A simple price action approach

Quote from wolfpacker:



methods to manage emotions during trading?
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I took a class a long time ago and the instructor called the dialogue that goes on in our mind when were are stressed or scared the monkey mind.

http://www.intent.com/blog/2009/03/03/quiet-please-taming-monkey-mind-meditation

Be observant of your thoughts and emotions, acknowledge them, "I am feeling scared", "I don't know what to do", "I am confused".......

You won't be able to block them out but you can redirect your focus.

One way is to create a list of positive affirmations that include your trading rules that you can focus on when you are feeling scared, unsure, panicked.

"I patiently wait for my setup to trigger me into a trade"

"I trade according to my plan, because I want to be consistently successful at trading."

"The market is in an uptrend therefor I am only looking to go long."

Obviously you can be much more specific with your wording.

Another way is to pay attention to the dialogue going on (in your head) while you are in a trade.

Let's say you are short on anticipation of the downside break out of a consolidation zone. Price wiggles around and after a while you stopped out of the position for a loss. 5 minutes later it starts to creep up to the top of the consolidation zone. You sit there and watch as price pushes thru the high and continues on up making new highs.

During the above scenario what was going on in your head?

How did you feel when your stop got hit? Angry, scared, the markets are out to get me.... Assuming the initial reason for getting into the trade was part of your trading plan then you should feel ok with it, because you followed your trading plan.

If you didn't feel ok with it then you need to examine what your expectations are regarding the trading environment. Losses are part of the trading environment. Also it shows that you don't have complete confidence in your trading plan.

How did you feel when price started to push up to the top of the consolidation zone? Ready to go long (if that is in your trading plan),
scared, disgusted, paralyzed....

Here is my litmus test for success in trading: Are my thoughts and actions in alignment with my goal to be a consistent and successful trader?
 
Two channel-based trades near the open, the first a loser and not a very good short on a pullback after a break through the midline (allowed to run too far against me, should have taken a smaller loss and looked to re-enter), the second a very nice long at the pit open, break of resistance (well, got in a little early) and target perfectly at the top of the channel.

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Quote from JoshDance:

Two channel-based trades near the open, the first a loser and not a very good short on a pullback after a break through the midline (allowed to run too far against me, should have taken a smaller loss and looked to re-enter), the second a very nice long at the pit open, break of resistance (well, got in a little early) and target perfectly at the top of the channel.

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Thanks for the chart JD. Can you go further into how you like to trade channels and PA? What setups are you looking for? Thanks.
 
(i shall not use bold face again. hope i can find some way to use italic instead for responses, can anyone help, pls?)

hi mark

i have about 30 min before having to run and pickup my daughter at her violin lesson. i shall attempt to answer your specific questions which were not responded to last time, K?

the answers are just my personal one person thoughts and reactions when focusing on watching out for a possible formulation of a trade pattern according to a person's well researched stats and strats, K?

Quote from wrbtrader:

This is not possible as shown in many psychology/psychological studies although the studies weren't specific to traders. The process of reacting requires thought and emotions. Therefore, I think you meant to say that one must "control" or "manage" thoughts and emotions at the time of trading...such is very possible for discretionary traders.

Same as above.

Your attached chart is a trade summary. It does NOT represent your ability to trade without thoughts and emotions. Just the fact that you attempted to use your trade summary to represent such is very problematic. Therefore, here's something you should think about very carefully the next time you trade or attempt to do what you just said that's not even remotely possible for a discretionary trader or a mechanical system trader.

* Does your resting heart rate change?

MY HEARTBEAT REMAINS AT ABOUT 90-110.
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* Does your blood pressure change?

MEDICALLY, IT REMAINS UNDISTURBED.
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* Do you talk to yourself while trading?

NO, THERE IS NO VERBAL REACTION OF ANY SORT.
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* Do your muscles get relax or tense when you open or about to open a new trade position?

NO, AS FAR AS I AM AWARE OF, THERE IS NO MUSCULAR RELAXATION OR CONTRACTION NOR TENSION WHEN PLACING A TRADE. BUT THAT DOES NOT MEAN THAT THERE IS NO ELECTRICAL IMPULSE CHANGES IN MY VERY PRIVATE AND PERSONAL E.E.G. THOUGH.

it is very much similar to when driving to lake tahoe from san francisco during stormy weather in wintry months.... :cool: of course, if you are new to the area, that experience would be quite scary.
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* Does your facial impression change when opening or closing a trade?

NO FACIAL EXPRESSION OR CHANGE OF ANY SORT. IT IS LIKE A PLASTIC FACE TOTALLY UNAFFECTED BY EMOTIONS, except when grandchildren bursting through the french door.... lol there would be emotions and activities to the extreme.... and my trading world stops instantaneously for the benefits of these little ones....
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* Do you get hungry or lose your appetite while trading?

MY REGIMENT IS, TO ONLY DRINK 'KOREAN GINGSENG' WHILE TRADING, EVERY HOUR ON THE HOUR.... i guess you already know what that is.... right?
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* Do you get thirsty while trading?

