Why Is The Obvious Not So Obvious?

[MrScalper]

Mr Scalper,

Some would argue that the exact same reasons you just laid out is the reason why a given market is more predictable than a less liquid one...

Having followed the ES for a long while now I certainly know there are patterns that repeat themselves and that this market has its idiosyncracies. Beyond swing trading, my experience with other markets are very limited intraday, so I wouldn't know. I had a fling with crude oil, but that's a market that to me is far more erratic compared to the orderly moves in the ES.

Are you 'nysestocks' by the way?

Making money trading has really nothing to do with prediction..but has everything to do with reaction!

Fools predict..traders react!

The "patterns" you see are probably the same computer programmes kicking in..and as the brains behind the code can only use what information they have at hand..most of what you see will be in line with standard TA taken from books..with what they call a "proprietary" element that makes "all the difference"..LOL..so irionic

I doubt very much if you can find any person who will show you a computer programme that has successfully daytraded the ES for 3 years or more..and if you do..I bet you any money in 3 years time it will not be able to do so!

Most of it is a complete farse...but do you think they are going to tell you that.. like hell they are

The basics of finance never change..nor will ever change.. understanding this is the first step in awareness..and when the "bulb" suddenly lights up..the big picture becomes crystal clear..so that you will truly know..that..

"there is one born every minute" !

Who I am does not matter one little bit..all that matters is if what I say makes sense in relation to making money..or..not losing money.

 

[MrScalper]

Again thank you for posting. You pretty much summarized the way that I view the trading game. The missing link at this point is internal I believe. Trade what you see rather than what you believe will happen. Easier said than done.

Ps. I like this thread for the riddles and puzzles and philosophical mumbo jumbo. Some may call it a waste of time but for me its bliss.

Be very careful with this internal mumbo jumbo stuff..as it can be a two edged sword!

Facts are..some ways are better than others..same as in all walks of life..so..the goal should be to seek out and discover these "better" ways.. everything else is secondary and does not really matter in relation to the bottom line.

You can try and improve your "self" all you want..but if you don't know what works best..then all the self improvement in the world will not do you any good.

First step is use bar charts..if you can't even do that..then what hope do you ever have of making more discoveries in relation to these "better" ways!

Common sense..really is..not that common

 

[Laissez Faire]

Making money trading has really nothing to do with prediction...but has everything to do with reaction!

Respectfully, that's your opinion only.

Personally, I believe you can do both, that is predict and react. In isolation, I think both are futile.

Even if you're a so called price action trader who only trades support and resistance, you are predicting or anticipating or whatever you want to call it that something will happen when price reaches your perceived S&R. So, you wait for that to happen and then you react. When you enter that trade as a buy, you are effectively predicting that price will go up.

Anyway, to add to this thread's theme, the obvious thing to me in trading is that you need to trust yourself only and think for yourself. I see a lot of people here not interested in doing that. To succeed in trading or any other endeavor, you can't be a follower.

At least that's how I see it.

 

[MrScalper]

Respectfully, that's your opinion only.

Personally, I believe you can do both, that is predict and react. In isolation, I think both are futile.

Even if you're a so called price action trader who only trades support and resistance, you are predicting or anticipating or whatever you want to call it that something will happen when price reaches your perceived S&R. So, you wait for that to happen and then you react. When you enter that trade as a buy, you are effectively predicting that price will go up.

Anyway, to add to this thread's theme, the obvious thing to me in trading is that you need to trust yourself only and think for yourself. I see a lot of people here not interested in doing that. To succeed in trading or any other endeavor, you can't be a follower.

At least that's how I see it.

I do not predict price levels...but I do know that when the ES reaches a major level there is going to be a good deal of action..so I do predict that there will be sufficient action that will allow me place a low risk trade..or several low risk trades!

Theoretically..you are correct..it is a prediction..but not in the sense that levels are being predicted. I used to predict target levels..but gave that up as my awareness grew..now..after entry..I let current price tell me when to exit..not a predetermined price level..but always move stop in line with current price..this is the bit that makes you money..and takes a while to master..but..as the saying goes.."you will never go broke taking profits"!

