Have you ventured to the dark side yet?

Don't worry about posting "too much". It's good to see a quality post......
I'm happy to "speak" off line so I'll PM you with my email address.

"always looking for perfection in every aspect of my life"
Typical Leeds man - like me ;-)
Moved up and out of Chapeltown long ago ;-)
Richard
 
Thanks for that MrCharts. I do love yorkshire but don't plan to stay too much longer. Ideally i'll move to New York within the next couple of years and live out my fantasy replicating life as a character in friends. Just need to find 5 friends who are also this sad.lol.

I'd like to ask if there are any other short term price action followers, i have used 1 minute charts before but find even a 1.8 pip spread a great hinderence, whereas the 5 minute charts often spit out 15 + pips on a single oscilation up of the stochastics indicator(An Indicator!!!)
I do condone the use of stochastics for setting up an entry on a shorter time frame,Eg 60 min and 15 min rising stochastics mean you shouldn't be shorting the 5 minute timeframe,this is how i would use an indicator.
Another use of the stochastics is its effect on the moving averages of a shorter time frame. For example a pup on the 15 minute stochastics indicator is often a pre warning of a pup on the 5 minute moving averages


In the hope that I can gain this thread some popularity I am posting a trade setup that explains i hope a sample of my methods. Hopefully I can produce a series of these educational pieces for everyone to keep,no charge.
It is attatched in an Ms word doc of a setup that occurred this morning which is pretty standard.
Please leave feedback if you like it.
Thanks Everyone

Nathan
 

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Hi Nathan,
Not many here will know what a pup is ;-)
Jea is a good guy ;-)
Richard
 
wannagetstacked said:
For the record,I trade from forex and so will not discuss traditional measures of volume as they are not applicable.
I have found the problem many people have with the switch to the dark side is the time and effort it takes.
One cannot expect to succeed without many many hours of bar by bar real time analysis of each candlestick to to see the different buying and selling pressures and to gain the ability to know where a stop and exit would be for any trade made,
I would like to discuss further the subject of exit and stop points, as i trade off multiple time frames with 5 min chart my main end focus stops and exit points become of extreme importance. I read an article in the Technical analyst magazine this month about how a random entry system(which i am not condoning) with correct exit and profit taking points which produced an impressive return. The importance of exiting strategies such as paring down when in profit are paramount in my eyes and can make or break a trader. I know some will say exit points cannot be predicted,which i agree, but knowing how to react to those changes is key.
I will now contribute a little on how i plan exits and stops on some of my trades.
For example:

If trading from a market hook (eg, market structure high or low)
After an down/uptrend of 3 or more bars i will wait for a hook to form, my stop loss will be 1-2 pips above the high of the hook, my entry point 1-2 pips below the 3rd bar in the hook.
KISS
There you go, a simple entry and stop setup, obviously ternding or consolidation filters have to be in place. I will not discuss these filters as they are very individual from trader to trader and should be developed through candle by candle analysis of your chosen market.
For exits, a simple strategy i use is to pair out 1/3 or 1/2 my profits when i have made my stop loss in profit. My stops are usually in the region 6-12 pips, therefore 1/3 -1/2 profits are paired out after 6-12 pips are made
I also use a trailing stop which is effective at filtering and missing noise on the majority of trades. I am a percentage trader, That means waiting and waiting for my initial filter to be met, and then analysing whether the conditions are met.
For example if the hook formed at the end of a trend provides a stop loss level of 15 points and you feel the move cannot make 30 points(1st and second profit taking levels would be at 15 pips and 30 pips using the previous profit taking setup i gave) then simply do not take the trade,how hard is that? aparently very hard for most traders as an indicator can never give you this level of detail. This simple strategy would outperform the majority if someone adapted it wholeheartedly and it doesn't even go deeply into candlestick analysis, The only caveat is the waiting you have to endure.


Phew that was a lot of writing and i don't feel i've scratched the surface of price action.
I feel this simple method provides concrete entry points,stop loss point,and exit points.

I provide this not as a system but as hopefully a stepping stone for the thousands of indicator traders. Give it a go, watch the charts and see how the hooks form,your entry points are breached, and where profit taking levels occur.

A little about money management: This strategy, if thats what it is called, uses an average of 10 pip stop loss on popular currency pairs. Using fixed fractional MM:
£10000 account
1% risked per trade = £100
10 pip stop loss = £100/10 = £10 per point

Consider this further if you will, 5 minute charts provide noise, but i feel this is acceptable noise when it means you can keep your stop at 10 points,
If you are a beginner you will not find a safer entry into trading, and it forces you to follow price action.

Have i wrote too much? Hope not, if you liked my post send some good karma my way.

Thanks

Nathan

Nathan,

Here's some good Karma, I'm just considering the Forex market. Attended seminars and thinking about purchasing 4XME. Even though your post it over my head, instinctively it makes sense. Please tell me where to begin. I have a Internet biz, selling timeshares on eBay and doing well. However looking for additional income. Used to trade Penny Stock. I like this Forex very much. I will copy/paste your post and keep reading it.

Thanks, gloribee
 
Nathan

What is a "Pup" exactly ?

Are you saying that in an up trend, should the faster MA (5) flaten, while the slower MA (15) continures to rise, that is a good long confirmation ? Likewise fast and slow stoch lines ?

Hagadol
 
hagadol said:
What is a "Pup" exactly ?

A PUP is a "Power Up Tick" - a term coined by Jea Yu and Russell Lockhart (underground trader).

"It's a formation triggered during an inactive uptrend as the 5MA flattens out while the 15MA continues to rise".


