Best Thread How To Make Money Trading The Markets.
- Thread starter Mr. Charts
- Start date
- Watchers 310
Back from holiday.
Thanks to BTippen and bfirth for your excellent posts.
ODT,
This thread is about US stocks intraday, but you have chosen a UK stock and your chart is a daily chart.
Chalk and cheese.........
Maybe you think as most do that chart movements are fractal. Ain't necessarily so..............
Jinxed,
Thank you and I'm very pleased you can see how to make money even just using this one approach
Richard
ty Richard,
I hope you are well.
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Two trades today using this particular technique.
TEVA just +13c (sorry to those people who want me to post a losing trade, this small win is the nearest so far, but next time I do have such a losing trade, I will post the image).
I didn't wait for the usual exit because I could see there were lots of buys and the price responded by moving up.
Why on earth wait for a trailing stop to be hit and lose accrued profits when you can clearly see the trade is moving against you, not wiggling around but actually going in the wrong direction?
TEVA just +13c (sorry to those people who want me to post a losing trade, this small win is the nearest so far, but next time I do have such a losing trade, I will post the image).
I didn't wait for the usual exit because I could see there were lots of buys and the price responded by moving up.
Why on earth wait for a trailing stop to be hit and lose accrued profits when you can clearly see the trade is moving against you, not wiggling around but actually going in the wrong direction?
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Here's the image taken at the time of exit and with the X hairs on the entry point.
And I'll say this yet again, EVERY single trade I've posted on this thread was alerted on my private site as a possible set up BEFORE I took the trade.
And no, you can't join my private alert site unless I have specifically invited you, so don't even ask.
Just run a scan for big movers, look for a clean and clear trend and you'll find the possibilities.
Follow the method in this thread.
Paper trade it for yourself 100 times and then draw your own conclusions.
Richard
And I'll say this yet again, EVERY single trade I've posted on this thread was alerted on my private site as a possible set up BEFORE I took the trade.
And no, you can't join my private alert site unless I have specifically invited you, so don't even ask.
Just run a scan for big movers, look for a clean and clear trend and you'll find the possibilities.
Follow the method in this thread.
Paper trade it for yourself 100 times and then draw your own conclusions.
Richard
Attachments
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
As can be seen I was stopped out on this one purely on the exit rule of the opposite end of the candle being exceeded.
What were the risk parameters?
The straightforward choices are ATR or end of candle.
In this instance the ATR was 16 and the bottom of the candle was 8 cents away.
Which to choose?
Look at the chart and you'll see that a move of 8c down would have brought the price well below the whole number suggesting that it was unable to sustain itself above the whole number as a result of strong selling.
tbc
What were the risk parameters?
The straightforward choices are ATR or end of candle.
In this instance the ATR was 16 and the bottom of the candle was 8 cents away.
Which to choose?
Look at the chart and you'll see that a move of 8c down would have brought the price well below the whole number suggesting that it was unable to sustain itself above the whole number as a result of strong selling.
tbc
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
.......so why wait for it to lose 16c?
8c is plenty in these circumstances with the whole number being involved.
Let's say your maximum "comfortable" loss is $200.
200 / .08 = 2500 shares position size. Obviously you have to check the position size is an easily tradable quantity which it was, 750k having already been traded within seven minutes of the open.
So risk = $200
Reward is unpredictable and most people simply guess and labour under the completely wrong idea that there is an equal probability of either risk or reward being hit. Don't ask me where they get such a fallacious idea from. People on web sites I imagine.........
You can control risk very well 99% of the time, reward is a different thing entirely.
So the reward for 2500 shares at 49c was $1225.
That's a risk:reward of 1:6, but don't kid yourself you can know that in advance.
Richard
8c is plenty in these circumstances with the whole number being involved.
Let's say your maximum "comfortable" loss is $200.
200 / .08 = 2500 shares position size. Obviously you have to check the position size is an easily tradable quantity which it was, 750k having already been traded within seven minutes of the open.
So risk = $200
Reward is unpredictable and most people simply guess and labour under the completely wrong idea that there is an equal probability of either risk or reward being hit. Don't ask me where they get such a fallacious idea from. People on web sites I imagine.........
You can control risk very well 99% of the time, reward is a different thing entirely.
