Dow 2007

[firewalker99]

Sorry for the late replies Lurker, but I felt the urge to reply to some of your latest posts.

I checked the dow and couldn't believe we hit 13950. I obviously don't understand this market any more, so I am staying flat.

If you are in this game for understanding the why's you've got your work cut out for you. Unless you forget about the reasons and forget about trying to comprehend what the market is doing and focus on taking profit of the moves, whichever direction they are.
Actually, it can be pretty simple. Why does price rise? Buying pressure is greater then selling pressure. Why does price drop? Sellers are stronger than buyers. (Okay this a very simplified version obviously but you get my point).

I took a short early in the day according to my rules, and it didn't work. I was wanting a position trade so gave it 30 pips room. Down -38 today, which takes a nice bite out of my +66 yesterday.
I'm attaching a chart of my short entry anyway, given that it looked sensible enough to me at the time. It still does look sensible, but I need to drop the idea of picking reversals (even when they appear obvious) from my strategy.

You took a trade according to your rules and it didn't work.
Fine, that's perfectly okay. You really need to stop analyzing why some trades work and others don't. I'm sorry to say, but you will ALWAYS and I mean ALWAYS find a reason to explain a losing trade afterwards. There will always be signals to be found that you overlooked or didn't take into account before. Always. But unless you learn to live with that and accept the losses and move on, you'll be going around in circles forever trying to improve your system.

Even if in this particular case the trend was clearly up and you tried to short it... if that's part of your plan and you've thoroughly tested and papertraded it you will have a good idea about the results to expect. But if you are continuously switching or changing strategies you'll need to do all of your testing again, from the beginning. Backtesting and papertrading included.

From now on, for any position trade, I will have a clean and unambiguous definition of trend, and will not trade against it without confirmation no matter ho obvious a "top" looks.

Playing the game by how it "looks" will guarantee you lots of losses. There are loads of patterns to be seen anytime. One trader might see a triangle, another a h&s formation, and yet another a triple top. Does it matter? No. You need to focus on what you have defined for yourself and forget about all the rest.

Big day on the Dow, and I have no idea what caused this. I am going to watch from the sidelines for a little while while I formulate a strategy.

Lurker, you've obviously got the will to succeed, but unless you stop thinking and start trading your plan you won't get anywhere. I mean really... "while I formulate a strategy"?! You can't just formulate a new strategy out of thin air because of one losing trade.

 

[firewalker99]

I thought you were going to stop using Ticks and all that other crap ? Look at the MAs - NOTHING is coming off at all.
you're driving me nuts. After all the advice people have given you here, and all your volte-face changing of methods every 5 minutes, you are still talking about "impulse" actions.

I'm sorry, but I for one will not be answering any more of your messages or trying to support you. Is there a Gamblers version of Alcoholics Anonymous in your country ? i suggest you check them out.....

Lurker, the above statement might sound harsh, but rathcoole definitely's got a point.
I have not been actively following this thread lately, but looking at some of your posts I am actually disappointed you are talking about different things again than last month.

It seems to me you are looking for a holy grail. If you've followed my trades for instance, you'll have noticed plenty of losers in between too. Obviously, the winners outweigh the losers and I cut my losses pretty short so the end result is profit. But do I bother about a loss? Do I analyze the why's? Actually I hardly ever look back.

This is not to say I don't analyze my trades at the end of the week or month and compare the results to previous results. From the thread I started about exits you'll know I'm still trying to improve my strategy too. But in the process (and before implementing any changes) I am testing hundreds of charts before I even start to think of changing something in my real live trading. What you are doing however, is switching from one method to another in the blink of an eye in the hope that your days of losing trades are over.

Well, unless somebody proves me otherwise (those who are lurking may come out of the bushes now ) there'll always be losing trades. You just can't know what's about to happen always (I know some will perhaps disagree and they are free to do so .

