Trading the US the Naz/Mr. Charts Way

[timcannell]

The real issue is that Richard only had the information he had to act on at the time he acted. Print off the charts he provided and slide a piece of paper right-to-left along the Time axis until the bar before Richard entered his trade. That's ALL he had to go on - at that time.

No, as I pointed out he had Level 2 and Time of Sales to help him make a decision as well...

 

[timcannell]

I'm sure he could.

I disagree - why would Socrates have made identical trades to Richard based on a different set of information sources ( Socrates relying on a subset of Richards tools ie just a Candlestick chart as oppose to Richard using a Candlestick chart, Level 2 and Time and Sales ). I am a mathematician and in terms of probability this is highly unlikely.

 

[dbphoenix]

FWIW, Socrates is correct about all of this, but it's not a matter of prescience but of understanding the interrelationships among demand and supply, buying pressure and selling pressure, support and resistance. If one is not aware of these things, he won't see them, just as one will have difficulty seeing things in the dark without night vision goggles.

Of course it can be done in real time. It has to be done in real time, though one ought to plot the S/R levels in advance. If I couldn't do it in real time, I couldn't trade. The question is not whether it can be done in real time or not but how to do it, and learning how to do it requires a certain "availability".

It's not at all unusual that these two should make exactly the same trades, if they did. I worked with indicators long enough to know what the indicator people are doing or are likely to do, though it doesn't enter into my decision-making process. But it's highly likely that somebody with the right MACD settings and/or sto settings and/or MA combos and so on will make the same trades I do. Nothing unusual in that at all.

 

[Salty Gibbon]

Quite frankly, who the hell cares anyway, Timcannell.

As I said before, people should make what they can of Richard's charts while they can, before he gives up on this rapidly deteriorating thread forever if he hasn't already done so !!!

Do mathematicians make a habit of splitting hairs all day long ?

And by the way, how many beans make 5 ?

 

[timcannell]

FWIW, Socrates is correct about all of this, but it's not a matter of prescience but of understanding the interrelationships among demand and supply, buying pressure and selling pressure, support and resistance. If one is not aware of these things, he won't see them, just as one will have difficulty seeing things in the dark without night vision goggles.

Of course it can be done in real time. It has to be done in real time, though one ought to plot the S/R levels in advance. If I couldn't do it in real time, I couldn't trade. The question is not whether it can be done in real time or not but how to do it, and learning how to do it requires a certain "availability".

It's not at all unusual that these two should make exactly the same trades, if they did. I worked with indicators long enough to know what the indicator people are doing or are likely to do, though it doesn't enter into my decision-making process. But it's highly likely that somebody with the right MACD settings and/or sto settings and/or MA combos and so on will make the same trades I do. Nothing unusual in that at all.

Im not disputing that Socrates description of buying and selling pressures makes sense - what I am disputing is that in this case what he has conducted is a retrospective analysis which I find very easy to do - there were no indicators on the charts in question - so yes I maintain it is highly unlikely for them to draw exactly the same conclusions

 

[timcannell]

Quite frankly, who the hell cares anyway, Timcannell.

As I said before, people should make what they can of Richard's charts while they can, before he gives up on this rapidly deteriorating thread forever if he hasn't already done so !!!

Do mathematicians make a habit of splitting hairs all day long ?

And by the way, how many beans make 5 ?

I must be honest and say Ive had too much time free today ;-)

 

[Salty Gibbon]

Me too.

Loss of focus by being on this godforsaken website.

 

[dbphoenix]

Im not disputing that Socrates description of buying and selling pressures makes sense - what I am disputing is that in this case what he has conducted is a retrospective analysis which I find very easy to do - there were no indicators on the charts in question - so yes I maintain it is unusual in this case for them to draw exactly the same conclusions

Well, no, not really. Not trying to be argumentative, but there are plenty of people who do this all day every day.

A bar is simply a representation of trading behavior. It doesn't make any difference if it's a candle or HLC or OHLC or even a line or point. Doesn't matter if it's tick or time or volume. It's just an illustration. What are traders doing? Are they rushing in to buy at a certain level and pushing price higher? What happens then? Can they sustain it? Perpetuate it? Hold it? Or will selling pressure overwhelm them? Not only can this be assessed in real time, it has to be assessed in real time. Otherwise, it's not tradeable. There's no trick to determining whether a price level is holding or not. It either is or isn't. Price is making a new high or a new low or it isn't. It may or may not be doing what the trader expects it to do, but that's the trader's problem. Price just does what it does.

 

[TheBramble]

Salty, he is going to do it for real when he gets my response in full, later. I am busy with a pozzie at the moment....

Don't know why this has suddenly jumped into my consciousness, but...

Bertie, I thought you didn't trade on Fridays?

(Lord knows why I hang onto such random bits of information...)

Is this change of pattern anything to do with your 'Back to the Future' project? Come on, you can tell us!

 

[timcannell]

Well, no, not really. Not trying to be argumentative, but there are plenty of people who do this all day every day.

