Day-Trading 2.0 for small traders

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Quote from jjrvat:

(as ddoonie pointed out 10 tick drawdown is peanuts if you are intending to catch all 100 ticks).
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Agreed.

But I never know if it's going to turn into 100 ticks after the 10 tick drawdown, or if the sell signal won't be generated until it's at -20 ticks.

I have no way of predicting potential profit (ie. +100 vs. -20) before I take a position.
 
Quote from jjrvat:

etfswingtrade, ammo, ddoonie, Bingoking, bilbod, toucan, BlowFish, umitd

Thanks for your comments

bilbod

Excellent post !!!
(http://www.elitetrader.com/vb/showthread.php?s=&threadid=113456&perpage=6&pagenumber=129)

What are your views on time charts? I am use to the 5min chart, and is why i use it for my entries. I see that you all use tick/volume charts, which makes sense to me. I'm watching a 4000 tick chart, secondary confirmation i guess..( ddoonie)

Time charts have a unique feature over all other form of charts: the obvious control of time. Controlling the frequency in which each bar is formed it is very helpful, it allows to have a time reference to make decisions, it tells a trader when to watch the screen, when it’s too late to entry and when to get ready to pull the trigger among other things.

These characteristics are especially important if you are “scalping” or trading fast timeframes. However and as you probably know, there is always a tradeoff when trading: in this case, bouncy charts, more whipsaws, lots of choppy (because of the nature of time charts, bars are plotted regardless of volume size or # trades) and missing some trades (most of them if you are using a bad time chart for your instrument) because of the size of the trigger bar can make a very bad entry.

In my opinion, the higher the timeframe the less impact these bad factors your trading plan will have. Again, the “fundamentalist” (long term traders) and investors are right and that’s why, “ceteris paribus”, trading daily, weekly or monthly charts are by far the best option.

Sometimes time charts can be poor for trading analysis but good enough as 2nd timeframe trigger when using multiple timeframes in slow charts. In general as a rough reference (it depends on the instrument) the chart below summarize my opinion on time charts.

20rwh2t.jpg


TIP: As you have noticed Heiken-ashi will help a lot smoothing time charts, but don’t forget to set the parameters of the current candle to the real price (and not HA candle formula), otherwise you are not going to get valid information to pull the trigger

Ironfist,

I have been reading your comments the last few weeks. IMHO, your wave analysis has improved a lot which is really good, but you seem to be stuck in that level of analysis. Among others, you are not paying attention to time, price and macro direction, your entries and exits are too rigid for the instrument you are using, and as I mentioned before you do not fully comprehend the extend of your timeframe (as ddoonie pointed out 10 tick drawdown is peanuts if you are intending to catch all 100 ticks).

Bingoking has a very good idea (Have you ever tried "no indicator?") trading naked. I propose you an idea that may help you and can improve the content of this thread: A live analysis exercise. Pick an instrument and timeframe slow enough to post live charts and comments but fast enough to have intraday position. I’ll post a live chart based on that for the discussion and we will try to build upon to find some answer for your concerns. Of course the idea is everybody can comment or lurk and that you and only you find the “right” option for your PBP. Let me know if you want so I can think about details.

jjrvat
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2ajozv4.gif


Thanks for sharing jjrvat.

I noticed that using the longer periods keeps you in the trade for more profit and it also keeps you out of early entries.

Since it seems the trade usually goes against me after I enter, I now enter at 2 pips or more LESS than my original entry price. I usually get the fill I seek.

In the M5 charts the pink and blue boxes are the H1 candles. I get a longer view on the short time frame this way.

Thanks again, jjrvat, I appreciate your posts.
 
Quote from jjrvat:

Time charts have a unique feature over all other form of charts: the obvious control of time. Controlling the frequency in which each bar is formed it is very helpful, it allows to have a time reference to make decisions, it tells a trader when to watch the screen, when it’s too late to entry and when to get ready to pull the trigger among other things.

These characteristics are especially important if you are “scalping” or trading fast timeframes. However and as you probably know, there is always a tradeoff when trading: in this case, bouncy charts, more whipsaws, lots of choppy (because of the nature of time charts, bars are plotted regardless of volume size or # trades) and missing some trades (most of them if you are using a bad time chart for your instrument) because of the size of the trigger bar can make a very bad entry.
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Good stuff there, very good information.

To partially overcome the problem a trader encounters when seeing that "the size of the trigger bar can make a very bad entry", I find it useful to use a tool which measures the volatility of the candlestick.
***
i.e.,
Bollinger Bands
Standard Deviation
etc.
***
Good trading.
 
Quote from IronFist:

I would do that. Am I allowed to have volume on the chart? I have no idea how to read volume. I've read a thousand posts here where people show how volume analysis impacts their price analysis and decisions but I never understand any of it. Some people say "increasing volume means the trend is strengthening!" and other people say "volume was increasing so I took the opposite side of the trade cuz I knew it was going to reverse!" And when I look at volume on my charts, I don't see any meaningful patterns or anything. There are some random spikes but sometimes they occur at the beginning, middle, or ends of trends so I haven't gotten any useful info from them. I also don't understand how people can draw on their charts "increasing volume" or "decreasing volume." It's always random distribution of highs and lows.

So maybe in this exercise we can talk about volume, too.
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I would be interested in this also.. I have pretty much gotten to the point where all this "SEE!! that's a "healthy" trend! strong up volume, and low volume on a pullback!" isnt that accurate..

I have seen stocks go up on average volume, and stocks crash after a healty strong volume run up.. There doesnt seem to ANY consistant correlation, so I have all but tossed it out the window entirely.

Of course, I am probably doing something wrong, but all the "textbook" volume analysis seems like it doesnt work in real trading.

I am beginning to believe pure price action (trendlines, support/resistance), but no volume, no indicators is the way to go.
 
Dumb question but I have tradestation and can someone help me figure out how to get the 240 WMA to change color with the slope of the trend. Thanks so much for any help.

Pacman
 
Quote from PACMAN1:

Dumb question but I have tradestation and can someone help me figure out how to get the 240 WMA to change color with the slope of the trend. Thanks so much for any help.

Pacman
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WMA with changing colors based on if prior WMA bar value > or < than current WMA bar value.

Cheers,
i
 

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Quote from iluv2trade:

WMA with changing colors based on if prior WMA bar value > or < than current WMA bar value.

Cheers,
i
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I have one for a least squared color-sloped CCI I'll trade for a WMA color-sloped coded in .efs
 
Quote from PACMAN1:

Dumb question but I have tradestation and can someone help me figure out how to get the 240 WMA to change color with the slope of the trend. Thanks so much for any help.

Pacman
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try this:

inputs: Price( Close ), Length( 240 ), Displace( 0 ) ;

variables: WAvg( 0 ),Color(white) ;

WAvg = WAverage( Price, Length ) ;

if price > WAvg[1] then Color = green else Color = red;

Plot1[Displace]( WAvg, "240",Color ) ;


 

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