 

[Kevin21]

firewalker, all i have to say about what you just posted is... word, you hit the nail on the head. In my opinion lurker you're thinking a bit too deep about it all, and it seems to me that you're constantly worrying about loosing money, as well as having too much emotion involved, which goes back to what i posted yesterday. If you go into a trade worrying about how much you're gonna loose then you're already defeated, something i learnt a few years ago from playing poker. I read an article in traders magazine about the subject and the editor compared a trader to an athlete. You've got two olimpic sprinters going into a race. Runner A is thinking about winning, runner B is hoping he doesn't loose and is thinking about the consequences of loosing. Guess who wins... In my opinion i think it is true to say that most traders aren't making as much money as they could be due to the fear of loosing money. To me a trade is a systematic and emotionless action. The system i use isn't complicated or much different from what a lot of people on these boards use, but like i said, i trade by rules and i employe them systematically - something i can't stress enough!

The definition of systematic from the dictionary....
1. having, showing, or involving a system, method, or plan: a systematic course of reading; systematic efforts.
2. given to or using a system or method; methodical: a systematic person.
3. arranged in or comprising an ordered system: systematic theology.
4. concerned with classification: systematic botany.

If you spend all your life worrying about loosing money then you'll never make any. Obviously this is just my opinion, i don't know exactly what your system is etc, but this is just some advice that has served me well personally with my trading. Feel free to tell me i'm talking out my a** people

 

[rathcoole_exile]

Kev, spot on.

As long as one incorporates correct money management into the plan plus never trade without Stops, just keep plugging away on your system and don't let previous losses scare or make you indecisive.
That's not say a system should never be re-evaluated, assessed or tweaked as the market evolves, but doing so is a long-term activity, not something to do after every losing trade.

 

[sizzler944]

dear oh dear

Lurker. Stop thinking and start observing.
All that patterns and formulae can give you is the indicators that the fearful are using and hence the ability to piggy back on the movement they create and their panic when an indicator is breached. There are serious big shakers about and to spot and exploit one of their moves is the most profitable save for riding a general panic otherwise known as a run. Our biggest opponent in trading is ourselves. Don't be afraid, don't panic, don't listen to the guessers called experts on what the market will do next, have a clear head to make money . Don't be greedy, make sure you leave enough for the next trader to make some money and when you lose get out quick and feel good about the money the other trader is making for his kids. Have a life and let others have a life.

There are some decent traders on this site who seem to have a mission to share the knowledge. Learn from them. Because when it clicks it's like learning to read, you stop reading the words and start being in the story.

 

[lurkerlurker]

Sorry for the late replies Lurker, but I felt the urge to reply to some of your latest posts.


If you are in this game for understanding the why's you've got your work cut out for you. Unless you forget about the reasons and forget about trying to comprehend what the market is doing and focus on taking profit of the moves, whichever direction they are.
Actually, it can be pretty simple. Why does price rise? Buying pressure is greater then selling pressure. Why does price drop? Sellers are stronger than buyers. (Okay this a very simplified version obviously but you get my point).



You took a trade according to your rules and it didn't work.
Fine, that's perfectly okay. You really need to stop analyzing why some trades work and others don't. I'm sorry to say, but you will ALWAYS and I mean ALWAYS find a reason to explain a losing trade afterwards. There will always be signals to be found that you overlooked or didn't take into account before. Always. But unless you learn to live with that and accept the losses and move on, you'll be going around in circles forever trying to improve your system.

Even if in this particular case the trend was clearly up and you tried to short it... if that's part of your plan and you've thoroughly tested and papertraded it you will have a good idea about the results to expect. But if you are continuously switching or changing strategies you'll need to do all of your testing again, from the beginning. Backtesting and papertrading included.

