Starting Over/Again

[breathtaking]

Hello 2 All - I am sure I am like a lot of traders so nothing you will read here will shock or amaze anyone ... my hope is to share my story and journey in a effort to help myself and anybody else who might feel alone while traveling down this road.

I began trading 5 years ago, as I was introduced to it by chance. After careful consideration (at that time I would have been quoted by saying, "day trading is for idiots, it's like playing on the freeway ... it's not if you will get run over, but when). As with many of you I began as a 'student' of an 'on-line' guru and spent the next three month 'learning' ... and then started trading. Three and a half years later and after losing more than $40K I cam across Market Profile and it changed my trading.

The sad part was, by then I was damaged goods and even though I put together multiple months for gains, it was too little too late. Oh but the shame ... I returned to the Corporate world for the certainty of a paycheck, benefits and knowing I would be providing for my family ... (there is much more to the story, but don't want to bore anybody with the details).

Now after almost a two year hiatus ... I am looking to re-enter the area ... "my name is Spartacus", once again ... older, wiser, and without as much baggage as when I left.

I am not promising I will be a success, however I promise to share everything I do, experience, and feel alone the way of this journey. I hope it will help me and somebody, anybody else, blessings - b

 

[scott_fx]

Good luck mate and hope you make it this time!!

 

[breathtaking]

Good luck mate and hope you make it this time!!

Thanks for your well wishes ... welcome yourself from accross the pond.

 

[breathtaking]

OK ... here I go, will be leaving on my last business trip early next week and will continue to work on my trading plan. When I get back I will begin the process again.

During this last business trip I will outline my trading plan and how I will trade it, blessings 2 all - b

 

[breathtaking]

Good Morning 2 All - blessings on this Sunday ... GIGATT

Theory – the market is a series of individual (or mechanical boxes) choosing to agree on a price. In trading futures one must always realize at the opposite side of your ‘button’ is another agreeing on a price with you.

It’s like when you sell something on Craig’s List or EBay … nothing sells until two people agree on a price.

This creates the conundrum of is you are on one side on the transaction (entering the market) and thinking it is a good deal, there is somebody else on the other side thinking you are ‘dead’ wrong … hmmmmmmm?

This then establishes the concept that the market is either in a place where a majority of the individuals (or boxes) are in general agreement as to what is a good price … this would be a range. Price movement in a defined area where there is a general agreement as to what is a ‘fair’ price. When the market is in this type of ‘mood’ there is very specific ways to trade it … (that will come later)

The reciprocal of the aforementioned is when there is no agreement as to the price and the price moves in a specific direction until a majority agrees on a price again. Think of it as an auction where a multiple bidders think the price of an item is to low … what happens? The price continues to climb until nobody thinks the price is too high and the bidding stops.

Now think about this … if somebody is buying something they are not planning on keeping on the shelf in a ‘show-box’, why are they buying it? Because they know they will be able to sell it to a ‘FISH’ later at a higher price.

Look around and if you don’t know who the FISH in the room is … then I suspect is it you?

OK enough for today, blessings - J

 

[breathtaking]

Hello 2 All and thanks for joining me on this journey.

So ... if we take our last 'mini' discussion we understand that the market is a series of mini auctions where the general public either agrees on a price - Range, or disagrees on a price and the price moves in a direction until there is general consensus - Directional Trend.

The next thing is to understand there are two types of traders in the Futures markets; they are the ones who move the markets and everybody else. Btw you and me fall into the 'everybody else' category. Sorry if I burst anybodies 'bubble' with that little tidbit.

With those who move the markets there are still two different types of traders; 1 - those who are swing/hold traders for larger levels and 2 - short term traders who push the markets around for the traders #1. However, for us ... the 'everybody else' trader it is trader #2 we must begin to understand, because they don't trade based on anything you and I know about, but only to push prices in a direction for a single purpose ... with for it ... locate stops and generate supply for Trader #1.

To begin to understand this situation and survive the 'Shark' infested waters you must begin with Trader #1: know where he is, where he is looking for the market to go and more importantly where his money is invested/how much of it is invested. This then will begin to open the 'book' on trader #2 ... more on this later.

I hope this is helping someone other than me, let me know and ask any questions you like, blessings - b

 

[breathtaking]

Hello 2 All - I hope this finds people profitable and blessed.

Now it's time be start getting more specific ... understanding my two earlier posts, there are four things one needs to make sure they understand when trading short term in the futures markets:
1 - where are the 'big' boys and which way are they currently pushing the market ... long or short
2 - where are the individual 'small' traders trading, where have they placed their stops and do the 'big' boy traders care?
3 - how much effort is being used to 'push' the market ... volume?
4 – agreement or seeking agreement

