I was sure Nod was not serious about doing 50 to 100 cars a trade with large stops. She knows "pain" as any live trader does when they traded with real bullets flying before going to a sim. Going to a sim is about refining the tactics etc. Sim trading certainly must have some value if the trader can connect to even a small extent the emotional reality of trading a live account. The trading 20 cars for small moves is actually done a lot more lately as i said (i think) because the ES has been in some small ranges lately. The main goal is still to catch the "RUN" as always. I was never a fan of range trades but lets face it, the last couple years we were all spoiled with great intraday swings when the financials imploded. Let me give an example again on a particular type of trade...... not a range trade though, more a swing reversal trade with the KEY reversal or the 2 bar reversal setup. In a bar chart you see a KEY reversal bar (keep in mind a reversal bar must have a previous move to reverse), it does not need to be a big move, adjust accordingly. Key reversals work especially well in smaller range days......such as Fridays action. Remember, you do not know if it is a KEY bar until it closes and you are looking at a key bar that IS A LONELY BAR, it is sticking out there all by itself relative to the previous few bars. But you all know that. Once you see a pointy bar and the 5 minutes is almost up and you see price going back down from its high and gets below the said bars opening you are anticipating a KEY bar to form. OK, the bar is printed and now your job is to go short if price goes below the KEY bars OPENING price with the objective to go lower than the KEY bars close and continue on down. Your STOP loss is easy, you will get freaking nervous if price comes back up to the KEY bars opening tick and if price hits the KEY bars high.......you then lunch the trade and regroup. What you want is for price to stay below the opening tick of the KEY bar, thats your number one clue if the other traders are taking the bait and getting out of their longs.................because they are now in a losing trade and you are not. Key bars from Friday: Only from 0930 to 1600 est. I hardly ever trade pre-opening of pit times. = 0950 bar the then high 1086even and closed at 1083.50, next KEY was at 1055 which was then the low of the pit session and proved to be the low of the day at 1077.50, it was not an outstanding KEY bar but one none the less....notice if you went long on that KEY bar you would have seen a 3 handle profit come all the way back and test the KEY bars OPENING TICK at 1078.50 on the 1140 est bar.......but PRICE did not go lower....your long was still valid. Now prior to that low reversal there was a rather punk KEY reversal bar at 1120 bar but there was not much to reverse so that was not given much reading because price ticked on two bars a tick above the KEY bars opening. It stalled at the previous high at 1082.00 as it was, 1 tick above previous high was a clue to be careful and be on the lookout to exit your long...then the 1140 bar test of opening tick on the 1055 KEY bar was your clue to stay long (you knew you were in a range now). The range got smaller after that and 1078.50 was not hit again and you saw 1082.00 as the resist. Price popped past 1082.00 at 1310 on up to 1087.0 and that was a KEY reversal bar again at 1350. price dropped down to 1082.50 at 1410 and showed a KEY reversal AGAIN and proceeded to make the days high before ANOTHER KEY reversal at 1540took price down into the close. KEY bars are not always gonna work as good as they did on Friday..........but they are something you should have in your tool shed. Mkts are like women, they sometimes are easy to understand and other times............well you know. :eek: PS: Great qualifying in the Brazilian F! today for tomorrows Brazilian F1. Ruben is on the pole and should be great next to last race of season. Speed channel tomprrow at 1130 est. Be there or be square.
I guess this is actually what I was trying to caution against - using simulation in a less than serious manner. If a person sims as long as I did, habits are developed, and no doubt on the subconscious level as well. If these 'habits' are not in tune with the harsher realities, then the mkt will eventually extract the costs for doing so. But you'll not hear any arguments from me about the benefits of refining one's tactics. It's a far cry from phoning in live orders to the broker while attempting to trade from delayed charts - what a sad joke that was. Of course, we all have different learning curves - mine just happened to be longer and steeper than most. bh - your discussion of reversal bars is at the forefront of what the Brooks book is all about. Biding one's time in front of the screens, waiting until the proper setup unfolds, and then acting as these potential reversal points are offering their highest probability of success, with the least risk as possible. Three push wedges w/ overshoots, failed final flags, one tick stop probes, trading range extremes, breakout tests, etc. - it's all good!
Yes, it is! His book has been amazing for me. I often spend 10-15 minutes on each page, which is why I'm only on page 160 despite having gotten the book back in July. He opened my eyes to so many things I never thought about before. All the things you mention above have gone into my very successful ES and CL sim trades lately. I've pretty much been testing Brooks to the hilt in sim. It's by far the most difficult read I've ever encountered (makes Farley's book seem totally approachable) and the layout and editing is awful, but it is hands down the most enlightening trading book I've ever read and I'm not half through it. As soon as I stop biding my time and become impatient, the trade sucks. It ends up being b/e or a loss and a time-wasting distraction.