There were two plans. Daytrading and position trading. The daytrading plan doesn't work. The daytrading plan didn't take account of trend, hence it permitted shorts when the trend is up. The plan didn't work. I have moved to position trading for what I feel are valid reasons, not holy grail searching. I am spreadbetting, so I need to trade less and minimise commissions. I can be impulsive, so I need a system I can use to plan entries and exits after market hours. I take profits too early, so I need a system which forces me to hold the trade until it tells me otherwise. Day trading was not suitable, and gave rise to reckless trades. I have changed a system because it didn't suit the way I trade. Sorry for any lack of continuity in this.

Playing the game by how it "looks" will guarantee you lots of losses. There are loads of patterns to be seen anytime. One trader might see a triangle, another a h&s formation, and yet another a triple top. Does it matter? No. You need to focus on what you have defined for yourself and forget about all the rest.


Lurker, you've obviously got the will to succeed, but unless you stop thinking and start trading your plan you won't get anywhere. I mean really... "while I formulate a strategy"?! You can't just formulate a new strategy out of thin air because of one losing trade.

That wasn't the reason fw. Most people here agree that position trading would be more suitable for me. Staying flat while I learn how to position trade isn't a bad thing, and it wasn't to do with one loss. I stayed flat on Friday because my system (well, a slightly modified version of Atilla's system) didn't give a new signal. That is fine. I don't want to have to take intra day positions off a 5m chart any more. I am just not good at that. I have tried it long enough to know that it is not for me.

Lurker, the above statement might sound harsh, but rathcoole definitely's got a point.
I have not been actively following this thread lately, but looking at some of your posts I am actually disappointed you are talking about different things again than last month.

It seems to me you are looking for a holy grail. If you've followed my trades for instance, you'll have noticed plenty of losers in between too. Obviously, the winners outweigh the losers and I cut my losses pretty short so the end result is profit. But do I bother about a loss? Do I analyze the why's? Actually I hardly ever look back.

I understand your disappointment that I have yet again changed methods. However, day trading is not for me. Would it satisfy you if I were to take a mechanical position trading system and only trade it, making no other Dow trades, trading when it gives a signal and staying flat when it does not? That is what I am trying to do.

This is not to say I don't analyze my trades at the end of the week or month and compare the results to previous results. From the thread I started about exits you'll know I'm still trying to improve my strategy too. But in the process (and before implementing any changes) I am testing hundreds of charts before I even start to think of changing something in my real live trading. What you are doing however, is switching from one method to another in the blink of an eye in the hope that your days of losing trades are over.

Well, unless somebody proves me otherwise (those who are lurking may come out of the bushes now ) there'll always be losing trades. You just can't know what's about to happen always (I know some will perhaps disagree and they are free to do so .

Of course there will be losing trades. I am simply trying to adopt a strategy which minimises as much as possible my disruptive tendencies. I understand that this is down to my own will and discipline, but which system do you think I would find easier to trade properly (not from the pip aspect, but to enable as close to flawless execution):

1. A 5m system which gives dozens of signals a day, sometimes counter trend
2. A 4h system which gives about 4 signals a week, always in the direction of the trend (as defined by MAs)

 

[lurkerlurker]

firewalker, all i have to say about what you just posted is... word, you hit the nail on the head. In my opinion lurker you're thinking a bit too deep about it all, and it seems to me that you're constantly worrying about loosing money, as well as having too much emotion involved, which goes back to what i posted yesterday. If you go into a trade worrying about how much you're gonna loose then you're already defeated, something i learnt a few years ago from playing poker. I read an article in traders magazine about the subject and the editor compared a trader to an athlete. You've got two olimpic sprinters going into a race. Runner A is thinking about winning, runner B is hoping he doesn't loose and is thinking about the consequences of loosing. Guess who wins... In my opinion i think it is true to say that most traders aren't making as much money as they could be due to the fear of loosing money. To me a trade is a systematic and emotionless action. The system i use isn't complicated or much different from what a lot of people on these boards use, but like i said, i trade by rules and i employe them systematically - something i can't stress enough!