OK let me explain why these 4 things are important:
Number #1:
If the 'big' boys have a vested interest in a direction, either up or down ... it will ALWAYS be more profitable and a better percentage trade if you are trading in the same direction. Think of it as swimming with the current, it's just easier.
Number #2:
If the 'big' boys are looking to push the market in a certain direction they want as much as they can get their hands on ... where and when is it easiest to pick up inventory? They could just purchase it at any price, but they don't have to do that like we do ... because they have the ability to move the markets. So the best place to pick up inventory is by stopping out the individual traders and forcing them to give up their position, just before it moves the direction they were trading ... sound familiar? Think of it this way ... if you were playing poker at a table and you knew you had the winning hand and the most money you would not be able to get anybody to play with you because everybody would know they would lose, so what would you do? You would make sure you had others who would sacrifice themselves to bet the pot up then drop out at the last minute so you could scoop in and take the win.
Number #3:
The volume will show you as to how many people are trading and in which direction, even though there is an individual trader on each side of every trade, that does not mean there are enough traders at any particular price to fulfill the 'need'. Volume tells us how many who and with what conviction the market is moving and whether or not we want to participate.
Number #4:
Is the market in agreement with the current price (range) or does it need to find a new price range for trading?

OK, now armed with this basic information it is time to unfold the trading plan, strategies, triggers, set-ups, exits, risk, money management, etc.

Again - I hope this is helping somebody other than just myself. Ask any question you like, my commitment is to be completely transparent and forthright, blessings - b

 

[pbstar09]

Thanks for this thread. I have just started trading daily at a proprietary trading office and have been getting killed. It seems like every time I take a trade I get stopped out. I feel like your info is helpful and I am looking for some kind of help here. I feel like they do know where my stops are and I don't know how to get an edge. At first i though I needed an edge against all other traders but now I think its just against the market makers/institutions.

 

[breathtaking]

Hello pbstar09 - I am sorry to say ... it is other traders and their emotions you will have to take advantage of ... I know it sould heartless, but it is true. I am glad it was helpful in a little way. I will contiue to share and get more specific, blessings - b

 

[breathtaking]

Good Morning to All - have to go to a lunch meeting, but wanted to discuss the last item before I begin to share the specifics I will trade and share with everybody each day ... it is about Support and Resistance levels.


I think every trader I have every spoken to talks about, believes in, uses some form if Support and Resistance in their trading and this is important as it speaks to the psychology of trading. It is important to understand there is a 'mass psychology' to the market based on information, human tendencies, emotions, sacred 'myth' cows ... this is why we have indicators, predictors, and trading euphemisms like: Risk-reward ratio, the trend is your friend, etc.

Not that any of these are necessarily wrong, but none of them actually help you be a profitable short-term futures trader ... Word to you mother ... Happy Mother's Day to all the Moms out there.

OK back to Support and Resistance:
We all understand in reality these are price points where the market auction can't get traction above or below ... the question is why? and who is able to push it through these levels?

So if the price keeps returning to a certain number and either threatening previous lows or just breaking them and then returning in the up direction ... what just happened? None of the 'Big Boys' were either scared out or stopped out of the market, because they have a vested interest in seeing the market moving to the upside. You see this 'temporary' move to the downside did not worry them it just presented a place where they could add to their positions at an original or even slightly better price as all the retail traders 'jumped' ship or got stopped out.

At the risk of sounding like a conspiracy theorist ... I might even say this type of move is orchestrated E.G., let imagine the 'Big Boys' wanted 200K contracts long @ 1300, but could only get 125K at and around that price ... they have two options: 1 - pay more than they or their bosses want to pay or, 2 - wait for all the retail traders to start to jump 'on-board' either in a break-out or in a trend following strategy and then not join them and actually start to trade against them until the action moves back to the price they want ... you see the 'Big Boys' get you/profits on both sides.

It like when you Broker calls to say his firm is high on Stock A and is placing a 'strong buy' recommendation on it. What you don't know is his firm is the one who just purchased a 'boat-load' of Stock A before your broker called you and that is the reason the price is moving up. This sad story has a second chapter, and I know you know what it is .... enough soap-box stuff.

OK ... I now promise to get into specific trades, set-up, money management, strategies, etc., in my next few blogs. Then I will start trading using what I disclose and share my results and thoughts.

As always, I hope this is helping somebody, anybody other then me ... blessings - b

 

[timsk]

OK ... I now promise to get into specific trades, set-up, money management, strategies, etc., in my next few blogs. Then I will start trading using what I disclose and share my results and thoughts.

Hi breathtaking,
A refreshingly candid and open journal.
A promising start and I look forward to following your progress.
Tim.

 

[Doomberg]

Three and a half years later and after losing more than $40K I cam across Market Profile and it changed my trading.

Hey please could you elaborate on what Market Profile is, thanks

Will be watching this journal

 

[beulah]

Good Morning to All - have to go to a lunch meeting, but wanted to discuss the last item before I begin to share the specifics I will trade and share with everybody each day ... it is about Support and Resistance levels.


I think every trader I have every spoken to talks about, believes in, uses some form if Support and Resistance in their trading and this is important as it speaks to the psychology of trading. It is important to understand there is a 'mass psychology' to the market based on information, human tendencies, emotions, sacred 'myth' cows ... this is why we have indicators, predictors, and trading euphemisms like: Risk-reward ratio, the trend is your friend, etc.

