No B.S. Day Trading

[Mr. Charts]

"when used properly" means exactly what I say, not what you think others use as an excuse for failure.
I'm talking about the right tools for the right job at the right time - common sense.
As for fundamentals, anyone getting a TA "signal" to buy FNM or FRE in other than an extremely short time frame would be wise not to use such a signal to initiate a trade....though possibly to cover a short.....so, yes, sometimes "fundamental" information does matter.
Richard

 

[Mr.J-Arthur]

Technical Trading is the only way to trade. If you invest, you must use fundamentals and technicals. If you trade products like OIL that are sensitive to fundamental "figures" such as inventories, make sure to take that into account. When I trade technically, I still keep my ears open for news/fundamental news.

But basically, if you trade the chart, the fundamentals have already been accounted for..usually.

support and resistance are not nouns...they are VERBS. The act of supporting and the act of resisting describe the flow of money in and out of the market. It's not concrete, but usually the same buyers/sellers are coming into the market at those points. I would much rather buy at previous support on a range-bound day than risk buying the highs.

 

[SFL Trader]

arabian
Most would refer to it as reading the tape which I don't equate with reading charts. However, I suppose it depends on your definition. If there is only fundamental analysis and technical analysis, then maybe reading the tape is technical but it could also be fundamental because if a cattle farmer is buying cattle due to his knowledge of the fundamentals and I'm buying because he's buying then I'm actually buying because of fundamentals. Tomato. Tomaato.

Neil
Denigrate all you want. At least I have proof that I walk the walk. If a new trader is looking for information, better he reads what I have to say than buying some course that talks about "head and shoulders" shampoo.

Grey
Cross orders? You had buy and sell orders placed at the same price?

Mr J
You hit it. They are verbs...which is my point. Money flows into and out of the market continuously and someone who reads the tape has a much better feel of that flow than someone who stares at charts. I know where "support" levels are but I am interested in seeing the act of supporting take place before I buy.

 

[Aspire]

Technical Trading is the only way to trade.

There is no "only way to trade"..

If you are consistently profitable then you should keep doing what you are doing but remain open to new ideas and look to continue to learn and improve.

If you are not yet consistently profitable then you would have to be an absolute muppet to close your mind and fix yourself with trading ideas and beliefs which are obviously not making you good money.

 

[Mr. Charts]

I remember an old "investing" friend saying all the ships at the bottom of the sea had charts.......as he denigrated analysing price movement technically (different to what most think of as technical analysis ).
However, all ships at sea and arriving/departing also have charts........
Richard

 

[johnyoga]

Hey big boy, if your long I'll give it a squeeze

Crack me up!

 

[AgentZ86]

Don't waste any more money or time on technical analysis crap. It doesn't work. The biggest day traders in the world are scalpers. They read the order book. They don't buy 3,000 contracts because this is "support level 2". They buy them because they think it's a good spot to squeeze the shorts. I know this because I've swung up to 150 contracts at a clip, sat next to guys who traded 500 at a clip and personally know a guy who trades up to 2,000 at a clip.

Either way, don't spend any more money on anything that talks about technical analysis. Do not pay $300 for any more dvds or software and DO NOT spend $3,000 on a seminar. The only thing you will learn is that you should have used that $3,000 for margin in your trading account. Or taken a vacation to Hawaii.

"Hesitation causes death."

SFL

How many technical analysis courses have you taken to conclude this ?

 

[AgentZ86]

I prefer technical analysis over fundamental trading, however if you don't watch the fundies and perhaps stay away from them, the fundies can create unstable trading condition where technical analysis is considering the stable repeating of the historical pattern etc etc.
So although I enjoy technical trading, if I don't watch the fundies and no when not to trade then the technicals have a higher probability of not holding to the historical patterns / waves.

Most of the professional traders use technical analysis even if they are fundamental traders they use technicals along side their strategy in my opinion.
I know traders who are making very good living technical trading for over 20 years. and no fundies at all just technicals and no trades during important economic reports upcoming. They wait till after the report and then trade the technicals sometimes not until the next day after the fundies.
Anyhow thats all I know.

