The markets and those involved

[MrGecko]

AS WE SPEAK...

A great example of identifying a region where price is likely to react, and of where you can pick out trades that might pass others by by watching the Price Action like a hawk...

Charts are cable Weekly and Hourly.. apologies for cr@p quality.

 

[trader_dante]

Great reply from MrG there and just as a quick thought before nodding off, you could try using a thicker line when drawing those levels and think of them as zones/areas rather than specific pip levels and of course, why its bouncing there will make you see a pip here or there is inconsequential.

Good points by sweepy and MrG and it's pretty much what I have been saying since I started the "Making Money Trading" thread. Identify the areas, watch the price, recognise and understand what the market participants are doing via the bar that prints and pull the trigger. Then manage the trade by being aware of the other levels ahead and by controlling your emotions. This is how you make money in the markets. Yes it takes screen time because as MrG said, there is discretion involved but esentially it is no more complex than what I have written above. If you really want to be fancy - getting your entries really tight, calling the turns to the exact tick with tight stops, you can start throwing in new skills such as looking at transactions made; reading the order flow, the pace of the price as it approaches key levels and start looking at what locals are doing, who is puking, who is spoofing etc etc etc - in otherwords, "tape reading" to define your entry. But I have to say that it is really not necessary to be able to do that. 100%, hand on heart, all that "tape reading" ever did for me was get me out of a winning position too early. Here at my prop firm when they saw how I trade they actually advised me not to use TT, to ignore the order flow and simply phone my orders in when I identified the setups. And for a firm ( and a business model) made up of traders that use "tape reading" to scalp for a few ticks at as much size as they can do in the market liquidity, I took that as a sign of confidence in me and the way of trading I have outlined in other theads.

 

[BSD]

100%, hand on heart, all that "tape reading" ever did for me was get me out of a winning position too early. Here at my prop firm when they saw how I trade they actually advised me not to use TT, to ignore the order flow and simply phone my orders in when I identified the setups. And for a firm ( and a business model) made up of traders that use "tape reading" to scalp for a few ticks at as much size as they can do in the market liquidity, I took that as a sign of confidence in me and the way of trading I have outlined in other theads.

Things haven't changed much in a hundred years have they:

"Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end.

Wait until you see -- or if you prefer, until you think you see the turn of the market; the beginning of a reversal of general conditions.

That is about all I have learned to study general conditions, to take a position and stick to it. I can wait without a twinge of impatience. I can see a setback without being shaken, knowing that it is only temporary.

One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world.

Everybody knew that the way to exploit a market conservatively was to take profits and buy back your stocks on reactions. And that is precisely what I falsely did in my early years, or rather what I tried to do; for I often took profits and waited for a reaction that never came.

They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market. You might lose your position and with it the certainty of a big killing. It is the big swing that makes the big money for you."

Jesse Livermore, who started out penniless, and became what would in todays money have been a Billionaire through trading almost a hundred years ago.

"Trading is not about how often you are right. Trading is about how much money you make when you do have a winning position."

George Soros, MultiBillionaire in todays money as well, lol.

Conversely, Market Wizard Marty Schwartz, who wrote the excellent Pit Bull, had what far too many cherish, the 70, 80% hit rate, and a NON-compounding return on his assets of 30% / month, but to keep that working he had to regularly clear out his account for market liquidity issues. Later when he tried to join the top dogs, first through Commodities Corp that was later bought out by Goldmans Sachs and supplied him with what for his style was too much money to make his method work, and later when he attempted to start his own hedge fund, both times he failed to get his scalping / very short term / high hit rate methods to work with large sums.

It's either scalp your way to a very good livelihood with a high hit rate, or go join the top dogs and forget about hit rate, maximising your risk / reward ratios instead.

If you could combine high hit rate with excellent risk / reward ratios you would be the richest person on this planet and most other galaxies out there in no time at all.

