Have you used dbphoenix's teachings to become a successful trader?

[dbphoenix]

Again

First, find a range, preferably one with an easily determinable upper and lower limit.

Second, determine where price is within that range.

Third, locate the extremes. If you have a range that is wide enough for you to trade (that is, there are enough points from top to bottom to make a trade worthwhile) and price is at the bottom of that range, there is a good possibility for a long. If price is at the top of the range, there is a good possibility for a short.

At this point, you have three options: a reversal, a breakout, or a retracement. If, for example, price bounces off or launches itself off the bottom of the range (support), trade the reversal and go long. If instead it falls through support, short the breakout (or breakdown, if you prefer). If you don’t catch the breakout, or you prefer to wait in order to determine whether or not the breakout was “real”, prepare yourself to short whatever retracement there may be to what had been support and may now be resistance.​

Being able to find a range, locate the extremes, determine the location of price in relation to those extremes and know how to trade a reversal, a breakout, and a retracement mean bupkus if the trader is too afraid to enter. If he's too afraid to take the trade, either because he's afraid of being wrong or because he's afraid of losing money, neither this nor any other approach will be useful to him. Even an automated system will be of no use as he has to develop the plan to begin with in order to automate it (of course he can buy somebody else's automated system, but that's hardly trading any more than turning on the dishwasher is trading).

The SLA/AMT can and often does help the trader rid himself of fear, largely because it tells him where to enter (see above) but also when to exit, i.e., when to "scratch". The trader has no control over what the market does, but he has complete control over how he reacts to it. Once he regains control over his trades via scratching, he can then clear the red mist from his vision and behave more rationally. And that will lay the foundation for success in trading.

 

[dbphoenix]

Trend lines are useful for clearly illustrating when the trajectory of price has changed, and that one should be alert for the possibility of a range forming, or trend resumption or reversal.

I know people who say trend lines are arbitrary as one can draw them in several ways, and they prefer support and resistance lines. Well, there is a paper available from the New York Fed site where a study was done on S/R lines on a few forex pairs to see if price respected these levels intraday at least. The comparison was between randomly drawn lines and the levels provided by several Forex firms to their customers daily. The finding was that price respected randomly drawn levels 56.2% of the time, and the Forex firm levels 60.8% of the time. There was also a significant difference in the usefulness of the levels between firms.

All said hardly an earth shaking difference, so pick your poison.

There's no reason why price should "respect" the lines at all. The only purpose of the lines, as you pointed out, is to show the trajectory of price and when it changes. But they don't provide either support or resistance. What is more important is the median of the price swings. The trendlines, other than illustrating the trajectory, are there only to show how far from the median price is moving, or, more technically, how far traders are moving away from the median during each effort at finding value.

 

[eurusdzn]

CL has shown some nice SLA behaviour at 53-54. Do those who use SLA daytrade primarily
and follow a single instrument like NQ or, follow multiple symbols on an EOD basis?
Thanks.

 

[dbphoenix]

CL has shown some nice SLA behaviour at 53-54. Do those who use SLA daytrade primarily
and follow a single instrument like NQ or, follow multiple symbols on an EOD basis?
Thanks.

Speaking only for myself, I focus only on the NQ for daytrading since doing so successfully requires that I maintain that focus. This may not be the case for everyone. I do, however, track CL because I have a list of about eight stocks that I want to buy when the time is right. As yet, the time is not right.

I did post a CL chart not long ago.

 

[fortydraws]

Just out of interest, what do you think qualifies you for a succesful trading career?

Other than the fact that I am doing as well as I'm doing, nothing at all. I'm surprised everyday that I am here. I am thankful for the opportunity I have been given, and grateful for the help I have received from DbPhoenix and for all the information he has provided to me. I sincerely wish all who desire success to attain it, including you. I have no axe to grind nor agenda to sell. I do not believe SLA/AMT is the only way one can succeed, but I know it is one way that some may succeed.

As I understand it, trading is essentially placing bets on future outcomes, and as such one needs an edge in order to succeed - some way of determining those moments when the probability of one event occurring next is greater than any other immediate outcome. And imo gaining an edge in trading comes down to gathering and interpreting information about the current state of balance or imbalance between supply and demand. SLA/AMT is one way of gathering, organizing, and interpreting the information available to us. But so are moving averages, oscillators, MACD, order books, fluctuations in the size of the bid/ask spread, volume traded at various prices, volume traded by dollar amount and on and on and on. To the extent that any of those methods provide an edge, they do so by providing information based on the Law of Supply and Demand, even if the trader employing the method doesn't understand it in those terms.