NO. NO THIRST, NO HUNGER, NO WONDERING EYES NOR WONDERING THOUGHT....; EXCEPTING WHEN TAKING THE 4 OZ OF THE GINGSENG.
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* Do you have a routine while trading (e.g. drink coffee, twirl a pen/pencil with your fingers, gentle swivel turn back n forth in your chair, log in to a trading forum during the trading day to post a message, document your trades for your own personal records beyond what the broker does for you et cetera).

MY ACTIVITIES BEFORE, DURING AND AFTER TRADING HOURS ARE VERY REGIMENTED....

I ONLY POST WHEN I AM ON A BREAK BUT MOST OFTEN I HAVE BETTER AGENDA THAN POSTING.... lol....; like chasing after my great grand children trying to put them to bed.... lol....
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Any of the above is a psychological manifestation of thought and emotion. Like I said, it's impossible to remove it because to do such...none of the above will ever exist for you. In fact, you wouldn't exist or you're dead

Further, to prove my point...you made the following message post during the trading day. Please note the time of your message (during the trading day) and the content that contains thoughts and emotions.

I ONLY POST WHEN I AM ON A BREAK BUT MOST OFTEN I HAVE MUCH BETTER AGENDA THAN POSTING.... lol.... KNOW WHAT THEY ARE....? LOL.... OF COURSE NOW YOU DO.... don't you do that too, mark?
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In addition, I like to remind you of several of your posts in the past elsewhere at ET where you've requested or you've asked nicely for a trader to revisit a discussed trade and tell you his thoughts so that you could learn from their experiences.

AND THAT IS ONLY ONE AMONGST MANY OF MY MAJOR STRENGTHS IN TRADING....; WHICH IS.... THE WILLINGNESS TO LISTEN TO OTHER TRADERS WHOSE OBSERVATIONS, EXPERIENCES OR DIALOGUES MIGHT AUGMENT OR ENRICH MINE.... just like your observations and contributions, for example....; many thx, mark.
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I think you get my point by now that you yourself do not have the ability to eliminate thoughts and emotions while trading along with the fact that you have a sincere interest in the thoughts of others when they were in specific trades. You're alive and your messages are FULL of thoughts and emotions especially the ones that occurs during the trading day.

WELL, YOU NEED TO DECIDE FOR YOURSELF AND MANY OTHERS WOULD DO LIKEWISE.... IF ANY AND/OR ALL OF MY EMOTIONS OR LACK OF IT.... AND OTHER PERSONAL AND TRADING EXPERIENCES WOULD BE EVEN AUGMENTING, BENEFITING, AND/OR ENRICHING TO YOUR OWN TRADING EXPERIENCES....

I AM VERY CERTAIN THAT LIKE YOU, MARK, ANYONE WHO HAS PUT IN SO MANY HOURS, DAYS, WEEKS, YEARS AND EVEN DECADES INTO LEARNING TO TRADE PROFITABLY AND CONSISTENTLY.... WOULD HAVE NO WAY TO GO.... BUT UP, UP AND UP.... CORRECT?

and that is one of my personal wishes for you and every trader as well....
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In addition, be careful not to develop an illusion that you have no thoughts or emotions while trading and that you've eliminated them while trading. In my +20 years of trading, I have not seen one trader survive such thoughts (pun intended). In contrast, the reality is that you've learned to manage your thoughts and emotions while trading when very few can. Also, if you're going to post trade summaries, you should do such every trading day and for many years instead of once in awhile whenever you feel like it.

YOU HAVE BEEN DOING VERY WELL AND ASKING ALL THE PERTINENT QUESTIONS THAT ANYONE WHO ASPIRES TO BE A CONSISTENTLY PROFITABLE TRADER, NEEDS TO LEARN, PRACTISE, DEVELOPE AND APPLY WITH EXTREME CONSISTENCY....

BUT THEN AT THE FINAL STRETCH, YOU CAME UP WITH--and i quote....

Also, if you're going to post trade summaries, you should do such every trading day and for many years instead of once in awhile whenever you....

MARK, PLS EXCUSE ME AGAIN; JUST SINCE.... WHEN OHHH WHEN...?

SINCE WHEN.... IS A TRADER REQUIRED TO TRADE OR POST EVERYDAY....?

AS YOU ALREADY KNOW, BY CHOICE, I DO NOT EVEN TRADE EVERYDAY.... LOL ....

LIKE YOU AND MANY OTHER AGED AND ALMOST ANTIQUATED TRADERS.... WE ONLY TRADE A FEW DAYS A WEEK.... LOL....

AND FURTHERMORE.... I AM ALSO SURE THAT YOU ALREADY KNOW THAT MANY TRADERS DO NOT TRADE FROM BELL TO BELL EITHER....

NEITHER DO THEY TRADE ALL YEAR ROUND....

MOST OF THE PARAMETERS IN TRADING ARE DESIGNED FOR THE ASPIRING TRADERS WHO DESIRE MORE THAN ANYTHING ELSE ON EARTH.... TO BECOME SUCCESSFUL TRADERS IN AS SHORT A TIME SPAN AS POSSIBLE.... (your own brokers will encourage you to trade every single day and from opening bell to ending bell.... that is how they make money.... right?)

