Quote from FastandFurious:
Thank you for your input, I use to play the MACD histogram divergences but I was "pushed" into focus on the tape (my first stlye of trading was "taught" to scalp) and the openbook that whenever size comes in my face, I get really shaky. Or when the stock moves a couple of cents, I'd take it right away as with the scalpers' mindset, that couple of cents is quite an achievement. I have to get my personality straightened out for trend plays but I'd imagine that shouldn't be a problem once I start believe it will work, and once I see profit. I'll go where the money takes me lol.
On the otherhand, there is a guy in my firm that does not have openbook, and I'd imagine that would help me a lot as when size pops in my face, I don't get too nervous. As you can see, it's hard to change what you have been doing, but I think this is a change that NEEDS to happen sooner or later. (especially when NYSE rolls out the hybrid on the Oct. 6th)
What I have been doing is looking at common chart formations: double top, double bottom, head and shoulders, etc... but I am still brand new to position trading as when to get in for entry and when to get stopped out. I also heard candlestick patterns are good too (hammer, doji star, hangman), etc...
Dogballon, can you describe your style?
Open book is crucial for following order flow, particularly because you can see orders come in at the inside and watch if they get posted or printed. Further from the inside it's less valuable, but it can still give vague indications of levels where buyers and sellers get active (but I think the chart and past price action is better).
I would stay away from the MACD histogram for a while, although it can be a good secondary tool once you thoroughly understand WHY it works (MA divergence/crossovers are not for all markets).
Most money made by traders comes from a few trades that just go ballistic. You need to be able to know HOW to let your winners run in order to understand when those times arise. Scalping is good for teaching you how to execute quickly, but quick execution is only good for cutting losses and occasionally for locking in profits in volatile markets. Never for cutting winners down to a few cents.
Position trading is usually defined as much longer holding times, over weeks or months, so that's not really what you're looking for. What would help in your situation now is slowly learning, not executing, and trading consistently on small size until it starts to make sense without screwing with your head.
I can't describe my trading style because it's hard to explain, as it's discretionary (and don't let the systems guys tell you discretionary is inferior). I use a few indicators, the best ones are a weird fit and I don't talk about them much, but it's not crucial to have indicators. It began with building a large foundation of knowledge about price action and economic/sector/market data, THEN beginning to build on it with execution plans, THEN internalizing how different techniques need to be deployed in different market situations.
The most important thing to learn is to always know where your exit is, always know how to size your position to reflect a consistent amount of risk (1-2% of your account maybe, depending on your # of trades and activity), and how to take advantage of real winners that will end up being 10-15 times what you risk. If you don't know where your exit is, how many cents to risk in the particular situation, and WHY you're taking the position, you should not be in the trade.
All that will come from spending time studying charts endlessly every night, reading about techniques of other successful traders here (and there are some good guys around), and slowly putting it together while plugging away every day with little bits of size until the lightbulb clicks.