 

[SFL Trader]

I've spent the last five years trying to forget everything I know about technical analysis...which is a lot.

I'm not talking about fundamental trading. Although, if you're a position trader, you should probably have a very good feel for the fundamentals. I'm talking about the importance of being able to read the price action when day trading.

A person can look at a chart for about 1 minute and make a note of major levels. Knowing where the numbers are is not the problem. Not knowing how to read the order book is the problem. Making an entry or exit decision just because the price is a level on a chart is the problem. A scalper knows where the number is but he also has a really good feel for whether the level will hold or not because he knows how to read the volume. There are plenty of times when it's pretty obvious which way the market is going. You certainly can't know if it's going to go another 20 ticks but you can see that's it probably going to move another 3 or 4 ticks, at minimum, and there's no reason to buy at 20 if you're pretty sure you can get 16s.

If a big day trader is long 500 contracts and the market is 4 ticks against him, he is dying. His stomach is churning. He doesn't care what the charts or indicators say at that point. He's down 4 ticks and he's not losing 8. If the market continues to break, he is going to dump his position. When he dumps, he has an impact on the market. Will his selling move the market down a lot? Don't know. Depends on whether or not anyone wants to buy 500 here. If they don't, he moves the market. When he moves the market, you want to be on the right side of that move or at the very least, you want to stand aside and not be going against it. Knowing where major levels are is fine but understanding what's actually happening in terms of how many contracts are being traded at what price is much more important. Understanding the mindset of huge scalpers is more important.

Plus, while a technical trader is sitting around waiting for a certain price to get hit, scalpers might see three different good opportunities to make money just by reading the order flow.

 

[akindele]

what are scalpers?
how do you use that to make trades?

i have been using technical analysis.
thanks for sharing that im still learning.

 

[Bolimomo]

.....
A person can look at a chart for about 1 minute and make a note of major levels. Knowing where the numbers are is not the problem. Not knowing how to read the order book is the problem.
.....

That sounds great. But for an average joe like me, how do I access the "order book"? Isn't it only privy to market makers or the floor traders? If so, how can I - average joe - read the order flow?

 

[Trader333]

I've spent the last five years trying to forget everything I know about technical analysis...which is a lot.

Have you tried hypnosis as it can often help in trying to forget and takes a lot less than 5 years


Paul

 

[timsk]

Hi SFL Trader,

. . . A person can look at a chart for about 1 minute and make a note of major levels. Knowing where the numbers are is not the problem. Not knowing how to read the order book is the problem. Making an entry or exit decision just because the price is a level on a chart is the problem. A scalper knows where the number is but he also has a really good feel for whether the level will hold or not because he knows how to read the volume. There are plenty of times when it's pretty obvious which way the market is going. You certainly can't know if it's going to go another 20 ticks but you can see that's it probably going to move another 3 or 4 ticks, at minimum, and there's no reason to buy at 20 if you're pretty sure you can get 16s.

. . .Plus, while a technical trader is sitting around waiting for a certain price to get hit, scalpers might see three different good opportunities to make money just by reading the order flow.

A couple of questions if I may. Do you cover all these points in your e-book, i.e. do you explain how you read the order book and volume and provide clear examples so readers can learn to do the same? Additionally, do you provide charts that conflict with your analysis - i.e. why conventional T.A. is part of the 'problem' rather than the solution?
Tim.

 

[Grey1]

I've spent the last five years trying to forget everything I know about technical analysis...which is a lot.

I'm not talking about fundamental trading. Although, if you're a position trader, you should probably have a very good feel for the fundamentals. I'm talking about the importance of being able to read the price action when day trading.

A person can look at a chart for about 1 minute and make a note of major levels. Knowing where the numbers are is not the problem. Not knowing how to read the order book is the problem. Making an entry or exit decision just because the price is a level on a chart is the problem. A scalper knows where the number is but he also has a really good feel for whether the level will hold or not because he knows how to read the volume. There are plenty of times when it's pretty obvious which way the market is going. You certainly can't know if it's going to go another 20 ticks but you can see that's it probably going to move another 3 or 4 ticks, at minimum, and there's no reason to buy at 20 if you're pretty sure you can get 16s.

