Day-Trading 2.0 for small traders

IronFist · Aug 15, 2009

there was no summary or anything posted. sorry, you gotta keep reading the thread

sync · Aug 19, 2009

Quote from TheRumpledOne:

Explain?

I am just following the price action based on the teachings presented in this thread.

My DIGITAL COMPASS just tells me which way the price is going... up or down. All TRADING 101 stuff.

If you see Higher Lows, then trend is up.

If you see Lower Highs, then trend is down.

So I look at the wma(240) and the price. That gives me what I call my overall trading BIAS.

Then I look at the Ind(5) {similar to WAM(6) } and the highs and lows.

I can scalp when the M1 and M5 arrows flip.

Looking at the longer time frame arrows, give you an indication of what's ahead. If they are in the direction of your trade, they you are going with the flow.... simple.

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TRO, I'm trying to automate as much of jjrvat's concept as I can. Does your digital compass let you know if the waves are making higher highs or lower low? I'm having difficulty visualizing that.

TheRumpledOne · Sep 5, 2009

Quote from sync:

TRO, I'm trying to automate as much of jjrvat's concept as I can. Does your digital compass let you know if the waves are making higher highs or lower low? I'm having difficulty visualizing that.
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Yes.

TheRumpledOne · Sep 5, 2009

Quote from jjrvat:

If the job for a trader is minimizing risk, a simplified imaginary trading equation can be defined as follows:

Risk (R) = [ ( Direction (d) + Momentum (m) + Timing (t) ) * Physiological (p) ] + Externalities (E)

jjrvat [/B]
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RISK = STOP LOSS * POSITION SIZE.

It is that simple.

prochargedmopar · Oct 16, 2009

You should see TRO's new RAT trader.

Got Cheese?

http://www.kreslik.com/forums/viewtopic.php?t=2095&postdays=0&postorder=asc&start=150

prochargedmopar · Oct 16, 2009

I would like to thank jjrvat

If he's still around.

I've been referencing this thread for month's. It helped me plenty with understanding price action.

Thankyou Sir.

prochargedmopar · Oct 16, 2009

Quote from jjrvat:

IronFist,

I will try to address you question in the next posts on Trend and S/R lines but just a quick comment on your post: If you are holding trades for longer periods of time youâre notâ scalpingâ and you will be better off trading a slower timeframe. There is not holding anything when âscalpingâ, pull the trigger grab your 2 to 8 ticks (depending on how fast is the instrument) and run, and run fast. Scalping is based on % of winners not in Homeruns.

Millimabuse,
OF COURSE NOT !!!. I Was just being sarcastic with your oversimplified comments â¦

S/R levels and Trendlines

At first glance, they are very efficient and so simple to understand that it seems impossible to deny their validity. But as you know, in a live chart they can be very difficult to recognize before is too late (lagging) or they can spread faster (too many contradictory âswingsâ) than swine flu, blurring the analysis of any rational trader.

1. S/R Levels are not the same as support or resistance points in a trendline

Itâs amazing how these 2 basic TA concepts are usually misunderstood and misinterpreted. A typical example of this problem is newbies (and sometimes not only them) calling the top or the bottom of a trend because a trendline got broken (just quickly glance at some the 1000s threads calling tops or bottoms). But before go in details, we need again to go back to basics.

In order to identify S/R levels and Trendlines, itâs necessary to define the only variable involved in this analysis: Swings (Highs and Lows). And like always, in the foundations is where all problems start. What is a swing? What is the faster and efficient method to determine a swing?.

The simple and more effective way that will cover 90% of the swings is the one shown on the chart. So you need 3 bars and the only âruleâ for a swing high is a Lower High in the Bar [-1] a Higher High in the bar [0] and a confirmed LH in the bar [-1]. The opposite for Lows.

This is one of the core fundamentals on Price Analysis. Once you have determined this points you can start defining (but not analyzing and even worst trading) S/R levels and Trendlines. To define S/R levels you just need Horizontal lines on those swings. For a trendline you connect the 2 swings (in the case of the chart Highs).

I know these are basic concept but in these very essential notions you can find the roots of most problems in this analysis. For example, based only in this chart you may think to go short in the next test of that trendline (which is valid idea) but price can go but not break the Horizontal Resistance level, breaking the trendline and still be a valid short setup. In other words the valid setup for shorts is because price is making LH and LL !!! ; and not because the trendline is broken you should start looking for longs, not until you have new swings pointing to a different scenario!!!!.

The second and probably indispensable fundamental in S/R and trendline analysis is defining the relation between swings and timeframe. Here is when everything gets messed up: All swings in your current timeframe will be reflected in a lower timeframe but NOT ALL swings from your current timeframe will reflect on a higher timeframe.
This means that you can connect and âunlimitedâ numbers of swings but you need to recognize which swings correspond to your current timeframe and which one are from a higher timeframe. In other words if you connect a major swing to a small swing you may end up with an INVALID trendline.

Iâll continue later with details

jjrvat
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I'll be watching for the continuation of sup/res discussion.
Looks a lot like a key reversal or KRB (body)
Very Good.

jr07 · Oct 17, 2009

Anyone out there in publishing? Or related to someone in publishing? Somebody needs to help jjrvat copy and paste all his posts on this thread, chapterize, print and amazonize pronto

prochargedmopar · Oct 17, 2009

yeah, good idea,
And it's a bummer some of the first pics have vanished from tinypic.

uasish · Oct 17, 2009

Quote from TheRumpledOne:

RISK = STOP LOSS * POSITION SIZE.

It is that simple.
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I subscribe to this view of 'The Rumpled One'

jjrvat's methodolgy is good i am following that for some time now ,thks to him.