A bar is simply a representation of trading behavior. It doesn't make any difference if it's a candle or HLC or OHLC or even a line or point. Doesn't matter if it's tick or time or volume. It's just an illustration. What are traders doing? Are they rushing in to buy at a certain level and pushing price higher? What happens then? Can they sustain it? Perpetuate it? Hold it? Or will selling pressure overwhelm them? Not only can this be assessed in real time, it has to be assessed in real time. Otherwise, it's not tradeable. There's no trick to determining whether a price level is holding or not. It either is or isn't. Price is making a new high or a new low or it isn't. It may or may not be doing what the trader expects it to do, but that's the trader's problem. Price just does what it does.

dbphoenix

I agree with nearly everything you say above - I was just trying to say that Richard reached his decisions about entry and exits in conjunction with level 2 and time and sales information, crucial for NASDAQ level 2 traders ( obviously ). Socrates reasoning could just as obviously not factor this in. I hope this makes my point a little more effectively. For this particular example Socrates' plausible assessment of buying and selling pressure on a chart in isolation, I maintain is not strong enough evidence to justify a high probability entry; at least not for me.

Kind Regards

Tim

 

[JonnyT]

Level II? Whats that?

Again Richards training didn't touch it when I attended and FWIW I don't think it adds anything either.

JonnyT

 

[dbphoenix]

dbphoenix

I agree with nearly everything you say above - I was just trying to say that Richard reached his decisions about entry and exits in conjunction with level 2 and time and sales information, crucial for NASDAQ level 2 traders ( obviously ). Socrates reasoning could just as obviously not factor this in. I hope this makes my point a little more effectively. For this particular example Socrates' plausible assessment of buying and selling pressure on a chart in isolation, I maintain is not strong enough evidence to justify a high probability entry; at least not for me.

Kind Regards

Tim

I don't use LII or T&S either. But the analysis is sound, nonetheless. If price continues to strike the bottom of a range on each succeeding high with lighter and lighter volume, it doesn't take a great leap of faith to determine that a short is a high-probability trade.

What is Catch-22 about these situations is that these concepts can be explained best in real time. Problem is, few people are interested. So one winds up having to explain them in hindsight to all those people who trade part-time, if at all. And is thus accused of trading in hindsight. And so on.

It's all basic principles, and if the principles are applied consistently, then it doesn't matter whether the movements are explained in real time or not (if one boasts that it's all done through instinct and feeling, that's another matter).

But, again, I'm not trying to stir the pot; just pointing out that what Socrates posted is consistent with the principles I've mentioned. That's all.

[Edit: Incidentally, this is not a defense of Socrates per se. I realize that there's some sort of history here that I don't understand and don't particularly care about. I'm just supporting the analysis.]

 

[TheBramble]

What is Catch-22 about these situations is that these concepts can be explained best in real time. Problem is, few people are interested. So one winds up having to explain them in hindsight to all those people who trade part-time, if at all. And is thus accused of trading in hindsight. And so on.

Where does the Catch-22 come in? Can you imagine just how many people viewing this thread would be more than happy for a bit of 'real time' explanation? 'few are interested' - arf! Few can do it more like!!!!

The fact that these concepts are not explained in real time is, I guess, the issue. It's always easy in the retrospective analysis when any fool can say 'this is why the price did this at this point' etc. Very easy pickings...

But, again, I'm not trying to stir the pot; just pointing out that what Socrates posted is consistent with the principles I've mentioned.

For someone with a self-proclaimed background in psychology - you are remarkably niaive in posting what it is you really don't want to say about what you are saying.

[Edit: Incidentally, this is not a defense of Socrates per se. I realize that there's some sort of history here that I don't understand and don't particularly care about. I'm just supporting the analysis.]

It's always the same. An interesting thread develops and all the 'gurus' jump on board...hoping to sound sufficiently aloof to be interesting without actually giving anything away. (Assuming they have anything to give of course... )

 

[dbphoenix]

Where does the Catch-22 come in? Can you imagine just how many people viewing this thread would be more than happy for a bit of 'real time' explanation? 'few are interested' - arf! Few can do it more like!!!!

I conducted these sessions several times in the past, but only a few people showed up, and no more than two of them were full-time traders. Doesn't do much good to explain something to somebody in real time if they're not there. So I now work with people who are interested in conducting these investigations in their own time in their own way.

The fact that these concepts are not explained in real time is, I guess, the issue. It's always easy in the retrospective analysis when any fool can say 'this is why the price did this at this point' etc. Very easy pickings...

True. Hindsight analysis is always easy. But if one knows and applies the principles, it doesn't matter.

It's always the same. An interesting thread develops and all the 'gurus' jump on board...hoping to sound sufficiently aloof to be interesting without actually giving anything away. (Assuming they have anything to give of course... )

What is it that you want to know?

 

[TheBramble]

I conducted these sessions several times in the past, but only a few people showed up,

Oh yeah? Wish I'd known. I would certainly have turned up to see how another trader works in RT. (Bet you'd like to see me in action... )

FYI - A little over a year ago we had genuine RT trading with another t2w member running the show and he did walk his talk - on-line, voice, charts, strategies, methods, real time - the lot. You didn't (and still don't) get any negs thrown at him - or anyone else who can show they really know what they're doing.