It's based on a combination of MA and Stochastics which are, er, indicators :eek:

This thread has taken a strange twist. How about "No Indicators - Reversed"?
 
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its ok Brambs, i'll return things to their rightful spot by saying that i am starting to trade without charts now..

cant have indicators on something that doesnt exist?

or can you?

hmm.
 
FetteredChinos said:
its ok Brambs, i'll return things to their rightful spot by saying that i am starting to trade without charts now..

cant have indicators on something that doesnt exist?

or can you?

hmm.


Interesting FC while walking to work this morning I was thinking to myself that maybe the reason 90% of traders lose is because the psychology of charts tempts them into positions.

They have with me in the past that's for sure ,who can resist entering a long on that powerful up candle unfolding in front of your eyes only to see it reverse on the next one!

So give us some more details how do you trade without charts how do you decide your entry/exit criteria?
 
Interesting point FC. {Humorous intent noted}

In 'the old days' there were no charts for RT trading. Just the tape. But the likes of Livermore, Wyckoff et al did create mental constructs of the data they were watching.

They had to manipulate the data as best they could: T&S, Bid/Offer and Volume. No charts. Just the data. Powerful stuff!

I imagine they would feel quite at home today with 'just' a LII screen.
 
FetteredChinos said:
time machine.


hmm, seriously though. ive been giving this some thought for the past few weeks.

over the fullness of time, buying low and selling high is bound to be profitable. all you need is an account big enough to cope with the inherent drawdowns

i have been doing some backtesting, and even something as simple as buying after a down day and selling after an up day is profitable. with refinements, the drawdowns become sensible, and hey presto, ingested testicles.

erm, sorry, hey presto, a simple, reliable, method.



who needs charts?
 
TheBramble said:
Interesting point FC. {Humorous intent noted}

In 'the old days' there were no charts for RT trading. Just the tape. But the likes of Livermore, Wyckoff et al did create mental constructs of the data they were watching.

They had to manipulate the data as best they could: T&S, Bid/Offer and Volume. No charts. Just the data. Powerful stuff!

I imagine they would feel quite at home today with 'just' a LII screen.


Tony,

And that mental construct would probably look like a bar chart with tick volume bars if you could have lifted the picture from their minds?

jon
 
There's nothing wrong with charts only the way they are used is problematic ..bit like a diy enthusiast who has not quite mastered using a saw..what do you think he should do..throw away the saw and use his teeth ,or learn how to use the saw the right way ?
 
The MS word doc I attatched was an example of how I sometimes integrate using indicators. I have great respect for the guys at underground trader and their insights helped me to explore the use of indicators. The "pup" is generally the only one i would usually trust, but even then my entry is still based on my strict price action filters being filled. For example on the chart i provided on 5 mins shows both a stochastics cross and a moving averages cross signalling a buy. The market hook and entry point defined in that strategy are produced 10-15 mins before either of these indicator crosses, by this time my trade is approaching its first profit taking level. I feel that the chart provides an example of something that will constantly occur if you do not take the time to explore the effects of price action.
So in this example i used indicators,but my trade entry level,stop loss level,and exit levels were based on the price action and provide concrete levels that should remove the urge to let losses run,whereas the profit taking levels allow you to let profits run as long as you see fit.
Examine the chart further, its all there, showing the failures of indicators, but also that their "potential" predictive qualities shouldn't be ignored, HOWEVER: My trade entry,stop,and exit levels are always based on price action,never on an indicator or based on a guess. If the trade gets stopped out that is fine, as you begin to feel the market more you will be able to increase your percentage of wins, when successful you can really abuse the profit making potential of having such a low stop loss amount and therefore capital risked per trade,(not accounting slippage, random price spikes-this all depends on the reliability of your broker,Spreadbetters beware.)
So, if you aren't ready to drop indicators yet, just try to incorporate entries based on these hooks that form, This way you at least have solid entry and exit levels to base your trade on,

Always remember to let the trades come to you,don't chase them.

I really do believe that this is sound advice for newbies, Ive provided a way to enter trades based on your current strategy that has low stop loss levels,and defined points of entry and exit.
Do you ever feel scared in a trade? Not know when to exit? Feel unsure about the decisions you're making? These questions should not be in your trading plan in my opinion, seek a way to remedy these and give you some level of confidence in your trading.

I'm not saying this is some holy grail destined to rain down profits on your bank account, but if incorporated i'm sure it will give you a bit more confidence in your trades, and the ability to exit trades based on facts,which should remove the emotions surrounding a losing trade. Not many prople can lose less than 40 % of the time so get used to it,its how you handle those losses that counts.

Waffle waffle waffle, I do go on a bit.

Hope its of interest.

Thanks

Nathan
 
"I really do believe that this is sound advice for newbies, Ive provided a way to enter trades based on your current strategy that has low stop loss levels,and defined points of entry and exit"


Sorry if that sounded arrogant guys.

Nathan
 
GammaJammer said:
Maybe in 100 years time people on the equivalent of T2W

you mean it wont still be going in 2104?

i was planning on hanging around til then. dont know about you guys though!
 
fc

so that's what your time machine is all about - and I thought it was for trading
 
dont worry barjon. for a small fee i will take you with me.

strange things happen on the way.

scotland end their 183 game losing streak in 2027 with a 1-0 win over switzerland.

an investigation is still underway for match fixing...
 
what odds are ladbrokes offering on Scotland beating Switzerland 1-0 in 2027 ?
thats my pension sorted
 
Here you go,another trade setup from 30-45 mins ago, sorry about the delay.

Feel free to ask questions

Thanks

Nathan

Ps,as i post this the second profit taking pink line has been breached(see attatchment)
 

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