How To Make Money Trading The Markets.

mostwanted0002

Newbie
4 0
its really not hard to find these stocks, they all show up on yahoo finance market stats when the market opens...

other observation: I think a lot of people use these methods with out understanding why the price/volume behaves like it does. Its a constant battle between Bulls/Bears...Mr. Chart - it would be helpful to explain a little about how the winner dictates the momentum.

(it might be hard to do this without going into detail about t&s & l2) but give it a shot)
 

foredog

Experienced member
1,879 313
its really not hard to find these stocks, they all show up on yahoo finance market stats when the market opens...

other observation: I think a lot of people use these methods with out understanding why the price/volume behaves like it does. Its a constant battle between Bulls/Bears...Mr. Chart - it would be helpful to explain a little about how the winner dictates the momentum.

(it might be hard to do this without going into detail about t&s & l2) but give it a shot)
I might be a bit out here but here goes....

If the last few candles of your chosen time frame are all the red and generally have lower highs and lower lows then you've got downward momentum as long as they continue this there's selling momentum.

For upward momentum blue candles and higher lows higher highs.
 

foredog

Experienced member
1,879 313
Richard

Just a quick question to clarify something if that's ok...

Would you say that with this method you are (nearly) always trading the break of the current Hi/Low of the day?
 

shadowninja

Legendary member
5,524 642
Doesn't that depend on the timeframe you trade in?

I am using this with satisfying success on M5 in conjunction with my own trading style for much, much tighter entries.
 

Mr. Charts

Legendary member
7,364 1,181
Richard

Just a quick question to clarify something if that's ok...

Would you say that with this method you are (nearly) always trading the break of the current Hi/Low of the day?
Hello foredog,
Usually but not always. I've kept it like that for this thread as I wanted to provide a simple straightforward method that people could use to make consistent money for themselves.
As I've said before, I use several other methods which also work extremely well.
I do use a variation of this method which takes trades which have not broken the hi/lo.
As I've said to some people who have emailed me about this method (EMAILS ONLY - NO PMS ANSWERED) if 100 people start out using this method 90 - 95 will soon alter it or ignore key requirements - and wreck it.
Hope that helps,
Richard
 

Mr. Charts

Legendary member
7,364 1,181
Doesn't that depend on the timeframe you trade in?

I am using this with satisfying success on M5 in conjunction with my own trading style for much, much tighter entries.
shadow,
I'm glad you've found the concept useful and profitable :)
I'm sure you've already figured out why it works.... :)
Richard
 

foredog

Experienced member
1,879 313
Hi Richard

Thanks for the answer. I thought that.


I guess it is easier totrade stocks making new hi/lows than looking for retracements somwhere in the middle of the trading range
 

Mr. Charts

Legendary member
7,364 1,181
The thing is, foredog, if you have a watch list of moving stocks, you often see the retracements anyway.

Here's a hot stock from this afternoon which fulfilled the requirements for this set up. There haven't been a large number of such hot stock opportunities recently so it's always nice - and very profitable - when they do crop up. All you've got to do is read the news stories pre-market, scan during market hours and use a high probability, low risk, tight position-sized stop loss set up such as the one I've described in this thread.
With this particular one I didn't wait for the usual exit signal as I could see on level 2 T&S that buyers/coverers were beginning to appear and selling pressure was abating.
With slow moving stocks you can sometimes find the exact low or very close to it, with faster moving ones you tend to find the broad zone where the turn around occurs; NOT ALWAYS, but often enough :) Even if you're "wrong" and more selling pressure comes along, you've still made good money :)
This little beauty was a profit of $1.54 per share on the actual fills.
Red X hairs on the short entry, screen shot at time of exit.
Richard

PS Click on image to enlarge.
 

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RubenE

Junior member
28 0
Hi Mr. Charts,

Thanks for the information. I have one question; I would think this system would also work on bigger timeframes such as the daily or weekly timeframes. Is this assumption correct or does it only work on the smaller timeframes (<= 5 minutes)?

Ruben.
 

Mr. Charts

Legendary member
7,364 1,181
Hi Ruben,
Yes it works on higher timeframes but the opportunities are fewer on daily and weekly and the risk is far, far greater. In fact your lack of control over risk makes it dangerous.
Richard
 

RubenE

Junior member
28 0
Hi Richard,

Okay thanks for the reply. So basically if I'm correct then position sizing to match the maximum allowed loss becomes even more crucial on the bigger timeframes using this method, because you also have to discount overnight swings. Still interesting to backtest, thanks for the inspiration.

Best regards,
Ruben.
 

RubenE

Junior member
28 0
Today I think I spotted this setup on the 5 minute chart of the stock AKZA.AS. It would have made about 50c a share in about 35 minutes. P.S. if I'm not supposed to post charts in this thread please let me know and I will remove it.

Best regards,
Ruben.

 

Mr. Charts

Legendary member
7,364 1,181
You've got it Ruben :)

The problem with overnight/multi-day plays is that the stock can gap against you unpredictably so your potential risk is also unpredictable.
Richard
 

Mr. Charts

Legendary member
7,364 1,181
to "jg"
I have answered your question but the email has bounced back saying you only allow incoming from listed senders.
Richard
 

danielion

Junior member
10 1
Hi Mr. Charts,

Thanks for the transparency and the great posts. Hey, earlier in the thread you mentioned that slippage is rare. I have never encountered more than about a 5 cent slip on my sell/buy stop for a stock like goldcorp. But I am concerned about what could happen. Could I see a 50 cent or so drop someday, and what is my best defence against this. A stop then limit order further down? Funny on the charts I noticed a bar down through my sell stop once about 20 cents and yet I wasn't liquidated untill about 5 minutes later. Will you normally see the big players sell and buy their large lots slowly. Thanks for the help?

Dan