So the reward for 2500 shares at 49c was $1225.
That's a risk:reward of 1:6, but don't kid yourself you can know that in advance.
Richard
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
James,
I've already said I am not going into level 2 T&S on this thread and in any case it simply wasn't needed in the way you mean on these two trades. Pure charting was all that was needed.
Also what you say is just not right enough, it's just not as easy as that.
Richard
I've already said I am not going into level 2 T&S on this thread and in any case it simply wasn't needed in the way you mean on these two trades. Pure charting was all that was needed.
Also what you say is just not right enough, it's just not as easy as that.
Richard
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
And James, you're a very persistent lad, but I'm still not going into it however many times you ask 
Concentrate on the school work, term has started.
One day in the future you are going to be a cracking good trader, but there's a time and a place for everything
Richard
Concentrate on the school work, term has started.
One day in the future you are going to be a cracking good trader, but there's a time and a place for everything
Richard
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
heh fair enough
il stick to FX dailies till i can afford pure comitment
Good man, James :clap:
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
I meant to say the exit from PCX proved to be at the right time and it never went higher, falling immediately afterwards by a whole dollar to 12.50
actually im trying to build up funds through easy daily price action stuff...the main reason im doing it is because i need money to get decent software to access tools for YM...mainly time and sales based trading i have been watching but it is so time consuming which isn't great around my GCSE year so i figure i should trade dailies, much easier and cleaner and less time consuming, plus it'll give me a taster of the emotions ....
plus there is no way in HELL my parents would let me trade futures until i'm 18
plus there is no way in HELL my parents would let me trade futures until i'm 18
Mr Charts,
I have to thank you for this thread.
Incredibly interesting and you seem to have such a logical approach. This is how I thought day trading would be.
It has taken me over 15 hours to read over the last couple of days.
I am going to re-read the whole thread again to see if I can grasp it better and look deeper at these graphs.
I can see that this would probably be the most basic start to day trading and appears to be so logical to me.
As a boring accountant and businessman, I always looked at Maximum Loss (and could I afford to take that loss) as opposed to potential profit; so your technic seems spot on in that respect.
However, all I know about day trading is what I have read on this thread.
I am going to ask you some questions that you might think are so daft and I will not feel insulted if you tell me so.
Can you confirm or correct me:
ATR
The ATR (Average True Range) is basically the buy-sell spread?
The ATR is the candle on the graph?
Candles
Is the ATR only the coloured section or the the whole length including often the black rods sticking out of the top and bottom of the candle and what is this and the significance.
When I start looking at the graphs and you talk about making atrade; I still dont understand how you decide on the how one makes the decision; i.e. stop loss price and price to take your profit at.
Take your example #454
Why did you choose to go for 3 min candles (as opposed to 1 min or 5 min as you have on other occassions)?
Your ATR was 8; but where did you get your 6c away from bottom of candle (is that the distance between the blue line and the bottom of the candle)?
What does the blue line represent?
Your Worse Case Risk is always the length of the candle (ATR)?
So you bought at 35.01
I gather your Stop Loss Price was actually 34.93 ; i.e. what you actually paid "Price", 35.01 - 8 c (worse case risk)?
I fully understand your Max Risk factor?
Big question, how did you decide to set up a sell off at 35c gain, i.e. sell at 35.36 and not 38c or 33c?
I am off to re-read the whole thread again to try and understand T&S again.
When you talk about volumes of +500,000 shares to trade is this to prevent the candle (ATR) length becoming more volatile and then hitting your Stop Loss when on average it wouldn't?
When you talk about the volume that you require, where do you get this figure from because the volumes below are for the candle length, so what is your definitio of volume?
As I said, these questions are probably so stupid at this point of this thread.
I have to thank you for this thread.
Incredibly interesting and you seem to have such a logical approach. This is how I thought day trading would be.
It has taken me over 15 hours to read over the last couple of days.
I am going to re-read the whole thread again to see if I can grasp it better and look deeper at these graphs.
I can see that this would probably be the most basic start to day trading and appears to be so logical to me.
As a boring accountant and businessman, I always looked at Maximum Loss (and could I afford to take that loss) as opposed to potential profit; so your technic seems spot on in that respect.