 

[Bladerunner]

good couple of posts

Good points by sweepy and MrG and it's pretty much what I have been saying since I started the "Making Money Trading" thread. Identify the areas, watch the price, recognise and understand what the market participants are doing via the bar that prints and pull the trigger. Then manage the trade by being aware of the other levels ahead and by controlling your emotions. This is how you make money in the markets. Yes it takes screen time because as MrG said, there is discretion involved but esentially it is no more complex than what I have written above. If you really want to be fancy - getting your entries really tight, calling the turns to the exact tick with tight stops, you can start throwing in new skills such as looking at transactions made; reading the order flow, the pace of the price as it approaches key levels and start looking at what locals are doing, who is puking, who is spoofing etc etc etc - in otherwords, "tape reading" to define your entry. But I have to say that it is really not necessary to be able to do that. 100%, hand on heart, all that "tape reading" ever did for me was get me out of a winning position too early. Here at my prop firm when they saw how I trade they actually advised me not to use TT, to ignore the order flow and simply phone my orders in when I identified the setups. And for a firm ( and a business model) made up of traders that use "tape reading" to scalp for a few ticks at as much size as they can do in the market liquidity, I took that as a sign of confidence in me and the way of trading I have outlined in other theads.

Things haven't changed much in a hundred years have they:

"Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end.

Wait until you see -- or if you prefer, until you think you see the turn of the market; the beginning of a reversal of general conditions.

That is about all I have learned to study general conditions, to take a position and stick to it. I can wait without a twinge of impatience. I can see a setback without being shaken, knowing that it is only temporary.

One of the most helpful things that anybody can learn is to give up trying to catch the last eighth or the first. These two are the most expensive eighths in the world.

Everybody knew that the way to exploit a market conservatively was to take profits and buy back your stocks on reactions. And that is precisely what I falsely did in my early years, or rather what I tried to do; for I often took profits and waited for a reaction that never came.

They say you never grow poor taking profits. No, you don't. But neither do you grow rich taking a four-point profit in a bull market. You might lose your position and with it the certainty of a big killing. It is the big swing that makes the big money for you."

Jesse Livermore, who started out penniless, and became what would in todays money have been a Billionaire through trading almost a hundred years ago.

"Trading is not about how often you are right. Trading is about how much money you make when you do have a winning position."

George Soros, MultiBillionaire in todays money as well, lol.

Conversely, Market Wizard Marty Schwartz, who wrote the excellent Pit Bull, had what far too many cherish, the 70, 80% hit rate, and a NON-compounding return on his assets of 30% / month, but to keep that working he had to regularly clear out his account for market liquidity issues. Later when he tried to join the top dogs, first through Commodities Corp that was later bought out by Goldmans Sachs and supplied him with what for his style was too much money to make his method work, and later when he attempted to start his own hedge fund, both times he failed to get his scalping / very short term / high hit rate methods to work with large sums.

It's either scalp your way to a very good livelihood with a high hit rate, or go join the top dogs and forget about hit rate, maximising your risk / reward ratios instead.

If you could combine high hit rate with excellent risk / reward ratios you would be the richest person on this planet and most other galaxies out there in no time at all.

good couple of posts you 2


Do not think anyone should under estimate the emotional stress ~ accumulated ~ not any one day or anything just a build up over time before choosing the short move approach.

I agree with you 2 ........................... eventually

going to be hard.............just watched the ftse go :arrowu::arrowd: past 6620 about a dozon times

Andy

 

[rags2riches]

Excellent contributions - thank you.

 

[KLfutures]

You're making it look simpler than it is(*). For all the newbies reading this, I think it's important to realize that determining what constitutes a breakout, a reversal, a retracement, a test, a re-test, etc. is not always that straightforward in real time as it is in hindsight. One person's breakout might be another person's shake-out.

If one hasn't defined how to recognize all of these in real time, what to do when he sees them - and what to do when he doesn't see them - then the trader will most likely run into trouble when the market is open.

PS: I don't even know what a 'tweezer top' is...
(*) Of course it's that simple !

Firewalker99,

Breakouts, shakeouts or whatever are just terminology. Why do they hold these terms? Because they are happening around a price that all or most market participants can see, that's why these prices are moving.

A shakeout/breakout is not mysterious, but you can only take the market at face value, doing anything else is doomed to failure.

I'm absolutely sure you know what i'm on about.

