Amazing that the OP has kept the thread going so well and keeps getting quoted. For my 2c worth. I reject requests to trade OPM because I've got enough of my own and don't need the grief. I reject any thought of trying to teach anyone my simple method because although I find it simple others will not and unless it was a family member or close friend it just wouldn't be worth the pain. My hat's off to anyone who genuinely tries to teach their way of profitably perceiving and trading the market.
In reality a highly successful methodology plus consistent trading prowess is confined to the very few and the words below are on the button.
1. If I were going to teach trading, I might do so through seminars @ $50,000 per person.... and it would be worth it to anyone trading size. 2. We wouldn't break for lunch. We'd be DONE by lunch. 3. Most would say, "You're kidding.... that's all Chaper 1 material". And I'd reply, "yes, and you skipped over it in your hurry to get on to the 'good stuff'". You want to be a good trader? Think "Mr. Spock... how would he trade?" Observation. Logic. Courage. Discipline. K.I.S.S.
You pirate Dell XP CDs through ET to survive... And you dream of idiots paying you to "teach them to trade"? The perfect conclusion to a truly surreal thread.
My K.I.S.S...just draw lines. 1. Role Reversal Support & Resistance zones are an analog for Fibonacci Clusters. Check this for yourself. 2. When price approaches a S/R zone look for a reversal...read Richard Wyckoff & Tom Williams: Learn Supply & Demand. 3. Use Money Management...a trade must have a 2X Risk potential, minimum. I've just put all the gurus out of business...never, no one will believe the above, it's to simple.
On the money! Took me a while to learn, but it is true. The system that is consistently making money is the simplest to see, simplest to use, the least indicators, and focuses on price action. Wisdom I could have used long ago and through expensive lessons!
You need to click the attached image to see the chart so that what I'm saying makes sense... I've labeled four points, A,B,C, and D. So I'm typing through stocks, going through the stocks which are up the most on the day, and I come across ENR. As I see it, it's right at point A. The first thing I notice on the chart is that the last two candles showed a decrease in momentum (rate of change... before it was going up 50 cents every 5 minutes, now it's taking 10 to barely go up 25)... and I see that it's at the 102 figure level, where 10,000 shares are offered. I look on the daily, and see that 101.95 is a resistance level from several months prior. I notice that that offer is sitting there and no one is buying it... the prints I see are for 100 shares, 300 shares, 200 shares... nothing over a few hundred... to me, that means pikers, there is no real buyer. There are a few bids in the low 90s, but then very little liquidity elsewhere... at this point, because this offer is going so slowly, I am considering going short into the bids at .92/.90 to see if I can scare people out. Just before I do that, an offer for 5000 shares drops to 101.95... this shows me that someone else sees what I see and I'm probably right, so I get short all the stock I can in the .90s; I throw some bids down in the low .70s, and get filled on a few hundred shares, leaving me with about 400-500 left. The stock keeps falling, and now we're at the beginning of candle B. Then, ANOTHER 10,000 share offer (the 102.00 and 101.95 offers are still there) drops down to 101.60... now I know I'm right... then it comes down to 101.50, people panic out down to 101.25ish, and then the stock heads right back up towards that 101.50 level. Once it approaches that offer, there is a print for 4400 shares. This makes me KNOW I'm right. Why? Well, who the fuck is buying 4400 shares? Obviously it's not a daytrader, since buying 4400 shares of ENR with no bid in sight after an over extended move is just suicide... but if he's a real player, a real buyer who wants to buy that stock up, he should take out the whole thing. Afterwards, no one else wants the stock, and as you can see, for the next four bars, nearly 25 minutes, no one takes out the offer. After about 15 minutes, another 3000 shares are taken out (really slowly, in 100-300 share prints, by daytrader/pikers), and I get out of the last of my short at 101.50... when I get out, the last 3000 shares sit there for another 6 or 7 minutes before they get taken out, showing me that the demand situation SUCKS. We're now at point C. I go on to yahoo finance, to make sure I'm correct on the news for this stock, and I am: there is no positive news, so the only reason this stock can be up 4 points is because of a buyer. I don't see a buyer now. The stock, after having taken out the 101.50 offer, trades up towards the 102.00 level (this is the principle I mentioned before, about how stocks gravitate towards huge size), and I tell myself I'll see how it reacts when it gets there. Once it gets there - actually, to 101.95, since the 3000 shares that came in there ahead of the 102.00 offer are still there - no one is buying, there is no demand, and there are very few bids. So I short all I can, a little under 1000 shares, and hold tight... and over the next 20 minutes, when the stock comes near that levle, I short all I can in the high 101.80s/low 101.90s. We're now at point D. My risk on this trade is 10 cents at most: there is no way in hell "I'm going to miss that 10,000 share offer at the figure... if I don't take any of the 3000 shares at 101.95. As you can see, after a little patience, the stock tumbles. Why? The stock was up because of a buyer, not good news... and that buyer was no longer there. He didn't want to buy near the 102 level, and he most likely finished his order at 101.50, with his 4400 share print... that was the buyer getting done, we can assume. As a result, the stock had nowhere to go but down. I got shaken out around 2:00PM in the upmove, for a profit of about a point and 30 cents, but had I not been so unnecessarily tight with my stops and placed it behind 100.80, which was the last real resistance level, I woul have made 3 points on the trade... or 4 points, if I choose to hold it overnight as the down move continued. Attachment: enrtrade.gif This has been downloaded 589 time(s)." Funny how we look at that situation on the chart differently. You traded in the range I would have avoided waiting to see if the stock formed a double top and failed (which it did). The big $ shorting seems to have been made after you were out. But congrats on scalping some $ on that trade.
Here is the true secret to trading, (and for some reason we fight it constantly) TRADE WHAT IS HAPPENING AND NOT WHAT YOU THINK SHOULD HAPPEN.