Not that any of these are necessarily wrong, but none of them actually help you be a profitable short-term futures trader ... Word to you mother ... Happy Mother's Day to all the Moms out there.

OK back to Support and Resistance:
We all understand in reality these are price points where the market auction can't get traction above or below ... the question is why? and who is able to push it through these levels?

So if the price keeps returning to a certain number and either threatening previous lows or just breaking them and then returning in the up direction ... what just happened? None of the 'Big Boys' were either scared out or stopped out of the market, because they have a vested interest in seeing the market moving to the upside. You see this 'temporary' move to the downside did not worry them it just presented a place where they could add to their positions at an original or even slightly better price as all the retail traders 'jumped' ship or got stopped out.

At the risk of sounding like a conspiracy theorist ... I might even say this type of move is orchestrated E.G., let imagine the 'Big Boys' wanted 200K contracts long @ 1300, but could only get 125K at and around that price ... they have two options: 1 - pay more than they or their bosses want to pay or, 2 - wait for all the retail traders to start to jump 'on-board' either in a break-out or in a trend following strategy and then not join them and actually start to trade against them until the action moves back to the price they want ... you see the 'Big Boys' get you/profits on both sides.

It like when you Broker calls to say his firm is high on Stock A and is placing a 'strong buy' recommendation on it. What you don't know is his firm is the one who just purchased a 'boat-load' of Stock A before your broker called you and that is the reason the price is moving up. This sad story has a second chapter, and I know you know what it is .... enough soap-box stuff.

OK ... I now promise to get into specific trades, set-up, money management, strategies, etc., in my next few blogs. Then I will start trading using what I disclose and share my results and thoughts.

As always, I hope this is helping somebody, anybody other then me ... blessings - b

Thank you breathtaking: I'm a newbie's newbie. Your information is certainly adding to my knowledge base. I'm in the process of doing research on beginning stock trade. I'm not sure what kind of a trader I want to become. I belonged to an all women's stock club about three years ago, applying fundamentals in buying & selling quality stocks to hold for 6-12 months or more. Now I'm trying to understand the technical side of things. Thanks again for your post.

 

[breathtaking]

Hey please could you elaborate on what Market Profile is, thanks

Will be watching this journal

Market Profile® was developed in 1982 by Peter
Steidlmayer, a Chicago Board of Trade member and Mike
Boyle, a vice-president of technology at the exchange. The
CBOT was looking for ways to give off-floor traders a better
idea of intra-day volume developments in the CBOT traded
markets. Back in 1982, the first run of clearing house volume at-
price data was not available until five hours after the market
closed. Traders that traded away from the pit could not monitor
activity within the market. Consequently, it was felt that
Market Profile could be implemented as a more real-time
proxy for volume data and give off-floor traders extra information
to help their trading. Steidlmayer and Boyle's intention was
to have Market Profile reflect the properties of the bell curve,
or a normal distribution, especially its first standard deviation.
This is the vertical bell curve display that is known today as
CBOT Market Profile®.

Below are two articles and a handbook, which can explain it better than I ... I will, however explain how I am/will be using it with my trading in future blogs. Copy and past the links and download the articles and handbook. The handbook is a really big file and a 'thick' read as are Steidlmayer's books. If you are going to read something about Market Profile, I would say you should read Daltons books on it.

http://www.earnforex.com/forex-e-books/forex-market/Market_Profile_Basics.pdf
http://www.cmegroup.com/education/interactive/marketprofile/handbook.pdf
http://www.trading-naked.com/library/market-profile-softwarereview07.pdf

Hope this helps and I am always will to listen, share, explain, etc., blessings - b

 

[Doomberg]

Thanks for the info, much appreciated.... you seem very knowledgeable, but with all this knowledge its odd to see you say that you are not sure if you will be profitable, maybe its just modesty... personally i think you'll do fine if you stick to your plans, especially since you have already learned from the losing days

 

[breathtaking]

Thanks for the info, much appreciated.... you seem very knowledgeable, but with all this knowledge its odd to see you say that you are not sure if you will be profitable, maybe its just modesty... personally i think you'll do fine if you stick to your plans, especially since you have already learned from the losing days

Thank you for your kind words ... I would not start trading again without an unwavering belief I will be successful this time around. It has been almost two years and I never stopped reading, learning, talking with experts, etc.

One thing is for sure ... anybody who follows along with experience it with me, the good, bad, ugly and successes, blessings - b

 

[Doomberg]

Well, this seems like a really interesting journal... because of the circumstances, and also because some of the information you shared was valuable and explained a few things that made sense, when do you plan to start trading? And what are your favourite markets?

 

[breathtaking]

Hello 2 All - hope this day finds you happy, healthy and profitable!

I am off on a quick business trip to Utah ... so this is not the week. But I did decide on a couple of things:
1 - will use Nija Trader
2 - will use the S&P Emini for all my initial trading and optimizing my results, however when I 'go-live' I will trade anything that moves enough during the shorter time frames to make $ if it meets the following requirements:
a) very liquid
b) it's regulated
c) the 'Big' Boys trade it

By the end of the week I will outline my strategy, indicators and time frames of trading, blessings 2 all - b