 

[wasp]

Good points by sweepy and MrG and it's pretty much what I have been saying since I started the "Making Money Trading" thread. Identify the areas, watch the price, recognise and understand what the market participants are doing via the bar that prints and pull the trigger. Then manage the trade by being aware of the other levels ahead and by controlling your emotions. This is how you make money in the markets. Yes it takes screen time because as MrG said, there is discretion involved but esentially it is no more complex than what I have written above.

Yep, you just need to be aware of what is going on around the price at the moment, where and why things happened and what is most likely. Discretion counts though as Jtraders thread states, every tick tells a story.

If you really want to be fancy - getting your entries really tight, calling the turns to the exact tick with tight stops, you can start throwing in new skills such as looking at transactions made; reading the order flow, the pace of the price as it approaches key levels and start looking at what locals are doing, who is puking, who is spoofing etc etc etc - in otherwords, "tape reading" to define your entry. But I have to say that it is really not necessary to be able to do that.

All this increases the returns and minimizes the losses when they happen and of course, it helps psychologically too as the less positions go against you, the less worry you have.

100%, hand on heart, all that "tape reading" ever did for me was get me out of a winning position too early. Here at my prop firm when they saw how I trade they actually advised me not to use TT, to ignore the order flow and simply phone my orders in when I identified the setups. And for a firm ( and a business model) made up of traders that use "tape reading" to scalp for a few ticks at as much size as they can do in the market liquidity, I took that as a sign of confidence in me and the way of trading I have outlined in other theads.

All good if it works for you though but correct tape reading surely should help your positions and with no disrespect, if it was getting you out too early, you were reading things incorrectly.

 

[wasp]

Firewalker99,

Breakouts, shakeouts or whatever are just terminology. Why do they hold these terms? Because they are happening around a price that all or most market participants can see, that's why these prices are moving.

A shakeout/breakout is not mysterious, but you can only take the market at face value, doing anything else is doomed to failure.

They are terminology, much like a pinbar, inside bar, doji and shooting star.... All these things have a certain % statistical strike rate, although none are perfect....

Remove the names and watch the action and think about what it is happening; a breakout is a breakout by name and is just that, breaking out, so named or not, but it is just part of the equation and the actions tell the full story, once you get past the name.

All these actions are correctly named as enough traders are watching them and expecting the same result... Is that enough to understand the action unfolding?

 

[KLfutures]

They are terminology, much like a pinbar, inside bar, doji and shooting star.... All these things have a certain % statistical strike rate, although none are perfect....

Remove the names and watch the action and think about what it is happening; a breakout is a breakout by name and is just that, breaking out, so named or not, but it is just part of the equation and the actions tell the full story, once you get past the name.

All these actions are correctly named as enough traders are watching them and expecting the same result... Is that enough to understand the action unfolding?

Absolutely!

 

[Windowsill]

Absolutely!

Support & Resistance, terminology that does not quite hit the mark for me....Why not areas of indecision.

 

[Splitlink]

They are terms understood by all technical traders. Why change the name?

 

[trader_dante]

Support & Resistance, terminology that does not quite hit the mark for me....Why not areas of indecision.

There is no indecision at the S/R levels I choose If you get the pivot point right you are either RIGHT BIG or WRONG QUICK.

 

[Windowsill]

There is no indecision at the S/R levels I choose If you get the pivot point right you are either RIGHT BIG or WRONG QUICK.

Exactly, the ones you choose, newbies will just expect them to bounce off..(50% of the time they wont )...if they were called areas perhaps of "interest"....Spitlink.....it was just an idle thought.

 

[trader_dante]

Exactly, the ones you choose, newbies will just expect them to bounce off..(50% of the time they wont )...if they were called areas perhaps of "interest"....Spitlink.....it was just an idle thought.

Ah, agreed! If I am in a trade already and a level is approaching I call it a "problem area"

 

[Windowsill]

Ah, agreed! If I am in a trade already and a level is approaching I call it a "problem area"

Hmm I like that.............I would however have to call that a...challenge. Think positive:cheesy:

 

[cashukid]

There is no indecision at the S/R levels I choose If you get the pivot point right you are either RIGHT BIG or WRONG QUICK.

I like that! RIGHT BIG or WRONG QUICK
How true, How true, How true.
Have learned quite a bit, reading these posts.
Thanks to all.:clap: