How To Make Money Trading The Markets.

Mr. Charts

Legendary member
7,364 1,181
The above is an interesting post.
Would you please start a new thread of your own so this one remains focused?
I'd be happy to contribute to such a thread, but I would like this one to be about this specific technique please.
Thanks,
Richard
 

Mr. Charts

Legendary member
7,364 1,181
Here's one from this afternoon.
Obviously it would have been more profitable to have entered earlier, but I picked it up on my scanner a minute before the short on the red X hairs.
Again I didn't wait for the chart exit signal as level 2 T&S told me there was a strong possibility of an imminent reversal.
I'll go into the amount of risk I was prepared to take on this trade when I have a little more time.
+65c
Richard
 

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Nearlythere

Newbie
9 1
Richard,

15.05 strikes me as a strange entry point. why were you confident it would make the whole number? You also only watched if for a minute, how where you confident that it would not simply reverse as can often happen at the high/low of the day? I'm sure if I had seen the chart I would have waited to see how it behaved at the whole number and entered if it had made it through or alternatively waited till there was a retracement and then a continuation on the trend before entering.
 

waverider

Member
91 2
Hi Richard

I've followed this thread with interest - thanks for all your time and input

You say this method can be utilized without L2 but I'm finding it hard to see how you select your entries without reference to your L2 data (which I don't have). Looking at your STI chart you entered just before the previous day's low was coming up and, as Nearlythere observed, just prior to a round number. Not the most inviting setup, especially given the two prior fake-outs. So, is this a realistic trade without L2, or is it simply a quickening cascade of lower bars (or higher for longs) that is the main decision criteria?

The ATR on the chart is also very low at your entry - is that then a major factor in your decision to enter, or just a supporting factor?

Thanks

WR
 

Mr. Charts

Legendary member
7,364 1,181
Hi Richard

I've followed this thread with interest - thanks for all your time and input

You say this method can be utilized without L2 but I'm finding it hard to see how you select your entries without reference to your L2 data (which I don't have). Looking at your STI chart you entered just before the previous day's low was coming up and, as Nearlythere observed, just prior to a round number. Not the most inviting setup, especially given the two prior fake-outs. So, is this a realistic trade without L2, or is it simply a quickening cascade of lower bars (or higher for longs) that is the main decision criteria?

The ATR on the chart is also very low at your entry - is that then a major factor in your decision to enter, or just a supporting factor?

Thanks

WR
waverider,
Sometimes level 2 is a great help, but not always.
"you entered just before the previous day's low was coming up " That is not correct, it was way below the previous day's low.
Level2 T&S is often very helpful as price approaches a whole number, but to automatically assume that price will stop at a whole number is not always correct in my experience.
"two prior fake-outs" - I see those moves differently; to me they are part of a series of lower highs indicating sellers coming in sooner each time.
"So, is this a realistic trade without L2, or is it simply a quickening cascade of lower bars (or higher for longs) that is the main decision criteria?" Yes it is a good trade without level 2 and the "cascade" was a main contributory factor.
The low ATR meant the risk was minimal and so I could take a larger position size.

I think many people want some degree of certainty in their trading, but there is no such thing, only high probability. There is also a temptation to think price is likely to reverse just as soon as they enter so they are reluctant to enter a strong trend till after a retracement. Personally I do prefer to enter after a retracement, but that won't stop me taking a trade if it's waterfalling provided it is readable and not so fast as to be unreadable. One of the advantages of direct access is the ability to exit instantly as soon as there is a sign of the waterfall stopping. You do need the ability to take instant decisions on the evidence in front of your eyes and then to execute that decision immediately.

I will return to discuss risk on this trade later in the week.

Thanks for your kind words and I hope the above helps,
Richard
 

shopsmart

Newbie
9 0
Hi Richard/others,

Could you please shed some light on how they have this set up to identify trades on time?