The definition of systematic from the dictionary....
1. having, showing, or involving a system, method, or plan: a systematic course of reading; systematic efforts.
2. given to or using a system or method; methodical: a systematic person.
3. arranged in or comprising an ordered system: systematic theology.
4. concerned with classification: systematic botany.

If you spend all your life worrying about loosing money then you'll never make any. Obviously this is just my opinion, i don't know exactly what your system is etc, but this is just some advice that has served me well personally with my trading. Feel free to tell me i'm talking out my a** people

Spot on Kevin. Which is why next time I see a signal, I will only take it if I could comfortably rip up the amount of money the stoploss represents. I will continue to trade small, and when I take a position trade I will ask myself about the stop; If I need a £20 stoploss, can I afford to lose that. Yes. Do I care if I lose that? Do I have an attachment to that money? If yes, I will not trade. If I can comfortably lose that, I will take the signal secure in the knowledge that I have intervened to make a decision, my losses are limited, my profits are limited, and the trade can manage itself subject to the signals of the system, and to a very limited extent my own judgement (not holding over weekends, exiting before news, etc).

Thanks for your contributions.

I would appreciate if you all would review and suggest additions to my list of tasks on my journal.

 

[lurkerlurker]

A Chart

Hope I'm neither hogging the board or detracting from my posts above!

I am in the middle of "Trading for a Living" by Elder Alexander, and thought I would try and apply some knowledge to a chart of YMU7. Annotations on the chart. Note that 8 hour DEMA should read 8 period DEMA (but I can't change that now anyway).

I'm particularly interested in Atilla's thoughts on this, as I am trying to apply his position trading to the Dow, but of course I would be keen to hear from anyone with something to say.

Cheers

Oh, it looks like 14,000 didn't hold. I so desperately wanted to fade 14,000, but I didn't. I know I annoyed some by even suggesting it (mostly because it wasn't terribly reasoned). However, I am no longer wishing to gamble my capital picking tops. Shorting this without trend confirmation and profiting would have set my trading back further than I would understand by teaching me bad habits. I am glad I had the discipline not to trade on Friday, although I understand there is much room for improvement in that area.

On a lighter note, am I the only one who works weekends? :-0 (okay, I know, you guys deserve the weekends off and make good use of the time, I am still frantically concentrating on my personal development while I don't have charts to watch!)

Rathcoole, I'll post again tomorrow night regarding TFAL and CIMTR. I'm enjoying TFAL immensely, and already feel like I have learned a lot. I am a little nervous about the depths of any insight, and how I will apply this knowledge in the markets, but I find it worthwhile. Thanks.

 

[Pat494]

Oh dear Lurker !
As Ollie C might of said - it may be time to be cruel to be kind and face a few facts ( if you really want to make money at this game )

From your posts you seem:-
irrational
illogical
uncomprehending
stubborn
irrepressable
the proverbial black-hole for sympathy
etc etc

I only hope your private life isn't one of total chaos, although I suspect it is. Are you some sort of juvenile tearaway that one reads about in the Mail ?

All is NOT quite lost my friend

May I make one last suggestion ?

Go through all your usual systems. all the usual mental gyrations and .......


DO the opposite

 

[Dinos]

Lurker, the information I want to pass onto to you regarding formulating your position trading strategy is not stored on the my laptop, but on my system at home. I have asked my wife to bring my datastick with her next week, so unfortunately I won't be able to get this to you until after next week, sorry pal.

 

[lurkerlurker]

Lurker, the information I want to pass onto to you regarding formulating your position trading strategy is not stored on the my laptop, but on my system at home. I have asked my wife to bring my datastick with her next week, so unfortunately I won't be able to get this to you until after next week, sorry pal.

That is okay mate. I look forward to reading it.

 

[rathcoole_exile]

analogy

I have recently been thinking about the behaviour, motivation and psychology of one particular contributor to these boards (who shall remain anonymous).

