Making Money Trading

Which market do you want to learn to trade?


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trader_dante

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Aug 18, 2005
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#76
As one clever observer has already pointed out, my FTSE chart does not look the same as his! Principally, he has no pin bar but a bullish bar instead!

The reason for the discrepancy is the SB broker I use has a unique way of dealing with gaps.

If a gap up/down occurs in price, rather than simply open the market at the new level leaving a visible gap on the chart, it will "fill" the price in on the chart.

So in this case, when the market gapped down after the weekend, rather than a chart showing a lower open (a gap) followed by a move up (to fill the gap)- my broker shows a large bar down that then retraces.

I hope this is not too confusing and I thought I would just let this one ride rather than delete it and post another example.

Many people will get slightly different looking price action from time to time. I have come across this frequently in the FX market. If you have a US and a UK based broker that operates their charting in their respective timeframes you may find that because of the international time difference, the UK end-of-day (EOD) bars are printing five hours earlier, creating sometimes very different setups.

I have always been taught to play these bars as you see them - your charting package is after all only a window to view price action through.

If you didn't have a pin bar in your FTSE chart, you could have still entered a high probability trade by trading "the gap". This is a technique whereby a trader will enter the market in expectation of a gap in price being filled. The confluence I illustrated above would have given you two supporting reasons to enter this trade long. I personally do not trade gaps so I won't talk about it further here but I know other traders who say that trading the weekend gap on some of the FX pairs is among the easiest money they make.
 
Last edited:
Jan 28, 2007
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#77
If you didn't have a pin bar in your FTSE chart, you could have still entered a high probability trade by trading "the gap". This is a technique whereby a trader will enter the market in expectation of a gap in price being filled. The confluence I illustrated above would have given you two supporting reasons to enter this trade long. I personally do not trade gaps so I won't talk about it further here but I know other traders who say that trading the weekend gap on some of the FX pairs is among the easiest money they make.
Not to hijack the thread, but from time to time I make trades based on anticipating the closure of a YM opening gap - something which could be discussed here in more detail perhaps if you decide to teach indices. (I'd much rather we went with Making Money Trading FX though!)
 
Jan 28, 2007
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#78
Pin Bars, Daily timeframes

As some of you who follow my posts may recall, I recently indicated I would be entering a new stage of trading and posting results shortly. This new method of trading was to learn how to trade FX from daily timeframes, and looking to hold positions for between a few days and 2 weeks to capture movement in trends. These "pin bars" look to be an interesting way of taking a trade in the direction of the trend when the market is over extended.

I look forward to learning more about how you trade FX. Thanks for the thread - something tells me it will be rather useful. In terms of live trades, hopefully you will post some, but if I take any trades based on advice received here, and the trades appear in my journal, I'll link here!

When a market is finally decided, could you give us some more information on how you go about trading it? I'd be interested in the timeframes you follow, whether you track fundamentals, how you establish entries and exits, and how you decide on placing stops. Also, do you use indicators*, and if so which ones?

* - I'll be honest here - I'd be very disappointed if you show us a system with 25 multicoloured indicators and tell us to buy when X crosses Y while Z is above 50%, A is blue, B is flashing, and it is a full moon. Moving averages are okay for defining trend, but I'm pretty much convinced that the professionals don't MACD and ZigZag! Saying that, I'm open to anything novel, interesting, or profitable regardless....it is just my preference to trade using price, volume, and candlestick patterns (and T&S/ order book when intra-day trading)
 

trader_dante

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Aug 18, 2005
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#79
When a market is finally decided, could you give us some more information on how you go about trading it? I'd be interested in the timeframes you follow, whether you track fundamentals, how you establish entries and exits, and how you decide on placing stops. Also, do you use indicators*, and if so which ones?

* - I'll be honest here - I'd be very disappointed if you show us a system with 25 multicoloured indicators and tell us to buy when X crosses Y while Z is above 50%, A is blue, B is flashing, and it is a full moon. Moving averages are okay for defining trend, but I'm pretty much convinced that the professionals don't MACD and ZigZag! Saying that, I'm open to anything novel, interesting, or profitable regardless....it is just my preference to trade using price, volume, and candlestick patterns (and T&S/ order book when intra-day trading)
Lurker Lurker,

I am going to show you some stuff that you will use forever. This material will blow you away. I promise you.