It's the unknown quantities who crave unsubstantiated approbation for their self-proclaimed skills, but can't deliver the goods that are constantly fighting their personal battles for recognition in the field of trading.

The people I personally most respect in this business are the ones who don't try to convince others they have all the answers or that 'their way' is the way.

They don't hide behind generalities or retrospectives or 'can't say too much because of fee-paying students' - they just GIVE - for the pure joy of being right, being seen to be right and helping out the few that will be alive enough to understand.

What is it that you want to know?

If I knew that Mr. B I wouldn't need to know.

 

[Mr. Charts]

Fascinating...........

Socrates, thank you for a brilliant exposition and the time and effort to express it.
Needless to say to you, correct.
To others, read and consider well what he has said.

Yes, I do use what I call micro-analysis and I have already listed the relevant constituents.

So, how do you reconcile micro-analysis with volume analysis?
They are different ways of looking at what is really happening in the market. In my view, they are simply assessing sentiment and its manifestation in actual buying and selling and the positioning of orders. If you like, they are looking from different but related angles at the same activity.
In my opinion I see emerging significant behaviour sooner the way I personally do things.

I'm happy, but not at all surprised, that certain people find some of my posts useful.
There are many ways of learning, some people like things spelt out, some like to think for themselves and perhaps enjoy discovery, others find debate preferable. We are all different.

Thank you to Socrates for his sterling explanatory efforts in 1008; to dbphoenix for his contributions, especially 1023, 1028 and 1032; to Salty for his on - the - button 980.

I guess I'm saying to anyone starting to read anything onwards from my KOSP post 970 that they should concentrate on the positive contributions enumerated.

Richard

 

[TheBramble]

Well, that's cleared it all up.

I'll leave this thread to the 'gurus' and all those who feel trading expertise is best measured by how inscrutable you can make yourself appear to be.

Meanwhile, back in the real world where results count...

 

[timcannell]

Well, that's cleared it all up.

I'll leave this thread to the 'gurus' and all those who feel trading expertise is best measured by how inscrutable you can make yourself appear to be.

Meanwhile, back in the real world where results count...

Well said Bramble - I havent seen anything to alter my views - Im disappointed with Mr Charts last contribution to say the the least but cant be bothered arguing the toss any longer - for anyone who is interested there is a great book called ' Techniques of Tape Reading' by Graifer and Schumacher; this conatins valuable information about the accumulation / distribution cycle, and several reliable setups ( mainly trend continuation but a couple of reversals ). It also has 30 detailed annotated chart examples of these in action, the most useful part of the book in my opinion. Anyone who wants to learn to trade by 'Reading the Tape' would be well advised to read it. I hasten to add I have no connection with or vested interest in promoting this book.

 

[Naz]

I've been busy trading the last few days and have only now just read all the comments.
Nice trades Richard.

I found it extremely interesting because i played those KOSP moves.Richard would understand why i was in that stock.It was great to see how his entries and mine were similar and also read Socrates excellent take on the move.

Did anyone spot the fib pull back after those moves played out.I attach my chart from that day for anyone thats interested.

I use t/a and level 2.So when i'm viewing volume i'm watching it in the level 2 screen.When lots of volume occurs and the guys on the bid play out their different feelings,i know we're about to turn.To me, afterwards it will stand out on a chart but at that moment in time i'm reading what is about to happen before any chart shows the next move.

Someone said its easy to use a chart afterwards and curve fit something thats happened.I believe thats true and thats why many look at a chart without volume whilst its forming and can see so many possible scenarios.Then after its made its decision there will be some kind of t/a that will offer an explanation to what happened. Therefore they take less out of a move because they need more confirmation before they step up to take the trade.

Using a chart gives a picture of what's happened but level 2 gives will give the trader the moment in time things are about to change before most have realised it.Direct access allows he/she to get filled immediately and take the trade before the chart signals the move.That gives them an edge others dont have and allows that type of trader to have the confidence to trade those type of early play moves.

To me have the best of both worlds.Great charts and a level 2 screen with direct access and put them side by side.Then you can use any volume ideas from a chart, get the bigger picture of the same story from the level 2 screen and take your trade in the blink of an eye with direct access.

Naz

 

[dbphoenix]

for anyone who is interested there is a great book called ' Techniques of Tape Reading' by Graifer and Schumacher; . . . Anyone who wants to learn to trade by 'Reading the Tape' would be well advised to read it.

I agree. This book, along with one by Neil and one by Wyckoff, are the three books on tape reading which I include on my recommended reading list. In fact, I recommend just about everything at http://www.realitytrader.com/ (articles, online videos, etc). Vad recently sent me a copy of his most recent book, a workbook for creating and developing trading plans, which is also excellent.

[Edit: Anyone who's genuinely interested in learning how to do this in real time can sign up for a free one-week trial to the RT chat room and ask all the questions he wants. This isn't to say that one can learn everything he needs to know in one week. But the resource is there for the taking.]