Best Thread How To Make Money Trading The Markets.

[Mr. Charts]

Ive had some emails about the FLS trade, including one from a troll accusing me of not having alerted ANYONE to that stock. I don't normally respond to these trolls but some normal people might think similarly so I'm posting a screen shot of the stock alert on my private board and it can be seen it was BEFORE I took the trade - check the time stamp on my post and the time on the chart post #1340 here.
"ANYONE" huh? Look at the number of hits on my private alert site that day alone
And no, as PitBull said earlier, you can't join

The other emails about FLS asked how I found it. A simple scan. I was looking for the the biggest risers and the biggest fallers on the day at that particular time. I then checked through their charts in chronological order of %age change. When I saw a stock, (in this case, FLS) which had a clear promising chart I then looked at the depth of market and T&S screen which I have linked in automatically with that chart. I could have taken the trade purely on the chart, but my confirmation trigger was the momentum which I saw building on L2 T&S and the buy/sell pressures. As I said, the latter wasn't strictly necessary, but I do prefer it and it gives me an additional very big edge.
Anyhow, that's the way I do it so I hope that helps.
No more responses to trolls !
Richard

 

[duncanhoo]

This is a great thread. one impassioned plea from me to all people posting unconstructive comments: please stop. This thread is long enough and it takes hours to plow through it without all of that noise.

Richard - keep up the good and generous work. I suspect there may be many silent readers like me that truly appreciate your teaching.

Duncan

 

[PitBull]

The last three posts have imo, clearly outlined the most important things you should be looking at with this method. You've got your stock scanned, youve got your chart set up and now Richard has just given the entry trigger. Bingo. Just keep on looking at time and sales and level2 depth and ax movements. Even use camtasia to record breakouts. Some people just dont stop searching for the holygrail, the holygrail is effort, experience, resilience to set backs, and get bloody good at one setup first, and then get better, then only can you consider adding another setup to your arsenal once you are the master of that setup. Are you in it for the longhaul or just a bit of excitement? We all know the ending here.

Bookmark this page, read Richards posts carefully. The answer lies everywhere in this thread!

 

[Black Swan]

You've got your stock scanned, youve got your chart set up and now Richard has just given the entry trigger. Bingo. Just keep on looking at time and sales and level 2 depth and ax movements. Even use camtasia to record breakouts. Some people just dont stop searching for the holygrail, the holygrail is effort, experience, resilience to set backs, and get bloody good at one setup first, and then get better, then only can you consider adding another setup to your arsenal once you are the master of that setup.

Excellent advice Sir!.

 

[Pazienza]

The last three posts have imo, clearly outlined the most important things you should be looking at with this method. You've got your stock scanned, youve got your chart set up and now Richard has just given the entry trigger. Bingo. Just keep on looking at time and sales and level2 depth and ax movements. Even use camtasia to record breakouts. Some people just dont stop searching for the holygrail, the holygrail is effort, experience, resilience to set backs, and get bloody good at one setup first, and then get better, then only can you consider adding another setup to your arsenal once you are the master of that setup. Are you in it for the longhaul or just a bit of excitement? We all know the ending here.

Bookmark this page, read Richards posts carefully. The answer lies everywhere in this thread!

Indeed, that is a very good post.

 

[duncanhoo]

Finished reading all 169 post..there should be an award for doing so IMHO

Richard,

Been very successful using what I learned on this thread for last 3 days (my first three days). wins: 6/day to losers of 2/day. Seems too easy...particularly since VIX is so low (and trending lower).

Is earnings season much easier for this strategy?

How successful was it when the VIX was super low in 05 and 07 timeframe? (seems like we are trending in that direction)?

Interesting to note that my wins were within 60 minutes of market open and losses (with one exception) came as i hunted for more in the 1030 - 1130 am time frame. I also have yet to find anything worth hitting in the afternoon...

Thank you Richard (and all the others) who contributed to this thread.

 

[Blaiserboy]

Finished reading all 169 post..there should be an award for doing so IMHO

Richard,

Been very successful using what I learned on this thread for last 3 days (my first three days). wins: 6/day to losers of 2/day. Seems too easy...particularly since VIX is so low (and trending lower).

Is earnings season much easier for this strategy?

How successful was it when the VIX was super low in 05 and 07 timeframe? (seems like we are trending in that direction)?

Interesting to note that my wins were within 60 minutes of market open and losses (with one exception) came as i hunted for more in the 1030 - 1130 am time frame. I also have yet to find anything worth hitting in the afternoon...

