How To Make Money Trading The Markets.

Dasnaq

Junior member
12 1
I agree with Mr Charts, even on days when the market is flat or range bound, oportunities are always out there.

I am curious about your dislike of GOOG Mr Charts. It can be chopy but when it trends it trends well I think. Even when it is range bound that 30c spread is nice to catch and often low risk when rangebound.

In my opinion.
 

nghislainf

Junior member
11 0
I love you Mr Charts!!!!!
How many times a day do you trade?
I know it's really hard to keep discipline in day trading,What instruments do you use? Any broker suggestions?
Thank you
 

Mr. Charts

Legendary member
7,364 1,181
As mentioned above,
I no longer read PMs.,so if you want to ask something, click on my name top left hand corner of this post and click on "email".
I don't read PMs any longer as I get some quite odd ones and I find people who bother to actually email are usually sensible and don't ask daft questions like "what is you trading?" or "how much money you make every day?" and actually expect a reply.
There is a difference between that and the sort of question someone thinks it might be embarrassing to ask on the thread, like "what is T&S?". That sort of question is fine.
Richard
 

Mr. Charts

Legendary member
7,364 1,181
I love you Mr Charts!!!!!
How many times a day do you trade?
I know it's really hard to keep discipline in day trading,What instruments do you use? Any broker suggestions?
Thank you
I take that to mean you find some of my posts interesting or helpful........ :cool:
Anything from about 5 to 15.
Like everything else it gets easier with practice.
What instruments? Not sure what you mean there, but I use eSignal and Interactivebrokers.
Hope that helps and thanks for your kind words :)
Richard
 

Mr. Charts

Legendary member
7,364 1,181
I agree with Mr Charts, even on days when the market is flat or range bound, oportunities are always out there.

I am curious about your dislike of GOOG Mr Charts. It can be chopy but when it trends it trends well I think. Even when it is range bound that 30c spread is nice to catch and often low risk when rangebound.

In my opinion.
Hiya,
It's just one of those personal preference things. I do often trade within the spread and capture part of it like a market maker, but in a momentum stock you don't always get your limit order filled as you know.
Good trading to you,
Richard
 

peto

Established member
924 72
Thanks, options.

With this approach......

In the next post I'll talk about position sizing and ATR and after that about when to exit if the trades fails at or shortly after entry so any possible losses can be kept to a minimum.
.......
Richard
Just found this thread, very interesting, many thanks. I look forward to hearing about position sizing, ATR and managing failing trades.

With respect to the latter, I'm guessing it is important to enter (short) near to the top of a bar, and exit if price rises above that of the preceding bar which should represent a fairly minimal loss?
Pete
 

trendie

Legendary member
6,232 1,007
hi Mr Charts, glad to see you have started a dedicated thread to your style. I have rated the thread 5-star, as this is simpler than repping every other post of yours!

timsk; as Mr Charts wants to keep the thread clean, why not set up a parallel "Potential Set-ups" type thread where followers can post their charts, in similar vein to the trader_dantes threads?

as I understand it; Mr Charts scans for yesterdays big-movers to focus on potential continuation moves on following day? then uses further filtering to narrow down best ones.
do you still use pre-market news and upgrade/downgrades as potential stocks to trade?
 

timsk

Legendary member
7,076 1,866

Newtron Bomb

Experienced member
1,602 86
Hiya,
...It's just one of those personal preference things....
Ive got to love that line... there can be quite a lot under that personal preference title not related to the execution of a trade, brokers platforms, trading goog and so on. This is really what defines a traders personality.

Great thread Mr Charts, Lots of valuable infomration here is people prepared to do their homeowrk and read through and make the time to understand what is being said here.

On a slightly differnt note using the tape on FX last thursday (thats the last price on right hand side of chart...no time and sales on FX (n) ) to trade gbpjpy after it had already dropped 600 pips (average at the moment is about 200-250) and a little cross tape reading between gbpusd and usdjpy was telling me that GJ was going to go lower as gbpusd and usd jpy were taking it in turns to trade down on what you call micro analysis... and no charts involved. As you described in post #4 sellers have the ball on GU UJ and as a result still influencing GJ.... Tape pausing on UJ while GU's tape making LH LL's pushing down GJ... then GU would pause and UJ would start moving down in the same way causing GJ to move further down....

You dont always get to see this on FX but on stocks as like you say you can find these trade set ups daily and is a most effective tool for trading.

Not traded NASDAQ for a while now but you have certainly re-kindled the fire again

When we last spoke about this I think the best way to describe this price action is to think of Paula Abdul's song - 2 steps forward and 1 step back

For those wanting fast, daily/regular and profitable action should consider Mr Charts method of trading
 

Mr. Charts

Legendary member
7,364 1,181
Spot on, peto.

There are various ways you can manage risk. In this particular set up, which is only one of about a dozen I use, an excellent method is indeed to use the "wrong" end of the previous candle as your WORST CASE STOP.
Let's say your short entry is at $43.32 and the high of the previous "falling" candle is at $43.44.
If you trade without using Micro-Analysis (level2 buy/sell pressures T&S) then you can set your stop at $43.45 a potential maximum loss of 13c.
Let's say the maximum loss you are prepared to tolerate on the trade is $100, then your position size would be 769 shares ($100 divided by 13c).
Personally I really can't be bothered with odd numbers of shares so I round the number to the nearest hundred.
If my level 2 T&S screens were to show sudden strong buying pressure and weakening selling pressure and the trades printing off reflected that, then I wouldn't wait for my worse case stop loss to be hit and would be out earlier. However that is beyond what I'm talking about in this thread and we'll stick purely to charts. This does NOT mean indicators, but READING what the market is telling you.
My attitude is that if the evidence in front of your eyes says you are losing this trade, why wait for a stop loss to be hit and produce a larger loss? I feel you are simply paying money to the market in the hope of being proved "right" in such circumstances.
Of course the situation is different if the approach involves using ATR as a stop and then maybe, just maybe, what you are seeing is intra candle noise. There are plenty of techniques which employ ATR like that.