 

[Vindago]

It is not the thread that will make you money

Forget reading it all..no need to..you now know that bars are better than candles..well..I hope so..key levels are your get ready points..what is important next is what happens..not what you or anyone else thinks might happen..if you are wrong..get out and wait or reverse trade if required..if right..and momentum takes off..use your 2 bars back to lock in profits!

As a poster here said.."rinse repeat rinse repeat"

Anyone know what happened to Mr Redneck btw..he seems to know a bit about trading!

I have been wondering the same, last time I checked he had not posted for some time...

 

[ironchef]

I do not believe in back testing..but if I did this is one method I would definitely test.. remember it is primarily for stop placement and adjustments..you still need to perfect the entry so that the chance of trade moving in your favor quickly is high..and when it does not work out you have plan B..which might require a fast reverse trade

I better be careful.. getting very close to the obvious

Thanks.

I will work on entry next.

 

[Vindago]

Hi MrScalper, when you refers to major levels to monitor for opportunities, do you have a specific Time frame in mind?

I ask this since I mostly trade Forex and there I recognize very important Key levels only on weekly/Monthly TF, these are foundamental to monitor to avoid major losses (and exploit great opportunities) but as yet I have not found an easy way to identify special levels on TF below (like Hour, etc) even if I trade these TFs (even the 5m TF sometimes).

But then, price stops every now and then, right? so that gives me levels to look at for my trading even if they may not be always Key levels...

 

[Vindago]

By the way, I cannot understand why anyone would Want to use candles when Bars are so much better for trading, it has always been self evident that bars gives such better picture of what the important "otheres" are looking at...

 

[MrScalper]

Hi MrScalper, when you refers to major levels to monitor for opportunities, do you have a specific Time frame in mind?

I ask this since I mostly trade Forex and there I recognize very important Key levels only on weekly/Monthly TF, these are foundamental to monitor to avoid major losses (and exploit great opportunities) but as yet I have not found an easy way to identify special levels on TF below (like Hour, etc) even if I trade these TFs (even the 5m TF sometimes).

But then, price stops every now and then, right? so that gives me levels to look at for my trading even if they may not be always Key levels...

FX as you know has no volume available..so you can not see VBP..which is very handy for key levels on any timeframe..so you are probably doing it the best way by using higher timeframes.

You might want to put up a line chart also..as the close price can sometimes help identify key levels.

There is another way worth investigating..a variation of TPO used in market profile..I have done this myself recently using Excel..and use it to monitor key levels on SPY, QQQ and DIA..but it can be used for any market that is traded..it gives you the same profile as VBP but done with closing prices..or can be set for any of the OHLC prices..or combination of same.

I will put in the EUR.USD when I get a chance and you can compare it to your key levels to see if it gives the same results?

Price of course will do 1 of 3 things..so it really is not that hard to identify the MRH and MRL on any timeframe..an elongated tick chart can also be handy..but as mentioned..the more things you look at the more things you will think about..and too much thinking can be a very bad habit when trading!

 

[Laissez Faire]

By the way, I cannot understand why anyone would Want to use candles when Bars are so much better for trading, it has always been self evident that bars gives such better picture of what the important "otheres" are looking at...

It's certainly not self evident to me. I use candles. Could you explain this rationally?

The one advantage I can see with bar charts is that they take up less space such that you might fit more bars into your charts, but if you compress your charts that way you end up loosing detail.

So, I certainly don't understand this statement, but would happy to hear your thoughts on this.

There is another way worth investigating..a variation of TPO used in market profile..I have done this myself recently using Excel..and use it to monitor key levels on SPY, QQQ and DIA..but it can be used for any market that is traded..it gives you the same profile as VBP but done with closing prices..or can be set for any of the OHLC prices..or combination of same.

Very interesting. Would like to hear more about this.