Day-Trading 2.0 for small traders

TRO, always nice to see a fellow musician passionate about his trading.

good trading!

el surdo baterista

 

Surdo:

I am NOT a musician!

I play bass.

I am NOT what I do.

But thanks for posting.

 

i had tried to impliment this wma theory but no success yet...problem is this look gr8 after the fact.

billdobson1972,

I completely understand the “this look gr8 after the fact” part, but it’s maybe because you are paying too much attention on the “technicalities” of a particular way to pull the trigger and missing the key issue which is price analysis. Only after that you will be able to develop your own timing strategy based on whatever you find useful, easy and good for you and consistent with your instrument, timeframe, risk and trading plan.

1. An “ex post” chart will always look easy to trader. The difference between a successful day trader and the rest is exactly recognizing a trade while a chart is being plotted (“ex ante”)

2. In order to “overcome” the “ex ante” vs “ex post” problem, in my opinion a trader need to trust his/her analysis and be convinced that even if you placed a bad trade (either because of a mistake or simply because the market made a “random” move) your strategy is still consistent, adaptable and sustainable in time.

3. Perception is a key issue when day trading and that’s why a small trader need to find an instrument, timeframe and time where he/she feels “comfortable” with.

4. The 240 WMA is a visual aid and it’s only a reference that tells us where we should have less probabilities of placing a bad trade. The fast MA is the visual reference to recognize waves (theoretically with screen time and experience you won’t need it) and it must be adapted to the specific conditions of each instrument and timeframe.

at the time when the graph is plotted you want be able to decide much..u need more info... i have recorded todays session will see what i see on replay

Be aware that if you are using a very fast non smooth timeframe with a fast instrument you can easily get “lost in translation”. By the time you “analyze” price and decide to pull the trigger in a live fast chart, the market maybe have already moved 2 or 3 mini waves completely changing the circumstances from which you decided to place the trade.

You don’t need more info. A tip: Do this exercise, plot a 240 WMA as reference and a smooth but not sensitive MA let say a 20 LSMA or a HULL 20 changing color according to slope. This will give you very but very clear waves (it will only show you the “real moves”). Every time a new wave is formed decide (you can demo trade if you want) if in the NEXT wave you are going to go long, short or stay aside (forget even about macro direction for the exercise). Go long if there is a consecutive HH and HL, short if LL, LH, else step aside.

Forget also about timing, just go long or short in the next candle reversal and set a PT of 3 ticks and SL 1 tick below the last low or high (it just for the exercise!!!). The objective of this is to develop trust in an “ex ante” chart and count how many times your price analysis was right or wrong not how much you can earn or lose. After you can introduce macro direction analysis and see how dramatically your trades improve.

If you master price analysis and trust and “ex ante” chart, you can start dealing with timing, entries, exits and better stops.

I hope it helps…

jjrvat

 

first post..

just want to say hello and thanks to jjrvat for this wonderful thread, it's so well explained and it's FREE. there are so many ebooks out there focusing only on how and when to enter and exit but most or all of them forget to teach the basic of price analysis.

jjrvat thanks to you and your emails I finally started to make real money with no fear and more confidence.

Thanks again and see you later ;-)

Happy scalping to all ET members

Alessandro

 

The chart shows what jjrvat just described.

Going long when the price is above the ma(240) and crossed/closed above the ma(20) would have been profitable ( so long as you were not trying to be greedy).

People know I like to poke fun at SQUIGGLY LINES but as one trader said, "If it makes money, it ain't no joke".

 

TRO.......

For a very long time I have enjoyed reading your comments and observations.

My question this AM: your posted charts are for USD/JPY. Why this pair in particular? Personal preference? A technical reason perhaps?

Your answer and any additional comments will be appreciated!

 

jjrvat: What are "H-lines" you mentioned earlier?

P.S. thanks for sharing your trading style

 

Simple answer: More bang for the buck.

GBPUSD avg hourly range = 32 pips

USDJPY avg hourly range = 24 pips

But I can buy twice as much USDJPY!

I usually only look at the 4 major pairs.

I am considering GBPJPY but I have to run the statistics before I will make the switch.

You may have noticed the RANGE indicator on some of my charts. That indicator gives me the real time statistics that allows me to maximize the profit each trade.

 

I like the ability to see what's going on in multiple time frames without having to have 8 charts open.

 

Ok, so if you have got this far in th ethread then you should understand how to read the direction, there isnt too much room to move on that one, what I would like to ask everyone out there though, is what are you using to pull the trigger? What works for you and what doesnt? Are you a stochastics cross trader? or maybe a believer in the good ol' fashioned MA cross. Put it up for all to see! (unless its a secret of course)