I can't or don't use most of those tools to my benefit. But I know there are traders - both individuals and institutions - that do use them to success. The fact that I can't use those methods has no affect on me emotionally, psychologically, philosophically, or intellectually. I am neither jealous nor distrustful of those who approach this activity differently from me. The fact that I do not understand how to use market profile to make a consistently profitable trading plan is no reason for me to doubt that there are traders who can and do use it for just that purpose. There is more than one way to skin a cat, as the saying goes. I have no need to learn more than one, and have no desire to spend my days criticizing practitioners of a method different from my own.

 

[marketsurfer]

Surfer attempting to spoon feed those who believe The Dark Lord relies onTA and CNBC shut ins who make fancy charts who rarely lose LOL!

 

[pokito]

Speaking only for myself, I focus only on the NQ for daytrading since doing so successfully requires that I maintain that focus. This may not be the case for everyone.

DB - In your opinion, are there any naturals in this field?....I'm almost tempted to say 40D is one. I haven't heard of too many retail traders putting in a futures trade within the first few minutes NY open and get it right most of the time. But then again, the direction may already have been set prior to market open, he just needs confirmation.

 

[dbphoenix]

DB - In your opinion, are there any naturals in this field?....I'm almost tempted to say 40D is one. I haven't heard of too many retail traders putting in a futures trade within the first few minutes NY open and get it right most of the time. But then again, the direction may already have been set prior to market open, he just needs confirmation.

Depends on what you mean by "naturals". If one understands that he's trading an auction market and understands how auction markets operate, if one understands how the Law of Supply and Demand is manifested in traders' behavior, if one can trade based on these understandings as well as what he has learned through observation are the realities of the market, and if he can trade based on logic rather than emotion (fear, anger, etc), then others might consider that trader to be a "natural". He would most likely instead consider himself to be prepared.

Most traders -- at least according to what they post and how they trade -- don't understand any of this. They therefore trade in a state of perpetual fear, or perpetual apathy (not caring whether the trade works out or not). In either case, they either don't do very well or they fail.

What most traders consider to be "natural", or even "magic", is the result of the trader having characterized his market. Once one has undergone that task, there are no surprises. He knows what price is most likely to do, how far it is most likely to go. He isn't afraid because he has nothing to be afraid of. He can therefore trade rationally and logically, amazing those who have not even begun to do the work he has done.

How to characterize a market is covered in Appendix E of the SLA/AMT pdf. An example may be found here with an explanation here.

 

[marketsurfer]

Folks,

Read carefully the words used above --- supply demand, auction market. Those are very broad terms -- its akin to saying "buy when the market goes up" "sell when the market goes down". In other words, they are carefully chosen terms designed to mislead you and elevate the guru. Just read for yourself. Peace.

 

[dbphoenix]

I am sick of hearing people say that 90% of traders lose because the market chews them up or the system doesn't work or whatever. That is just BS. The problem is those traders spend all their time playing with indicator values or analyzing timeframes or whatever and they miss the whole point of what they are doing here. This is a MARKET.

All markets have buyers and sellers. I don't know why everyone can't be experts on value when they look at items in a store or a piece of real estate or whatever but not in the market. If you wanted to sell your house for 500k and you had nobody even look at it in a booming market what would that tell you? The price was too high. Would you then raise the price of the house the next day? Of course not, you drop your offer if you wanted to sell it. You see what I mean? Markets make sense when we are talking about real estate or whatever, but people just blindly look at indicators and follow systems even in the face of obvious current price information.

Example: in the last 5 minutes price has had a high failure at 1350 three times and is currently trading at 1348. Do you take a long setup here because a momentum indicator is above zero and the 9 day moving average just crossed over and above the 20 day? Why not, don't we always have to stick to our trading plan blah, blah, blah? That is a great example of how traders follow systems to the letter and then scratch their heads because they can't figure out why they are losing. Into the 90% pile they go. This isn't a ridiculous example either. This scenario repeats itself about once every 10 minutes on most days in any market.

Anon