Thank you Richard (and all the others) who contributed to this thread.

He is watching his charts after the close also..... you will see a trade that he made very late in the day.

 

[Mr. Charts]

Finished reading all 169 post..there should be an award for doing so IMHO

Richard,

Been very successful using what I learned on this thread for last 3 days (my first three days). wins: 6/day to losers of 2/day. Seems too easy...particularly since VIX is so low (and trending lower).

Is earnings season much easier for this strategy?

How successful was it when the VIX was super low in 05 and 07 timeframe? (seems like we are trending in that direction)?

Interesting to note that my wins were within 60 minutes of market open and losses (with one exception) came as i hunted for more in the 1030 - 1130 am time frame. I also have yet to find anything worth hitting in the afternoon...

Thank you Richard (and all the others) who contributed to this thread.

Thanks for the kind words, duncanhoo.
Please check your email
Richard

 

[timsk]

Seems too easy....

Ooooh, I wonder how long it will be before you regret that comment! The last time I let thoughts like that run through my head - I lost 70% of my account on one trade!
Mind how you go duncanhoo, the markets just love to humble those who think they've got the measure of it.

Tim.
P.S. Welcome to the site!

 

[duncanhoo]

Roger to that. In fact I have traded options (somewhat successfully) for past year or so and am well versed in what Senior Market (CSTR) can do to even the humblest of us.....

Which brings me to my next comment question on this method. Assuming you take your lumps appropriately on the losers, seems another risk/challenge with this (and i guess many intraday trades) is capital limitations. For example you have 100k which you can lever 4x for intraday trades (i think). But since you have to wait 3 days to clear you effectively have 400k of capital for three days. Using this technique to make the numbers matter, you have to trade in 500 or more share trades (of course subject to share price etc). Using 1000k shares alone you burn through your three days in 8 trades (assuming 50/share stock).

Unless i am missing something...seems like tiny losses pale in comparison to opportunity cost?

One more though question - seems to me a good way to play this would be buying/selling deep in the money calls with deltas of 1 (so they move with the equity). Of course challenge there is wider bid-asks. that would reduce the opportunity cost. I am going to start paper trading these using calls/puts to see what i get.

 

[duncanhoo]

Richard,

Got the email. Wish you had waited till tonight....I am going to lose my day job if i go through all of that.....

thanks again.

 

[Mr. Charts]

duncanhoo,
All my trades are intra day and rarely more than three different positions at a time; hence no question of three days to clear as everything is closed by EOD. Doing this means you sweat your capital using it several times over in the same day. And yes, you get x4 margin.

It is five hours ahead of Eastern here, so your "tonight" is my sleep time
No more today then

Best wishes,
Richard

 

[duncanhoo]

answered my own question on calls - not enough open interest (typically) and bid ask spreads except in all but most liquid names are just too wide.

Traded this method today again and essentially broke even. I way over-traded and it seems to me that almost no point (at least in my case) trying between 11/1130 AM EST and 230PM....too hard to find.

I also found short side (today) much more difficult to apply it to due to my inexperience (both with this method and shorting equities).

That said the thing i did well was limit my losses. My mistakes were in selection and trading too much.

 

[sir paul]

So what about ATR?
I use it in my personal trading as a rough guide to risk.
The higher the ATR is in the time frame I'm trading, the greater the potential risk as price is more likely to leap around. Stocks with ATRs of say up to 5c do move slowly and READABLY, ATRs up to 8c a little faster and are very slightly more difficult to read, 12c faster still and 20c+ really quite fast and dangerous.
Of course you can reduce position size accordingly with a higher ATR and that's fine, but again for me I know that the higher the ATR the more unpredictable a move can be and I prefer READABLE stocks I know I can exit from at the time of my choice at the price on my screen and not a price which has leapt away 10c, 20c, 30c in a second or two. I don't feel I'm in control in that situation, but that again is my risk averse personality. Others will differ and that's fine. Nothing is "right" per se, it's what works for the individual and their personality and above all what makes consistent money for them every day in all market types.
Richard.

When I first found this thread I liked this post here stating these key points. It appears after reading through this entire thread Mr. Charts does not follow his own writings. Why would he write one thing and do the opposite? Just look at the charts that have been posted on this thread and you will see that most are fast and dangerous as he states. Mr. Charts states this thread is about one set up out of twelve that he uses. Actually it looks like he is posting three set ups on this thread. 1) The high of day break out. 2) The low of day break out. 3) A reversal type bounce play.

