Actually, it's not whether you use charts or not that's relevant. What's relevant is that you're using price HISTORY. The past. What happened. There are people who don't use charts at all, but still utilize price history in an attempt to predict.
6 months isn't that much in this business, to be honest. And you won't know if it works until you've actually put together a robust and proven methodology. Like I said earlier, it's very easy to think you know something, when you don't really know that much at all. This is typical with Brooks' stuff and similar methods. Telling the tale of price history and what happened (like many here are expert at after the market close) and annotating charts isn't THAT hard. It's impressive to the newbie because he's finally able to makes sense of market movement. Here sellers gave up and buyers came in, look at this double top, oh, here's a head and shoulder, OH, there's a fake head and shoulder. This gives the illusion of knowing and thinking that you one day can be able to be more consistent in your predictions of price movement. NEXT time, you'll figure it out, right? The problem is that the market is a complex machine and there are many more variables to consider than the bar-by-bar approach (which would be the micro) in order to put together a robust system. With the intuitive and subjective bar-by-bar approach you're oblivious to all this stuff. First, you need to master the macro and have an expectation of what will happen on any given day (the broad strokes). Utilizing statistics can help with this. I don't ever heard Brooks (please tell me if he has added this by now) recommending the use of something simple as the N-day true range or average range. Pivot levels (don't use them myself) CAN also be useful. Or the average range per 30 or 60 minutes after the open or within the close. There's of course a LOT more to consider than this. Now, you may become emotional by this and want to prove my wrong, but I promise you it's meant to be helpful.
Is DOM reading considered a part of technical analysis? A lot of the stuff I see Brooks writing about significant sellers being at certain locations on 5-minute bar charts can be discerned off the DOM instead of charts.
I'm not going to try to prove you wrong, or get emotional. Just kidding. You offer plenty of good advice, and I appreciate that. 6 months is a very short time. Agreed. I've added 6 months (more if you count his first book) studying his method, to my 12 years of trading (with one year off after a very bad year...I didn't blow up account...I've never blown one up, but might have had I not taken a break), which became profitable in 2013 in my long term account (22%...I mistakenly stated in an earlier thread 22% last year...was the prior year) last year: (8.5% ) This year(.19% ... I've executed very few trades this year in that account), and now I'm working on making my daytrading account profitable (down 3% after 1320 round trips as of the end of Aug.) This is my first year back to daytrading since I took my break some years back. I began reading Brooks original articles 2011 (might have been sooner) and his first book shortly after. It was a difficult read for many reasons, but I liked what I understood in it. It offered new insights to how I was already trying to trade. I'm not a newbie, and I wouldn't necessarily recommend his books to a newbie. (I know, I know...many here wouldn't recommend it to anyone.:eek I simply state that his material is helping me turn the corner by giving me a different perspective to what I've already seen over and over again for years. Now if you believe it's just coincidental that I'm doing much better after studying Brooks (I've studied others over the years, including many books regarding indicators), but rather just finally been trading long enough to be figuring other things out, I would say you might be right, but you might be wrong. Kind of like taking a trade. I'll let my long term gains for the last two years speak for themselves. And at the end of the year I'll post my return, + or - in the daytrading account, and long term account if I place more trades there...which I might very well do...after FOMC Thu. If I turn my DT account profitable, you may feel free to consider it pure luck.
lots of good ideas and suggestions, i am very interested in the chart you posted, would you be kind enough to post the whole chart, so we may learn even more from what you explained and your chart which would represent more than thousand words? thanks in advance for your generosity and compasion for those who want to move to the next level of trading for a living, pls?
I can't explain much more than I already have. Many in here will disagree with my reasoning. This type of pullback to the 20ma, including after a bull spike, is repeatedly explained in Brooks' book, in particular, the one regarding trends, and probably many books by many other authors. In it's simplest terms, it's just a bull flag. There was no guarantee that this play would work (especially at the time of day I traded it). It could have just as easily gone against me. I can assure you other traders who took the same direction might have done so for different reasons than I did. Brooks explains that in great detail. (Disregard the red line. Unrelated to the chart from the other night.) I like the chart you posted the other day. Looking back at your chart, I think you've got a perfect system for yourself. Good luck in your trading!
thx much for your kind words which meant very much, as one trader to another. on the contrary, i admired your willingness to share which is incidentally my weakest personality, for i am the only spoiled child in my family. trading-wise, the markets have been more often than not, cooperative; otherwise, the same setups, as many old timers already eluded to, will without the slightest warning, turn the other direction to many experienced traders' dismay. most profitable trading to you and everyone.
You're most welcome! The reason I had so many words in my other post wasn't to explain the trade, but I was trying to convey that my greater understanding of the basics of technical trading have been helping me to overcome the parts of my personality that interfere with my ability to trade effectively (and objectively). Once those are removed from the equation, it's much easier to see things in the charts that might increase our ability to make more than we lose. Again, best of luck to you, and certainly we'll have future discussions.
From Wikipedia (Investopedia has a similar definition): In finance, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.