How To Make Money Trading The Markets.

darktone

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Elsewhere on this site people are discussing whether or not to have stop losses.
For me it's very simple, let the flowers bloom and pull out the weeds when they are small. Why anyone should sit watching themselves lose money in a trade is beyond me! I've been trading for a living for 15 years and staying in good situations and getting out of bad ones fast works ! Having small losers is the cost of doing business, simple as that.
Richard. With all respect. Trading without stop orders does not have to mean that 'the trader will sit there and watch themselves lose money'.
Even with your 15 years in (which I can match btw), Its entirely possible that the reason Its 'beyond you' is that you maybe a touch less savy than you think you are.
 

seguna

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Darktone...not sure you appreciate Richard's view on this.

From my reading of his comments over the years, it's simple...just cut your losses as soon as you recognise a failed pattern/signal. That's it.

HOW you actually do that - stop loss orders or market orders - depends on a number of factors. In his case, as an aggressive very present day trader, market orders work best.

For trading styles that are more laid back with less time available, stop losses are all important.
 

darktone

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Darktone...not sure you appreciate Richard's view on this.

From my reading of his comments over the years, it's simple...just cut your losses as soon as you recognise a failed pattern/signal. That's it.

HOW you actually do that - stop loss orders or market orders - depends on a number of factors. In his case, as an aggressive very present day trader, market orders work best.

For trading styles that are more laid back with less time available, stop losses are all important.
I think I do, and as a previous advocate of stops I see now see it as a flawed view, from the point of profitability at least.
Theres one order you missed btw, a limit order.

This is Richards thread, so thats all ill say here. Pop in to the I Stopped Using Stops and test your view.
 
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seguna

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Hmmmnnn...not quite clear.
Are you saying Richard is advocating for or against using stops?...Either on this thread or in general trading?
 

darktone

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Hmmmnnn...not quite clear.
Are you saying Richard is advocating for or against using stops?...Either on this thread or in general trading?
Im saying that I understand the seeming logic behind the use of a stop order. I understand Richards view. I shared this view a long time, a looooong time. I now see it as flawed.

As I understand it. Richard is advocating the use of a stop order. And not using a stop order means your are sitting there 'watching yourself losing money.' Maybe he can clarify.

I dont like like stop orders as they dont seek value, they seek loss.
That really is all im saying here. Its Richards thread.
 
Nov 15, 2012
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to all thise on this thread that keep trying to disprove Richards style of trading whilst implying that he is anything but honest and sincere in his comments and trade explainations, please simply leave and stop cluttering this thread with rubbish as the rest of us actually appreciate his comments and are hungry for his pearls of wisdom.
 

seguna

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As I understand it. Richard is advocating the use of a stop order. And not using a stop order means your are sitting there 'watching yourself losing money.' Maybe he can clarify.

I dont like like stop orders as they dont seek value, they seek loss.
That really is all im saying here. Its Richards thread.
This is where we see it differently. I'm not so sure Richard is in all cases.

From what I've read on this thread so far, he pro-actively manages his trades and exits at first sign of 'breakdown'. That may or may not involve the use of stop orders, he doesn't always say.

I'm sure he'll clarify soon...:smart:

By the way I agree with you in part about stop loss orders in general.
 

Mr. Charts

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BABA was a pre-market alert. As it raced North on rising candles I jumped on board and got a good bite out of the move, not being in as early as I could have been and I exited, as it proved, a bit on the early side, but still a very nice profit using the particular method in this thread. You do need practice and some experience with this sort of high ATR stock, so it's not for beginners to trade in large size, but you simply reduce position size to match your own chosen risk profile as explained earlier in the thread.
+68c per share
 

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Mr. Charts

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I used this method on two of my five trades today.
The loser was SNY where I lost one cent per share. I always cut losers fast when/if the price turns 180 degrees against me. Personally I have never sat and watched myself lose money in directional or unhedged trades, even in my early days of trading. For many years now I have only traded directionally and that suits my style just fine. If a move reverses against me, I exit quickly and almost take a sort of professional satisfaction from doing so.
 

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Mr. Charts

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AAL was traded twice, the first time using another of my methods and that was more profitable than the second one shown here.
The latter was a rising candle method one and produced a nice bread and butter sort of trade of +21c per share.
Extirpate the weeds when they are small and let the flowers grow and bloom.
 

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Mr. Charts

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This is where we see it differently. I'm not so sure Richard is in all cases.

From what I've read on this thread so far, he pro-actively manages his trades and exits at first sign of 'breakdown'. That may or may not involve the use of stop orders, he doesn't always say.