Have patience. There is a lot of work for me to do and I am already worried that those new to this will be out of their depth from my first post above which has gone right in at the deep end. This is what I was afraid of. For the seasoned traders this may all seem "old hat" but I am sure there are many out there that don't even know what pin bars are or the psychology behind them. I will explain all though...
 
Likes: Directional

firewalker99

Well-known member
Jul 29, 2006
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#80
First is that lately, I've started to realise that there is more to life than trading. I've gone through hell to learn to trade. I've cut myself off from my friends and family and nearly wrecked a six year relationship with the girl I love. My attempts to learn this game have led to anger and frustration. I found that all I would do is be thinking about the market and I became gradually more introverted until I lost sight of everything that really matters in life.

And then suddenly it dawned on me: the market doesn't care who I am - it was here long before I was born and it will be here long after I am dead. I am giving up precious years that I can't get back in order to learn how to make money. And I am ignoring the things that really matter in life like: "Do I show the important people in my life that I appreciate them?", "Am I making the most of my time here?", "Will I be remembered after I die?".
You have no idea how much that story relates to mine :eek: .

Much R-E-S-P-E-C-T to you trader_dante, not only for trying to educate the masses, but also and more importantly for putting yourself in the middle with nothing to gain, but a lot to lose.

To the sceptics out there: it's fair and normal to question somebody who claims to offer xxxx % in xxxx amount of time, as I would too - absolutely. But after reading some of dantes posts he seems like an honest person. I have no reason to doubt his intentions nor his credibility as a trader.

The only thing I would suggest dante, if you permit, is that you remove that line from your signature. It's absolutely not needed to support your claims, it only makes you look like you are trying to sell something. It's already very clear to me that you know what you are talking about and I very much understand your reasoning to share some of your knowledge.
 

firewalker99

Well-known member
Jul 29, 2006
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#81
As you don't mention the only 3 authors of whom any notice should be taken whatsoever, Dr. Alexander Elder, Daryl Guppy and John Murphy, I can only conclude, along with your continual postponement of anything concrete or of substance, that You Sir are a Charlatan. or in other words, enough already, post something of value or get off the pot.
We usually agree, but on this particular occasion I'd have to say none of the authors you mentioned have contributed to enlightening my insights in the market. I'm not saying they were a bad read, but the true Aha-Erlebnis sure didn't came from them... but each to his own :)
 

trader_dante

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Aug 18, 2005
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#82
The only thing I would suggest dante, if you permit, is that you remove that line from your signature. It's absolutely not needed to support your claims, it only makes you look like you are trying to sell something.
Accepted and done.

It's 2.45am Sunday morning and I can't sleep for thinking about the best way to convey everything to you all...

I really hope I do this method justice.

If anyone has any questions or doesn't understand anything as we progress, please, please ask. If you are afraid to ask infront of everyone, then PM me.
 
Aug 21, 2004
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Manchester
#83
Accepted and done.

It's 2.45am Sunday morning and I can't sleep for thinking about the best way to convey everything to you all...

I really hope I do this method justice.

If anyone has any questions or doesn't understand anything as we progress, please, please ask. If you are afraid to ask infront of everyone, then PM me.
T_D, consider if you will that this thread is in the First Steps Forum and that this is where newbies ought to ask their questions...saves going over and over the same issues time after time.

Also consider that they can only be spoon fed to a certain level, but as we know, at some point they surely must do the work in order that they may benefit from the teachings.

tx cv
 

firewalker99

Well-known member
Jul 29, 2006
6,655
597
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#84
I'd say a good imagination. But you won't believe me because you are a rookie. There are no shortcuts. OK? But you still won't be able to keep away from this thread. It has been very interesting to see who has expressed an interest in it. Hard to determine whether it is genuine or not....can't be genuine....surely....:LOL:
Beg to differ... you don't need imagination to come up with 2,164% in 15 weeks time.
All you need is a simple calculation :p

This leads you to an average of 4.185% a day (15 weeks being 75 trading days). If you read trader_dante's posts carefully, you'll notice he has a slightly higher than normal tendency towards risk-tolerance. I don't know what the maximum position is that he would allocate to any single trade, but his largest single drawdown was almost 10% (rather big).

So if you take a rather big risk on each trade, but are confident in your trades and have a high win ratio (which is around 80% according to dante), then it's perfectly seizable to average 4% a day.
 

trader_dante

Well-known member
Aug 18, 2005
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www.trader-dante.com
#85
I would like you all to think of the first example I posted above (FTSE 100) as like a finished puzzle.

