Most traders beleive they get paid to come in and push the buy and sell buttons all day long. It makes sense, after all, if you do not place a trade it is impossible to extract a profit from the market. While that is certainly true it is also true that the more active you become in a given tirmeframe the less likely you are to make any substantial amount of money. The reason is simple, there just are not that many great trades. Great trades are the ones that will pay your bills. Professionals wait for great trades, amatures run around like crack addicts looking for anything that moves. Brandon
Discerning Good Setups From Poor Ones Mini-Lesson 06/20/03 09:01:01 Toni- this is a great example though to help you learn when to discern a good setup from a poor one though 06/20/03 09:01:59 Toni- the fewer inhibitors.. the higher % correct you will have 06/20/03 09:03:15 Toni- so you can cut down and add to make the avalanche or phoenix etc different rates of success.. you may be comfortable with 60-70% accurate if over time the additional number of trade signals you get makes more 06/20/03 09:03:40 Toni- or you might want to customize it down to a setups that works 90% of the time or more and take a lot fewer trades 06/20/03 09:04:06 Toni- and yes.. there are setups that have 90% or better odds off success but you don't get them often 06/20/03 09:04:52 Toni- for a higher % avalanche 06/20/03 09:04:57 Toni- here are things to look for: 06/20/03 09:05:11 Toni- a pullback that is sharper than the last section of the prior rally 06/20/03 09:05:19 Toni- a pull directly into the 20 sma 06/20/03 09:05:37 Toni- a narrow base along the moving average followed by a trigger as the prior bar's lows break 06/20/03 09:05:50 Toni- no moving averages meaning the 20 or 200 06/20/03 09:05:51 Toni- intraday 06/20/03 09:06:02 Toni- on any of the time frames the setup occurs on 06/20/03 09:06:10 Toni- or on the higher time frames 06/20/03 09:06:24 Toni- ie 5 min avalanche with a 15 min 20 sma under it adds a lot of risk 06/20/03 09:06:33 Toni- if it's not there.. it leaves it open to move 06/20/03 09:06:52 Toni- if your setups also doesn't have a significant price support right under it that also helps 06/20/03 09:07:24 Toni- not as significant as the moving averages thoguh 06/20/03 09:07:45 Toni- if the volume is dropping off as it bases along the moving average for the avalanche 06/20/03 09:07:50 Toni- that makes it a better setup 06/20/03 09:07:55 Toni- it shows indecision 06/20/03 09:08:05 Toni- and a trigger for the avalanche will bring in more panic 06/20/03 09:08:31 Toni- if the rally into highs before the avalanche pattern starts to form is coming into strong price or mvoing average resistance etc 06/20/03 09:08:34 Toni- that also makes it better 06/20/03 09:08:43 Toni- if the trend is exhausted that is better still 06/20/03 09:08:59 Toni- an exhausted trend is often one that has had three waves of buying or selling 06/20/03 09:09:13 Toni- so the more of these you combine, the better your setup will be 06/20/03 09:10:55 Toni- it's simply putting these things together and enough of them together on each setup that will often make the difference between someone saying.. well this setup just stinks.. i can't ever make money on it! and someone else who makes the majority of the money on the same setup but has it more refined 06/20/03 09:11:22 Toni- of course.. letting your profits run and being able to identify your targets well 06/20/03 09:11:33 Toni- will also be a huge factor 06/20/03 09:12:25 Toni- =) for members, i have several clases in the members section that just focus on lowering risk and setting targets 06/20/03 09:12:39 Toni- they become much easier with practice 06/20/03 09:18:49 Toni- one thing on breakdowns 06/20/03 09:19:05 Toni- the earlier you can catch one on a new trend intraday the better 06/20/03 09:19:11 Toni- after several drops already 06/20/03 09:19:19 Toni- the stock will start to think more about a larger corrrection 06/20/03 09:19:31 Toni- so if you have a stock that bases after just reversing 06/20/03 09:19:39 Toni- that is going to have a higher R:R 06/20/03 09:19:49 Toni- than if you have had three waves of selling and are now seeing a base 06/20/03 09:20:15 Toni- that base you would then want to be larger than the prior two if the prior two are of the same general length 06/20/03 09:20:18 Toni- now.. 06/20/03 09:20:25 Toni- if you have two prior bases 06/20/03 09:20:32 Toni- but he second base was like twice the first one 06/20/03 09:20:42 Toni- then you can get a third base still break with good R:R 06/20/03 09:20:49 Toni- because what you have are the first two moves 06/20/03 09:20:57 Toni- equal one on a larger time frame 06/20/03 09:21:09 Toni- so that the socnd base will be the first larger time frame correction 06/20/03 09:21:12 Toni- I should post a chart 06/20/03 09:21:19 Toni- because otherwise i'm going to lose you =) 06/20/03 09:21:31 Toni- hold on a sec and will draw one quick 06/20/03 09:21:42 Toni- then read over this with that chart again and it will be clearer 06/20/03 09:29:43 Toni- http://www.tradingfrommainstreet.com/img/roomexamples/breakouts.gif 06/20/03 09:29:58 Toni- ok... if you read over that coversation again with this chart it will help
Brandon, I trade ES and I currently use Esignal for data feed and charting. I would like to know in your opinion what is the best data feed and charting for trading the ES? BTW, thank you for the free trial membership to TFMS!
Hi Brandon, Thank you for your education, it really helps new traders. Can you explain the differences between trading e-minis, ETF, stocks. And who should trade them, depending on experience.
Hi Brandon, I really liked what you said in a couple of your recent posts. This is so true. One of the things I have noticed about many traders who are struggling is that they are constantly in positions even when the markets are clearly choppy. I have tried to persuade a number of them to cut back on the amount of trades they do per day, and to try to stay out of a lot of the chop simply by not trading during the mid-day chop-fest period. One underlying issue that has come to the surface is that many of these traders believe that they must trade to be traders (always remain active in the markets). I have tried to convey the concept that NO position, when market conditions call for it, is a position that is just as valid as a Long or Short position when the market is moving. For newer traders who are coming from an 8-5 corporate work culture, the idea of simply standing aside for a portion of the day and not taking any trades is contrary to their sense of the traditional American work ethic. For some traders this is a difficult hurdle to overcome. I tell our traders that part of your JOB as a trader is to do nothing when there is nothing to be done...not to try to make something out of nothing. PEG LEG JOE
I think that if you are trading the indexes exclusively that Esignal or Tradestation are both great. If you are doing stocks I love realtick for its scanning and sorting ability, which is the best out there IMHO even if they do have some reliability issues from time to time. Brandon
From the first post Over the last month or so a surprising number of newbies have been starting to come into the market, more than anytime I can remember since early 2000. Maybe it should not be such a surprise given that the bull is back and all (This according to Barrons, Cavuto, Joe Battataglia and all those others people and groups that have performed so well over these last few years) What has been pretty surprising to me though has been the genuine lack of basic knowledge that many of the people coming in have. Things like trends, support, resistence, money managment, basic entry techniques, order types, choosing brokers etc. So, with that I'd like to start a thread going over the very basic aspects of trading. This will be useful for Emini or stock traders, swingtraders, daytraders etc. Also to pimp my site