IN THIS THREAD: IronFist learns (the elusive) PRICE ACTION

I am posting the chart with my marks to show you how 2 people looking at the same chart come up with different trades.

All the trades marked my OP were not trades in the direction of the trend taken from a PB.

The 3 I marked with blk arrows are. All profitable.

 

On intraday charts closes (and opens) are not important. In fact they are different on different data feeds.

The entry technique I showed IF does not depend on opens or closes. It is based on PA.

 

I took the short after the market bumped up against 402.75 a few times. Then got filled on a sell limit. Another thing you can do there is place a buy stop a tick or two above the recent high (vice-versa for low). Then set a sell limit a point or so above that. If it cracks the high it usually pops for a quick point that can get filled in seconds. I play for short gains. I don't like hanging around too long. Kinda like being at a casino - the longer you hang around the more likely you are to be separated from your money. When greed takes over I lose.
The thing to concentrate on is finding something that will get you on the right side of the market for whatever timeframe you are trading. Keep it simple. Maybe do something like watch ES, YM & NQ on a 5 minute chart with a 55 MA. When price in all three cross above the MA go long. When all 3 cross beIow then go short. Don't know if that works or not - just an idea.

I just watch the price action in the DOM and see how it behaves. I was introduced to trading 4 years ago by three friends who traded in the MGEX wheat pit so maybe that has flavored my thinking some on the short-term stuff. I like the (usually) slower moving markets like ZC or ES which usually have a tight spread. Then you can get out easy if it starts moving against you. I would not think of trading the YM off the DOM - too big a spread - harder to get out. If you are watching that market on the DOM I can see why you would be stymied a bit. Although I think you could time 8-10 tick trades there if you watched it for a while.

Blah, blah blah.
So much for now.

 

probably another term for "roll the dice and hope you get lucky."

 

The ES is considered "slow moving?" :eek:

What is considered "fast moving"???

 

Hello IF,

I am going to repeat a piece of advice I gave you several months ago in another thread.

Pick one setup and learn to trade it. Learn all its nuances and make it your own.

Stop jumping from one thing to another. Stop asking is A better than B. There is no holy grail. There is just you one-on-one against the market.

Choose one strategy and stick with it until you can trade it profitably.

IMO, trading PB's to S/R in a trend and managing the trade based on PA is a good one to start with, it works in all actively traded markets on all market fractals. If you disagree, that's fine but pick one method and focus on that to the exclusion of everything else.

At the end of each day, post your chart for the day with all your trades. Explain each one, your entry and why, your exit and why.

You will get lots of comments. Pay attention to the constructive criticism but ignore the noise.

Don't go off topic and don't get distracted from your strategy.

It should not be too long before you start to trade profitably.

 

Generally speaking the ES moves slower than the YM plus you have the tight B/A spread. Hard to get out where you want/when you want if there is a wider spread. But then sometimes you can just scalp your way out. Perhaps the best thing to do is scalp your way in, scalp during the duration and scalp your way out.
The pits are going away and the new "pit" is the DOM. If the DOM can help you, then fine. If not its not for you then that's fine too.

 

Iron Fist

This is my attempt to “Pay it forward”



First and foremost - let me say I in no way want to, or am trying to – discount or contradict – any previous suggestions


I believe trading is a personal thing – akin to two people staring at a painting – they each are going to see and interpret something different – neither is wrong in what they see –they just have different perspectives



I solely, and successfully, trade price action – Yes I have loosing trades (most days), but I end up making money (just about every day), and I do not mean to sound egotistical or cocky by writing this Sir – Please forgive me if it comes across that way



Before I begin – Trvlwanderer had a very good suggestion on a previous post; And as has already been stated by others – You really need to adopt one methodology, stick with it, and evolve it into your own.


