How To Make Money Trading The Markets.

simba00000

Junior member
12 2
Hi Mr. Charts,

How are you configuring your scanner? Mine has a crazy amount of options.

Thanks in advance!

Chris
 

trder2win

Newbie
2 0
.....

What I am looking for is an ongoing sequence of candles in the time frame I'm trading - one minute in this instance - where the tops of the candles are lower, (in a down move), than the previous candle. .....

Hi Mr. Charts

How many bars we should expect for before we enter a trade? I looked these charts you posted and I found no fixed/defined number of bars for the set up...are these fully discretionary?

Anyway, thanks for this thread, I like this 'simple' approach.

Trder2win
 

Mr. Charts

Legendary member
7,364 1,181
Hi Richard!

Thank you for sharing your wisdom with us. There is an statement (marked in blue)that got my attention in the quote before and a question arose: How do you relate your position size to the stock movement?

Thanks
Hi Freeman,
There are two ways.
Firstly ATR will give you a good idea how much a stock moves within a given candle.
If you are trading on 3 min candles for example then you certainly don't want to have the same position size on a stock with an ATR of 60 as you would on a stock with an ATR of 15 as it tends to move more suddenly and violently and your risk is greater.
Always bear in mind that the intra-candle range can suddenly explode. By that I mean that the ATR might be say 12, but the next candle might range through 30.

The second way is actually quite simple but sounds complex. It depends on level 2 movement, T&S and buy/sell pressures, (what I call "Micro-Analysis"). As I've said before in this thread I am NOT going to go into how I use them in detail.
The nearest analogy I can think of is driving when you need steering and two or three pedals, some skills and knowledge and the skill to anticipate road conditions ahead. You obviously also improve with experience and practice. With time these become integrated.
By the way, all the old fashioned follow the market maker techniques are much less significant than they used to be, though still matter sometimes in some circumstances.

However, many stocks at many times are readable - not all of them - not all the time - on micro-analysis. If you can see the steady progression of price and can read its continuity on level 2, see the roadblocks and whether they remain under pressure, and several other factors, than you can gain a huge edge and sometimes see things which may be about to happen BEFORE they appear on a chart.
In this type of situation then the ATR comments earlier in this thread are trumped.

Of course most people can't be bothered with level 2 and some denigrate it without understanding exactly how and when to use it. They think that because old techniques no longer work so well then it' all useless - throwing the baby out with the bathwater.
It's not a be all and end all technique, it's a precision approach some of the time, not all, but my goodness, when it does come into play, it's a huge help and very profitable.

Hope that helps, Freeman,
Richard
 

Mr. Charts

Legendary member
7,364 1,181
Simba,
We actually have a cat called Simba :)
Scanners vary hugely. Some days are relatively low volume days. Some stocks have a sudden expansion in volume, often triggered by news. I use different scans at different times.
Richard
 

Mr. Charts

Legendary member
7,364 1,181
trder,
No hard and fast rule as you have discovered for yourself. As in the last example I found it later than would have been ideal - an earlier entry would have been better. As long as the momentum is there on the chart and on the level 2 screen, that's fine. The key is the exit rule and appropriate position size to limit any losses on the ones that reverse on you, though as I've said, if level 2 is warning me of a possible imminent reversal I won't wait for the candle signal. No point in waiting to lose money or earn less if you can see the wind is blowing against you.
It's below freezing here in the UK, goodness knows how cold it is in Ontario - nice state, btw, we drove through it on an Atlantic to Pacific drive in 2007.
Richard
 

chump

Senior member
2,212 274
Hi Richard ,hope you don't mind me saying something for the scanner guys...

You don't need a scanner per se. If you can get access to sector data then unless you are completely blind you will soon be able to find out which sectors you should be trading if that is you are looking for volatility. Likewise if you are looking for a trade that moves then look at those stocks that are taking up a technical position that will support a sudden move.
I don't do US stocks ,but here in the UK you'd have been very happy just trolling the mining sector of late...likewise if you had seen Standard Life hitting a range support bottom on narrow price you would have set up for it today and so forth.
 

