a more detail expose on PFG i often wondered before what would it be really like if you lost every single penny in your trading funds due to reasons not of your own doing.... today, right at this moment, some 2 hours later after reading larry's email and going to nfa to verify.... i now knew exactly how it felt like.... but cheers everyone.... particularly those who are not the least affected by the perpetrated frauds.... i shall return.... God willing.... nakachalet@gmail.com
=========== RE; Range[aka sideways slop/chop trend] I will take your word for that[range/sideways slop/chop trend].;i have enough charts to look /study with ] Great implied point; learn the difference between a range[ sideways slop/chop trend; and an uptrend or downtrend.Long live the difference.LOL As far as a market being in a range for years [sideways /slop chop trend]; thats why one is supposed to trade reasonable position size, so a sideways slop chop market does not slop/chop one to pieces. Hope this helps; it helps me.
Keep it simple. I removed all technical indicators from my chart. Follow price only. Never predict price. That means waiting for the break of support and resistance and getting in on the retracement.
Break of one support /resistance can be a false move , which support or resistance , is it key support and resistance?I trade a combination of support /resistance and trend line support , and least two supports/resistances to be broken.
We all try to predict price, otherwise you would not be waiting for break of support and resistance. Other than flipping a coin, we all have a bias to the direction we want price to go.
Agreed, False moves are common. Thats when screen time and experience is important. Using two S/R breaks is a good starting point especially if you're trading shorter term charts (For me its 3min,5min)
I've found that when predicting price it creates an expectation that forces me to prove that I have to be right. I wouldn't say predicting is wrong but a huge part of human psychology. What I've found to work is to wait for the break out and trade the retrace. The market tends to move back to initial break out point, making several tests then continue on its direction.
I use to sit infront of comps with 6 large screens infront of me. If your not healthy and slim, a component of narcolepsy takes over. So before trading to keep your CNS wired, by tricking your body into 'hunter' mode. Dont eat a full meal, snack. Drink some caffeine. Otherwise your brain just gets desensitized to all the info. The signals you should be looking for dont trigger inside your head as they should. And a mistep compounds further decision making. Once the screens fail to keep you awake. Automate your method, find a computer programmer that you trust locally and have him program your ideas. Then let the systems trade while you just monitor the infrastructure. You have to let the systems do their thing if they are behaving in the scope they were programmed in. I've second guessed what the systems do and only to be proven wrong.
This article sums up the author's opinion of why day trading is difficult. It's full of opinion and void of facts, starting with the title "The Only Way To Day Trade". There are many ways to day trade successfully; there's no only way to do it. Think about that statement logically: If there was only a single way to day trade successfully, as soon as a successful day trader was identified, everyone wanting fast money would simply mimic that method and become wealthy. The first paragraph lists four cardinal principles, which are quite valuable for beginners, but the fact is there are extremely successful day traders who trade ranges and reversion-to-mean (counter-trend). Both of these methods are advanced and require ample market experience, but they are highly profitable in experienced hands. The second paragraph is totally off base. "Trade with the trend relates to the decision of how to initiate trades. It means you should always trade in the direction of recent price movement." Trading with the trend is just as effectively done by initiating trades in the opposite direction of recent price movement (entering with-trend off a pullback) as it is by initiating trades in the direction of recent price movement (with-trend breakout of previous high/low). "Since market price action is mostly random, successful trading methods must somehow exploit a non-random feature of market price action." Brilliant observation, Mr. Babcock! A non-random feature of market price action is commonly referred to as a "pattern" which is detected using an analysis of past price action, which is frequently identified by discretionary traders using a "chart" of price action (and possibly related influential components such as volume and technical indicators). If you trade manually you use a visual chart; if you set up automated trading, your program is coded to identify patterns using variables such as price, volume, indicator values, etc. and acts on the patterns it's looking for. These non-random features of market price action are the foundation for a trader's "edge" and one should not even consider a live trade in any time frame until an edge has been identified, researched, back tested, forward tested, and risk management rules put in place for trading the edge. "Commodity price action is fractal. That means that as you shorten or lengthen the time frame, price action remains similar in behavior. Thus, five-minute charts have roughly the same appearance as hourly charts, daily charts, weekly charts and monthly charts." Yes, and one-minute charts have roughly the same appearance as five-minute charts, and 10-tick charts have...and so on. Now, it's not easy to do the work necessary to create a trading plan, but that work applies to any trading time frame. It's also not easy to stay focused for intraday trading using small time frames such as five- and one-minute charts. But the mechanics behind trading trading trends (or ranges or reversion-to-mean) in these time frames are the same and the advantage of day trading is you avoid overnight gap risk. As for "...the trend component is so very small in short-term data that you must use a highly effective method to overcome the costs of trading", that's known as position sizing. Why do pattern day traders get twice the buying power of swing traders and as soon as a position is closed this full buying power is immediately restored so they can do it again and again all day long? Because they need to trade larger size than a swing trader to compensate for the fact that letting a profit run might be a 1% move during an intraday trend as compared to a 10% move during a multi-day trend as compared to a 50-100% move during a multi-week/multi-month trend. If I'm day trading a volatile $40 stock in a $50K trading account, I'll have no problem trading 1000 shares for a 1%-5% intraday move, but if I want to hold that same stock for days or weeks, I'm going to trade far smaller size because of the overnight risk (earnings, global economic news, takeover bids, black swan event). The first difficult task of short term trading is developing and properly testing a complete trading plan. Once that's accomplished the most difficult part of trading is ensuring that your big brain stays out of the way during active trading hours. The irony that's easily found in this brief article is a delight for those who enjoy laughing their asses off: "There are plenty of people out there ready to sell you a day trading course or system for thousands of dollars that will show you how to implement this fantasy. The only problem is they haven't been successful traders. They make money only by selling their losing methods to others." "I have been day trading successfully for the past couple of years using a system that trades on average only two or three times a month. I have also recently published a second day trading system that trades only once or twice a month. These systems are available from our company."