Best Thread How To Make Money Trading The Markets.

[zupcon]

hi there mr charts .
i would like to know what is the other indicator you have on your attached thumbnails .
i can see volume as one of them but the cursor box is obstructing the view of the other indicator .

Its a 14 period Average True Range

 

[Mr. Charts]

Thanks, zupcon
Richard

 

[Mr. Charts]

Apple (AAPL) reports after market close on Monday and although I will be away helping someone during the day, I should be back home in time to see if any UK evening (US afternoon) or post-market trade opportunities present themselves.
Expectations are 1.42 earnings and 9.2 bn revs, but the rumours suggest those are under-estimates. We shall see. Sometimes the rumours swirl round and you can get a rise into the close.
More on my blog.
Again, do not trade the news, or your opinions, trade what is actually happening and/or trade the reaction to the news.
Richard

 

[westernforce]

"Again, do not trade the news, or your opinions, trade what is actually happening and/or trade the reaction to the news.
Richard"

I think that statement has heaps of merit.

 

[Mr. Charts]

Well, Apple was sweet and I took a nice bite out of it by trading the reaction to the news.
Details and chart on my blog.
Richard

 

[Mr. Charts]

I took quite a few trades this afternoon (UK afternoon - US morning) with other set ups, but this CAT one was using this particular technique.
Profit +76c
Initial risk was the top of the entry candle as a worst case last ditch stop loss, i.e. 20c away - far more than I like to risk.
Richard

 

[Mr. Charts]

You can see I was stopped out on the trailing stop of the top of the previous candle.

 

[Mr. Charts]

Two of this afternoon's trades using this particular method, the second a little bit different.
Reading order flow was necessary for both entry and exit with the GILD trade
GILD +95c per share

 

[Mr. Charts]

And the one that's a little different NTRS +86c per share.
This one did not require order reading (level 2 T&S) at all, just pure charting on the entry.
The whole number mattered on the exit.

Remember a certain %age of trades will fail, those that do I get out of very very quickly to keep any loss very small. There hasn't been one of this type that has failed recently and that I've got an image of, though remember the failed ones look just the same at entry as the large majority which succeed.

Just take a look at this beaut of an inverted head and shoulders.
You can adopt this technique to other situations like this inverted H&S.

Richard

 

[amit1986]

Great trades!

Its been a good, relatively easy trading day today. If you haven't got it in your watch list, take a look at DE on the NYSE, it's doing exceptionally well today and I still think it has a little further to go.

Amit

 

[Mr. Charts]

Thanks for that, Amit.
I'd be surprised if DE has got more in it but, hey, I don't trade my opinion, I trade strict rules and on the evidence !
The market doesn't care about opinions.
Hope you made money out of it.
Richard

 

[Mr. Charts]

....and if it does go up further you make more money !

 

[amit1986]

Hi Mr Charts,

I didn't really form an opinion on DE. Just by watching Time and Sales I could tell momentum was hot in that stock still. I took the trade on the break of the previous days high ($47.19) and closed it above the whole number at $48.10 because I had to go somewhere. If I didn't, then I would have closed half my trade above the whole number and trailed my stop using the EMA(10). Check out how it did. If I didn't close out the trade, I would still be in it as it hasn't broken the EMA(10) yet and it's at $49.43 right now as I type this.

I agree with you that rules have to be followed. It's tough to really "master" the ability to follow rules. But don't you find that trading via tape reading has a little more subjectivity than other trading methods such as moving average crossovers or oscillator divergence/convergence? In the latter methods, you know for sure when a buy/sell entry has been triggered as you can see it. But when reading level 2/time and sales, although there may be a clear definition of "momentum", there is still a small degree of subjectivity in "reading the tape" to trigger an entry.

For this reason, wouldn't you say that momentum trading through Time and Sales/level 2 is a "forever learning experience" since it never really defines a strict entry criteria? Instead, the more you trade via this method, you tend to figure out what to look for and what to avoid when reading the order flow. I am asking you this because you've been doing this for a long time and are one of the very few "traders" who are consistent.

Hope all is well,

Amit

 

[Mr. Charts]

Good trading, Amit
I think trading is like driving a car and most other skills. You can achieve a basic competence but you get better with experience.
Richard

 

[Mr. Charts]

Another decent day's trading. There tend to be even more opportunities during results season.
Some big ones are announcing after the close tonight - details on my blog.

 

[Mr. Charts]

For those in the UK, our clocks have gone back but the US doesn't till next weekend so the US opens at 13:30 UK time.
Richard

 

[Mr. Charts]

Nice move on CELG using this technique.
+$1.60 per share
Exited as I saw buying pressure coming in on level 2 T&S but you could have waited for the high of the previous candle to be taken out.
Richard

 

[Mr. Charts]

This CELG trade was helped along by the sudden turnaround in the markets. Apparently as a result of the Euro breaking 1.50 and Nasdaq futures bouncing off resistance...........according to one "explanation" I've seen.
So maybe a little luck played a part in this trade, you might think. Well, maybe. Bear in mind no such set of fortuitous factors came together in any of the other trades on this thread........
I'm not saying you make your own "luck" in the markets, but if the market is weak then have a watch list of very weak stocks, if it's strong then vice versa. If it's mixed then have a mixture of weak and strong stocks.
Don't expect a weak or strong stock to remain so throughout the day - things change, stocks reverse, bounce etc. Often stock price movements run out of steam, but they can just chop around as well as reverse, pause etc.
Anything can happen. I believe in being prepared to take advantage of a move in any direction and to be completely flexible.
If the facts change my trading changes. I'm not wedded to any opinion, view, hope, wish etc. It does what it does, so trade what it does, NOT what you think it should, might, ought to do etc.
Trade the evidence, never your opinion.
Richard

 

[Mr. Charts]

I've just had an email asking about CFDs etc so maybe it's worth commenting here as it's a frequent question.
Of course you don't need a direct access account to trade a move like that, spreadbetting or CFDs would do the job very, very nicely, but you can squeeze more profit out with direct access and pay negligible commission.
Richard

 

[Mr. Charts]

MCK, V, APOL, CEPH are announcing after market close. They may produce trading opportunities.
Details on my blog.
Richard