IN THIS THREAD: IronFist learns (the elusive) PRICE ACTION
- Thread starter IronFist
- Start date
I took the short after the market bumped up against 402.75 a few times. Then got filled on a sell limit. Another thing you can do there is place a buy stop a tick or two above the recent high (vice-versa for low). Then set a sell limit a point or so above that. If it cracks the high it usually pops for a quick point that can get filled in seconds. I play for short gains. I don't like hanging around too long. Kinda like being at a casino - the longer you hang around the more likely you are to be separated from your money. When greed takes over I lose.
The thing to concentrate on is finding something that will get you on the right side of the market for whatever timeframe you are trading. Keep it simple. Maybe do something like watch ES, YM & NQ on a 5 minute chart with a 55 MA. When price in all three cross above the MA go long. When all 3 cross beIow then go short. Don't know if that works or not - just an idea.
I just watch the price action in the DOM and see how it behaves. I was introduced to trading 4 years ago by three friends who traded in the MGEX wheat pit so maybe that has flavored my thinking some on the short-term stuff. I like the (usually) slower moving markets like ZC or ES which usually have a tight spread. Then you can get out easy if it starts moving against you. I would not think of trading the YM off the DOM - too big a spread - harder to get out. If you are watching that market on the DOM I can see why you would be stymied a bit. Although I think you could time 8-10 tick trades there if you watched it for a while.
Blah, blah blah.
So much for now.
The thing to concentrate on is finding something that will get you on the right side of the market for whatever timeframe you are trading. Keep it simple. Maybe do something like watch ES, YM & NQ on a 5 minute chart with a 55 MA. When price in all three cross above the MA go long. When all 3 cross beIow then go short. Don't know if that works or not - just an idea.
I just watch the price action in the DOM and see how it behaves. I was introduced to trading 4 years ago by three friends who traded in the MGEX wheat pit so maybe that has flavored my thinking some on the short-term stuff. I like the (usually) slower moving markets like ZC or ES which usually have a tight spread. Then you can get out easy if it starts moving against you. I would not think of trading the YM off the DOM - too big a spread - harder to get out. If you are watching that market on the DOM I can see why you would be stymied a bit. Although I think you could time 8-10 tick trades there if you watched it for a while.
Blah, blah blah.
So much for now.
probably another term for "roll the dice and hope you get lucky."
Hello IF,
I am going to repeat a piece of advice I gave you several months ago in another thread.
Pick one setup and learn to trade it. Learn all its nuances and make it your own.
Stop jumping from one thing to another. Stop asking is A better than B. There is no holy grail. There is just you one-on-one against the market.
Choose one strategy and stick with it until you can trade it profitably.
IMO, trading PB's to S/R in a trend and managing the trade based on PA is a good one to start with, it works in all actively traded markets on all market fractals. If you disagree, that's fine but pick one method and focus on that to the exclusion of everything else.
At the end of each day, post your chart for the day with all your trades. Explain each one, your entry and why, your exit and why.
You will get lots of comments. Pay attention to the constructive criticism but ignore the noise.
Don't go off topic and don't get distracted from your strategy.
It should not be too long before you start to trade profitably.
I am going to repeat a piece of advice I gave you several months ago in another thread.
Pick one setup and learn to trade it. Learn all its nuances and make it your own.
Stop jumping from one thing to another. Stop asking is A better than B. There is no holy grail. There is just you one-on-one against the market.
Choose one strategy and stick with it until you can trade it profitably.
IMO, trading PB's to S/R in a trend and managing the trade based on PA is a good one to start with, it works in all actively traded markets on all market fractals. If you disagree, that's fine but pick one method and focus on that to the exclusion of everything else.
At the end of each day, post your chart for the day with all your trades. Explain each one, your entry and why, your exit and why.
You will get lots of comments. Pay attention to the constructive criticism but ignore the noise.
Don't go off topic and don't get distracted from your strategy.
It should not be too long before you start to trade profitably.
Generally speaking the ES moves slower than the YM plus you have the tight B/A spread. Hard to get out where you want/when you want if there is a wider spread. But then sometimes you can just scalp your way out. Perhaps the best thing to do is scalp your way in, scalp during the duration and scalp your way out.
The pits are going away and the new "pit" is the DOM. If the DOM can help you, then fine. If not its not for you then that's fine too.