However, all I know about day trading is what I have read on this thread.
I am going to ask you some questions that you might think are so daft and I will not feel insulted if you tell me so.
Can you confirm or correct me:
ATR
The ATR (Average True Range) is basically the buy-sell spread?
The ATR is the candle on the graph?
Candles
Is the ATR only the coloured section or the the whole length including often the black rods sticking out of the top and bottom of the candle and what is this and the significance.
When I start looking at the graphs and you talk about making atrade; I still dont understand how you decide on the how one makes the decision; i.e. stop loss price and price to take your profit at.
Take your example #454
Why did you choose to go for 3 min candles (as opposed to 1 min or 5 min as you have on other occassions)?
Your ATR was 8; but where did you get your 6c away from bottom of candle (is that the distance between the blue line and the bottom of the candle)?
What does the blue line represent?
Your Worse Case Risk is always the length of the candle (ATR)?
So you bought at 35.01
I gather your Stop Loss Price was actually 34.93 ; i.e. what you actually paid "Price", 35.01 - 8 c (worse case risk)?
I fully understand your Max Risk factor?
Big question, how did you decide to set up a sell off at 35c gain, i.e. sell at 35.36 and not 38c or 33c?
I am off to re-read the whole thread again to try and understand T&S again.
When you talk about volumes of +500,000 shares to trade is this to prevent the candle (ATR) length becoming more volatile and then hitting your Stop Loss when on average it wouldn't?
When you talk about the volume that you require, where do you get this figure from because the volumes below are for the candle length, so what is your definitio of volume?
As I said, these questions are probably so stupid at this point of this thread.
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
John,
Simplest of all is
StockCharts.com - ChartSchool - ChartSchool
Have a look at http://www.trade2win.com/boards/first-steps/8332-t2w-first-steps-guide.html
and that should help answer some of your questions.
I can't vouch for the accuracy of everything there but it looks very helpful.
If you want to go into things more thoroughly then
Amazon.co.uk: technical analysis of the financial markets
To be brutally honest I see no reason why you should pay anyone to teach you the very basics nor can you hope that anyone will spend all the time necessary to teach them to you free either.
The reality is that the nuts and bolts are freely available but you have to make the effort to find sources yourself.
The three above URLs should keep you out of mischief for a while and out of the hands of sharks and charlatans.
There is no point in thinking your questions are "stupid", we all start an interest in a subject from the base of an almost total lack of knowledge. What you do next is what matters.
Now there is a great deal about trading which you will never learn from web sites, books or the vast majority of posters who talk the talk but can't walk the walk - they don't actually trade for a living but because they appear to (and probably do) know much more than you, there is an understandable tendency to accept what they say. They are often blind alleys, and expensive ones if you trade doing as they say. On the other hand there are nuggets of gold from a small handful of people on a very few threads, but the difficulty is in knowing who to take notice of, distinguishing the gold from the dross.
Use your own common sense and judgement if you decide to progress beyond the nuts and bolts level of the first three URLs I've given you. Use the same levels of intellectual enquiry as you would in your own profession.
Bear in mind also that most people who decide to find out about real trading for themselves through their own experience of trying different things tend to embark on either unending voyages or painfully long ones. Less than 1% (not the much repeated 5%) get to the promised land.
Most people here will disagree with what I've said, but I've been trading for many years since I gave up my dental practice to do this for a living, so I think my views are at least worthy of consideration, even if you reject them and 99% of people think I'm talking nonsense.
But hey, I'm right
Richard
Simplest of all is
StockCharts.com - ChartSchool - ChartSchool
Have a look at http://www.trade2win.com/boards/first-steps/8332-t2w-first-steps-guide.html
and that should help answer some of your questions.
I can't vouch for the accuracy of everything there but it looks very helpful.
If you want to go into things more thoroughly then
Amazon.co.uk: technical analysis of the financial markets
To be brutally honest I see no reason why you should pay anyone to teach you the very basics nor can you hope that anyone will spend all the time necessary to teach them to you free either.
The reality is that the nuts and bolts are freely available but you have to make the effort to find sources yourself.
The three above URLs should keep you out of mischief for a while and out of the hands of sharks and charlatans.
