Day-Trading 2.0 for small traders

Yt,

What tick chart frame do you recommend using for the british pound? I am currently using the 17 and 34 to scalp the pound for a quick 6-10 ticks. Is this too big or too small for my trading stratagy? I was wondering if you find a different tick setting produces more waves and the same or more profit targets.

I strongly believe that each trader must find his/her own timeframe according to his/her own capital, risk, time and trading plan.

In my opinion, 6 to 10 ticks is a “healthy” target for scalping the BP (if you are trading futures of course) with 17 – 34 tick charts. Of course you can find different tick, volume or constant range bar charts that can produce a lot more waves but more important than that is if those can be manually tradable or show smoother and clearer trades.

Look at the following charts (same time different perspective) / Yesterday European Morning BP.

1) 35 ticks = 8 green waves (red arrows) with potential 6 to 10 ticks trades
2) 1 Range bars = +++20 green waves with potential 6 ticks trades.

These are the 2 extremes in the range you are trading, you can plot and compare with 8 tics, 18 ticks, 25 or 50 vol bars or constant bars of 1 or 2 … Its up to you to decide which one is better, easier, riskier, smoother, etc, etc, etc for YOU and only for YOU.

jjrvat

 

Thanks very much for sharing.

what is a 1 range bar please?

 

Amitman,

You’re welcome …

Now i'm trying to apply this method to stocks (Espcially AMZN) using a 240 WMA and pivot points for the macro dircation and a 6 WMA for the micro direction (waves) i apply this on a 150 Tick charts. A few qustions though. First, do you find it better to use tick charts in stock instead of Time charts? in that case, how many ticks per bar for stocks with volume like AMZN CELG CROX BIIB etc.?

Are you scalping? Swing trading? Position trading? Investing?

In my opinion, I don’t think “scalping” stocks like the ones you mentioned are the best option (you might need more volatile stocks?) and I guess if you are planning to “scalp” stocks you already have a decent size account (at least more than $25000 to have the minimum required) so it can be worth the risk and profit targets; and you already know what are you doing.

In my limited experience “scalping” stocks I will definitively go for volume charts, you will combine the most important factors for trading stocks: price and volume (try 35000 vol charts in amzn... see chart below). Research, test, experiment and trade until you find the one which is better suited for you (and only for you) and your trading plan.

Does this scalping method do work in stocks and what PF should i use (i guess it depends on the stock's range but i don't know what should be the relations between them).’

Exactly … I can’t help you with that; it’s your experience and screen time that will give the best answer.

and a third question. does the 240 WMA and 6 Wma are good for stocks or should i try something else or different numbers.

The 6 and 240 WMA ARE JUST VISUAL AIDS that can help with price analysis!!! There are by no means a set of rules or parameters that you should follow as the Holy Grail… Don’t tweak them too much, just test which one is the best visual aid for you to understand price.

And a last question, on the charts you gave, what is excactly your entry point is it a tick highr then the bar where the fast WMA changed it's direction or is it something else?

As I said before, timing is just the final formality. Of course it’s important to pull the trigger on time but your decision to take that particular scalp is already decided before you wait for your trigger.
Look at the following example: AMZN 35000 vol bars / Monday 18:00 – 20:00 (don’t aim for more than .30 or max .40 cents per trade)

1. Macro direction. OK
2. Wave Direction. Ok
3. Timing = Trigger … Some basic ideas:

a. Close above the 25 Hull
b. Change of Slope of 25 Wma
c. Candle Formation
d.Horizontal Grid lines
e. MACD cross … yes MACD cross… you already “know” that your are going to take the trades because of price analysis so MACD cross will work …
f.Many others …


"Execute the basics; master the basics,...When you master and execute the basics, the rest comes naturally”
I hope it helps

jjrvat

 

I think I understand.

Thanks for sharing.

Those MAs are Linear weighted moving averages.

Using my TRO DIGITAL COMPASS, I can see what is happening on multiple time frames in a glance.

This is so cool.

 

see section on range bars at this site: http://www.linnsoft.com/tutorials/periodicities.htm

 

I hope this chart fits better.

Watching the arrows flip from up to down, trigger a nice quick short scalp off that double top.

 

Wrote another indicator to show if price is above or below the moving average.

Makes it easier to know when/when not to trade.

Thanks again for sharing your idea.

 

Gauges show moving average turning south.

 

This really is cool.

 

This actually works!