Consider this - on any given day, one identifies about 10-20 stocks (via scanner) that are trade-able. To enhance probability of success, one needs to monitor trends on 1 min, 3 min and 5 min candles. For 10 stocks, that is 30 charts. Since there is not an algorithmic trigger logic, how do you detect a possible trade? (Perhaps, there is a trigger - I just do not get it yet. Or you actually have 30 charts up!)

Am I approaching this entirely the wrong way?

I ask because I set out to work on this method and have not had success locating trades in time. Ideally, I would assume scans are done intra-day as well.

Thanks for any advice in advance. As well as, thanks for sharing so much information on these forums. It has been very helpful for a novice like me.
 

tradespreads

Member
76 0
What is this price being a whole number I am hearing about in this thread and one other thread? Looks to me as quite a bizarre indicator if people happen to be using it.
 

tradespreads

Member
76 0
Hi Richard/others,

Could you please shed some light on how they have this set up to identify trades on time?

Consider this - on any given day, one identifies about 10-20 stocks (via scanner) that are trade-able. To enhance probability of success, one needs to monitor trends on 1 min, 3 min and 5 min candles. For 10 stocks, that is 30 charts. Since there is not an algorithmic trigger logic, how do you detect a possible trade? (Perhaps, there is a trigger - I just do not get it yet. Or you actually have 30 charts up!)

Am I approaching this entirely the wrong way?

I ask because I set out to work on this method and have not had success locating trades in time. Ideally, I would assume scans are done intra-day as well.

Thanks for any advice in advance. As well as, thanks for sharing so much information on these forums. It has been very helpful for a novice like me.
Pick and choose basis of the 10..

You also don't need 3 charts on each stock all the time. But you do so when going in for the kill. That reduces the combination down from 30 substantially.
 

Nearlythere

Newbie
9 1
Cryoplasm,
Whole numbers often act as support and resistance levels. See attached an example from this afternoon, 54.00 acting as a clear resistance level.
BTW I don't use technical indicators, they are normally based on the price, if the price moves up/down so do they, I think you can just use the price itself (just my humble opinion).
I use price (direction), volume (strength) and ATR (as a measure of volatility).
 

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tradespreads

Member
76 0
Cryoplasm,
Whole numbers often act as support and resistance levels. See attached an example from this afternoon, 54.00 acting as a clear resistance level.
BTW I don't use technical indicators, they are normally based on the price, if the price moves up/down so do they, I think you can just use the price itself (just my humble opinion).
I use price (direction), volume (strength) and ATR (as a measure of volatility).
Without parading off-topic too much on this discussion..

Now, your argument is completely unconvincing :!: From your example, S/R could well have been 53.99 or 54.01 (real nos). The fact it was 54.00 (integer) is purely coincidental. One could derive additional regions of S/R in previous timeframes at which price points are not integers but real numbers. Integers are real numbers but not all real numbers are integers.
 

Charlton

Experienced member
1,501 325
Without parading off-topic too much on this discussion..

Now, your argument is completely unconvincing :!: From your example, S/R could well have been 53.99 or 54.01 (real nos). The fact it was 54.00 (integer) is purely coincidental. One could derive additional regions of S/R in previous timeframes at which price points are not integers but real numbers. Integers are real numbers but not all real numbers are integers.
Cryoplasm

It's a psychological thing - not amongst those who are more conversant with trading, but with the general naive public.

When they are thinking about buying or selling equities, particularly as investments rather than trading, they don't normally say to themselves "I will buy when it falls to 53.99 because it is cheap". They normally think in integers or major decimal places such as .25, .5, so their internal message becomes "I will buy at 54 because it is cheap".

Thus there tends to be a preponderance of trades and stops set around these areas, of which the more canny trader can take advantage.

Charlton
 

Mr. Charts

Legendary member
7,364 1,181
Thanks for that excellent post, Charlton. It's saved me some time.
I would add that shops often sell products priced at £59.99 for example...........

shopsmart,
cryoplasm is correct about not needing 30 charts.
Put your watch list in a quote box and scroll down.
I also have the best six or eight charts on another monitor.
Richard