Trading the US the Naz/Mr. Charts Way
- Thread starter Mr. Charts
- Start date
- Watchers 59
- Status
Naz
Experienced member
- Messages
- 1,391
- Likes
- 25
Din,
I use www.Directaccesselite.com and Tradestation charts.
--------------------------------------------------
Level 2 was really something that was used in a big way by scaplers.Most of the information printed i believe is years out of date or makes the wrong assumptions.
Some years ago i stopped scalping and started using t/a with level 2, looking for the bigger moves.
At first its a bit tricky because you feel an affinity to the side that you have relied on heavily in your trading before.In the end you use both together in unison.This to me is the way forward trading the Nasdaq.
The problem with learning level 2 from someone is that they are impressing their style of trading on you.So if you learn from a group that are intent on making many many calls during the day then you'll end up over trading and looking for small moves.
Adding the charts to the equation i believe suddenly gives you a chance to see the bigger picture and go for the bigger moves.
Many day traders take 10c,15c,20c etc.because they believe thats what its all about,which can lead to over trading and paying to many commissions.Although many of us have to do this at times its always worth spotting the bigger intra day move.
A one dollar run can make a day trader a days money in one trade,if the risk is 20c then the trade has a 5:1 R/R.I believe that now stocks are a lot cheaper looking for these type of moves is a good play.
Naz
I use www.Directaccesselite.com and Tradestation charts.
--------------------------------------------------
Level 2 was really something that was used in a big way by scaplers.Most of the information printed i believe is years out of date or makes the wrong assumptions.
Some years ago i stopped scalping and started using t/a with level 2, looking for the bigger moves.
At first its a bit tricky because you feel an affinity to the side that you have relied on heavily in your trading before.In the end you use both together in unison.This to me is the way forward trading the Nasdaq.
The problem with learning level 2 from someone is that they are impressing their style of trading on you.So if you learn from a group that are intent on making many many calls during the day then you'll end up over trading and looking for small moves.
Adding the charts to the equation i believe suddenly gives you a chance to see the bigger picture and go for the bigger moves.
Many day traders take 10c,15c,20c etc.because they believe thats what its all about,which can lead to over trading and paying to many commissions.Although many of us have to do this at times its always worth spotting the bigger intra day move.
A one dollar run can make a day trader a days money in one trade,if the risk is 20c then the trade has a 5:1 R/R.I believe that now stocks are a lot cheaper looking for these type of moves is a good play.
Naz
Last edited:
Just some observations on Post # 1043 from NAZ.
Level2 was, and is only part of what scalpers use, some other tools would be TRIN, $TICK.
Scalping is simply buying / selling pressure in very compressed timeframes, using very low, or non-existant "commission" to make 100's, mabe even 1000's of trades a day, with a very tight stoploss, looking to "scalp" a tick or two.
As such, I wouldn't expect it has changed much.
It is also one of the statistically more successful forms of daytrading, if you know how, and are very disciplined, and have zero, or very low commission basis.
From the examples that you and Mr Charts have posted in the past, that would be the type of profit per trade that would seem to be the average.
I think you may need to clarify this somewhat.
A $1 run in a $10 stock, is a 10% change in price, and is a good return in % terms for a daytrade stock.
A $1 run in a $100 stock, is 1%, and is a very average move.
Of course position size becomes all important.
Lets say a 10% position, of total capital, ie $100,000, with 2% risk
Following these money management rules, a 1000 share position equates to $10,000, and is a valid position, that you would catch the full $1 move is debatable, but assuming you could, a perfect entry, and exit, would net you $1000 for the day less expenses.
In a $100 stock, your $10,000 position size will buy you a 100 share position, and again assuming a perfect exit and entry, net you $100 less expenses for your days work.
Now, the following information is critical in assessing the advisability of the aforementioned.
1......How regularly can you find big % movers to match your MM rules, you need at least 1/day
2.....How often can you execute perfectly
3.....What sort of realistic bank is required to maintain (a) the return (b) money management
4.....At what level of living expenses
5.....# of trades taken per week on average to meet requirements.
