Best Thread Firewalker's Journey: A path of discovery in search for enlightenment

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dbphoenix

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firewalker99 said:
I've decided to add this to my journal, in case I ever need reminding myself of why I want to be a trader:

1. Why?
I want to make a living of trading, I don't want to become a millionnaire or anything of the kind, but I want it to be similar to a full time career. Instead of working for someone else or being the slave of the corporate machinery, I'm willing to choose the path less travelled.

2. How?
Daytrading is what I prefer the most. I'll be spending 8-12 hours a day looking and analyzing charts. My time frame for a trade should be about 15 to 45 minutes at most. I'm looking for about 5 trades a day, as I've experienced the less I trade the less trades are based on weak signals or impulsive reactions.

3. What?
FDAX futures starting at 8:00 till about 17:30. Around 15:30 I also start looking at ER2 till around 22:00. At lunchtimes I prefer to stay out of the market and look what happened. I'm not trading news events. I won't be trading throughout the whole day, but want to be available to the market from around 9 to 21hr. Before and after I don't follow realtime.

4. When?
The charts are 3 minutes candlestick charts, which I crossover with a 15 minute chart, and at the start of the day I take a look at the previous day and week.

5. I will not trade countertrend nor retracements itself. I will look to pick up a trend and try to place an entry before a runup or rundown phase. Within a ranging period, I'll be looking to pick up some points by buying/selling with the trend. Breakouts of S/R zones can be interesting, but I won't react on a breakout through a trendline.

Thank you for posting this. If I don't come back to it later, remind me.

Db
 

dbphoenix

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firewalker99 said:
For me it's not about catching all the moves, if I'd have let's say 3 good trades per day that would be fine. If they happened during the first part of the day than I'd probably papertrade or analyze some more, read some stuff or check forums. For the moment however, I'm miles away from that target. Personally, it's not about the hours I spent on the charts, I'm willing to sit all day before my pc and watch price move around. I guess this is partly due to the fact that I want to be learning as much as possible...
If you're still at the point where all of this is endlessly fascinating, then you can probably do this. But sitting in front of your screen for hours on end and watching price move is not the same as trading it. Trade only when you're at your physical and mental best. When you start to lose it, stop. Come back when you're ready. If you're not ready, then either sit on your hands and just observe or go do something else. If you have replay, you can review the action later. If you don't, you can still scroll through the chart bar by bar after the trading day is over.

Db
 

firewalker99

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dbphoenix said:
If you're still at the point where all of this is endlessly fascinating, then you can probably do this. But sitting in front of your screen for hours on end and watching price move is not the same as trading it. Trade only when you're at your physical and mental best. When you start to lose it, stop. Come back when you're ready. If you're not ready, then either sit on your hands and just observe or go do something else. If you have replay, you can review the action later. If you don't, you can still scroll through the chart bar by bar after the trading day is over.

Db
I've used trademaven to replay some random days but FDAX is not available there.
I must also note that I'm not looking at the charts every second or minute of the day, but it is becoming a sort of addiction in a sense that I actually miss it in the weekends. If it were an addiction that I had to make a trade, that you'd probably say it's a negative one. But as I am papertrading with more eagerness to learn that ever, I hope this is a positive sign.
The more I learn, the more fascinating I find it actually - even if there have been frustrations on more than one occasion.
 

firewalker99

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one good entry

if I had drawn that red line at the beginning of the day I would have had more than one possible setup. But I know... woulda/coulda/shoulda/... anyhow. I did take a short now and it's working out fine (still in the trade for the moment)

Before I go any further, I read your thread of plotting S/R again.
But most of your examples are quite clearly... I mean, could be me, or could me FDAX (probably the first) but I seldom seem to get that clear S/R lines. Trying to establish where support or resistance lies by checking out previous days/week and month as I've demonstrated but is there really a zone around 5707.5 ?
 

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dbphoenix

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firewalker99 said:
Before I go any further, I read your thread of plotting S/R again.
But most of your examples are quite clearly... I mean, could be me, or could me FDAX (probably the first) but I seldom seem to get that clear S/R lines. Trying to establish where support or resistance lies by checking out previous days/week and month as I've demonstrated but is there really a zone around 5707.5 ?
I've looked at thousands more charts than you have :) It takes time. And practice. Don't just draw your lines but study what happens when price approaches them. Does price care? Does it hesitate? Does it test? Does it just plow right through as if they weren't there?

Look for those points or levels where price is repeatedly turned back, from either side. Look also for those levels where price repeatedly fails, i.e., "weaves" through, even though there may not be a precise level where the bottoms or tops of the bars align (remember that price couldn't care less about your bars; price is in continuous flow; the "bar" is nothing more than what you've chosen to display that flow).