AS YOU MENTIONED, THAT YOU HAVE ALREADY BEEN TRADING FOR MORE THAN TWO DECADES.... SURELY A PERSON WITH SUCH VAST TRADING EXPERIENCES WOULD ALREADY KNOW EVERYTHING THAT I ELUDED TO HEREIN.... RIGHT? :cool: and i know in my heart that you do....
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MARK, ONE THING THAT I ADMIRE ABOUT YOU AND SOME OTHERS ON ET THE MOST IS.... YOUR WILLINGNESS TO COME ON LINE.... AND SHARE WITH OTHERS.... (WHAT YOU PERSONALLY KNOW.... WHICH MIGHT OR MIGHT NOT BE APPLICABLE TO TRADING PROFITABLY)....; WHO ARE MOST ANXIOUS TO LEARN TO TRADE PROFITABLY.... YOU DESERVE THREE CHEERS.... :cool: :cool: :cool:
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my compliments and with all due respects.... and admiration too....
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Let the market make you ask questions about its intentions. It usually signals change in many ways.

Be sensitive to a change in wave duration and size as it may be the birth of a new channel.
 

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SUPER POWERED CHANNELS & PATTERNS

Earlier in the thread I mentioned that channels allowed a trader to map out the potential future moves of the market. For you die hard channelers I want to leave you with some inspiration for further research.

I had the good fortune to be mentored several decades back by someone who made their fortune on the market and taught me his method of how to combine channels and trend lines to produce a self adjusting predictive framework. Self adjusting means that as PA fills in the true path the trader adjusts the framework anticipate the next target.

Trades are seldom taken on anticipation as it requires a good awareness of exhaustion signals approaching a reversal point and combinations of S&R lines.

I really thought that everyone learned to do this but as the years went by I saw that it was more like a voodoo secret. As I had mentioned earlier in this thread that a predictive framework was an evolution of channels I will leave this with you and see if it lights anyone's imagination.

When we have a high or low and thereafter get 2 minor waves in any time frame we can develop a prediction way into the future. What are the tools you need?

A simple grasp of Fibonacci, wave structure, price patterns, volume and channels. I have given several hints in this thread of what the keys are to unlock this potential.

Right now the market is moving into a phase that will probably be either the biggest and fastest money maker ever or very close to it and most traders won't have a clue how to trade it. You don't have to map out the year ahead, but it sure helps! It really helps to map out the day ahead.

So from 2 waves we can form a channel. From the impulse we get angle and fib gives us a target. Fib then gives a reversal target and the 2nd wave gives an angle and then wave structure or price pattern comes into play. So we can soon have time and price targets to help maximize the profit potential. Volume tells us when the Smart Money is in the market and that is the way to make money - piggy back.

What you are about to experience will most likely change the world as we know it and it was all mapped out by Kondratiev close on 100 years back ( http://en.wikipedia.org/wiki/Kondratiev_wave ) The demise of Western power and the rise of the Asian trading bloc had time lines from way back then and I watched with fascination as it unfolded. It was this potential that intrigued me about TA.

Here's a simple example and if you look in my other thread you will see how a weekly support provided a future warning to look for volume to signal a buy move on the 5 min chart on the Dow when the market was in 632 panic drop sell mode. In other words the large time frame gives key trading points on a small intraday time frame and having an advance warning provides confidence when you see the pieces fall into place. Few would have called a potential buy opportunity in advance when blood is on the trading floor. The risk was taken out of the trade when multiple signals converged.

Good luck and good trading. You will see a few people prosper and many go bankrupt. Welcome to the NWO.
 

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Quote from dv4632:

X, you had me on the edge of my seat with that post. :D

I'm trying to figure this stuff out but I'm a little slow to learn. Hopefully I'll "get it" soon enough.

Here is a chart I came up with fairly recently. I drew a trendline across the lows and copied the parallel up to the 2000 high. The 2007 high doesn't fit, but what caught my eye was the recent top was pretty much a direct hit on the upper tl.

Is visiting the lower tl a valid scenario?

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Trading now so I'm busy. You have one ingredient of the five I mentioned. The question you need an answer to is how can you tell what the potential is and the 5 keys will unlock that. If I said yes you would take that as the answer next time you saw this pattern and it's not that simple as you would be blind sided.
 
Thanks.

By one ingredient, I assume you mean the channels. I'll have to get to work on the other 4. If you have the time, any insight on how I could do that would be appreciated. :)

On your previous post....

When we have a high or low and thereafter get 2 minor waves in any time frame we can develop a prediction way into the future.

So from 2 waves we can form a channel.
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Ok, I get that part.

From the impulse we get angle and fib gives us a target. Fib then gives a reversal target and the 2nd wave gives an angle and then wave structure or price pattern comes into play. So we can soon have time and price targets to help maximize the profit potential.
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Here things get a little fuzzy. I think I can figure out how to use fibs for targets, as I've experimented with different ways of making fib extensions. But what about angle? How does that come into play?
 
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