For those who have carefully read my earlier posts on this thread, you will recognise that this end of candle stop loss exit is the same as the taking profit exit. In a down move when the high takes out the high of the previous candle; in an up move when the low takes out the low of the previous candle.
This in no way "guarantees" you have exited at the right or best time, but it does mean you can continually take profits from the market.
Remember the "right" or "best" time can only be recognised as such in retrospect. You must always act on the evidence in front of your eyes at the time, never "wish" or "hope".

There is another approach which is very useful, but has to be used in context.
After paper trading, which has its limitations as we all know, you can start trading 100 shares at a time and gradually increase your position size as you develop and proceed and meet satisfactory success targets.
You should ONLY do this in my personal opinion if it is a slow moving stock with a low ATR and you can read it on level 2 very easily. What I mean is that if the stock is liquid (plenty of trades going through) and ticks up or down slowly at 1 cent at a time you can easily exit whenever you want and control your risk very easily. A stock like DELL would be like this.
I would not use such an approach on a stock like GOOG where the price can leap around by 20c or
30c in the blink of an eye. You are not in control in such a situation, at least not in sufficient control for a financially risk averse control freak like me :)
I use 1 min, 3 min and 5 min candles - the method works well on all those time frames.
TBC
Richard
 

Mr. Charts

Legendary member
7,364 1,181
So what about ATR?
I use it in my personal trading as a rough guide to risk.
The higher the ATR is in the time frame I'm trading, the greater the potential risk as price is more likely to leap around. Stocks with ATRs of say up to 5c do move slowly and READABLY, ATRs up to 8c a little faster and are very slightly more difficult to read, 12c faster still and 20c+ really quite fast and dangerous.
Of course you can reduce position size accordingly with a higher ATR and that's fine, but again for me I know that the higher the ATR the more unpredictable a move can be and I prefer READABLE stocks I know I can exit from at the time of my choice at the price on my screen and not a price which has leapt away 10c, 20c, 30c in a second or two. I don't feel I'm in control in that situation, but that again is my risk averse personality. Others will differ and that's fine. Nothing is "right" per se, it's what works for the individual and their personality and above all what makes consistent money for them every day in all market types.
Richard.
 

Mr. Charts

Legendary member
7,364 1,181
trendie,
Although sometimes I do look at the previous day's big movers, my early attention is on stocks that have moved pre-market and/or news stories. However, I never trade the news, only a clean market reaction to that news if one of my dozen set ups occurs and then triggers.

timsk,
Thank you for your request to mods. I shall make a comment on that thread in a few minutes.

Richard
 

Mr. Charts

Legendary member
7,364 1,181
Ive got to love that line... there can be quite a lot under that personal preference title not related to the execution of a trade, brokers platforms, trading goog and so on. This is really what defines a traders personality.

Great thread Mr Charts, Lots of valuable infomration here is people prepared to do their homeowrk and read through and make the time to understand what is being said here.

On a slightly differnt note using the tape on FX last thursday (thats the last price on right hand side of chart...no time and sales on FX (n) ) to trade gbpjpy after it had already dropped 600 pips (average at the moment is about 200-250) and a little cross tape reading between gbpusd and usdjpy was telling me that GJ was going to go lower as gbpusd and usd jpy were taking it in turns to trade down on what you call micro analysis... and no charts involved. As you described in post #4 sellers have the ball on GU UJ and as a result still influencing GJ.... Tape pausing on UJ while GU's tape making LH LL's pushing down GJ... then GU would pause and UJ would start moving down in the same way causing GJ to move further down....

You dont always get to see this on FX but on stocks as like you say you can find these trade set ups daily and is a most effective tool for trading.

Not traded NASDAQ for a while now but you have certainly re-kindled the fire again

When we last spoke about this I think the best way to describe this price action is to think of Paula Abdul's song - 2 steps forward and 1 step back

For those wanting fast, daily/regular and profitable action should consider Mr Charts method of trading
Absolutely spot on as usual, Bomber :)
Richard
 

Mr. Charts

Legendary member
7,364 1,181
I've spent Sunday afternoon two finger typing here and catching up with EMAILS people have sent so I won't post again till tomorrow or Tuesday, but there was a "failed" trade using this method on Friday afternoon and I'll post that then.
It was still profitable but only by a few cents but does show the right time to exit the trade on the CHART as I couldn't use level 2 etc effectively because its signals were not clear at the time (sometimes they are not) so I exited as per the chart exit rule mentioned earlier in the thread.
Richard
 

Mr. Charts

Legendary member
7,364 1,181
By the way, I know some people would just like a "just tell me what should I do step by step 1 2 3 4 5"sort of thread, but I think on an open BB it's better to have the concepts gradually become clearer as no-one should accept something without thinking and understanding, even before they test a method for themselves. Trading must always have some thought and judgment and understanding involved, even if it's a small percentage.
However, I might possibly do a summary at some point.
Richard
 

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