my journal 2

This is a discussion on my journal 2 within the Trading Journals forums, part of the Reception category; Examples of the 4 types of trades I am studying: 1. Breakout above resistance (40): LONG opportunity (ongoing example) SECOND ...

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Old Feb 1, 2010, 6:51pm   #141
 
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re: my journal 2

travis started this thread Examples of the 4 types of trades I am studying:

1. Breakout above resistance (40): LONG opportunity (ongoing example)
SECOND MOST FREQUENT SITUATION
snap1.jpg
Have learned to be profitable with these trades (it seems easy now).

2. Bounce on support (12sh): LONG opportunity (ongoing example)
MOST FREQUENT SITUATION
snap2.jpg
Have learned to be profitable with these trades (it's a little harder than with breakouts above resistance).

3. Breakout below support (30): SHORT opportunity (ongoing)
LEAST FREQUENT SITUATION
snap3.jpg
Have NOT learned to be profitable with these trades (I think it will be the hardest thing to learn).

4. Bounce on resistance (100): SHORT opportunity (it happened already)
THIRD MOST FREQUENT SITUATION
snap4.jpg
Have NOT learned to be profitable with these trades (I think I'll be able to learn soon).


You see that I am not using the concept of trend. The trend is a confusing concept to me when I am talking about support and resistance and I'd rather translate it as follows. "Uptrend" is a breakout above resistance. "Down trend" is a breakout below support. The other two situations are "range". Since all these patterns are necessarily oversimplified we have to draw some lines somewhere. Obviously nothing is clearly defined like in geometry. This is how I prefer to draw my lines and make my simplifications.

In terms of how often these 4 situations happen, I am just referring to the charts of the "chart game". Don't object that the EUR is different or other things. I am ony talking about the charts I am playing and it's just an estimate. I am open to changing my mind, if someone shows me I am wrong.

I realize that all these situations and their frequency all depend on how you define s/r, trend... and I don't know yet a univocal way of defining s/r or else I would have automated it already. But if there's no univocal way of defining s/r, then it's not going to be easy to discuss them.

Lowest low, swing low... there's some formulas out there that attempt to define them, but I suck at formulas anyway. Let me know if you can help me in any way regarding these matters.

Last edited by travis; Feb 1, 2010 at 9:32pm.
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Old Feb 1, 2010, 8:18pm   #142
 
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Market Wizards: Richard Dennis (again)

travis started this thread Here's another interesting quote by Richard Dennis from Jack Schwager's Market Wizards:

Quote:
A trend could easily be defined using a simple system. Is there something special that you look for to define a trend?
No. If I see a trend developing, I know eventually I'll have to get in. The question is whether I get in earlier or later, and that might depend on how I see the market reacting to news. If a market goes up when it should go up, I might buy earlier. If it goes down when it should go up, I'll wait until the trend is better defined.
This stuff about using the news jointly with technical analysis is tempting me, as all these traders interviewed in Market Wizards do it.
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Old Feb 1, 2010, 8:22pm   #143
 
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re: my journal 2

travis started this thread Here's two links I am looking at, in order to try and connect how the market (in my case, the dollar) is reacting to the news:

http://www.dailyfx.com/calendar/
http://biz.yahoo.com/c/e.html

From dailyfx.com, I find out that this is today's most important news:
USD ISM Manufacturing (JAN)

Here I find out what it means:
http://www.wikinvest.com/index/ISM_Manufacturing_Index

Here I read the forecast:
http://biz.yahoo.com/c/e.html

So I find out that the news was better than expected (58 instead of 55). Also more on this here:
http://jutiagroup.com/2010/02/01/the...spired-by-ism/
http://finance.yahoo.com/news/Stocks...&asset=&ccode=

So I will now look at my charts (currencies and stock indexes) and see if they show a good reaction at 9 CST or not...

YM
ym.jpg

EUR
eur.jpg

They had an impact, definitely. But just up and down impact, on both YM and EUR chart, and causing more volatility on the EUR chart. However, both markets kept on going where they were going earlier, regardless of the news. The dollar to the euro slightly down, and the YM higher.

