If You Can Draw A Straight Line . . .

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Gringo is correct. As you circle the field and prepare to land on the activity just prior to the upcoming session, you of course focus only on those areas most likely to be factors, in this case, 3051/52 and 3060. Adding more lines would just clutter everything up. If price breaks through one of these levels, then it's time to zoom out a bit to the larger picture, such as 3039. More information does not necessarily make for a better trade.

It's not unlike driving. If you're paying attention, you know what's in front of you, what's behind you, what's to either side. Plus you're looking at the sky for advance warning of adverse conditions. And so on. If you're fiddling with the radio, you're likely to miss your exit.
 
Quote from Gringo:

No Niko. It's to show price can be read in RT. I like EOD trading. This intr-day is a bit too focus consuming for me! It also shows that it doesn't matter what time frame one uses or bar intervals, reading price is the same.

Gringo
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I've been working toward an EOD plan for last past few weeks. Mostly that has meant I 've been reviewing Wyckoff, especially sec. 7, DbPhoenix's book, and some supplemental reading as well, e.g. Mamis's trilogy and William J Oneil, and an entertaining piece by Nicolas Darvas. I bought the Mamis and ONeil because DbPhoenix had given Mamis good reviews, and I had recalled a post of his where he had mention Oneil as being close to Wyckoff. I read the Darvas book because my local township public library has about 5 books on investing, and that was the only one they had that I had heard of before. And I did enjoy it, and his approach reminded me somewhat of what I found in Oneil.

This weekend I've done a lot of replay of daily bar interval charts. Some observations I have made as a result of my bar replay activity this weekend:

1) I do not seem to have made much progress in one area, and that is my ability to read volume and translate it consistently into correct price direction reads. I am disappointed in this, but I will keep working at it.

2) I do seem to be able to make many if not all of the same type price based reads I use on the 1 minute NQ and the as I used on the 1 & 5 minute stock charts I had been trading from on the daily charts (this observation is what made me quote Gringo's post here) - reading price on daily bar intervals over the course of weeks and months seems no different that reading it on 1 and 5 minute charts over the course of a few hours.

3) When I was day trading individual stock issues, my plan was to trade long only and only issues that were gapping open higher than the prior day's high. In my replay/backtesting, these gaps often led to continued price increases lasting days, weeks, and months. I will focus at least some of my initial efforts/attempts on stocks gapping open higher.

4) One thing that appealed to me about day trading was that it allowed me to make regular money on at least a weekly/bi-weekly basis if not a daily basis. I wonder if I also was not attracted to the idea of not being in the market too long. I think I might prefer a short-term, few days or couple of weeks at most type trades. I don't know if I could do the longer term Oneil/Darvas type holds. Maybe I can, but my daily bar replay experience of the past couple of days tells me I will likely comfortably lean toward holding for a few days to a few weeks.

5) While I have no problem trading the NQ futures from both the long position and the short position, I do not feel comfortable being short individual stock issues. I know that when the market is down trending, most issues will follow the market, so I would have to decide to be happy sitting out the bear moves and waiting for the bull moves, or I could maybe learn about some of the ETF's that would go up in value as the market declines if I want to participate in EOD trading during bear moves.

I will be watching a list of stocks, mostly those that I had used as day trade candidates, and I am going to see what I can put together in terms of an EOD short-term trading plan. I will use a relatively small amount of capital to start with, and I will not use margin, at least not at first.
 
Quote from fortydraws:


1) I do not seem to have made much progress in one area, and that is my ability to read volume and translate it consistently into correct price direction reads. I am disappointed in this, but I will keep working at it.
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Fortydraws,

Don't worry much about volume. I use volume to keep myself alert about the intensity of the trading but not for making entry or exit decisions (mostly :)). This doesn't mean volume is totally useless. I learned to read price only after Db came up with the revolutionary idea of removing absolutely everything but the price. Now this was even beyond Wyckoff as Wyckoff himself has volume analysis in his course and it is quite extensive. It was at that time after going through the many examples given by Db, with my hand covering the right side of the price that one day a light bulb went off. I can still recall the day it happened and literally felt a paradigm shift taking place in my head as my heart started to race knowing in my gut I had broken through the wall. Thought it wasn't really a wall but more like the obvious simply becoming the obvious. I still wonder at the simplicity of all this and even feel guilty knowing it's no rocket science.

The whole price movement thing is so damn simple and yet there are scores who would feel so desperate as to resort to planetary motions and lunar movements to predict price movements. (I am not kidding when I mention this). Just because I started to read price better didn't just mean I had become a better trader. My old habits were a big hindrance. Unlike you, I had gone through quite a few years of trying to master O'neil, Darvas, Schwager, Murphy, Nison, and scores more. The bad habits were not so easy to wish away in my case. We all have our speed and our idiosyncrasies. In time when my skill started to become more stable and price reading a bit more automatic, Db nudged me along to reacquaint myself with volume. I do see an advantage in having volume handy but don't consider it to be an essential. Once one reaches a point where decision making by price alone is automatic adding volume back even if the focus on it is minimal is a bit advantageous. My enlightenment came less than a year ago, therefore, I don't consider myself any kind of an expert.

