I used channels to make a nice trade this morning. It's very simple, but powerful. The channel is up from yesterday, yet at 3:45am price failed to reach the top of the channel. Then before the open an even lower high was made, and after a bearish bar closing at prior support (.68 if i recall), I placed a sell stop under the low and let it take me into the short. The bar was especially enticing because the high was 3 ticks higher than the minor high 4 bars earlier, indicating a rejection. Even though it was at the channel line, this weakness inside the channel led me to take the trade. Used the smaller channel on the 5m as a target. Entry: Target:
Trading does become easy eventually. Once you've proven that trading your plan (based on extensive research) produces real-world results that match months of post-market bar-by-bar analysis, it becomes very routine. You really have to do your homework, learn methods of filtering out uncertainty, lose the fear of missing a good move which results in chasing price inside range/chop. Many times it's better to let price show its hand first, miss out on the initial move, and be the second mouse (confirmed trade). You pay more for the entry, but the odds of success go way up. One good way to do this is to wait for the break out of chop/consolidation, then look for an entry trigger on a pullback to (or near) the breakout level, which should now hold as new support or resistance. And this is a key to trading becoming easier. You know your valid setups very well. You've learned how to filter out chop and wait patiently for confirmation. Hands under butt or talking to oneself is very helpful in preventing over-trading during consolidation or chop. It comes with practice and as much as I practice doing this, I still get discombobulated a lot; it's the nature of trading a volatile instrument. Day trading ES is like a zen meditation compared to day trading CL. Sometimes I just get tired of the constant focus and concentration and I start managing a trade by watching the action on the DOM. This is NOT a good way to trade! SAR is a great tactic on key failures, but not a good idea around a flat 20 EMA. That's one great filter to keep you out of trading chop - avoid trading around a flat 20 EMA in your time frame. If a smaller time frame offers clarity, great. If not, wait for the breakout, then trade the next setup off of it. When I read a book, watch a webinar or DVD, or watch a recorded trading session, I pay attention to information that is useful. I don't care if the people presenting are profitable traders or not. If I see information that's useful to me, I will study it and integrate it into my trading plan if it sharpens my edge. Sometimes information takes a long time to sink in. I read Al Brooks' book and he's a big proponent of using stop orders to enter trades. I never grasped the power of this method of trade entry until I traded my first breakout (bought a new high in an up trend). I eventually came to realize that every time you use a stop order to enter a trade it's like a mini-breakout. You're automatically positioned in the direction of price movement (as long as you don't trade right into a key S/R level). I honed my edge tremendously from information in this thread. I "got it" very quickly, mainly because the timing of this thread coincided with my gradual understanding of trend lines. nakachalet, you've been following and posting on this thread for quite a while. Are you gaining useful knowledge from it?
It's a great technique, not sure why so many "naysayers". I use it all the time and eventhough it's not the holy grail it definitely beats losing money. FoN
after having been reading this thread, i often marvel at what different things people would do to get ready to pick a point of entry, long or short; most of which rituals or methodologies i personally would not do, could not do or do not wish to do; because i do not look into the next trendline or where the current trendlines are going to result in.... it is just, in my opinion, too time consuming, labor intensive and it only looks great on paper and screen.... to convince ourselves that ah ha.... we could have done this or that.... after the facts.... as for myself, when waiting for my setup, i mainly focus on the current price and the immediate preceding 4 or 5 or 6 price ranges.... there is nothing more to distract my attention nor focus.... when three of my indicators are in complete agreement with one another and the color codes are all in agreement.... i would set my buy or sell stop order accordingly.... together with stoploss, profit target and runner.... and the breakeven +2.... ---------- nakachalet, you've been following and posting on this thread for quite a while. Are you gaining useful knowledge from it? there are tons of useful info in this thread, but then too much info is not always good for trading either, lol. after having spent about a week reading et, an aspiring trader needs to determine for himself/herself just which kind of trader he/she is going to become, short term, medium term or long term trader. if an aspiring trader can not answer this basic simple direct question to his/her own satisfaction, then by all means read and search further and ask questions.... there are many here who are willing and able to help you find your own preferred trading vehicle to trade successfully on your own....; and nodoji here is one among others, who can ably assist any one toward successful trading.... sim or otherwise.... thx everyone....
