit orders are is also critical to trading S/R effectively.
The following points are all learnable through experience but are not really something that can be incorporated into a rigid system because they are forever changing with the flow of the market.
Furthermore, once you understand how to identify the S/R levels that are worth trading off you still need to overcome the common pitfalls of losing traders; poor money management, a lack of confidence, too much confidence, not trading off a plan, not keeping records, not having patience, having unrealistic expectations of how much money you could make, having a false belief that you can predict market direction, constantly changing your approach because you do not understand the expectancy of an edge. Etc. these are just some of the many things that mean no trading methodology is ever simple or easy. I trade exclusively from S/R levels and have a video blog that I make every day that highlights my trading plans for the day and the levels that I consider important.. It is completely free and invite you to send me a private message if you would like a link to it. Best of luck with your trading.
I'm at 6 posts, let me post a few more times and then I'll pm you for that link! thks
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Old Dec 4, 2012, 6:56am   #27
Joined Sep 2012
Re: Keeping it simple

Hi Jfink,
Don't forget to pm me too for that link, and thanks in advance.
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