Riding my bike to church this morning, an anology came to mind that I'd like to share if I may ? It may be complete ollocksbay, please feel free to tell me so, no offense will be taken:

Despite riding a big powerful sports motorbike I never seem to get further ahead of all the local thai people putting along on their little scooters. This is because of
a) traffic signals - they force me to stop and pause and then re-engage my gears when given the next green light
b) pot-holes - bangkok roads are littered with holes, craters etc, some of which are so large your front tyre could almost disappear into one. These hazards could do me and the bike some serious damage unless carefully negotiated.

So what is the point of having a big bike ? Well, sometimes the opportunity will present itself, such as taking a longer trip on the express way, to really open up and let her rip. there are still hazards - holes, crazy drivers, buses, hump=back bridges etc so I can never take my eyes off the road but i can still reap the benefits of the occasional burst.

The connection with trading ? Well, as I see it, we all need to have the right system that allows us to capitalise when everything falls into place. But we also need the patience to understand that we can't use the system to it's full extent all the time. If one is prepared to keep putt-putting along every day, making small sums of money out of the market, (while steering clear of hazards such as risky positions, unwarranted losses, overextending margin etc) you can and should be ready to benefit on the odd occasion that the market lets you onto the freeway.

The important point is to have the self-discpline not to go tear-arsing off down the road. You might avoid a few buses, swerve a few tuk-tuks, skim over a couple of small craters, but sooner or later if you drive too fast and impatiently one of those potholes is gonna get you big time. Keep stopping at the red lights, take time to look around, re-evaluate the road, your riding position, the weather and keep an eye out for the next green signal. Here endeth today's Lesson

Thankyou, Garry

 

[Atilla]

I have recently been thinking about the behaviour, motivation and psychology of one particular contributor to these boards (who shall remain anonymous).

Riding my bike to church this morning, an anology came to mind that I'd like to share if I may ? It may be complete ollocksbay, please feel free to tell me so, no offense will be taken:

Despite riding a big powerful sports motorbike I never seem to get further ahead of all the local thai people putting along on their little scooters. This is because of
a) traffic signals - they force me to stop and pause and then re-engage my gears when given the next green light
b) pot-holes - bangkok roads are littered with holes, craters etc, some of which are so large your front tyre could almost disappear into one. These hazards could do me and the bike some serious damage unless carefully negotiated.

So what is the point of having a big bike ? Well, sometimes the opportunity will present itself, such as taking a longer trip on the express way, to really open up and let her rip. there are still hazards - holes, crazy drivers, buses, hump=back bridges etc so I can never take my eyes off the road but i can still reap the benefits of the occasional burst.

The connection with trading ? Well, as I see it, we all need to have the right system that allows us to capitalise when everything falls into place. But we also need the patience to understand that we can't use the system to it's full extent all the time. If one is prepared to keep putt-putting along every day, making small sums of money out of the market, (while steering clear of hazards such as risky positions, unwarranted losses, overextending margin etc) you can and should be ready to benefit on the odd occasion that the market lets you onto the freeway.

The important point is to have the self-discpline not to go tear-arsing off down the road. You might avoid a few buses, swerve a few tuk-tuks, skim over a couple of small craters, but sooner or later if you drive too fast and impatiently one of those potholes is gonna get you big time. Keep stopping at the red lights, take time to look around, re-evaluate the road, your riding position, the weather and keep an eye out for the next green signal. Here endeth today's Lesson

Thankyou, Garry

What does the road say about the DOW direction? Be interested in your view of the pot holes up ahead.

Just reflecting on the week ahead and I'll post mine shortly.

 

[Atilla]

Hi everyone,

I'll start by posting one of my first charts from last Nov 06. This SPX500 chart is still in play imo. Sorry about it's poor quality. Notice how I dropped the MA5-10-20-40 and moved onto DEMAs using Fib sequence of 8-13-21-34-55.