The pieces that make up this puzzle are:

The price action (the pin bar) ,
The fibonacci level
The support/resistance area

These pieces come together to create a high probability setup.

Any of these pieces could have been played on their own but I personally want to see confluence when I trade.

Confluence is simply a joining of elements. In the above example, the fib level and the support/resistance area came together to give that level importance. When the price reacted to it we gain even more confidence in the trade.
 

firewalker99

Well-known member
Jul 29, 2006
6,655
597
173
#86
Accepted and done.

It's 2.45am Sunday morning and I can't sleep for thinking about the best way to convey everything to you all...

I really hope I do this method justice.

If anyone has any questions or doesn't understand anything as we progress, please, please ask. If you are afraid to ask infront of everyone, then PM me.
I got home early from a night out and as we are changing hours this night (daylight savings time) I found myself an extra hour :) . Was only going to check T2W for 5 minutes, but then I stumbled upon this thread...
 

firewalker99

Well-known member
Jul 29, 2006
6,655
597
173
#88
I would like you all to think of the first example I posted above (FTSE 100) as like a finished puzzle.

The pieces that make up this puzzle are:

The price action (the pin bar) ,
The fibonacci level
The support/resistance area

These pieces come together to create a high probability setup.

Any of these pieces could have been played on their own but I personally want to see confluence when I trade.

Confluence is simply a joining of elements. In the above example, the fib level and the support/resistance area came together to give that level importance. When the price reacted to it we gain even more confidence in the trade.
I suspect most readers won't have a problem with identifying a Fibonacci level nor with seeing a pin bar. However, identifying support & resistances zones might be a whole different matter, which is why no matter how hard you try to describe your system, other traders might still see something different than you. Which isn't necessarily a bad thing.
 
Jan 28, 2007
2,482
148
73
#89
Been saying that all along. One fantastic exit can cover 10 miserable entries...
Actually, your entries and exits thread was very very informative. The exits thing has been bothering me regarding trading on a daily timeframe. What constitutes noise on a daily time frame, and what signals that the direction is changing or that the entry was wrong?

Look at trader_dante's reputation points - he has added an extra 3 green dots today!
 

nine

Well-known member
Sep 5, 2003
2,038
506
123
#90
As one clever observer has already pointed out, my FTSE chart does not look the same as his! Principally, he has no pin bar but a bullish bar instead!

The reason for the discrepancy is the SB broker I use has a unique way of dealing with gaps.

If a gap up/down occurs in price, rather than simply open the market at the new level leaving a visible gap on the chart, it will "fill" the price in on the chart.

So in this case, when the market gapped down after the weekend, rather than a chart showing a lower open (a gap) followed by a move up (to fill the gap)- my broker shows a large bar down that then retraces.

I hope this is not too confusing and I thought I would just let this one ride rather than delete it and post another example.

Many people will get slightly different looking price action from time to time. I have come across this frequently in the FX market. If you have a US and a UK based broker that operates their charting in their respective timeframes you may find that because of the international time difference, the UK end-of-day (EOD) bars are printing five hours earlier, creating sometimes very different setups.

I have always been taught to play these bars as you see them - your charting package is after all only a window to view price action through.

If you didn't have a pin bar in your FTSE chart, you could have still entered a high probability trade by trading "the gap". This is a technique whereby a trader will enter the market in expectation of a gap in price being filled. The confluence I illustrated above would have given you two supporting reasons to enter this trade long. I personally do not trade gaps so I won't talk about it further here but I know other traders who say that trading the weekend gap on some of the FX pairs is among the easiest money they make.
I like what you're doing here.

I would suggest one correction to what you have been taught. You were taught: "I have always been taught to play these bars as you see them - your charting package is after all only a window to view price action through."

I would suggest that its better to try to figure out how the other players in the market see the world and then make sure that you can perceive what they perceive. My rational is that the confluence of support/res fibs and price action (and/or mas) is really you, the trader, looking for situations where as many players as possibly perceive your scenario as a good setup or will do so in a short time as their patterns fill in.

So, FWIW, I attempt to look at the market thru the same lenses as big players, active traders, and other major influences. I try to look at their preferred timeframes; their preferred tools; and think "what will they see now?"

Which brings me to my only criticism of your generous thread: if a two bit (sorry but you did say a spreadbetting) company shows the market differently to the way that the major influences see it then you need to get different charting. ;)

All the best.
 
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