The price action facebook journal
- Thread starter amitman
- Start date
Here is an updated FB daily bar chart. While nothing is certain, there is information to be had.
12/20 - huge volume, positive close (buyers outstripped sellers), but given the volume, the stock went nowhere, with respect to price, a somewhat pyrrhic victory, as one should suspect a fair amount of churning. Think in terms of the quality of the buyers relative to thew quality of the sellers.
12/23-4 - stock traded 3 1/2 points higher but volume dried up into the high.
12/27-30 - stock fell 5 points from its high and on volume that rose each of the two days.
12/31 - today - stock has edged/drifted/wafted higher, volume again has dried up.
So, what would a "price action" trader be looking for next? In my opinion, I would be looking for which direction does price go once activity again picks up. Does price break higher out of its drift? If so, is it attracting good demand? Who is winning the battle of the daily and weekly closes? Does price instead drop out its current drift? If so, does it do so in active trade? Where is the nearest level of anticipated support? Resistance? What level of trade occurs at those price levels?
Not everything is clear, but some things are certainly more clear than not, don't you think?
I know you didn't ask, but given what I see, I would bet a decline to test $49-$50 is a better bet than a rally to test $58-$59.
As seen in the above chart, that was when FB was trading at $55.01, and since FB is typically and easily traded with penny spreads, let us assume, for the sake of this particular discussion, that I am short FB at $55 even, and as a mental stop loss I'll close the short with a loss on a close above 55.65. I'd also stop out and rethink things on any price action that indicates such a course would be wise, for example, a gap up open on Monday that rallies rather than fades. This way we can discuss what, in a few days, will be a known outcome, without anyone being able to suggest that there is no value in studying "known outcomes."
If you traded today, amitman, I hope it went well for you. Have a good weekend.
Here is an updated daily chart of FB:
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Hi NoD,
I saw you've mantioned the Al Brooks Books (the series of 3 on PA trading) in your original journal.
I've managed to get my hands on them, but I'm a bit drawn back by, what seems like endless writing (the very dense paging doesn't help a lot), but I still want to give them a chance,
So, do you recommand these books, do you have any suggestions on specific chapters/subjects that are a must-read?
Thanks!
Edit: Was stopped out of MSFT at friday -82$, Ebay stop was cancaled for some reason and I wasn't able to do anything on friday so I'm still there, currently -200$ (
)
Hi NoD,
I saw you've mantioned the Al Brooks Books (the series of 3 on PA trading) in your original journal.
I've managed to get my hands on them, but I'm a bit drawn back by, what seems like endless writing (the very dense paging doesn't help a lot), but I still want to give them a chance,
So, do you recommand these books, do you have any suggestions on specific chapters/subjects that are a must-read?
Thanks!
Edit: Was stopped out of MSFT at friday -82$, Ebay stop was cancaled for some reason and I wasn't able to do anything on friday so I'm still there, currently -200$ (
)
I'm clearly not NoDoji, but I wanted to offer my opinion as I am going through the books myself.
I read half of his first book, Price Action Bar by Bar, but because I was reading it quite slowly, I was a bit lost half way. So I went to the 3 volume collection since this is reported as being an easier read, although much longer as you can see.
It wasn't so much that I was lost, its just that the organization is all over the place. He jumps straight into things without first explaining them, and 1/4 into the first book on trends he backs up and holds your hand almost with a more thorough explanation that should have come first. Sometimes I see the exact bar numbers don't match the chart he is explaining as well so this can confuse the heck out of you also.
Aside from all the negatives, if you can get through it, I think the books are a goldmine! My humble opinion is that he tells you the truth exactly how it is. His outlining of the markets and how they work is refreshing. He really is trying to put 20 years of experience into these books.
You feel lost because there are sooo many rules. Sometimes you can short based on a certain setup, and sometimes you can't, all depends on context.... etc.
The trick is to really just get through it. I feel lucky because this is all new to me and I don't have any preconceived notions, so not much to undo. As I'm reading, I can really see my way of thinking changing. He explains what the bulls and bears are thinking and why the bars look the way they do. When you see the next bar go up one tick and then drop, it is clear that so many traders were trapped in the trade since they had all their buy limit orders above this bar, but there wasn't enough buying pressure to follow through. Or perhaps when you have a strong trend and see a reversal pattern not to take it because most traders will want a second entry to confirm the reversal. Stuff like this is all gold.