Unfortunately, I am stuck here. I feel like I am in a rut with my trading lately. Not because I am losing, but because I feel like my setups aren't ironed out to the point where I could scale up and really make a solid living. Is trading a TL break really a valid setup? I guess I don't know any more at the moment. I feel like I've lost the context in my entries, and even when ending the day green, I feel a bit flustered and disappointed. Does anyone else ever feel this way? Any tips for progressing to the next step / level? I never really feel like this with the ES, because it's not as volatile and I have an "indicator" to lean on with the NYSE TICK. I just trade with volume and price with the CL, and I'm 100% spent after staring at it for only about an hour. I feel it is completely correlated to my concern above...
I sort of feel that way with my ES simming. Though I'm stuck in a rut just below breakeven, rather than above. I use TICK and volume-spread analysis to handicap the odds and they keep me out of major trouble. IMO this first problem is the smaller daily ranges in ES. On wide range high volume days my system works much better, but I often get chopped up on the other days. I'm assuming my weakness when it comes to reading price action may be the other problem. So am working on learning PA now and will see if that can push me over the hump. I've been learning PA on 6e (because it has more action to learn from) and yeah, I get mentally spent at times and that never happens with ES. This is where I start to lose context on things. I'm having a hard time with exits... when it's appropriate to throw in the towel on a winner before it hits target, how to pick a target on an SAR, etc.
Annotating a chart to post on ET is time consuming, but drawing lines in real time takes a few seconds. I have a "clear lines" button that clears old lines in an instant so I can start fresh as new price patterns unfold. Adjusting an existing line to encompass a widening or narrowing range also takes but a couple seconds of effort. It doesn't only look great on paper and screen, it looks great in your account at the end of the day. If you don't care for this style of trading, wouldn't it make sense to start your own thread instead of constantly presenting arguments against it in this one?
bigsnack and dv, ES is very different from 6E and CL (which I find quite similar to each other). I think it's easiest to define a set of fixed rules for profit-taking, remove the discretion from the process, or it will become stressful and emotionally draining. For example, with CL, I have very specific rules for targeting profits depending on whether I'm trading a breakout in a defined trend, an early trend reversal signal (counter-trend), or in a range. By having fixed rules, I let my rules do the trading. In my experience, I've never ended a day frustrated because of following my rules, but I've ended many, many days frustrated by not following them. Also, since developing my trading plan, I've never had a losing day when I followed my rules. Never. All losing days I've had were a direct result of trading outside my plan.
Jack, do me a favor and consider me a convert. Us older chaps do need to stick together after all. I need to understand your statement above, i am still lost after all these years to comprehend WHY volume precedes price. What am i missing? I, for example, can trade just as good or just as bad with/out volume on the chart. Last few months i was messing around with different strats in a couple instruments. Truth be known, i wasted time trying to trade a porcupine with a hair up its ass instrument like CL. Price itself is my bailliwick, CL proved to me that i am not a scalper, never was, never will be. Price itself in CL can be managed if one desires to trade in such a frenzied job. Trading is a job, i prefer lazy trading. Why complicate this whole deal and clog the mind with stuff like volume leads price when the bottom line is from how we dance with price itself? NoDoji, thrives in a style that i do not, she is a special person (character, HA), she insists on price movement, she can handle what others can not, intelligence, stubbornness, refusing to give up, constantly digging deeper and deeper into the mkts mind, knowing she had to find a new career in order to pay the bills, etc etc. PRICE led her to the promised land, price, price was the answer. Her strength to beat all the guys in trading was a joy to witness, HA Just send out a condensed version of WHY volume leads price. I will not argue, i will not debate, past all that. Just wondering what the basis is to put volume before price. Unconfuse me. Have a good evening Jack One final thought: ES is far less active than CL. That works for my tactics, 6E is in the middle, it is also a good runner "IF" like ES that is what you are working on. Scalping and runners do not mix. Find your style and work it.......