Db
 

firewalker99

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dbphoenix said:
I'll withhold comment on the charts you've posted until the end of the day in the hope that others will chime in. But I will suggest that you have too much on your plate. Go back to the buffet and scrape off some of it, starting with volume and channels and trendlines. If S/R is your trigger, focus on that. If it isn't, then determine just what your trigger is and focus on that. But if it is, my S/R thread (below) may provide you with some help on drawing lines. If you investigate it, note that the charts were posted in real time beginning with the open. Note how the preliminary lines are drawn then modified and adjusted as traders begin to trade. In other words, don't start at the end and work your way back but rather begin at the beginning and work your way through to the end. If you have any questions about them, ask there. It's easier to keep track of what's what that way.

Db
I'm also hoping that others are willing to comment or observe and react on what I'm posting, but although my thread has attracted apparently a lot of views, replies some to come mainly from you. Which I'm grateful for of course! But I'd be nice if this would involve into a discussion rather than a dialogue...
 

FX_Cowboy

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250 16
I'd like to try to offer something I hope will be constructive here, one student of price action to another. I've posted your first chart with a couple of additional S/R levels marked.

First, it occurs to me that the upper line I've drawn in has been a fairly consistent level of resistance for the duration of the chart. On the 28th, price again found resistance there and fell back over the next couple of days to 5687.50. At this point, I don't know whether price is more likely to find support at 5687.50 and move on through that resistance level or to remain in the range I've marked (and I don't follow the DAX, so I'm not sure how this actually played out), but I would be cautious at this point about going long, and would probably want to see price at least start moving back toward the top of the range before committing to a long here.

If you were to draw a line from the point where price last touched the top of the range to the last price printed, that line would roughly describe a supply line, along which sellers are offering contracts in sufficient quantity to keep price moving down. That supply line has not been broken, and until it has been, I would be in a "watching and waiting" mode. In other words, even though price is now at a level where it has found support before, I personally don't see the indication (yet) that it will bounce here again.
 

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firewalker99

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FX_Cowboy said:
If you were to draw a line from the point where price last touched the top of the range to the last price printed, that line would roughly describe a supply line, along which sellers are offering contracts in sufficient quantity to keep price moving down. That supply line has not been broken, and until it has been, I would be in a "watching and waiting" mode. In other words, even though price is now at a level where it has found support before, I personally don't see the indication (yet) that it will bounce here again.
Thanks for posting. I added a just so you can see what happened. As you indicated, price indeed droipped below and even nearly touched 5600. You say you would wait and see what happens, is that a gut feeling or based on some signals you can distinguish? Can you perhaps elaborate a bit on that?
 

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firewalker99

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dbphoenix said:
Glad I asked, since this provides a good example of a high-probability short.

Note on your 30m chart of the previous week that long bozo just past the halfway point that reaches to about 5737. This provides you with an "air pocket". Price then futzes around more or less above 3725 for the remainder of the day. The fact that price opens way up there the next day is pretty much a go for a short given that there's zip support within that air pocket.

So, yes, good short.
Db
You called this a high probability short. Could you elaborate on that? What are the signals that make you say that? You name it "air pocket"... Incidentally I thought I had a similar situation today. Let me start by posting a chart of the last month, with yesterday's down move.

Ok, next is an intraday chart where I see an uptrend. Around 1100 there's a bozo on high volume. Also an "air pocket" or what is your definition of it? Not that I trade those, but anyway, the day opens with an up gap as you can see on the 2-day 5min bar chart. Next (after 1100) price drops gradually on low volume. Well, if I take everything you've said and compare it with the monthly chart, I've got 3 exact same signals. So, I guess I'd short. But as you can see, price only keeps moving up further.

Yes, no two situations are the same, everything has to be looked at in the right context.
But I'm not learning anything if for every situation there's a example pro and one contra...

Chart 1 = monthly chart with hourly bars to include the air pocket we talked about yesterday
Chart 2 = intraday (today) with 3 minute bars, to get a picture of the uptrend + air pocket at 1100
Chart 3 = yesterday + today with 5 minute bars so you can see the opening gap
 

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FX_Cowboy

Well-known member
250 16
firewalker99 said:
Thanks for posting. I added a just so you can see what happened. As you indicated, price indeed droipped below and even nearly touched 5600. You say you would wait and see what happens, is that a gut feeling or based on some signals you can distinguish? Can you perhaps elaborate a bit on that?
I really don't have any deep insight to offer here. At the time the chart was made, price had failed to break out through resistance that had held for quite some time, and had retraced to a support area. In other words, for the last day or so, price had been falling (look at the first bar from 7/31 and compare to the last bar printed on the chart).