Decision making is becoming easier for me now. I don't look over my shoulder and worry too much if someone else's opinion our outlook differs from mine. Db had encouraged me to post my thoughts, just as he encourages most to post their thoughts and reasons before the fact, and then check them after the fact. This is a very powerful method as it forces one to become accountable. It forces one into making the conflicting and muddled thinking coherent. There is no hiding from one's analysis and thoughts once it's been posted. It is one reason I continue to post even though at times I might not even have any interest in trading that particular instrument. I wondered at the beginning whether posting my thoughts would make everyone start trading like me and destroy the price movement (how presumptuous of me!) . I am still not sure why but somehow it's not that straight forward to replicate someone else's trading.

You fortydraws have been very very fortunate to bypass developing bad habits. I am probably the slow turtle that raced the hare, but you, you my friend are the hare who doesn't even go to sleep during the race. There's tremendous potential in you. Keep at it and give yourself some time. The sky's the limit.

And yes, I was saying something about volume as well somewhere :).

Gringo
 
Quote from Gringo:




.... he encourages most to post their thoughts and reasons before the fact, and then check them after the fact. This is a very powerful method as it forces one to become accountable. It forces one into making the conflicting and muddled thinking coherent.
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You mean publicly post? Yipe! My thinking is at times embarrassingly muddled.
 
after sleeping on it, perhaps in addition to any muddled thoughts,
I found posting charts or even just entries and targets a distraction, and I didn't trade as well. But you are talking about something else... posting your thoughts before the open... and after trading... posting what you did with that....

it's a different kind of educational process. Is that what you mean?

I bought db's ebook last week, and am reading away. Should be more in tune... soon.
 
Quote from Hooti:

You mean publicly post? Yipe! My thinking is at times embarrassingly muddled.
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Hooti,

Yes. Both public or private postings are fine, however, posting publicly has more of an emotional impact. I have noticed sim trading doesn't involve as much of stress as the live trading, but having publicly posted, one experiences a kind of emotional pressure that's a bit more realistic, knowing one's being judged at some level. We also have the advantage of someone pointing out flaws and suggest improvements allowing us to adapt and correct those flaws. It also helps us recognize our biases as there are going to be conflicting suggestions based on diverse experiences of different people. Some of these suggestions may sound wonderful and actually be profitable but may not be suitable for the trader we may be striving to become. Posting publicly is time consuming but the benefits outweigh the rewards by a great margin, and especially for a trader who's in the learning phase.

Gringo
 
I need to learn, that's for sure.
You say that you studied a lot. I took classes, and still sit in on a weekly 'traders lab'. If the classes were great or not I don't know. I think they were competent for what they teach... which is a pile of indicators. Stochastics and tick charts and keltner channels, Elliot wave, and and and. But one day a year or so ago the indicators were giving nothing and the teacher said that when that happened, well, you always have price action.

That obviously seemed like the most important thing then to learn, so I read all of Al Brooks and Bob Volman, as I suppose many of us have. And paid attention when db started talking here. But I have a lot of old crap to unload yet.

It's funny tho, in the traders lab, (just recently as I grasp more of what db is presenting...) I see the teaching in the lab as they go through all these indicators every week. They seem to be quantifying what as a price action reader you just 'know' by looking at it and telling the story. You don't have to quantify it to use it. It's like all the stuff is peripheral. I hope as I continue to read the ebook, those indicators become more peripheral! Thanks for your contributions and examples, Gringo.
 
  • The first step for a trader is to determine the current trend of the market.

    The second step is to determine one's place in the current trend.

    The third step is to determine the proper timing of one's entry into whatever it is he's trading.

    -- Richard Wyckoff


All of this must of course be done ahead of time, i.e., before the trading session begins.
 
Quote from Hooti:

I need to learn, that's for sure.
You say that you studied a lot. I took classes, and still sit in on a weekly 'traders lab'. If the classes were great or not I don't know. I think they were competent for what they teach... which is a pile of indicators. Stochastics and tick charts and keltner channels, Elliot wave, and and and. But one day a year or so ago the indicators were giving nothing and the teacher said that when that happened, well, you always have price action.

That obviously seemed like the most important thing then to learn, so I read all of Al Brooks and Bob Volman, as I suppose many of us have. And paid attention when db started talking here. But I have a lot of old crap to unload yet.

It's funny tho, in the traders lab, (just recently as I grasp more of what db is presenting...) I see the teaching in the lab as they go through all these indicators every week. They seem to be quantifying what as a price action reader you just 'know' by looking at it and telling the story. You don't have to quantify it to use it. It's like all the stuff is peripheral. I hope as I continue to read the ebook, those indicators become more peripheral! Thanks for your contributions and examples, Gringo.
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Hoot - one of the biggest mistakes a new trader can make is to not stick with an approach. Any approach - whether its using stochastics, tea leaves or darvas boxes - takes time to gel. Most new traders (myself included) spend too much time changing settings on their indicators, or their tick charts or wondering if they add bollinger bands to their current setup if that will filter out their bad trades.

Just pick an approach and stick with it. The first part is to find something that resonates with you. Work with just that thing for a few months at the exclusion of all else. Enough soap box - sorry.
 
I'll post my thoughts on this as I am sure applying the techniques described in this thread one can become a millionaire (if properly capitalized) within a year or two. That should be in the back of ones mind however, not the forefront. I think the most valuable things in this thread have been:

1. Understanding trading behavior first
2. Focusing on price on the far right hand side of the screen and not so much lines or indicators
3. Not neglecting any time frame, even though they are all the same and one should always look for profit on the larger, and risk on the smaller.

I know that every day I traded last week I could have made money had I been more nimble and skilled at price reading.

Below is what I saw today, and I took a mental trade as I am sitting out this week to study.
 
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