Iron Fist
This is my attempt to âPay it forwardâ
First and foremost - let me say I in no way want to, or am trying to â discount or contradict â any previous suggestions
I believe trading is a personal thing â akin to two people staring at a painting â they each are going to see and interpret something different â neither is wrong in what they see âthey just have different perspectives
I solely, and successfully, trade price action â Yes I have loosing trades (most days), but I end up making money (just about every day), and I do not mean to sound egotistical or cocky by writing this Sir â Please forgive me if it comes across that way
Before I begin â Trvlwanderer had a very good suggestion on a previous post; And as has already been stated by others â You really need to adopt one methodology, stick with it, and evolve it into your own.
I day trade equities, on a direst access platform with level II
What I use are three charts of the same equity, and one chart of the overall market
Chart 1 âVery short time frame of the equity (This is where I really get a feel for price action)
Chart 2 â Medium time frame of the equity (I use this for trading)
Chart 3 â Long time frame if the equity (I use this to get a feel for the current trend / price direction)
Chart 4 â Long time frame of the Market (synced to the longer time frame equity chart) I use this to gauge current market sediment / direction
NOTE 1 â These time frames are relative to day trading (not swing trading)
On these various charts â I have the following;
EMAâs - A couple of exponential moving averages (which help keep me orientated to the current price direction)
Candlesticks â (personally I donât like bar charts) with the up and down candles in shades of grey (not the typical red and green) as I donât want to be swayed one way or the other by color
Several Horizontal Lines - On my longer time frame charts (Stock and Market) just as Trvlwanderer described
A couple of Horizontal Lines - On my mid frame chart (the one I use for trading, and the one I stare at the most) I just have a couple of horizontal lines so I donât get wrapped around the axle so to speak
NOTES
Moving averages
1.) Use MA the equity your trading respects (itâll take some trial an error as every equity has a personality) â But find MAâs that the equity respects on wild moves, and / or when its ranging (congestion) or consolidating), and / or on minor (very minor) pullbacks â but limit it to a very few MAâs
2.) Also use MAâs settings that give you the same view on all charts â example a 1 minute chart with a 20 ma, is different that a 5 minute with a 20 ma. (at least on my platform)
If you decide to use a 5 minute chart 20 ma, then consider using a 1minute chart with a 100 ma â Itâll give ârelativeâ the same signal â in lieu of contradictory signals (By the way I am not suggesting you use the above time frames or ma settings - that is for you to decide â I just picked those as examples)
Horizontal lines
1.) Call them support and resistance / supply and demand if you wish but please remember nothing about where price could go is set in stone â but these can indicate a higher âprobabilityâ of one thing happening over another
Price Action
1.) Long bars are not tradable (in my view) unless Iâm already in a trade, AND in the direction price is racing toward.
However let me give you a couple of examples to consider;
2.) Price keeps bumping itâs butt on a horizontal âsupportâ line on the mid and long term time frame charts but doesnât break it, and / or price is exhibiting a tendency to move away that level â guess which way price will âprobablyâ move
3.) Price keeps bumping its head on a horizontal âresistanceâ line on the mid and long time frame charts but doesnât break it, and / or price is also exhibiting a tenancy to move away from that level â guess which way price will âprobablyâ move
Another scenario
4.) Youâve found an MA that an equityâs price respects, and price is currently âclimbing upâ the MA â probably a long (assuming Market and Time of Day are agreeable)
5.) Youâve found an MA that an equityâs respects, the price is currently âclimbing downâ the MA â probably a short (again assuming Market and Time of Day are agreeable)
I hope your getting the picture Sir
AND MOST IMPORTANT â All the above have logical levels to set your Stop Loss â that if / when hit you are relative sure the trade isnât working
Then at the point of stopping out you may even decide to exit and reverse â which is why they call us traders, and not investors
To add âhigher probabilityâ â You may also want to be aware of what the overall market is doing;
Is it an
Inside / Outside day
Upside / Downside day
And
Be aware of the âTime of Dayâ
My opinion â once you start really focusing on price nothing else matters, and youâll also begin to identify all types of âprobableâ trade set ups
In closing I would also like to add, a trading plan, with entry / exit rules, money management rules, and daily / weekly monthly goals, continuing education, and a daily journal is paramount
For me trading is a business
Take Care Sir
This is my attempt to âPay it forwardâ
First and foremost - let me say I in no way want to, or am trying to â discount or contradict â any previous suggestions
I believe trading is a personal thing â akin to two people staring at a painting â they each are going to see and interpret something different â neither is wrong in what they see âthey just have different perspectives
I solely, and successfully, trade price action â Yes I have loosing trades (most days), but I end up making money (just about every day), and I do not mean to sound egotistical or cocky by writing this Sir â Please forgive me if it comes across that way
Before I begin â Trvlwanderer had a very good suggestion on a previous post; And as has already been stated by others â You really need to adopt one methodology, stick with it, and evolve it into your own.