Given that scenario, I would not be considering a long for the sole reason that I see no indication that price will head back up again. Sure, price was at a level that had provided support in the past -- and also had been broken in the past. But price breaks through support and resistance levels all the time. All I was saying was that there was no indication (that I could find) for a long, so I would not have initiated a long at that point. I should add that I certainly did not know at that point that price would continue to fall either (perhaps a more experienced trader could have seen that coming). So, with no reason to initiate either a long or short position, I would have waited for some reason to enter a trade.
 

firewalker99

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FX_Cowboy said:
I really don't have any deep insight to offer here. At the time the chart was made, price had failed to break out through resistance that had held for quite some time, and had retraced to a support area. In other words, for the last day or so, price had been falling (look at the first bar from 7/31 and compare to the last bar printed on the chart).

Given that scenario, I would not be considering a long for the sole reason that I see no indication that price will head back up again. Sure, price was at a level that had provided support in the past -- and also had been broken in the past. But price breaks through support and resistance levels all the time. All I was saying was that there was no indication (that I could find) for a long, so I would not have initiated a long at that point. I should add that I certainly did not know at that point that price would continue to fall either (perhaps a more experienced trader could have seen that coming). So, with no reason to initiate either a long or short position, I would have waited for some reason to enter a trade.
Thanks for answering that question, so I can state that "absence of evidence" was evidence to NOT enter a trade. I understand what you're saying. Could you let me know your comments on my charts of today? It just looks quite similar situation there...
 

FX_Cowboy

Well-known member
250 16
firewalker99 said:
Thanks for answering that question, so I can state that "absence of evidence" was evidence to NOT enter a trade. I understand what you're saying. Could you let me know your comments on my charts of today? It just looks quite similar situation there...
It looks like a nice up trend. I hope you're long. :cheesy:

Seriously, I'm not sure what you want me to comment on. And I'm not sure I catch your meaning concerning the similarities. How do you see the situations being similar?
 

firewalker99

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FX_Cowboy said:
It looks like a nice up trend. I hope you're long. :cheesy:

Seriously, I'm not sure what you want me to comment on. And I'm not sure I catch your meaning concerning the similarities. How do you see the situations being similar?
Well, perhaps I didn't put it as cleary but what I meant is I thought I saw a similar situation as yesterday on the monthly chart after that air pocket as dbphoenix mentioned a high probability short.

* air pocket appearing at 1100 -> air pocket on 07/28 just past the middle of the day
* following bars aren't able to reach much higher -> same here
* volume drops and price moves down slowly on 07/31 -> same here between 1100 and 1200
* it has been an uptrend from 07/24 till 07/31 -> uptrend from start of day

If I'm seeing things that just aren't there, please point out so.
I took a long entry at 09:30 actually... (but got out of the trade by that down spike around 10:15)
 

dbphoenix

Legendary member
6,952 1,250
firewalker99 said:
You called this a high probability short. Could you elaborate on that? What are the signals that make you say that? You name it "air pocket"... Incidentally I thought I had a similar situation today. Let me start by posting a chart of the last month, with yesterday's down move.

Ok, next is an intraday chart where I see an uptrend. Around 1100 there's a bozo on high volume. Also an "air pocket" or what is your definition of it? Not that I trade those, but anyway, the day opens with an up gap as you can see on the 2-day 5min bar chart. Next (after 1100) price drops gradually on low volume. Well, if I take everything you've said and compare it with the monthly chart, I've got 3 exact same signals. So, I guess I'd short. But as you can see, price only keeps moving up further.

Yes, no two situations are the same, everything has to be looked at in the right context.
But I'm not learning anything if for every situation there's a example pro and one contra...
Sorry, but you're showing me three charts which appear to be unrelated and which have no annotations that relate to what you're asking, so I don't know what you're looking at or what the focus of your question is.

As to the "air pocket", I erred in assuming that that, plus the S/R line you'd drawn, was the reason why you took the short. Since that had nothing to do with it, please explain why you did take that short.

Incidentally, your second chart has no date, so I don't know the context.

Db
 

firewalker99

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dbphoenix said:
Sorry, but you're showing me three charts which appear to be unrelated and which have no annotations that relate to what you're asking, so I don't know what you're looking at or what the focus of your question is.

Db
Sorry, I'll fill in the blanks and edit the original post.
I left out any annotations because I'd wanted to leave them blank as you could make your comments on them without my S/R, trendlines, etc interfering...

dbphoenix said:
As to the "air pocket", I erred in assuming that that, plus the S/R line you'd drawn, was the reason why you took the short. Since that had nothing to do with it, please explain why you did take that short.

Db
Mainly I shorted because that support was broken with a large down bar on higher volume, it went under by more than 5 points and then I shorted when it retraced a little back to 5720 (around 9:25)

dbphoenix said:
Incidentally, your second chart has no date, so I don't know the context.
Db
That one is of today
 
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