6.....Ratio of winners to losers required to fulfil all the above.
Now, there is a further cost, and that is possibly changing your job to allow fulltime daytrading.
That is not a small cost, but also from a psychological point of view, adds tremendously to the pressure to find performance every-day.
It is this over-riding need to make money every-day, fast, that leads to the huge failure rate in daytrading. There is no real way for the average trader from home, to make BIG MONEY FAST.
While the markets will deliver wealth, they will not do it over-night.
Generally speaking, if you cannot profitably trade a daily system, it is highly unlikely that you will daytrade successfully. Most just lose more quickly.
cheers d998
Level2 was, and is only part of what scalpers use, some other tools would be TRIN, $TICK.
Scalping is simply buying / selling pressure in very compressed timeframes, using very low, or non-existant "commission" to make 100's, mabe even 1000's of trades a day, with a very tight stoploss, looking to "scalp" a tick or two.
As such, I wouldn't expect it has changed much.
It is also one of the statistically more successful forms of daytrading, if you know how, and are very disciplined, and have zero, or very low commission basis.
From the examples that you and Mr Charts have posted in the past, that would be the type of profit per trade that would seem to be the average.
I think you may need to clarify this somewhat.
A $1 run in a $10 stock, is a 10% change in price, and is a good return in % terms for a daytrade stock.
A $1 run in a $100 stock, is 1%, and is a very average move.
Of course position size becomes all important.
Lets say a 10% position, of total capital, ie $100,000, with 2% risk
Following these money management rules, a 1000 share position equates to $10,000, and is a valid position, that you would catch the full $1 move is debatable, but assuming you could, a perfect entry, and exit, would net you $1000 for the day less expenses.
In a $100 stock, your $10,000 position size will buy you a 100 share position, and again assuming a perfect exit and entry, net you $100 less expenses for your days work.
Now, the following information is critical in assessing the advisability of the aforementioned.
1......How regularly can you find big % movers to match your MM rules, you need at least 1/day
2.....How often can you execute perfectly
3.....What sort of realistic bank is required to maintain (a) the return (b) money management
4.....At what level of living expenses
5.....# of trades taken per week on average to meet requirements.
6.....Ratio of winners to losers required to fulfil all the above.
Now, there is a further cost, and that is possibly changing your job to allow fulltime daytrading.
That is not a small cost, but also from a psychological point of view, adds tremendously to the pressure to find performance every-day.
It is this over-riding need to make money every-day, fast, that leads to the huge failure rate in daytrading. There is no real way for the average trader from home, to make BIG MONEY FAST.
While the markets will deliver wealth, they will not do it over-night.
Generally speaking, if you cannot profitably trade a daily system, it is highly unlikely that you will daytrade successfully. Most just lose more quickly.
cheers d998
Last edited by a moderator:
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Of course, sometimes with the early moves you can manage very large gains very quickly.
For example, looking at the pre-market news about ADBE it was highly probable to me it was going to sell off quickly and sharply and when that was actually confirmed by its pre-market trading behaviour,
I shorted ADBE at 56.27
Again with these moves they often don't last long so you must be ready to move as soon as the market shows buyers coming in and when that happened,
I covered at 53.87
for a profit of $2.40 in a few minutes.
For this type of move, in my opinion, you need to be able to anticipate what is likely to happen, have your pattern set up ready and then execute when the buy/sell pressures, MM and ECN behaviour and actual trades printing off confirm the likely immediate future movement. You then often find yourself in a trade before the chart itself confirms the move and before volume bars show anything significant. The exit is on the same micro-analysis.
Of course sometimes, but not too often, it doesn't pan out that way and my approach is simply to exit the trade straightaway for a minimum loss, scratch or small profit.
All this means you know the trade has a high probability of success before you enter it because you are doing what the market is telling you, (having anticipated the move), and if proved wrong you merely close the trade. These factors together mean that my risk is always small and the probability of reward, (even though you cannot know the size of that reward), is far higher than that of losing.
