How To Make Money Trading The Markets.

Mr. Charts

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Sep 18, 2001
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Hello be-positive,
I left my screens after my last post so I really don't know for sure.
I do like to see how price is actually behaving as it gets to a break out point and that gives me a clue as to whether the break out might succeed. In other words I don't automatically take a trade because price breaks out.
As a general rule I wouldn't go long again at that time of day because you get more false break outs during the US lunch time, especially on a choppy day.
Richard
 

montmorencyt2w

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May 17, 2008
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Richard,

Belated thanks for the several posts and the alert for BTN.
Afraid I was away from the computer then, and until after the US close.
However, I will check it out at leisure now in retrospect and use it as part of my education.

Many thanks,


BTW, I've just started using my old IG account again after some time, and I believe their advanced charts (or something!) has some sort of stock-screening facility. Didn't take much notice first time I noticed it, as I wasn't doing stocks at the time, but will look into it now. Don't supposed it's as advanced as specialised stock-screening software that you pay more money for, but something to get going on.


Best wishes,
 
Jan 14, 2010
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Mike... I like this quote a lot my friend...

Still learning my trade.

"Trade what you see", but make sure you are looking from the right viewpoint.



Thanks and good luck
 
Apr 18, 2008
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Great thread Mr. Charts, congratulations on the hard work and useful information. Maybe i have missed it, but how are you looking/scanning for the stocks you are trading? What criteria are you looking for?
Thank you
Alex
 

Mr. Charts

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Thank you for your kind words, Alex.
I think I've said this already, but I read news stories and scan pre- and during market hours.
There are many scanners on the market and I'm not going to write publicly on this thread about the details and the service I use, but if you use a scanner look for the biggest risers/fallers and look at the trend.
Richard
 

DionysusToast

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Dec 6, 2009
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Here's one - well - kind of.....



Position sizes deleted 'cause that's none of your business :LOL:

Level 2 was going haywire on Tradestation today seems like the T&S and L2 were out of synch. A bit of a pain.

In at 26.92, out at 26.82 for 25%, the remainder our at 26.31. Just over 12 minutes in the trade.
 

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DionysusToast

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are you a TA convert now then Dion?
ps - nice trade
Well - I'm not totally anti-TA. I'm just against the concept that it can be used in place of all other knowledge. I will always be against indicators in terms of using them for entries & exits. They can be damn handy in scanners though (e.g. using stochastics to find stocks in a pullback).

Using T&S and L2 is really about understanding who does what and why. I can't seem to get to grips with NYSE stocks but I am OK with NASDAQ stocks, so I no longer trade the NYSE. I don't know many people that know how to use L2 and T&S as it applies in 2010. I think there are plenty of theoretical books on how it applied in 1998 though. With a grounding in the theory, you can spend a lot of time at the screen to learn how to put it into practise.

I don't see any of this stuff mentioned in TA books - and I have a LOT of TA books. It's all MACD, MA xovers, stochastics - you know the drill, you must have some of the books.

So - I will go out on a limb and say that the reading and 'getting a feel' for buying & selling pressure is a skill that I would not specifically associate with TA.

Sorry to go off topic Mr C :eek:
 

GladiatorX

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Jun 7, 2009
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I don't know many people that know how to use L2 and T&S as it applies in 2010.
The main difference to effect use of level 2 these days, is that its more about exploiting it through different routing styles these days than just SMART, most retailers don't really understand all the possbilities with routing.

Oh well, cya.
 

Mr. Charts

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Several trades today, three of which were using this particular method.
Lost -5c on the first, gained +29c on the second and gained +24c on the third.

Of course, the losing ones look the same as the winning ones when I enter the trade. The key is that I follow the exit rules and since I am trading in the direction of the trend and most of the time in the direction of the market, then the probabilities are stacking up on my side.
In the near future I'm going to start showing how the same underlying principles work in reversing stocks as well. There is already an example in post #850

Here's the +29c per share KO trade. As can be seen the exit was following the chart rule I've mentioned many times.
Richard
 

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Mr. Charts

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Here's one of a few using this one method from today; a nice bread and butter trade of
+31c a share.
Spot the established trend, jump on board with a tight stop of either the ATR of 12 in this case, or the low of the candle 8c away in case it reverses on you; then follow the chart rule for exit. Straightforward and mechanical. Not rocket science. Follow the trend till the bend at the end. It might not be the end, you can't be sure, but you've banked money using a sensible logical methodology time after time after time, and when the evidence says it is turning against you you've done the right thing by exiting.
Remember, the stock doesn't have to be trending constantly till the time of entry, but it does need to have been trending for a while having clearly broken out of its range.
There are other situations, like in post #850, when there is a new trend after a reversal and this methodology works well with those too.
Richard
 

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Mr. Charts

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PS I know people like to see losing trades, but there aren't many of them to post as most using this approach are profitable. The losing ones are always small - which is the key - as I follow the exit rule or sometimes anticipate the exit and get out sooner.
Trading is a probability business, it's not about finding the start and end of moves every time, though finding the end does happen often.
I think of it like eating in a tapas bar. You intend having a mouthful or two of something, but then you might end up having a lot more. And there are always other dishes to come........
Richard
 
Feb 14, 2010
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Mr Charts, if you can post details of your last 200 trades I will tell you exactly how good your approach is? Preferably an excel file. This should be possible with all modern day broker platforms.