Why do traders find it difficult to make money?

PPC said:
It's nice of you trying to teach others, but I read the PA differently to you. I guess every trader sees different things on their charts, and so here is what I saw when I looked at your annotated chart. (My comments are in yellow)


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My 3 trades were over before your annotation in yellow #2, #3, and #4. My comment in orange letters about taking a trade (which I did not take it..I probably had something else to do..I don't remember) wee made beause in bull channels most BO's south of the channel will fail and price will head back towards the bottom of the channel. So, since I am a scalper I reasoned that it was a viable long scalp. I would see the bottom of the channel as the resistance area and it was plenty afar away to leave room for a 2 to 5 point scalp. And that is exactly what happened. I don't remember what happened after that but I even suspect price went at least a little more up into the channel, maybe even to the middle of the channel. Why? That last bar was a bull bar too so now two bull bars in a row. The scalp was a trade on inertia as price moves back towards the bottom of the channel. Remember, I am a scalper of 1 to 8 points so I am looking for scenarios that would render me that. And even though I didn't take that trade mentioned in your #3 and #4 yellow annotations it would have worked out just fine for a scalp. Either I had something to do or I was busy annotating the chart to take the trade. But I took the screen shot and at some point in the day annotated it.

If you wish to go back and find that session and show us what happened afterwards that will be fine. I acknowledge it could have turn back south after hitting the bottom of the channel or it could have continued north towards the middle or even the top of the channel. However, my point about going long on that bar precious to last bar was for a scalp. Of course I would hold it it kept going up for an even bigger scalp.

If you wish show us what did indeed happen after that last bar in my chart. I have no idea.
 
HawaiianIceberg said:
volpri, your explanations are so thought-out, it's amazing. I've read, probably, a thousand of your posts and have only had a couple questions (which you've thoroughly addressed here and in your journal). I even have a little more than a hundred screen shots on my phone of what I think are your most important posts and charts.

Thank you again!
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Thank you. You are welcome. Hope something I say or show helps in your trading. I don't have anything to sell so I am not a vendor LOL!
 
@PPC

And others that may be interested.

I decided to go back and see what happed on that day. I likely had something to do and just quit trading. I don't remember. Nevertheless, as you can clearly see that price, after my suggested long to myself on the chart went up not only up to the middle of the channel but almost to the top before reversing back down. This is typical of bull channels.

When a bull channel is in play going long on any BO south of it is a higher probability trade than doing than going long at the bottom of a bear channel. I think the reason is obvious. The larger context (bear channel) is bearish!

I think maybe your assumption that I suggested going long because the entry was on a bull bar is perhaps a wrong assumption on your part. I always consider not only the immediate situation but the larger context.

Immediate context: We have a BO south of the bull channel. Usually within 5 bars price heads back towards the bottom of the channel and can go all the way to the top. In addition, look what follows the BO. Smaller bars than the larger bear BO bar. The BO volatility didn't continue.

In that BO series at least 3 dojis are in it. You might could even say 4 dojis (if you count that second bear bar after the BO as a doji. Doji's are 1 bar TRs. That means two-sided trading is taking place.

If that was going t be a successful BO with continued volatility (gusto) we would have seen better follow-through. Instead we see volatility wanning (bars smaller), dojis...two sided trading. Means both bulls and bears are active. The bearish institutions could not continue pushing price down. With that bull bar (my suggested entry bar) the immediate context also showed the bulls are now winning. I saw a viable scalp back up to the bottom of the channel and depending on how strong they proved themselves to be the move could last to the middle or even to the top of the channel.

So see I am not acting on just a bull bar but I am acting on the immediate context (among that the bulls are turning the tide) and the larger context i.e. we are in a bull channel.

In addition, in the larger context we also have 3 maybe even 4 MTRs (major trend reversals) depending on how you count them. I will touch upon the elements in a MTR later today showing and example of one taken today.

Bottom lie all was a go for at least a scalp...i.e. green for takeoff!

Maybe the professional traders would have been throwing their coffee pot at the screen or maybe they would have just accepted they were wrong shorting and reversed their position. Hopefully the latter.

Just remember, I am considering several things when I make a decision to enter or suggest a entry to myself even if I don't take it.

I don't make calls for people nor do I advise. I am just showing techniques that I use. Some may feel these techniques could be useful in their own trading. I am not telling anyone to trade the way I do. If they choose to do so then that is their decision.

I lose too. Just like we all do. There are times I am flat out wrong on my PA read. That comes with discretionary trading. I am OK with that as I usually know how to get my losses back fairly quickly and end the session in the green.

BTW many professional traders do in fact scale in averaging down. They will often add to their losing position. But what do the books say? Most indicate that doing such an evil thing is breaking a cardinal rule of trading. I probably do it 50% of the time. It works fine for me in scalping as I know when I need to get out of an averaged down position and just take my loss and how to quickly get it back and usually then some. But then I am a scalper. I am not just going to sit around keeping on averaging down a losing position, all session long, hoping for a bounce to profit or BE.

Well know you got my explanation. Maybe it will make sense?





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OK I am back.