In my opinion this is really no more difficult than driving a car well. It's about anticipation, decision making and executing the manouevre. Obviously you need to learn what to do, then get lots of experience.
HTH
Richard.
For example, looking at the pre-market news about ADBE it was highly probable to me it was going to sell off quickly and sharply and when that was actually confirmed by its pre-market trading behaviour,
I shorted ADBE at 56.27
Again with these moves they often don't last long so you must be ready to move as soon as the market shows buyers coming in and when that happened,
I covered at 53.87
for a profit of $2.40 in a few minutes.
For this type of move, in my opinion, you need to be able to anticipate what is likely to happen, have your pattern set up ready and then execute when the buy/sell pressures, MM and ECN behaviour and actual trades printing off confirm the likely immediate future movement. You then often find yourself in a trade before the chart itself confirms the move and before volume bars show anything significant. The exit is on the same micro-analysis.
Of course sometimes, but not too often, it doesn't pan out that way and my approach is simply to exit the trade straightaway for a minimum loss, scratch or small profit.
All this means you know the trade has a high probability of success before you enter it because you are doing what the market is telling you, (having anticipated the move), and if proved wrong you merely close the trade. These factors together mean that my risk is always small and the probability of reward, (even though you cannot know the size of that reward), is far higher than that of losing.
In my opinion this is really no more difficult than driving a car well. It's about anticipation, decision making and executing the manouevre. Obviously you need to learn what to do, then get lots of experience.
HTH
Richard.
Attachments
neil
Legendary member
- Messages
- 5,169
- Likes
- 752
Verno said:
Just use the "Glossary" under "Resources" at the top of the page on this site. Here's a link I found earlier
http://www.trade2win.com/boards/glossary.php?s=<r=E
SOCRATES
Veteren member
- Messages
- 4,966
- Likes
- 136
Again, I must compliment you on your accuracy of execution, and this, as we both know is the result of deep understanding and knowledge reinforced by experience, which becomes the personal intellectual property of the trader. There are many individuals only too eager to try to somehow get hold of that type of knowledge, but in my view totally unfit to be given it.Mr. Charts said:
I am commenting because you have displayed a trade that is bound to arouse interest from sincere aspirants and criticism from envious and corrosive individuals who may try to find a hole in this.
I assure the lot of you that there is no hole. Again it perfectly obvious.
I am going to proceed to explain it but only in mechanical terms:~
Here we see an instrument and it does not matter what it is and whether there is adverse press comment preceding the opening or otherwise as the stage is set at the previoous close.
Towards the previous close the price lifts in very narrow spreads, but the volume is very thin indeed.
It is obvious that the price is being lilfted with great effort and in a very gradual and calculated manner, that is despite the market conditions, with great difficulty.
This is because the underlying volume towards the close (in mechanical terms) gives the clue that there is no real underlying demand for it, if at all.
This is a cue to a tremendous fall in the offing.
Sure enough, as day follows night, at the open the price is gapped down sharply and begins to fall.
This type of price decline occurs very quickly and continues very rapidly because while it is under way, no floor can be percieved. The gains on this type of operation can be substantial and can happen very quickly, but handling this type of situation requires the correct snap close and the timing is crucial.
I am not willing to expand on this and only restrict my comments to a purely mechanical synopsis. This is because the great majority already have great difficulties in coping witth all of this, even at a very basic mechanical level.
Above the mechanical level there is a cognitive level.
Above the cognitive there is an intuitive level.
Above the intuitive there is a futurological level.
There is no point in attempting to illuminate or explain the reasons according to these three much higher levels of attainment, but they do confirm what the mechanical level exposes.
To any of you who do not understand this, you ought not to be attempting to trade at all.
You ought to better spend your time studying and in deep self reflection until at least you are able to attain a more or less acceptable degree of proficiciency in what is rock bottom basic mechanical.
The same applies to my previous post on this thread with regards to Mr Charts' post and thumbnails, a commentary which I can see has prompted all sorts of comments from individuals who ought not to be expressing opinions without foundation but instead should put their time to better use in devoting serious effort to concentrated study, observation, and proper self development.