I know that one day when I master this and read the books all over again for the 5th time it will all make so much more sense, but initially I would just try and get through it all. Sometimes he explains it better 20 pages later, so you just have to wait for that.
The thing with this trading business is that it doens't matter if you miss 80% of the knowledge in the book. If you only stick to looking for particular setups I think you will do just fine, assuming you stick to your plan and have good money management. With Al Brooks he says he wants to extract every tick, so this is why he is so precise. But if you just want to be profitable, learn initially only the best setup, repeat them a million times and study the in depth stuff at your own pace.
As I look at the charts of the stuff I watch every day, its funny how I see now exactly what he says. Sure it doesn't happen every time, but it doesn't have to as long as you get out when its not working and then you just look for the next good setup. His explanation of how someone has to be on the other side of a trade and how this means you are only every maybe 60% right that it will work is spot on.
Anyway, as you can see, what I am saying is that its is difficult to read, but just stick with it and don't expect it to come all to you at once. He is really not just teaching you what to look for but changing how you think, and changing your brain is really a long process.
Quote from amitman:
Edit: Was stopped out of MSFT at friday -82$, Ebay stop was cancaled for some reason and I wasn't able to do anything on friday so I'm still there, currently -200$ (
Oh.. and if I may ask, why do you have loses of $82 and $200? From the beginning of your journal you were consistently making $20 or $30 on a trade. So how is your stop loss so far that when you lose, you lose more than 4 or 5 times of what you gain when a trade goes your way? Perhaps I missed something in your journal.
The reason I also ask is because my good friend had this same problem. He was trading futures and for the first 4 or 5 days consistently made about $800 a day. Then one day he loses $2,500, and the next day he loses over $2000, so practically to where he started. Took some time off, and would you know it, same exact pattern when he started again!
If your loses on a trade are so much bigger than your gains, you will be finished from my humble and amateur perspective.
Hi all, some of you must be wandering what is the "grand plan" , so...
Plan for 2014
My current account balance is about 12K.
I'll be trading 300 shares at the start and be increasing/decreasing every week according to the current balance.
I really hope I can average 15-20cps each day, If I can make it I'm supposed to make about 150% on my account be year's end, but I'd be very happy for even half of it.
I hope to be able to trade more seriosly in the coming yead (i.e. actually trade the full 1.5 hours of the day, a thing which didn't happen so far) But I admit that this might not happen, due to circumctences that are beyond my control.
For today, was able to trade spordically through the day and missed 95% percent of the up-move, and even when I was able to trade I know I should have got much more, espcially on my last two trades.
Nonetheless, it was still my best day so far:
5 trades, 4 winners, 1 loser, +60$ /20 cps (after comm)
Morning (was only able to trade 3/4 hour):
Evening (sporadic avilablilty):
Plan for 2014
My current account balance is about 12K.
I'll be trading 300 shares at the start and be increasing/decreasing every week according to the current balance.
I really hope I can average 15-20cps each day, If I can make it I'm supposed to make about 150% on my account be year's end, but I'd be very happy for even half of it.
I hope to be able to trade more seriosly in the coming yead (i.e. actually trade the full 1.5 hours of the day, a thing which didn't happen so far) But I admit that this might not happen, due to circumctences that are beyond my control.
For today, was able to trade spordically through the day and missed 95% percent of the up-move, and even when I was able to trade I know I should have got much more, espcially on my last two trades.
Nonetheless, it was still my best day so far:
5 trades, 4 winners, 1 loser, +60$ /20 cps (after comm)
Morning (was only able to trade 3/4 hour):
Evening (sporadic avilablilty):
Wait...I think you are NoDoji because I couldn't have said it better myself!
Amit, you appear to have a very solid approach to scalping FB using basic price action scalping concepts.
Although Brooks book(s) offer us the calculus of price action day trading and make for excellent study, be careful not to get too caught up in a search for the Holy Grail. Focus on one or two setups (like you're doing) and know there will be plenty of time to add to your arsenal as you gain more experience