 

[sir paul]

Also as mentioned and explained many times, position size according to ATR and personal risk.
And it's no good saying this stock has a spread of 5c. That's equivalent to 1c on a $22 stock and if you know what you're doing and the stock isn't moving too quickly you can trade within the spread anyway, though you might miss the trade doing that.
This was FLS and this particular trade produced a profit of 48c per share.
It's a nice easy clean one and requires no further explanation about entry point - it's obvious. I exited at the time of the screen shot as per the chart rule for exit - again explained many times on this thread.
Richard

Trying to buy a limit order between the spread is like trying to fish without bait. No one will bite. Market Makers have no reason to fill your order unless they can produce a reversal and squeeze you to sell at a loss. Wide spreads are risky because the buyers and sellers are so far apart.

 

[sir paul]

answered my own question on calls - not enough open interest (typically) and bid ask spreads except in all but most liquid names are just too wide.

Traded this method today again and essentially broke even. I way over-traded and it seems to me that almost no point (at least in my case) trying between 11/1130 AM EST and 230PM....too hard to find.

I also found short side (today) much more difficult to apply it to due to my inexperience (both with this method and shorting equities).

That said the thing i did well was limit my losses. My mistakes were in selection and trading too much.

That is how trading these methods worked for me. I barely broke even. Losses were small. But I was faked out of a lot trades that went on to be big winners. It as if the Market Makers know how to fake out traders on the 1 to 5 minute time frames.

 

[Blaiserboy]

When I first found this thread I liked this post here stating these key points. It appears after reading through this entire thread Mr. Charts does not follow his own writings. Why would he write one thing and do the opposite? Just look at the charts that have been posted on this thread and you will see that most are fast and dangerous as he states. Mr. Charts states this thread is about one set up out of twelve that he uses. Actually it looks like he is posting three set ups on this thread. 1) The high of day break out. 2) The low of day break out. 3) A reversal type bounce play.

My impression is that we use his ideas as a guide for our own thinking and research and that we keep in mind that this is a discretionary system which is subject to revision as the market changes its face from minute to minute.

There is not an easy way to describe the criteria for an entry and then stick with it in rigid fashion.... he is watching charts and making entries based on his feeling as to potential.... his attunement to the price action.

The criteria is to develop three or four (or more) suitable scans and then to learn to trade them profitably, not necessarily in accordance with the charts shown on the thread, he interprets his charts with his eyes and that may be unsuitable for another person.

From what I have seen. he does not need his scans, he can flip from chart to chart and see his criteria and make decisions. He has been doing it a long time and I am sure his scanner was well used in the first days.

He has given us a few details as to what he looks for and that is enough for us to start to learn on our own and to develop our own scans. The development of scans and the development of good entry and exit skills is an individual thing that comes only through practice.

 

[duncanhoo]

So far this has been the case for me but I think the discipline of hitting losses quickly and letting winners run comes with time.

I paper traded Friday and broke even and today made 150 or so. WAY too early to draw conclusions. Today was definitely one of those days that the winners did not really run that well. In fact once i recognized that fact, I changed to hitting my winners at a profit of 10 - 15. I probably left 1000 or so of profit (or more) on the table in just cutting off winners though :-(

Definitely noticed that at least Friday and today the shorts worked better for me than any longs in the afternoon.

Richard's techniques work. But it takes practice (lots of it) to property IDENTIFY AND EXECUTE them. I am going to paper trade it for a long time to see if i can get it right. He has been doing this for ten years....going to take at least 3-6 months of practice to get even close to his success rate (i figure).

Remember, "nothing in the world takes the place of persistence....." (Calvin Coolidge).

That is how trading these methods worked for me. I barely broke even. Losses were small. But I was faked out of a lot trades that went on to be big winners. It as if the Market Makers know how to fake out traders on the 1 to 5 minute time frames.

 

[duncanhoo]

I should also add that I WAY OVER TRADED AS WELL.....

 

[coopster]

I should also add that I WAY OVER TRADED AS WELL.....

I would say so. I don't find so many opportunities each day for this setup. 1 maybe 2 a day if at all.

The best thing i have done so far to improve my trading is document my trades. I've setup Microsoft Access as a trading log and now fill out a form each time i trade. The form has all the expected boxes to fill in but also a dropdown list that asks me what setup i intend to use for the trade. The setups must be pre-defined with documentation before i can use them. If the chart i intend to paste onto the form is not easy to categorise as to which setup it is, then it's not worth trading and i talk myself out of trading it. Discipline still required obviously but if its written down, its harder to lie to yourself.