There are exceptions, but sadly, very few indeed.
All of that type of tedium is very boring and one gets tired of putting up with persistent nonsense.
I have devoted the better part of one year in an attempt to help members progress. It expires in 5 days.
I am not waiting another 5 days. This is likely to be my last post, as in contrast to all the nonsense on this website, I have much better things to do.
So now it is "down periscope", enjoy your rowing boats and you may bob about in them as much as you like from now on.
Ta Ta.
Socrates,
It mostly draws comment due to the historical nature of the trade.
That is to say, as it is a daytrade, lasting, in this case minutes, and unless posted live as it is happening, will unavoidably be historical.
This does not invalidate the trade methodology, but it does not promote education, as in hindsite, analysis is not a huge challenge for the majority.
Why bother analysing a trade that in hindsite is obvious.
Why not provide an analysis of what will happen tomorrow, based on whatever methods you wish. This for most, would be far more interesting, and educational, not to say, impressive should it develop exactly as you predict.
Mechanical would be more than acceptable.
If they are all confirmatory, then, by utilising the lowest, and easiest, you would produce the same result?
Again, pure hindsite.
For an absolute novice, as an introduction to basic chart reading, quite possibly useful, but again for the majority, irrelevant. Provide an analysis going forward, if it is written in stone, then the accuracy of the analysis should reflect the outcome.
Always keep that escape clause handy.
cheers d998
It mostly draws comment due to the historical nature of the trade.
That is to say, as it is a daytrade, lasting, in this case minutes, and unless posted live as it is happening, will unavoidably be historical.
This does not invalidate the trade methodology, but it does not promote education, as in hindsite, analysis is not a huge challenge for the majority.
Why bother analysing a trade that in hindsite is obvious.
Why not provide an analysis of what will happen tomorrow, based on whatever methods you wish. This for most, would be far more interesting, and educational, not to say, impressive should it develop exactly as you predict.
Mechanical would be more than acceptable.
If they are all confirmatory, then, by utilising the lowest, and easiest, you would produce the same result?
Again, pure hindsite.
For an absolute novice, as an introduction to basic chart reading, quite possibly useful, but again for the majority, irrelevant. Provide an analysis going forward, if it is written in stone, then the accuracy of the analysis should reflect the outcome.
Always keep that escape clause handy.
cheers d998
timcannell
Member
- Messages
- 88
- Likes
- 1
SOCRATES said:
I would summarize/generalize by saying that counter-trend movement on reduced volume is worth monitoring for a subsequent opportunity to enter in the direction of the greater trend
Last edited:
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Socrates,
Thank you for your kind words
timcannell,
Your comment is generally true in most time frames, though in the shorter ones I think it's worth being aware of time of day factors e.g. lunch time chop when MMs can manipulate movement.
Thank you for your kind words
timcannell,
Your comment is generally true in most time frames, though in the shorter ones I think it's worth being aware of time of day factors e.g. lunch time chop when MMs can manipulate movement.
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
In fact, timcannell, the very two first posts I made on this thread are, even without volume, examples of a counter-trend movement leading to a continuation of the original trend.
The first image shows my entry and the second the exit.
The first image shows my entry and the second the exit.
timcannell
Member
- Messages
- 88
- Likes
- 1
Mr. Charts said:
Thanks Mr Charts, Ive just had look - excellent short entry which could be picked by anyone - this is the whole basis of my early trading appraoch....
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Yes, and imo, it's a good reliable one.
frugi
1
- Messages
- 1,843
- Likes
- 133
Members may have noticed the new "Trading the US the Naz / Mr. Charts way" private forum that has appeared at the bottom of the Members' Private Boards category. In order to be able to read and post in this forum, members must request access from Naz and/or Mr. Charts, using the "Group Memberships" link which is found in the User Control Panel. Please be advised that members who disrupt the new forum can have their membership of it withdrawn at any time. This thread is now closed but will remain a public resource. Thanks.
- Status