Freeman.ayres

Junior member
13 0
Hi Freeman,
There are two ways.
Firstly ATR will give you a good idea how much a stock moves within a given candle.
If you are trading on 3 min candles for example then you certainly don't want to have the same position size on a stock with an ATR of 60 as you would on a stock with an ATR of 15 as it tends to move more suddenly and violently and your risk is greater.
Always bear in mind that the intra-candle range can suddenly explode. By that I mean that the ATR might be say 12, but the next candle might range through 30.

The second way is actually quite simple but sounds complex. It depends on level 2 movement, T&S and buy/sell pressures, (what I call "Micro-Analysis"). As I've said before in this thread I am NOT going to go into how I use them in detail.
The nearest analogy I can think of is driving when you need steering and two or three pedals, some skills and knowledge and the skill to anticipate road conditions ahead. You obviously also improve with experience and practice. With time these become integrated.
By the way, all the old fashioned follow the market maker techniques are much less significant than they used to be, though still matter sometimes in some circumstances.

However, many stocks at many times are readable - not all of them - not all the time - on micro-analysis. If you can see the steady progression of price and can read its continuity on level 2, see the roadblocks and whether they remain under pressure, and several other factors, than you can gain a huge edge and sometimes see things which may be about to happen BEFORE they appear on a chart.
In this type of situation then the ATR comments earlier in this thread are trumped.

Of course most people can't be bothered with level 2 and some denigrate it without understanding exactly how and when to use it. They think that because old techniques no longer work so well then it' all useless - throwing the baby out with the bathwater.
It's not a be all and end all technique, it's a precision approach some of the time, not all, but my goodness, when it does come into play, it's a huge help and very profitable.

Hope that helps, Freeman,
Richard
Thanks Richard,

I will have to become more acquainted with ATR, since I have never used it.
I will make this information you gave me very useful.

Thanks,
 

Mr. Charts

Legendary member
7,364 1,181
I would always welcome your imput, chump :)
I don't really want to get into this in too much detail, but there are basically two approaches, top down, bottom up. Neither is "right" or "wrong". Both are fine.
For quickly finding opportunities intra-day, a scanner is, imho, extremely useful. Although finding clearly trending stocks is possible with multi-day sector movements, you can find a much larger number of good opportunities with a scanner which searches through 16000 stocks individually in seconds; faster if you narrow the parameters.
In fact I sometimes use a hot sectors scan which does what it says, then zero in on the individual stocks.
It's what works which matters, top down or bottom up.
US stocks do tend to be different to UK stocks for various reasons, not least the number of day traders and their activities sometimes creating clearer and more reliable moves. Also US movements tend to influence UK from mid day onwards.
Best wishes,
Richard
 

Mr. Charts

Legendary member
7,364 1,181
My pleasure, Freeman
Richard
 

mlbuzz

Newbie
9 0
Richard,

Thank you for your on going posts and advice. I have been using level 2 and attempting to learn some of your "micro-analysis" techniques. I have had some really positive initial success. I have been quite conservative, and had limited profits, but have made very few bad trades (and per your advice, got out of those quickly as well). So net I am up and doing well.

I just wanted to let you know I appreciate your help. (We "newbies" can use all we can get!)

Mike
 

Mr. Charts

Legendary member
7,364 1,181
My pleasure


Here's another one today.
This is slightly different as I took the break out on a strongly trending stock which was on my hot list.

+49c per share on this one so $490 for a 1000 shares,$245 for 500 shares etc.

Richard
 

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thevinman

Guest
53 2
My pleasure


Here's another one today.
This is slightly different as I took the break out on a strongly trending stock which was on my hot list.

+49c per share on this one so $490 for a 1000 shares,$245 for 500 shares etc.

Richard
Hi Mr. Charts,

Your timing and entry in this trade is perfect. (y) I was wondering: If you missed this entry and the price was already trending upwards, would you still consider entering this trade?

I also found ACN in my scanner. I didn't trade ACN, because it already broke out of the base.

Thevinman
 

shadowninja

Legendary member
5,524 642
His entry isn't perfect. I think that's the point. You don't have to grab every single point. (Correct me if I'm wrong.)