Check out this fellow when time permits. Wonder how he'd fare w/ price action and pattern recognition ? http://video.stumbleupon.com/#p=0k4lsi1dql
2point gain per trade has 100% winning rate is very likely. the probability increases when the gain amount reaches the smallest. 0~1point maybe around 90% 2~3point maybe around 80% 3~4point maybe around 70% 4~5point maybe around 60% ..... 10~20point maybe around 30% ... 50point maybe around 5% you know what I am talking about. if you want high rate of winning, the amount you want to catch will be small, if you want to catch home-run, the probability is small. there is a trade off between winning rate or amount gain per trade. if you put a 10point stop loss for ES, your chance to be stopped out or lose is small (10point move is low probability event compared to 3point move), if you put a 30point stop loss, your chance to lose or be stopped out is of very lower probability . that is why warren buffet almost every time wins because he has no stop loss. back to 2006, I remebered I do not use stop loss, I enter a trade, if red, I wait wait... most time, maybe several days, several months, finally I am green. when look back to my old trades, the truth is almost 99% trades are winners if I chose to wait, of course still there is 1% chance of trades until so far time they do not work! I remebered I bought crude exactly at teh bottom price of 33.67 with 3 contracts, that is the first time I trade crude. if I hold them, I win more than I trade in and trade out or day trade up to this moment. kind of funny. of course, my objective is produce daily cash flow, so that is another story
Nod knows from chat i like to remember tidbits from past reads etc, etc. Just a couple for now: This 1 was from one of Joe Ross books that i spent about a grand on, i usually gleaned at least a couple money making/saving tidbits from every book i ever read and put in the tool sheds drawers to use when needed. Joe said: (paraphrased) When to get nervous after getting filled. If LONG, you get nervous if the NEXT bar does not make a higher high -or- it fails to make a higher low. If SHORT, you get nervous if the next bar fails to make a lower low-or- it fails to make a lower high. OR, i look to exit if the next 3 bars have gone nowhere. A couple more: Chinese philosopher: Training, the more you sweat in peace, the less you sweat in war. Pete Sampres: Do not doubt your abilities. "that loss changed my career, I did notfight enough. I got a new coach. I convinced myself that i was "good on grass". Then after winning at Wimbledon, it all got easier. Yogi Berra: the future is not what it used to be. F1, Kimi: To win you need to get all the mistakes out of the way. F1, Bernie Ecclestone: If a driver is competitive in a go-cart. He can be as competitive in F1, just a matter of being able to handle things. 5 birds in hand are better than 20 that got away. Russian that designed the AK 47, Mikhail Kalashnikov: Unless solving the "BIG BANG", all that is complex is useless, all that is simple is useful. My goal Mikhail said is "Simplicity & reliability". The toughest tick in trading is the first tick after getting filled. (me, ha) Tennis: Do not play on your heels, Step into your shot. MaryJoe Fernandez. TA: The essense of trading (me, ha) Just do what you have to do. Unknown F1, Alonso: "no pressure - just motivation" Tennis: Justine Henin: "She was very comfortable moving forward, most women are not" "i won't be scared to move forward in our match". F1: perfectly controlled, but you are out on the ragged edge. Fear: fear can sabatage the bravest heart. cast off fear, believe in yourself. Find your weak link and fix it. Tennis: Announcer = She showed what shes got. When she learns how to use it she will move up in the rankings, big time. FOCUS: You have to focus all the way to the end of a trade. Tennis: Roger Fedderer: announcer; his body was out of shape but his head was on the ball. now: the moment is now. Indicators: The more indicators one uses, the more excuses available not to pull the trigger. Scared? When you are scared, the imagination exaggerates things. Thats all for now.
Your last line says it all! Warren Buffet's trading time frame is, what, 10-50 years? I called my creditors and they weren't willing to wait that long for my big returns There are a few stocks I swing traded in my IRA's back during March lows and wish I'd held them. Of course back then the world was ending and you happily took those profits when presented. Oil below $35...the risk:reward there for a long term investment was as good as it gets. I wish I'd been paying attention.
Very nice post, Hog, thank you. As for the quote above, I spent the past 20 months learning that one the hard way. If I'd followed that advice from the start, I'd be a wealthy woman. I'm much better at that now and all that's left to do is trust myself and start trading my regular size again. Here are a couple of my faves: You miss 100 percent of all the shots you never take. Some people skate to the puck. I skate to where the puck is going to be. - Wayne Gretzky You've achieved success in your field when you don't know whether what you're doing is work or play. - Warren Beatty
yes, I need cash flow to feed the family. that is my problem. but what the heck with my roth IRA, I once bought TXT at 4.8, THC at 1.3, LVS at 1.8, MIC at 1.5 USO(crude tracker, my creditors should let me have the return) at 23... all are in my roth IRA, why I sold them prematurely, there is no hurry to cash in on my IRA. the only thing I said to myself: I am not a stock rider, I am a gambler. my point is when you zoom in the timeframe, the characteristic of gambling becomes more obvious. 1point gain/loss is just like toss a coin in the air since in a day, there is millions of them. but 10point gain/loss or 20point gain/loss needs a little bit of skills (patience, system future proof,discipline, some wisdoms). I did lots of coin tossing things in crude, that is why I am amazed to find I did not beat the buy and hold strategy. so after I realized that, I normally just did one or two trades a day, the results obviously greatly improved. I could not give up day trading since I am still obsessed with the illusions of "only do something, then can produce something", trapped with illusion of "compare myself with doing a 8~5 job".
you may also entertain the distinct possibility that there may be something to intraday chart analysis, with reliable signal bars actually increasing your odds to greater than 50% or if only 40%, then taking home 4 handles for every 2 lost/stopped out. if playing the e-minis were truly the odds of a coin toss, then with commissions, fees, and software to consider, no one would be making money scalping the e-minis and the truth is that some people are, week in and week out, year after year. there is certainly some skill there. if you are able to take out the bigger moves consistently, then that is great but IMHO, it doesn't serve you to disregard or rail against the potential profitability of the 5 minute chart plays. 43 ways to skin a cat, brotherman, always good to keep your eyes open for new methods NoD, thanks for keeping up your journal... loads of trading wisdom and would be lucrative reminders throughout as you and a few of those that have contributed have a great and ever expanding understanding of tech. analysis. best of luck trading to all.