A MTR major trend reversal simply means a trend that will likely last for 2 legs and at least 10 bars. It is a reversal of a previous trend. So how do I detect one and how do I trade it?

First I am looking for a previous trend. Most TRs and channels if broad enough will have a few MTRs in them during the session. These are usually opportunities for bigger gains than say just scalps of 1 to 8 points in the ES.

So once I see a trend then I look for a countertrend that breaks a trendline or channel line or even a TR line. Then I watch to see if that BO will go up to a 20 ema. Best if it is strong enough to trade through a 20 ema (exponential moving average). This is showing counter trend strenght as not only did price break a trendline but price went a good ways beyond it going thru the ema. This break of the ema won't always happen but when it does it makes the trade more likely to be a successful trade.

Next, I want to see a reversal or PB back down towards the low of the original trend that it broke out from. It is OK if it now goes back through the ema. It is better if price makes a good counter move of the counter move.

Next I wait for a signal bar on a reversal. That is a reversal of the second counter trend. If the original trend was bearish as in my example below then I am looking for a long MTR. That is, the price has now prove to have broken not on the original bear trend but it did so on strenght then it tested the low of the original trend, before then taking off north as in my example. I just reverse everything if the original trend is bullish and I am looking for a bear MTR.

Once I make my entry I then look to draw in some MM's (measured moves) as likely target profit areas. I may draw more than one MM as you can see by the two that are in blue and drawn on the chart.

So I am looking for at least 10 bars and 2 legs on any move towards the MM profit target. As long as price keeps moving I can keep holding but I try to at least capture this intraday swing trade by 2 legs and 10 bars. In the example you can see 3 legs. I held as it just kept going up slowly. That is because the session early on turned into a SPBL (small PB bull trend). These are some of the strongest trends but they can be grinding. They are program buying. Every PB is bought. I may have time later on to show today's session an overall SPBL.

So, this was a 3 legged 20 point intraday swing trade.

I am showing this trade and explaining it on a overnight/day session chart. This first chart.

I will post the same trade in a subsequent post as on a day chart. Just so you can see how it looks from both charts.

Hope I explained things well enough. If not, then ask me some questions for clarification.
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Ok here is the same trade on an intraday session chart. You can see the previous days close. Then today opened gap down (big blue bar I have drawn in). This represents what happened in the overnight session. It simply traded down. It is helpful to see this as ONE BIG bear bar so I drew that in (blue). Now it is important to see what happens to that gap down on the open. You can view this as a trend down (dotted although vertical we know it took place overnight over time). So, we have our trend down in the MTR scenario.

Next will we get a reversal which will be the countertrend of the overnight trend? And will it get through EMA?

Price does in fact reverse the overnight trend with a strong counter trend that goes through the EMA. Then it comes back to test the opening low. On this second countertrend it does trade back down through the ema. That is good as it shows bears are pushing back. Will they stop the bulls?

Next it starts back up giving the signal for a MTR entry so I take it and it is off to the races. To repeat after entry I am looking for at least 2 legs 10 bar swing trade to the MMs target. I got the three legs and close to the top of the MMs. Price then traded sideways and closed down off the top. But I had my 20 points.

Now this was with one contract. Let your imagination run. If your account is big enough what if you had traded 5 or 10 contracts? This one trade would have sent you off buying a ribeye and sent momma off to Dillards and everyone is happy!

Please understand you see two moving averages on my chart. This trade has nothing to do with MA crossovers. They are, just a 20 period EMA (exponential moving average) and SMA (simple moving average) on a 5m chart. Just to visually compare them. They are in all practical terms the same look. In fact, one of them can be totally eliminated.


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volpri said:
Ok here is the same trade on an intraday session chart. You can see the previous days close. Then today opened gap down (big blue bar I have drawn in). This represents what happened in the overnight session. It simply traded down. It is helpful to see this as ONE BIG bear bar so I drew that in (blue). Now it is important to see what happens to that gap down on the open. You can view this as a trend down (dotted although vertical we know it took place overnight over time). So, we have our trend down in the MTR scenario.

Next will we get a reversal which will be the countertrend of the overnight trend? And will it get through EMA?

Price does in fact reverse the overnight trend with a strong counter trend that goes through the EMA. Then it comes back to test the opening low. On this second countertrend it does trade back down through the ema. That is good as it shows bears are pushing back. Will they stop the bulls?

Next it starts back up giving the signal for a MTR entry so I take it and it is off to the races. To repeat after entry I am looking for at least 2 legs 10 bar swing trade to the MMs target. I got the three legs and close to the top of the MMs. Price then traded sideways and closed down off the top. But I had my 20 points.

Now this was with one contract. Let your imagination run. If your account is big enough what if you had traded 5 or 10 contracts? This one trade would have sent you off buying a ribeye and sent momma off to Dillards and everyone is happy!

Please understand you see two moving averages on my chart. This trade has nothing to do with MA crossovers. They are, just a 20 period EMA (exponential moving average) and SMA (simple moving average) on a 5m chart. Just to visually compare them. They are in all practical terms the same look. In fact, one of them can be totally eliminated.


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FFS. All your nonsense is blown out by FA.

You are making PA mole-hills out of FA mountains.

Stop the madness.
 
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