A Retail's Day Trading Experiment

[Concinnity]

The times price is random is not a lot vs the times it isn't. That isn't to say that sometimes it cant be extremely difficult to detect a pattern or what's going on.

If you're watching multiple charts there's almost always a theme to the day, week or even month sometimes. Probably a fair amount of people consider the action this week pretty random, but it was moving in a pretty consistent and repeatable manner despite moving abnormally when compared to most other days.

 

[Concinnity]

I spoke too soon.

Starting January, I switched over to the thinkorswim platform. Paper traded for three weeks. Disaster! First time I had 3 losing weeks paper or live!

I think something is wrong yet without any indicators or references, I really can't tell, it is as if all of a sudden, the market just changed and what worked before no longer works.

Over the weekend, I decided I need some indicators, if nothing else, to capture and quantify the approach. After some study, I decided the best indicator that reflects my approach is MACD.

I am starting to use MACD as my reference indicator. First day doing it, so far so good.

Stay tune.

It might just be context man, there is no replacement for that. Context meaning understanding general macro direction, ability to detect the stability of the market you're trading and also the current pattern of micro price action. If Asia, Europe and than US are all stopping at relative lows or highs and than immediately reversing that's something you need to be aware of. Because if that pattern continues than almost any break out or trend strategy is going to fail because price isn't even moving directional enough for it to work. So it doesn't matter how good your strategy normally is in that case. You need to be able to pick up on these changes as fast as possible.

 

[ironchef]

It might just be context man, there is no replacement for that. Context meaning understanding general macro direction, ability to detect the stability of the market you're trading and also the current pattern of micro price action. If Asia, Europe and than US are all stopping at relative lows or highs and than immediately reversing that's something you need to be aware of. Because if that pattern continues than almost any break out or trend strategy is going to fail because price isn't even moving directional enough for it to work. So it doesn't matter how good your strategy normally is in that case. You need to be able to pick up on these changes as fast as possible.

Thanks for the post and suggestions. Give me something to work on.

By the way, @padutrader said the same thing: context is important but never explained what he meant by context. You on the other hand explained what you meant.

Just thinking out loud, since I am trading single names, using an index as reference might be a good way to get an idea how the general macro market is behaving.

This post and you, are why I keep coming back to ET and "waste" my time here.

 

[ironchef]

Price movement can be quite random but price levels are not.

Any data on that?

 

[ironchef]

@Concinnity, actually I trade off the 1 min chart, the 5 min, tick and DOM were in a sense used as "context". 5 min for sustainable trend, tick and DOM are like eavesdropping on the actions in the pit. I could sense if there were feeding frenzy or panic from the activity and speed and watched stops being picked off....

 

[tiddlywinks]

tick and DOM are like eavesdropping on the actions in the pit.

There was a time pit audio+commentary was a worthwhile subscription service.

79's are trading!!!!!

Where were you??

 

[Sprout]

There was a time pit audio+commentary was a worthwhile subscription service.

79's are trading!!!!!

Where were you??

gives me anxiety just listening to it

 

[ironchef]

There was a time pit audio+commentary was a worthwhile subscription service.

79's are trading!!!!!

Where were you??

I have no idea what it was like, just read stories by pros describing what it was like and imagine it. For all I know, I could be all wrong.

 

[Jzwu2017]

Any data on that?

Day high/day low or both are usually reached in the 1-2 hr of the day. Then there are Fibonacci levels, mostly the mathematical middle level of high/low price, etc.

However, prive movements between 2 price levels are rather random, for example between day high and day low, or day high and middle level (avg. of day high and day low). If you watch the market long enough, you’ll have a pretty good feeling of where price is going. Of course, everyday is different so it requires work to figure out for each day.

 

[ironchef]

Day high/day low or both are usually reached in the 1-2 hr of the day. Then there are Fibonacci levels, mostly the mathematical middle level of high/low price, etc.

However, prive movements between 2 price levels are rather random, for example between day high and day low, or day high and middle level (avg. of day high and day low). If you watch the market long enough, you’ll have a pretty good feeling of where price is going. Of course, everyday is different so it requires work to figure out for each day.

Thanks for the explanations.

This morning, the stock is so well behaved a monkey can make money, no indicators needed, simply buy low sell high and then sell high buy low: