Why Is The Obvious Not So Obvious?

[ironchef]

ironchef, I am a day trader and my trades come exclusively from my charts. I don't pay attention to news, "calls" or anything that isn't my charts and strictly defined in my trade plan. If you were interested in day trading I would say, watch real time price development until your eyes bleed, change time frames to see if that improve optics and other adjustments. But as you appear to be interested in swing (multi day) trades, I would recommend studying daily and weekly charts. Learn to see daily dynamics in the weekly and notice how the weekly smooths price action.

I use two or three time frames per market for day trades and you might want to use a smaller time frame for swing entries...2 hour or four hour charts to better manage stop losses distance and fine tuned entries. Experiment with moving averages, they may help you see momentum changes and trend strength. Try a small time frame MA such as a 9 ema, 10 sma 8 sma etc and a longer one such as a 20 sma or a 30 wma. Safest trades are always in the direction of prevailing momentum. Pullback entries area common and relatively safe. Picking tops and bottoms can be done but it's a much tougher enterprise.

No matter what or how you trade, a well defined and tested trade plan is important. Your signals should be unequivocal and your trade management defined. Respect your stop limits and experiment with profit goals, whether fixed targets based on average maximum favorable excursion or adopt a trailing strategy which can be based on any number of things, including trailing pivots, parabolic SAR, MA crosses, oscillator crosses etc. There is no limit to the variability of trade plans. You just need to have gains outnumbering and or out weighing losses resulting in net gains over a series of trades.

I realize this is but a brief overview but I have no idea where you in in your development. I would however recommend to anyone to avoid risking real money until one has a well defined and tested strategy I don't believe in hedging day trades and don't trade options so have nothing of value to offer there...good luck.

Thank you speedo.

 

[ironchef]

I am just pointing out that if you do not know what your max drawdown can be..then you are letting yourself open to a major drawdown sooner or later..or even a major loss..similar to what happened to me..months of hard work washed down the toilet in less than 5 min!

All experienced investors hedge winning positions - give up some profits for peace of mind!

I admit, the way I trade I don't know my max drawdown. If 2008 was a guide, it was very painful with obscene drawdown.

Something are counter intuitive, for example, after reading globalarbtrater's blog, I went and researched optimization of return and for the first time realized that my 100% equity bet did not optimized max returns, that for me, adding a percentage of fixed income actually enhanced it. Now I am also implementing Kelly in my trade sizing....

So, yes, thank to all of you, I am managing risks a little better now.

Now if only I can read charts like the rest of you.

Thanks and best to all of you.

 

[Buy1Sell2]

The guy is not surf...surf was much smoother.

Believe me. surf's up

 

[Buy1Sell2]

Isn't surf anti chart?

No

 

[_eug_]

These are a few of the many books I purchased during my ignorant days.. however..one of these books is well worth the money.

It is a "dead" giveaway!

You can skip most of the book..and start reading a chapter that is not yet sweet sixteen..and is just a little more than 180 degrees

View attachment 176116

So this is where you got the term "reference points" eh

 

[Simples]

Let autocorrelation lead the way! (yes, "surf's up" - not marketsurfer, but you need to adjust charts properly in order to see that, or step 5-10 meters away)

1. For detailed chart reading it may help to have some context to visually assist and aide.
What is the latest dominant development within this chart and can its pace(s) (slope) be found?

These annotations are fixed - no translation required (What we know that we know).
More annotations may help provide context and background, though do require translation and reference point:

2. Markets will go wherever they are pushed or pulled. What is moving price?

3. For analysis to work in any timeframe, it cannot rely on fixed parameters or logic. What must it rely on?

 

[MrScalper]

Let autocorrelation lead the way! (yes, "surf's up" - not marketsurfer, but you need to adjust charts properly in order to see that, or step 5-10 meters away)

1. For detailed chart reading it may help to have some context to visually assist and aide.
What is the latest dominant development within this chart and can its pace(s) (slope) be found?

These annotations are fixed - no translation required (What we know that we know).
More annotations may help provide context and background, though do require translation and reference point:
View attachment 176135

2. Markets will go wherever they are pushed or pulled. What is moving price?

3. For analysis to work in any timeframe, it cannot rely on fixed parameters or logic. What must it rely on?

There is a much "simple" way

The danger of "looking" at too much "stuff" is inability to act. The best way..is the way that allows you react to what is happening now..but in a framework that allows you to quantify your risk..in such a way..that your winning trades will make more money than your losing trades.

This framework can be achieved by observation..and..bar charts tend to best suited for this approach.

So..the big question is..why can one person "see" things that others can not see!

The answer is "obvious"..but the soultion is far from easy..as the "seeing" is the easy bit

 

[MrScalper]

So this is where you got the term "reference points" eh

No..but it is a very good explanation..and should point one in the direction of what they should be looking for when looking at a chart..or the DOM!

Like I said..many times previously..standard text book stuff is really of no value..if it was.. everyone would make money trading..which is of course not the case!

Next time you look at a chart..and "see" an opportunity to enter a trade..do this..

Wait one bar of whatever timeframe you are using..then see if the trade is as you thought it would be..if it is..then enter and see what happens..if not..consider trading the opposite direction..but wait again one bar

 

[Pelt]

So..the big question is..why can one person "see" things that others can not see!

B/c it has not been pointed out to them.

Most people have never noticed the arrow in the Fedex logo. But once it is 'pointed' out, you will NEVER think about the image in the logo the same way. You're visual perception of that image is forever changed.

 

[_eug_]

The first rule of waves, especially in the open ocean, is that there are no rules. Waves take their time to develop; they don't spontaneously erupt from the ocean. In reality, alternating weather patterns, varying water depths, opposing currents, fetch obstruction and a multitude of other factors may change the way waves in a particular area react.

However, as a wave comes closer to shore it begins to break as its base can no longer support its top. Predicably, it collapses when the slope, or steepness ratio, is too extended.

To experience the greatest impact of a breaking wave, one must postion themselves in the trough where the water is most shallow due to the greater volume having been temporarily pulled into the crest.

Love this post from somewhere in the begining of this epic thread. So much wisdom!