Forgive me for the eco analysis on there too as I was very bearish at the time. Very very bearish last November and just goes to show what I know with the S&P now at 1550...

Funnilly enough the economic challenges are still with us today, but markets so much higher. Imo things are worse. Long term yields lower than short term yields on bonds pointing to an ominous sign of things to come. However, I'm removing my bias now and just looking at the pure TAs.

Comparing the DOW to the SPX500 last November, I thought we were going to have a drop and it went up. Likewise I can't help thinking with the drop in the $ollar this rise is going to continue. And you know 15000 on the charts doesn't look like Mission Impossible anymore. The three peaks did give some but not the mighty fall.

The 4 hour charts look like they are cooling off but not enough to enter a short trade imo. I really would like to see the following before entering a short trade:

1. Price drop below the DEMA21 currently around 13855,
2. DEMA8 drop below DEMA21
3. MACD lines cross over too.

I think we will have some consolidation at these levels and BBands will narrow before a move up or down is established.

And so I will remain flat.

Good trading for the week everyone...

In all honesty the DOW can go in any direction and I will merely stick to the correct side of my MAs.

 

[2468steve]

These two reverse head & shoulders give aprrox 14200/400 targets on Dow and 1580 on SPX.......

 

[firewalker99]

These two reverse head & shoulders give aprrox 14200/400 targets on Dow and 1580 on SPX.......

Well I don't really see a h&s formation in those charts...
More like a cup-and-handle on the SPX but apart from that.
Oh well, price patterns that's another thread

nevertheless you've been quite sharp in your projections lately, so I'll keep an eye out for those levels

 

[lurkerlurker]

These two reverse head & shoulders give aprrox 14200/400 targets on Dow and 1580 on SPX.......

Looking at the ES chart, I note that it claims that the exchange doesn't provide volume data. Since I know a lot of you here trade with price and volume, I'm putting up a recent chart with Steve's SMA/Williams %R settings with volume included. Hope this helps.

I have to agree with firewalker that I don't know about the inverse head and shoulders, but I've only ever been half decent at spotting those at tops.

I also find myself agreeing with Atilla, and don't think I will be doing much YM trading this week. I have firewalker's papertrading to do (he set me a challenge to papertrade a YM system for 2 weeks to prove discipline) and will soon get some of Elder Alexander's study guides, so the exercises there will most likely keep me busy. I further agree with Atilla about sticking to the trend and MAs. I am currently using Price and DEMA Crossover with MACD Support on a 4 hour chart for my entries and exits, so it looks like I will be on the sidelines too!

Hope the volume on the ES chart helps, and I wish you all a productive week.

Cheers

 

[Dinos]

Help

Hi guys

I have a chart for you to look at, but me and technology don't go hand in hand well, I use pro real time, how do I send my screen shot??????

 

[Dinos]

A view on the Dow

I have tried several times to attach 2 charts with no success, and I cannot simply be arsed to pratt about any more so:

What I am looking at on my weekly chart is last fridays close, which was just above the upper resistance line and breakout line. A crude EW count shows perhaps the current level maybe a 5 count.

RSI just about about overbought, a neg divergence on the macd histogram (whilst price moving upwards), stochastic, not quite the yet, but at 91.

On the otherhand PnF shows a triple top breakout with a bullish price objective of 14400, (somewhere near a figure already mentioned earlier on the fred)

imho, we are still in a bullish trend, however (perhaps), we maybe at a level were a turn is just around the corner, if the current upper trend turns into support, then I believe we are heading as per the PnF, if it turns out to be a resistance level, then I will be applying the fib retracement lines to gauge the fall, (perhaps) 11800.

What am I going to do, trade with caution and quite happy to stay flat, let the day decide on its direction and only when all my indicators confirm entry will I take the trade.

Shame about the attachments, never mind

 

[2468steve]

short @ 26 cash....stop above Fri high