I day trade equities, on a direst access platform with level II


What I use are three charts of the same equity, and one chart of the overall market

Chart 1 –Very short time frame of the equity (This is where I really get a feel for price action)

Chart 2 – Medium time frame of the equity (I use this for trading)

Chart 3 – Long time frame if the equity (I use this to get a feel for the current trend / price direction)

Chart 4 – Long time frame of the Market (synced to the longer time frame equity chart) I use this to gauge current market sediment / direction




NOTE 1 – These time frames are relative to day trading (not swing trading)



On these various charts – I have the following;

EMA’s - A couple of exponential moving averages (which help keep me orientated to the current price direction)

Candlesticks – (personally I don’t like bar charts) with the up and down candles in shades of grey (not the typical red and green) as I don’t want to be swayed one way or the other by color

Several Horizontal Lines - On my longer time frame charts (Stock and Market) just as Trvlwanderer described

A couple of Horizontal Lines - On my mid frame chart (the one I use for trading, and the one I stare at the most) I just have a couple of horizontal lines so I don’t get wrapped around the axle so to speak



NOTES
Moving averages

1.) Use MA the equity your trading respects (it’ll take some trial an error as every equity has a personality) – But find MA’s that the equity respects on wild moves, and / or when its ranging (congestion) or consolidating), and / or on minor (very minor) pullbacks – but limit it to a very few MA’s

2.) Also use MA’s settings that give you the same view on all charts – example a 1 minute chart with a 20 ma, is different that a 5 minute with a 20 ma. (at least on my platform)

If you decide to use a 5 minute chart 20 ma, then consider using a 1minute chart with a 100 ma – It’ll give “relative” the same signal – in lieu of contradictory signals (By the way I am not suggesting you use the above time frames or ma settings - that is for you to decide – I just picked those as examples)


Horizontal lines

1.) Call them support and resistance / supply and demand if you wish but please remember nothing about where price could go is set in stone – but these can indicate a higher “probability” of one thing happening over another



Price Action
1.) Long bars are not tradable (in my view) unless I’m already in a trade, AND in the direction price is racing toward.

However let me give you a couple of examples to consider;

2.) Price keeps bumping it’s butt on a horizontal “support” line on the mid and long term time frame charts but doesn’t break it, and / or price is exhibiting a tendency to move away that level – guess which way price will “probably” move

3.) Price keeps bumping its head on a horizontal “resistance” line on the mid and long time frame charts but doesn’t break it, and / or price is also exhibiting a tenancy to move away from that level – guess which way price will “probably” move

Another scenario

4.) You’ve found an MA that an equity’s price respects, and price is currently “climbing up” the MA – probably a long (assuming Market and Time of Day are agreeable)

5.) You’ve found an MA that an equity’s respects, the price is currently “climbing down” the MA – probably a short (again assuming Market and Time of Day are agreeable)


I hope your getting the picture Sir


AND MOST IMPORTANT – All the above have logical levels to set your Stop Loss – that if / when hit you are relative sure the trade isn’t working

Then at the point of stopping out you may even decide to exit and reverse – which is why they call us traders, and not investors


To add “higher probability” – You may also want to be aware of what the overall market is doing;

Is it an

Inside / Outside day
Upside / Downside day

And

Be aware of the “Time of Day”



My opinion – once you start really focusing on price nothing else matters, and you’ll also begin to identify all types of “probable” trade set ups

In closing I would also like to add, a trading plan, with entry / exit rules, money management rules, and daily / weekly monthly goals, continuing education, and a daily journal is paramount

For me trading is a business


Take Care Sir

 

Good advice. Plays into what I'm saying, Ironfist. Pick real strategies with real rules. Then try them out.

Bilbod, How do you define a PB to SR in trend and when to you enter? Meaning for longs:

1) Low/Support is established in what time frame?

2) How many times does low have to be hit for you to consider it real support?

3) Support (or a low) can only be established if it's followed by one, two or three HLs. How many do use to clearly say you've bounced of support (as its happening) rather than still be asking yourself, is support going to hold?

4) If so, which PB do you buy on? The first after the first HL, the second or third?

Once you get those answers and you add the all important TIMEFRAME, Ironfist, you should try this simple method, if you haven't already.

 

I.F. remind me of Flash Boy
http://elitetrader.com/vb/showthread.php?s=&threadid=20535&perpage=6&pagenumber=1