I'm sure he'll clarify soon...:smart:

By the way I agree with you in part about stop loss orders in general.

Correct, seguna. I always use mental stops, never hard ones as actual price action is vital in decision making in entry, exit and trade management.
Richard
 
Jul 14, 2014
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I honestly cannot believe this thread is parts of the FAQ on this forum.

The idea behind this thread is to show it is not difficult to make money from day trading US stocks
Nothing could be farther from the truth. It is difficult. The vast majority of traders lose money. And the vast majority of traders who claim big profits - lie about it.

given good methodology and the self-discipline and control to follow and trade it
Given you have an edge, it is possible to be profitable. But there are only slight edges in the US stock market. So unless you are really sure that your methodology has an edge, you can be self-disciplined as a robot and still lose money.


You need to see what is in front of your eyes and act accordingly on that evidence – nothing else, no hope, no fear.
Don't you first need a way to measure whether what you are seeing has an edge? Once again, you can trade like a robot, but if you have no edge - you will be consistently losing money.

Above all you need self-control and the humility to realise you are not the master of the markets, you are not “clever”, you are merely an individual who is going to carefully choose high probability situations to make consistent money from the markets.
The psychology mumbo-jumbo sure sounds nice. But you are implying that "choosing high probability situations" is as easy as being able to "see what is in front of your eyes"? Once again, there are no edges in the markets that are so blatantly obvious. Why? Because, once again, the vast majority of traders lose money.
Another problem with this statement is that there is no such thing as a "high-probability" situation. There are edges which tip the scale SLIGHTLY in one direction over the other. But there is no such thing as a high probability situation. If there was, then we'd all only trade these "high probability" situations.

I often use specific triggers to confirm the trade entries and often the exits. Those triggers are level2 buy and sell pressures and Time & Sales... but often enough to give me a powerful edge.
If your edge is in reading Level2, then what do the charts you are posting have to do with anything? Aren't they worthless without the Level2 reading, where your edge is?

This thread will only include charting, not level 2 buy and sell pressures and Time & Sales.
Of course. This way your superhuman Level2 reading abilities can remain a great mystery.

The method I’m going to show is fairly straightforward and works well with stocks which are either strong or weak and clearly trending.
Don't you first need to define "trend" in your understanding so everyone is on the same page?

There will be examples and then descriptions and clarification to follow.
Your charts are cherry-picked examples of places where the candles look pretty and moving in one direction.. with no mention on how you create a watch-list. Oh, sorry, I forgot. You just read the news and you have your watch-list ready. It's that simple.

it is absolutely vital that losses are kept to a minimum.
This is false. Keeping losses to a minimum is a sure way to bleed your account to $0.
Tight stops in a noisy market such as the US stocks is a sure way to rack up loss after loss after loss which will add up very quickly.

There were plenty such opportunities to make money this afternoon using this straightforward technique.
So what is the edge in this techniques? I must have missed that part. Oh, that's right. The edge is your Level2 reading. But you didn't share that part.. The "technique" then clearly has no edge without that piece. So what exactly is the point of this thread then?
 

Mr. Charts

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Here's another example from today. I alerted ITEK on my list more than an hour before market open.
Why? The company had come out with very good news and it had gapped.
All I had to do then was to wait and see if one of my dozen set ups occurred. Sometimes depth of market skills and experience help in timing and decision making, sometimes they are not even necessary.
The stock price moved up but didn't produce a set up till later. Patience helps.
My entry was not optimum as I didn't see it until the surge of rising candles was well established as I was looking at other stocks as well, but I had this one up on my screen of charts so it wasn't long till I spotted the move.
I got a good chunk of the move, +182c per share, that's $1820 for those trading 1000 shares, $910 for 500 and pro rata of course.
I do think preparation, method and self control are absolutely key to finding and awaiting high probability situations to trade.
In any stock, a strongly moving price is more likely to result in profit than a stock with no direction or which is choppy on your chosen time frame.
Like many things in life, once you have the pre-requisite knowledge, skill and some experience and have your mental approach sorted out it is no longer difficult to be profitable. Of course nothing works 100% of the time, trading is a probability business not a certainty. Keep the losers small and let the winners run.

On this occasion I'll show my time stamped alert (UK time) and if a mod thinks I shouldn't have, he is obviously free to delete the image if he chooses.
 

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I alerted ITEK on my list more than an hour before market open.
Why? The company had come out with very good news and it had gapped.

Big deal I had it on my list also and so did a lot of traders. How can you take credit for putting it on a list when it had gapped and it had good volume.
 
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