There is no point in thinking your questions are "stupid", we all start an interest in a subject from the base of an almost total lack of knowledge. What you do next is what matters.
Now there is a great deal about trading which you will never learn from web sites, books or the vast majority of posters who talk the talk but can't walk the walk - they don't actually trade for a living but because they appear to (and probably do) know much more than you, there is an understandable tendency to accept what they say. They are often blind alleys, and expensive ones if you trade doing as they say. On the other hand there are nuggets of gold from a small handful of people on a very few threads, but the difficulty is in knowing who to take notice of, distinguishing the gold from the dross.
Use your own common sense and judgement if you decide to progress beyond the nuts and bolts level of the first three URLs I've given you. Use the same levels of intellectual enquiry as you would in your own profession.
Bear in mind also that most people who decide to find out about real trading for themselves through their own experience of trying different things tend to embark on either unending voyages or painfully long ones. Less than 1% (not the much repeated 5%) get to the promised land.
Most people here will disagree with what I've said, but I've been trading for many years since I gave up my dental practice to do this for a living, so I think my views are at least worthy of consideration, even if you reject them and 99% of people think I'm talking nonsense.
But hey, I'm right
Richard
Mr Charts,
Thank you for the advise regarding training. I can see that there are a lot of "Trainers" and "Training Courses" and totally agree that I should learn charts and the basics before even contemplating any training.
Thank you for those three links for information about charts. They seem to be what I am looking for.
I have plenty of time to read as I am slowly getting rid of my accountancy clients that were becoming a pain as my patience with them diminishes.
I definately need a reference book as I am travelling back and forth to Switzerland so spend a lot of time in the airports and planes. I definately need to study a book on Chart Reading. That link you sent to me to Amazon web site had a few books on that link. Which one would you recommend for me baring in mind that my education was logical and science based as yourself?
Was it Technical Analysis Of The Financial Markets: A comprehensive Guide to Trading Methods & Applications by John J Murphy?
Thank you for your help and advise.
Thank you for the advise regarding training. I can see that there are a lot of "Trainers" and "Training Courses" and totally agree that I should learn charts and the basics before even contemplating any training.
Thank you for those three links for information about charts. They seem to be what I am looking for.
I have plenty of time to read as I am slowly getting rid of my accountancy clients that were becoming a pain as my patience with them diminishes.
I definately need a reference book as I am travelling back and forth to Switzerland so spend a lot of time in the airports and planes. I definately need to study a book on Chart Reading. That link you sent to me to Amazon web site had a few books on that link. Which one would you recommend for me baring in mind that my education was logical and science based as yourself?
Was it Technical Analysis Of The Financial Markets: A comprehensive Guide to Trading Methods & Applications by John J Murphy?
Thank you for your help and advise.
Mr. Charts
Legendary member
- Messages
- 7,370
- Likes
- 1,200
John,
Yes, Murphy's book is all you need.
The two earlier links I gave you were so you could build up to Murphy gradually and also the t2w link has a lot of non-TA material.
Of course, the vast majority of TA is worthless, just as the vast majority of most University courses is worthless, but ideally you need the rigour and the immersion; you know what I mean.
Having said that the amount you need is maybe 2% of what is in Murphy but your questions suggest to me you would benefit.
For other people reading this I suggest a basic understanding of support/resistance, what a candle is, (not all the weird patterns or combos), ATR, bid/ask, spread are the essentials.
As for courses, trainers etc., there are a lot of sharks out there the vast majority of whom talk the talk but do not walk the walk by trading for their livings, so beware.
Hope that helps,
Richard
Yes, Murphy's book is all you need.
The two earlier links I gave you were so you could build up to Murphy gradually and also the t2w link has a lot of non-TA material.
Of course, the vast majority of TA is worthless, just as the vast majority of most University courses is worthless, but ideally you need the rigour and the immersion; you know what I mean.
Having said that the amount you need is maybe 2% of what is in Murphy but your questions suggest to me you would benefit.
For other people reading this I suggest a basic understanding of support/resistance, what a candle is, (not all the weird patterns or combos), ATR, bid/ask, spread are the essentials.
As for courses, trainers etc., there are a lot of sharks out there the vast majority of whom talk the talk but do not walk the walk by trading for their livings, so beware.
Hope that helps,
Richard