Of course I still don't know enough to weigh this kind of news or any news. For now the good info I'll retain is that from the above web site I know when the news will come out and I know which news will affect the market's volatility. Unfortunately I am rarely home, or else I could trade the news quite easily (they make prices go one way and then come back very quickly, 5 minutes up and then 5 minutes down, or viceversa).

Last edited by travis; Feb 1, 2010 at 8:39pm.
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Old Feb 1, 2010, 9:34pm   #144
 
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re: my journal 2

travis started this thread I'll now practice the SHORT trades on the Chart game. The first one I'll learn is the easiest, the bounce on resistance.
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Old Feb 2, 2010, 5:55pm   #145
 
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danger... danger... danger...

travis started this thread I will now resume my simulated trading (see above), after winning twice on real trading: yes, because that's when it gets dangerous for me. Usually, emotionally I can bear no more than 2 wins per day. Maybe I'll do one more trade in 4 hours.

I will now practice short trades, as I had decided to do in the post above.
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Old Feb 2, 2010, 6:43pm   #146
 
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re: my journal 2

travis started this thread I finally doubled capital by going only SHORT. It was very easy and fast, after trying and failing 4 times, but it wasn't just luck and I can do it again. However, you can lose your money quite fast. This type of trading really teaches to use a stoploss. For example, I could never bring 10k to 50k without using the stoploss.

The SHORT opportunities are there similarly to the LONG opportunities, except that it's hard to spot them if you're looking for both types of trades at once. It's easy to spot them if you just focus on them. To focus on the SHORT trades, you almost exactly reverse your thinking of when you're looking for LONG trades. It's very hard to identify them simultaneously.

snap1.jpg

If you catch a move below support, you can quite easily double your capital with just one trade, but you get that situation (like in my first stock) only in one out of 10 trades. The majority of charts present the exact opposite situation: price above resistance. Once again, these charts go more up than down.

Last edited by travis; Feb 2, 2010 at 6:50pm.
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Old Feb 2, 2010, 8:50pm   #147
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Re: danger... danger... danger...

Travis,

I like your discipline bud... it's easy to get caught up in the game and feel "invisible"

Do you usually stick to this 2 wins and done mindset everyday?

Thanks!




Quote:
Originally Posted by travis View Post
I will now resume my simulated trading (see above), after winning twice on real trading: yes, because that's when it gets dangerous for me. Usually, emotionally I can bear no more than 2 wins per day. Maybe I'll do one more trade in 4 hours.

I will now practice short trades, as I had decided to do in the post above.
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Old Feb 2, 2010, 9:58pm   #148
 
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re: my journal 2

travis started this thread Read my profile... Unfortunately I write the best anti-gambling posts because I've been the worst gambler for over a decade. I still have not found a way to be profitable except with automated trading. I'll let you know if I ever turn profitable. My most recent experience with discretionary trading was that, after I got my capital to 30k thanks to automated trading, I've brought it down to 3k thanks to my discretionary gambling.

In the past 12 years I've lost over 50k (in US dollars) thanks to my discretionary trading. That's partly why I started this journal (see "my journal" for what I wrote before this one), in order to try everything, in my quest to become a profitable trader. So far I've been the most undisciplined and reckless trader there could ever be. I am a rebel in every field, and in trading I rebel against my own rules. Even today. After those two trades, two hours later, I went back and made another 2 trades, of which one went right and the second one went wrong and made me lose what I made in the other one. So I was right that I should have just stopped at 2 trades instead of 4.

What's your experience with compulsive gambling?
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Old Feb 2, 2010, 10:34pm   #149
 
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re: my journal 2

travis started this thread http://megavideo.com/?d=WUCX2WI5
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Old Feb 2, 2010, 10:53pm   #150
 
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re: my journal 2

travis started this thread Oh yes! Another doubling up just by doing SHORT trades. Yes yes yes! Learning to make money by both going SHORT and LONG. I never thought I'd be able to figure it out, regardless of the fact this is only simulation. I guess I have learned to read stock charts.

snap1.jpg

This is exactly like learning how to land on the flight simulator, or to learn to win at risk, or like learning any other video game. Why isn't real trading like this? Because fear of losing money paralyzes your learning skills!
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