I day trade equities, on a direst access platform with level II
What I use are three charts of the same equity, and one chart of the overall market
Chart 1 âVery short time frame of the equity (This is where I really get a feel for price action)
Chart 2 â Medium time frame of the equity (I use this for trading)
Chart 3 â Long time frame if the equity (I use this to get a feel for the current trend / price direction)
Chart 4 â Long time frame of the Market (synced to the longer time frame equity chart) I use this to gauge current market sediment / direction
NOTE 1 â These time frames are relative to day trading (not swing trading)
On these various charts â I have the following;
EMAâs - A couple of exponential moving averages (which help keep me orientated to the current price direction)
Candlesticks â (personally I donât like bar charts) with the up and down candles in shades of grey (not the typical red and green) as I donât want to be swayed one way or the other by color
Several Horizontal Lines - On my longer time frame charts (Stock and Market) just as Trvlwanderer described
A couple of Horizontal Lines - On my mid frame chart (the one I use for trading, and the one I stare at the most) I just have a couple of horizontal lines so I donât get wrapped around the axle so to speak
NOTES
Moving averages
1.) Use MA the equity your trading respects (itâll take some trial an error as every equity has a personality) â But find MAâs that the equity respects on wild moves, and / or when its ranging (congestion) or consolidating), and / or on minor (very minor) pullbacks â but limit it to a very few MAâs
2.) Also use MAâs settings that give you the same view on all charts â example a 1 minute chart with a 20 ma, is different that a 5 minute with a 20 ma. (at least on my platform)
If you decide to use a 5 minute chart 20 ma, then consider using a 1minute chart with a 100 ma â Itâll give ârelativeâ the same signal â in lieu of contradictory signals (By the way I am not suggesting you use the above time frames or ma settings - that is for you to decide â I just picked those as examples)
Horizontal lines
1.) Call them support and resistance / supply and demand if you wish but please remember nothing about where price could go is set in stone â but these can indicate a higher âprobabilityâ of one thing happening over another
Price Action
1.) Long bars are not tradable (in my view) unless Iâm already in a trade, AND in the direction price is racing toward.
However let me give you a couple of examples to consider;
2.) Price keeps bumping itâs butt on a horizontal âsupportâ line on the mid and long term time frame charts but doesnât break it, and / or price is exhibiting a tendency to move away that level â guess which way price will âprobablyâ move
3.) Price keeps bumping its head on a horizontal âresistanceâ line on the mid and long time frame charts but doesnât break it, and / or price is also exhibiting a tenancy to move away from that level â guess which way price will âprobablyâ move
Another scenario
4.) Youâve found an MA that an equityâs price respects, and price is currently âclimbing upâ the MA â probably a long (assuming Market and Time of Day are agreeable)
5.) Youâve found an MA that an equityâs respects, the price is currently âclimbing downâ the MA â probably a short (again assuming Market and Time of Day are agreeable)
I hope your getting the picture Sir
AND MOST IMPORTANT â All the above have logical levels to set your Stop Loss â that if / when hit you are relative sure the trade isnât working
Then at the point of stopping out you may even decide to exit and reverse â which is why they call us traders, and not investors
To add âhigher probabilityâ â You may also want to be aware of what the overall market is doing;
Is it an
Inside / Outside day
Upside / Downside day
And
Be aware of the âTime of Dayâ
My opinion â once you start really focusing on price nothing else matters, and youâll also begin to identify all types of âprobableâ trade set ups
In closing I would also like to add, a trading plan, with entry / exit rules, money management rules, and daily / weekly monthly goals, continuing education, and a daily journal is paramount
For me trading is a business
Take Care Sir
Good advice. Plays into what I'm saying, Ironfist. Pick real strategies with real rules. Then try them out.
Bilbod, How do you define a PB to SR in trend and when to you enter? Meaning for longs:
1) Low/Support is established in what time frame?
2) How many times does low have to be hit for you to consider it real support?
3) Support (or a low) can only be established if it's followed by one, two or three HLs. How many do use to clearly say you've bounced of support (as its happening) rather than still be asking yourself, is support going to hold?
4) If so, which PB do you buy on? The first after the first HL, the second or third?
Once you get those answers and you add the all important TIMEFRAME, Ironfist, you should try this simple method, if you haven't already.
I.F. remind me of Flash Boy
http://elitetrader.com/vb/showthread.php?s=&threadid=20535&perpage=6&pagenumber=1
http://elitetrader.com/vb/showthread.php?s=&threadid=20535&perpage=6&pagenumber=1