Shame on you!

Brock Landers

Brock Landers

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(lulz at title)

Right, in another thread a poster (who shall remain anonymous) asked for guidance on taking their trading to the next step. Said plonker had explored the basics of order types, order entry, and had fired off a few trades, but lacked a solid methodology for determing what and when to trade.

In an effort to offer assistance to someone looking for a few pointers, I made the following post:

Brock Landers said:
Here is a simple strategy for you to follow (see diagram). It is basically looking to profit from opportunities where the elasticity of supply is greater than the elasticity of demand (i.e. if it goes down, it will go down more than if it were to go up). This is because of order clusters around the level which, when breached, create a positive feedback loop (selling results in further selling).

Mark your levels out (the green and red lines) from one timeframe, and then examine the candlesticks on a lower timeframe as your levels are approached. Keep a record of a few metrics that you can easily track in a journal, and as each setup occurs, mark in your journal what the metrics are doing (for example, one metric might be to look at the speed at which the level has been approached, either by some rate-of-change indicator, or candlestick length. Another might be whether the price is above or below an opening range). Have a few, but no more than you can readily examine. I personally think volume is well worth following if you can get reliable data.

After a while, you will start to notice patterns among which trades have worked and which trades haven't. This is less to do with examining the records you have kept, and more to do with your sub-conscious memory giving you clues (see link). Some trades won't "feel right", some will, and it is this experience that you should look to develop over time.

In the first instance, this strategy will lose you money. I am sorry to say that turnkey trading strategies don't exist, and in the least you will be crossing spreads and paying commissions. This is the cost of your education - your P&L will resemble a J curve, if you have the necessary skills and dedication to see it through. Chopping and Changing strategies ad infinitum will never get you beyond the trough in the J, at some point you have to pick one and run with it.

Initially, have stops and targets calculated by some volatility measure; ATR is as good as any. Manage your risk with the knowledge that at this stage it is less about how much you make and pretty much exclusively about how little you can lose. A penny saved is a penny earned, and given that you will be losing money initially, loss minimising is a primary goal.

Aside from that, there are several books you can be reading to broaden your horizons. I personally would read two at a time, one technical and one psychological. To start you off, say, read a candlestick book by Steve Nison as your technical research and "remenicenses of a stock operator" for your psychological research.

Lastly, examine your lifestyle and make any changes to it that can improve your performance. Eat well, take regular exercise, make sure you are rested before approaching the market. Have a set time to trade in your day. Don't trade after you have had a fight with your girlfriend. Find 10 mins each day and practice breathing in for 5 seconds, and then out for 5 seconds. All these inches add up.

Al Pacino's Inspirational Speech - YouTube

good luck on your journey.
Click to expand...

... to which the Original Poster was most ungrateful for and reacted with disdain when informed of my ability to concentrate on more than one thing at once. Upon recieving this reaction, I removed my post, basically in an act of spite.

It has since been pointed out to me that other, more humble aspiring traders might in some small way benefit from what I had written. With regard to that, I reproduce my post here in full.
 

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If you follow those steps, and you are as good looking, affable, charming, funny, articulate and intelligent as I am, one day you might get to go out with girls like this

kaley-cuoco-bikini-pics1-600x1001.jpg
 
Here is a straightforward example of the above strategy.

On the first chart (60m), I have marked out the obvious swing highs and lows where I think order clusters are likely to be. How you determine the levels you mark out is a personal preference, there are many alternatives. Bear in mind, though, that enough of the market have to see the same level and place their orders accordingly for the strategy to work.

Then, on the second chart (a 5m), I have marked a range +/- 1 ATR(5m) around the price level in question.

When price breaches into the range, the objective is to take a long (or, in the lower region, a short) position if your read of the action suggests a follow through beyond the price level is likely, and on from that if there is enough momentum to continue the move or whether the net effect of the order flow at these prices is to contain the prevailing move.

This strategy benefits greatly from having access to the order flow, but on longer timeframes this is not necessary.
 

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The theory is all very well - I assume, I didn't read it. So now can I see a statement of jaw dropping profits showing the theory is working ?
 
Brock Landers said:
Here is a straightforward example of the above strategy.

On the first chart (60m), I have marked out the obvious swing highs and lows where I think order clusters are likely to be. How you determine the levels you mark out is a personal preference, there are many alternatives. Bear in mind, though, that enough of the market have to see the same level and place their orders accordingly for the strategy to work.

Then, on the second chart (a 5m), I have marked a range +/- 1 ATR(5m) around the price level in question.

When price breaches into the range, the objective is to take a long (or, in the lower region, a short) position if your read of the action suggests a follow through beyond the price level is likely, and on from that if there is enough momentum to continue the move or whether the net effect of the order flow at these prices is to contain the prevailing move.

This strategy benefits greatly from having access to the order flow, but on longer timeframes this is not necessary.
Click to expand...

You loving Ninja now?
 
DionysusToast said:
You loving Ninja now?
Click to expand...

It's grown on me, but there are still a few things I would like to see as "out of the box" functionality - Market Profile, proper treatment of spreads, option for more than one panel would be a great addition... over the years I have used a fair few TA packages and each have them have features I like.

Bottom line: it's very good for very simple stuff, but if you want something else you (I) need to find someone else to program it :confused:
 
Agreed - I've yet to see a 100% trading application. I hated Ninja at first coming across from Tradestation but it's grown on me...

For the stuff it can't do - I either don't need it or I program it mesself...
 
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