Hi all, Several weeks ago I started to use a simulator of http://dastrader.com for day trading. This is a direct access with the servers in the Nasdaq, with real time data which guarantees instant executions, ( and comes with a price, higher than other services ) so it is definitely for day trading, right? Apparently not.. the support of DAS, a guy name Matt, keeps stating that ONLY 12 hours charts shall be used for trading, while the 5' or 1' are a waste of time. My first question was... aren't 12h charts for swing trades? And would one need real time data for swing tades of several days? To me, the power of a direct access trading service , lays on the fact that you can place instant trades in an out, based on a precise price and timestamp on a given minute. BUT, if I have to use 12h charts and do slow trades of hours / days , then I don't understand why would I need a NASDAQ direct access... he answered that 12h are for day trading but he didn't explain why, how... anyone? After that he stopped answering and kept saying that I have to watch all these videos in order to understand price action , and how to place S/R which are the solely worth indicators for day trading. But these videos relate to forex. Can we really treat stocks as forex when it comes to price action? because stocks have an uptrend bias, I find it really hard to find securities that have the same patterns as forex. IMO stocks don't move like forex, for example a currency exchange moves in monthly up/down channels while stocks are generally uptrend, or downtrend, with some corrections, but it's hard to find stocks that move in a horizontal channel pattern on 12h charts. Plus, you can't just pick up any stock just because it has the right 12h pattern for S/R, there has to be enough liquidity and low bid/ask spread... so.. - Can we treat price action on stocks like in forex? - Why in your opinion a daytrading platform is suggesting to trade only on 12h charts? - How to screen stocks with patterns where it is easy to identify S/R over 12h charts? - How to use level2 quotes , liquidity, volume, to pick a "hot" stock for day /swing trade? any input is welcome, cheers! Al ps, I'm attaching his answer on my trading questions..
- Can we treat price action on stocks like in forex? No. Two different beasts imo. Fx is more difficult to trade and frequently experiences highly random price action. With stocks (not speccy stocks) these have better trending / less volatile and more predictable price action. Speccy stocks / penny dreadfuls, they're as good as the casino, best to trade short rather than long if possible.
but someone would argue that Fx doesn't have overnight gaps, and it's easier to find S/R stocks are uptrending and most of the time they are in uncharted territory, where no S/R can be applied
Charts are charts, if you saw a chart of Wheat from 1890s and without the name or value on right side, you would think it be anything recent. Ever instrument has little repeating patterns or nuances, but you read enough of them, you can see much of the same price action.
You are right, Matt sounds like hes talking out of his arsehole. If you are paying a premium for a specialised high speed low latency service which guarantees instant executions then it seems apparent the service is geared towards a scalping type strategy. Ignore Matt. Use the service as you see fit. However, if you dont intend scalping then Matt is correct. Why did you sign up for the service then? 12 hour charts are not suitable for day trading. Decide what you want to do. Are you going to hold trades or scalp trades? Once you know what you want to do then a lot of your questions will take care of themselves.
In fact i'm talking about equities, not commodities. Plus, most of the stocks have an uptrend bias, I find rather difficult to find liquid ones with a clear S/R pattern on 12h charts.
Thank you, the first reply that makes sense. I signed for DAS in order to SCALP, high frequency day trading, period. It was solely Matt's idea to push the 12h charts and tell to only swing trade. Indeed I want to focus on scalping.
He's oddly prescriptive and giving an air of objectivity for things that are decidedly subjective. To suggest out of hand that alcohol and caffeine are incompatible with trading would raise a red flag for my opinion of credibility. Never mind that he extends to this things like fermented foods (bread!!!)--consumed daily by the vast majority of the world's population. And the outright false statement that soy is fermented (soy sauce, yes, but not the raw bean--i.e. edamame). This is obviously not someone who is scientifically rigorous as he seems to imply from the context. So I'd take the entire exchange with a grain of salt (and a glass of beer, thank you; but I digress). So, to your question, I'd dismiss him out of hand. He's making claims about state of mind with demonstrably false beliefs dressed as scientific fact. I'd say it's plainly wrong to assume he's been more rigorous in his analysis of trade style. You could ask 10 successful traders what their preferred charts are and probably will get 10 different answers, and all be right. Because they are opinions.
12 hour charts for day trading and no coffee? He sounds like he checked out of the whole program like colonel Kurtz. Whats next?, maybe Matt's next email will read "I watched a snail crawl along the edge of a straight razor. That's my dream. That's my nightmare. Crawling, slithering, along the edge of a straight... razor... and surviving"
What in the heck did I just read? Was he going to give you the secrets to life and the money your Great, Great Grandfather left in Nigeria? Going forward carbs are on the chopping block along with soy sauce and basically anything else. Good diet = Me being next Bobby Axelrod I need to remember that.