TA question plus some psych stuff

Discussion in 'Trading' started by neo_hr, Jan 20, 2002.

  1. neo_hr


    Pure and simple :

    TRADING STYLE : 1-4 day swing trading
    TOOLS USED : Ensign, daily candles, 18 SMA, vol, eventually BBs

    How far back is important? I will download my daily data and start scrolling throug h charts, draw s/r lines etc. but then I get confused because something makes me look deeper and deeper back into past. Also I start turning weeklys on and off. So basically my Q is how far back should I go?

    Second problem is more psych stuff related... I cant seem to concentrate on a single pattern and choose say ... 3 stocks to watch the next day in realtime but I rather look at like zillion dailys and come up with 20ish candidates...hrm...:( . Also, I tend to see "something" with every stock instead of passing the bad ones. What would be a better approach... I mean ion developing some sort of a feeling for stocks that are "doing something" vs. ones that are not worth your time?

    THX and great trading tomorrow!
  2. "I cant seem to concentrate on a single pattern "

    Then IMO you have a real problem. I have been at this swing trading thing for two years and I can't interpret charts "on-the fly".

    It took me months to focus on one thing that works for me trading long and just as long to get a grip on a short setup. I feel it is simply too difficult for anyone without a lot of talent and years of experience to react properly to a wide variety of situations like gaps, breakouts, pullbacks, exhaustion plays, knowing when to fade etc.

    The basic principles of any setup can be explained quite simply, but I believe the devil is in the details and it is not until you have a lot of experience with any setup that you will be able to understand the subtleties and exceptions that cannot be simply explained, but which are probable essential to success.

    I know you spent some time looking at Tony Oz's Bottom Fisher and Skyscraper setups. Why not resolve to do nothing but study and trade (small size) those types of setups until you discover the details of what makes some trades successful and others not. Resist the temptation to trade other types of patterns just because good trades don't appear for your preferred setup.

    The market is a very bad place to behave like a kid in a candy store, rushing here and there taking a some of this and a bit of that just because it is attractive to your inexperienced eye.
  3. duff

    Great post.
  4. neo_hr


    MAN, YOU COULDNT HAVE NAILED IT BETTER!!! I wasnt too sure about how I should phrase my question but this is it! Geez... hrm... right a kid in a candy store. Yes, I tried Oz setups and I really I mean REALLY tried to learn the details etc. I even had an online friend of mine write me a business plan and sh** but It just doesnt work for me, I end up missing the move as it often happens on the open, Or it gaps or something and besides I feel it is really a discretionarty setup(s) AND I DONT HAVE 15YRS EXP. IN THE MARKETS.

    Hrm, guess ill have to work on it... how many charts do you screen on a daily basis? And how long does it take you to "do" one? :embarrased: this sounded a bit rude ?!

    I think I will focus on simple pullback entries (bear/bull flags)

    THANX man and good trading!
  5. neo,

    everyone is wired differently.. in basic psych terms there are 4 temperaments.. melancholy, sanguine, choleric and phlegmatic.. each temperament places a different emphasis on task/people and outgoing/reserved.. we are all made up of a mixture of these but generally have one dominant trait..

    someone who is likely more melancholy like duff, would tend to be a critical thinker.. someone who wants to delve into the details.. basically, a thinker type.. what this has to do with trading is this.. when duff sees a chart pattern, his mind automatically begins looking for ways that it is different from all other chart patters that he has ever seen..

    someone who is likely more sanguine/phlegmatic like yourself, would tend to be more of a social thinker.. you have a problem, so you log onto elite and ask someone for help.. you need a business plan so you get a friend to help you.. generally a people person.. how does this relate to trading? well.. when you see a chart for the first time, your mind automatically begins looking for ways that this chart is similar to other charts you have seen in the past..

    and thats why you see a familiar pattern in every chart, and duff might flip through 1000 before being able to find one that looks right..

    the key is to understand how you are wired and learn to compensate.. when you look at a chart, first you will notice something similar.. but then ask yourself (and this will seem awkward at first) what is dissimilar.. spend a few minutes identifying just things that are different.. soon this will become a habit and you will find your trading is much more selective..

    hope this helps =).. good trading..

  6. tuna


    Hi Neo i go thru heaps of charts as well..differant explorations for this and that..i weigh them up... if i like one i put it on the short list.
    Hey if you come up with 20 enter them into your quote screen,set an alert on a price below where it would fit into a buy for you or maybe where it takes out resistance.
    If the price alert goes off go take a look.
    I don't think theres anything wrong with having your options open.....Hell the 3 that you pick may do nothing.
  7. neo_hr


    K, guys fwiw here are my plays :





    ***bottom fisher***




    Im not gonna post entry/exit prices as theese will be different for different people but ill use 30 min charts to find theese. Good night all,

  8. Quick, you are right that I am a critical thinker. I was trained as research scientist and critical thinking is an essential component of that trade. You never accept anything at face value without considering other alternative explanations and checking the experimental evidence very carefully.

    However, your corrollary is incorrect. I actually look for patterns that are as similar as possible to those that have been successful in the past. Once in the trade I probably revert to the sceptic thinking again, checking for flaws and things that don't look right as the trade develops.

    Neo, at any time I may have between 70 and 300 stocks on my long watch list and 50 to 150 charts on my short list. It takes perhaps 20 minutes to flip through them to find those that are superficially attractive for the next day (perhaps 8-25 of each) and perhaps another hour to study them in a bit more detail and reject some. I don't do in-depth analysis of how I will trade each one. Instead I just flip through them in real-time the next day looking for the kind of behaviour I am seeking, which is a move in the right direction on a volume surge. Therefore, I am keyed on one simple thing, not a multitude of considerations.

    "Yes, I tried Oz setups and I really I mean REALLY tried to learn the details etc. I even had an online friend of mine write me a business plan and sh** but It just doesnt work for me, I end up missing the move as it often happens on the open, Or it gaps or something and besides I feel it is really a discretionarty setup(s) AND I DONT HAVE 15YRS EXP. IN THE MARKETS. "

    As nobody is going to give you a foolproof mechanical method for trading, you have only two hopes. You either learn to become a discretionary trader or you stop trading now and invest hundreds or thousands of hours searching for your own mechanical method.

    How long did you work with the Oz setups? Remember I said it took me months to learn how to trade long. If you didn't put at least a couple of hundred hours into studying the two Oz setups day after day after day, saving charts, making notes, etc., searching for common characteristics of the good ones and discovering what to do in those that looked good but turned bad, you didn't try hard enough.

    Why are you still going with four setups rather than 1 or 2? I started out trying to trade four long setups, it was too much for me to handle, and it was only when I focused on one that I started to have some success.
  9. Qwik

    Nice post...........

    How do I rate? And is there a way to tell easily for anyone a test?

    Dufferdon also nice post and I'll give the same advice to ALEX

    Choose just ONE pattern and get to know it really well.

    Robert Tharp
  10. neo_hr


    Thank you guys, for advice and effort put in! I hope ill be able to return it someday...K, Ill focus on ONE thing and stick with it even if it kills me :p

    Have a great trading today!
    #10     Jan 21, 2002