If a big day trader is long 500 contracts and the market is 4 ticks against him, he is dying. His stomach is churning. He doesn't care what the charts or indicators say at that point. He's down 4 ticks and he's not losing 8. If the market continues to break, he is going to dump his position. When he dumps, he has an impact on the market. Will his selling move the market down a lot? Don't know. Depends on whether or not anyone wants to buy 500 here. If they don't, he moves the market. When he moves the market, you want to be on the right side of that move or at the very least, you want to stand aside and not be going against it. Knowing where major levels are is fine but understanding what's actually happening in terms of how many contracts are being traded at what price is much more important. Understanding the mindset of huge scalpers is more important.

Plus, while a technical trader is sitting around waiting for a certain price to get hit, scalpers might see three different good opportunities to make money just by reading the order flow.

SFL,

Your post and the case you are putting forward is an old concept at least as far as the traders on this BB are concerned,, . If you search for some of the 1999-2000 posts you will come across many of arguments both pro and against .

In light of your argument I have the following to say.

1) Scalping is NOT risk adjusted and dangerous and MUST be avoided at all cost. Scalping is gangster trading . Did not use to be before decimalization .
2) The zero profit rule applied by VWAP codes makes market very efficient and hence those who are not algorithmic scalping eventually LOSE to program traders.
3) Order book analysis is not useless but does not justify the time and effort.
4) VWAP codes can populate, de populate, spoof the order book in nano- second which a trader has near to zero chance of recognising the true flow.
5) The dual sided algorithm are extremely intelligent to fake the order flow . The buy and sell programs are not that difficult but as I said dual vwap based codes warp your trading model..

6) The tell tale traces are there but before you identify and capitalise on them other program trades trade them and an average trader is left guessing .

7) Iceberg orders are no longer a key in identifying the flow as they are intelligently distributed by third party buy/sell codes/
8) Even program traders get caught scalping if a new information( all categories of NEWS ) HIT the market


ALL IN ALL.. forget it ,,

I realise you are here to sell your E BOOK and get a donation but my interest is to tell the whole story/

Now if you think I AM WRONG AND YOU CAN CALL THE MARKET THEN I AM RUNNING MY MONTHLY LIVE TRADING SEMINAR 24th SEP ,,, come and show me LIVE how you do it.
Of course you can claim you are making a million here and a million there using order book analysis which in this case I would say GOOD LUCK BUDDY because i cannot do what you do ...



Grey1

 

[Trader333]

I AM RUNNING MY MONTHLY LIVE TRADING SEMINAR 24th SEP ,,,

I think you meant Sep 26th


Paul

 

[BSD]

Hey there Grey, whats that all about on Sept 24th ?

Always good to see some other traders walking the walk I say, even if their styles are totally different it's still a good experience.

Thats basically how I got up and running, meeting lots of people who trade for a living and then synthesize sthg that fits me from their methods.

And as for vwap, never heard of that before must admit, but then I mainly do FX which doesn't have volume at all.

 

[Grey1]

I think you meant Sep 26th


Paul

rofl Paul ,, sorry it is SEP 26th ,, I have missed my holidays in the past getting my dates wrong OMG

 

[Grey1]

Hey there Grey, whats that all about on Sept 24th ?

Every month I trade LIVE for Technical Trader members . It is often an 8 hour session where I out line the trading strategies that I use for day trading and make $$$ on the day as well for our members.


grey1

 

[BSD]

Sounds interesting Grey, can anyone come, or what is a technical trader member ?

(Always ready to have an excuse to pop over to London, and have read good stuff about your trading to boot ;-))

 

[Trader333]

(Always ready to have an excuse to pop over to London, and have read good stuff about your trading to boot ;-))

No need to travel Markus as it is all done in a Paltalk room and yes you need to join the Technical Trader Private Forum on this site which is FOC.


Paul