Is there a book that explains it all?

[NoDoji]

Quote from Redneck:

Hey Bart

Just a thought to ponder

Look at the bar just preceding the one your watching as a range – hence it becomes that “risk point of reference” you're looking for...

And as the preceding bar is now a range – then you’re simply trading a range B/O as price moves along its merrily way Sir


See Ya
RN

This is truly valuable information, especially if you miss an ideal entry, still want to be part of the move, and need to quickly calculate the adjusted stop/target parameters to determine if the reward:risk ratio still makes sense.

I had a real-world example last week in which I put on a trade, was stopped out break even (I moved my initial stop too soon), price quickly came back to my entry price and I missed the re-entry. The setup was still intact, but price had run a significant distance from my initial entry and I had to quickly make a decision where to place a survivable stop, and if my initial profit target (which would now provide much less $$) would keep my positive R:R intact.

Because I have the smaller time frame always in view for reference, I quickly decided to get in $160 away from my initial entry because based on the micro swings, the place I could put a survivable stop kept the R:R positive. I achieved my profit target and avoided the frustration of missing the entire move.

By keeping a smaller time frame available for reference, it can help you in these situations, such as where to enter a really strong trend. Have you ever watched a strong trend where price just runs and runs and you watch helplessly, not sure where to enter or how to manage the trade if you do? The smaller time frame chart lets you "see into" the ranges defined by each bar in the larger time frame. For me, the look of the price action on the 1-min chart clarifies the 5-min chart in a strong trend.

Thanks (yet again) to RN for introducing me to this concept very early this year.

 

[Redneck]

Aside

This is exactly why I stay away from most trading specific discussions

----------------------------------------------------------------------------------------------------------------------------------------------------------------


Being Profitable,

With my next comment I am not disagreeing with you – or busting on you… So I hope you don’t take it as such – but it is your choice


Appears you’re trading patterns, waiting for confirmation, setting stops at logical places (logical meaning where most traders do) etc.. etc…

Kudos….


I fully admit I used to trade as you’ve described – I don’t now – and haven’t for awhile…

------------------------------------------------------------------------------------------------------------------------------------------------------------------


Random Thoughts


“Safest” is a misconception in trading…. “Ideally” rarely exists either – close is always close enough

Stops should always be a few pennies or less – as that is all that is necessary

Objectivity is truly in the eye of the beholder – as is opportunity

Personally I do not like front running – 1.) In its real connotation – it is illegal, 2.) In your connotation – I’ve found the one leading typically gets their head handed to him/ her more times than not…..


I trade as much based on what price is doing – as I do based on what it is not doing

-----------------------------------------------------------------------------------------------------------------------------------------------------------

I don’t expect you to get what I’ve just posted – I am trying to give Bart something to ponder – that if he extrapolates out a bit – will lead to new insights – and provide him more opportunity, with very low risk…



How about we both agree I’m a dumbass and leave it at that

RN

Quote from BeingProfitable:

Waiting to trade the breakout is usually the safest way to trade the retracement. In other words, if the trend is up (pattern of higher lows), wait for the pullback, let price establish support and consolidate a little. ideally it will create a contracting support/resistence area aka a wedge pattern. Place a buy stop where you feel price need to go in order to break out of the wedge and re-establish the uptrend trend. Then place the stop where price is no longer reflecting the re-establishment of the trend. This is usually below the last price support area.

Now once you get the feel for things, you can start to front run the break out in some cases. I won't not recommend it to new traders because they will get it wrong, but once you have traded this pattern hundreds or thousands of times, you well start to see when it is ok to front run it.

Once again, I recommend waiting for price confirmation via the breakout of the wedge/contraction/consolidation. Using this method you can pretty much create a 100% objective trading method which allows you to focus on execution.

 

[Redneck]

Quote from NoDoji:

Thanks (yet again) to RN for introducing me to this concept very early this year.

Wow….

Thank You NOD

I wish you a Truly Wonderful Day Ma’am

RN

 

[crgarcia]

Quote from Palatine:

What nonsensical advice is this, please? How can someone advise a newbie to go ahead and trade futures instead of stocks or ETFs? I am assuming that you want to urge him into day trading, instead of easier, less active approaches. Hence the minimum requirement of 25k. Of course you can trade stocks with less than that!

Matter of fact is, you do not need that amount to trade profitably with stocks (this includes index funds, ETFs). And you do not need to erase your account with the severe leverage of futures. The solution is to keep away from day trading because a newbie will not succeed in it anyway. Newbie traders tend to trade in a way that is not advantageous while the experienced trader trades in a way that is advantageous. By being very active, one will make many mistakes. It is something that experienced traders have learned.

They recommend it because they are brokers and they want more commissions. Futures traders often get stop-lost, thus generating commissions.

Quote from Expect Positive:

Malkiel's Random Walk is good...

anything that makes you a skeptic at heart.

Words of wisdom indeed.

 

[BeingProfitable]

Quote from Redneck:


Being Profitable,

Appears you’re trading patterns, waiting for confirmation, setting stops at logical places (logical meaning where most traders do) etc.. etc…

RN

Yep, this would be correct. Especially the etc.. etc.. ;-)

I'll admit that the method I use is very simple and seems so obvious that it should not work, but it does. Basically, I'm just using simple SR patterns to catch a trend. Combined with good money management it works pretty darn well.

Back to the OP, I'm simply suggesting as many have before me that a good first step is to learn basic support and resistence patterns.

Quote from Redneck:


Random Thoughts
....

Agree. I should not have used safest or front run. Poor choice of terms. However, the term objective in the contect of trading is just a way of saying that the trading method is not subjective. In other words, the rules are clearly defined in a way that could even be programmed into an ATS which is exactly what I have done. If this is no longer the case, then... damit. I give up JK.

Quote from Redneck:

How about we both agree I’m a dumbass and leave it at that

RN

Hah. Not because of your trading knowledge, but because you are a Redneck. JK of course. It is possible that we agree on more things than not.