tampa's "short skirt" trades...

I notice this is a chart of the NQ rather than the ES. You are trading the ES, right?

I put the 5, 20, 60, and 220 avg on a 1 minute chart. Ouch!!!!! That would confuse me so much I wouldn't know what to do!

OldTrader

 

...well, I was just makin' sure that you were paying attention.

(OK, so I messed up - it was my first attachment)

 

Old Trader

You remind me of my mother when I was trying to get her interested in computers. Bah.. Humbug... I think we have a semantic problem. I would define indicator as anything that gives you a clue whats going on so all the things you check each day are indicators of a sort. I know a number of people that use Macd, stos, etc. with good results. I dont use any other than ma's but I do use multiple ma's because I have found a pattern (don't ask) that occurs with some regularity which is tradeable and which I dont always see with bars alone for some reason. I enjoy your posts and have the highest regard for your insights but your persistent denigration of indicators suprises me.


p.s. I am probably older than you are so its not a generation gap talking.

 

My "persistent denigration of indicators" should do little more I suppose than tickle you pink! Think of it, without the benefit of those indicators you may take complete advantage of me!!

Actually, I don't feel like I need them. Take overbought/oversold indicators for example. And in the group you can put stochastics, RSI, there are indicators I used to keep by hand like the advance/decline oscillator, 10-day trin, McClellan Oscillator, etc etc. I've looked at them all, and still do. But it's really easy to know when we're overbought or oversold without them isn't it? But amazingly enough, get them on your chart and the next thing you know you're trying to act on them....and guess what, sometimes they just don't work. Ever shorted a market that was overbought that just kept going? I have...and lost one helluva lot of money doing it.

Moving averages? Yeah, I look at them on daily charts because I know that other people look at them. But again, start watching them too close and the next thing you know you're buying strength selling weakness....a sure route to the poorhouse in my opinion. Worse, you get whipped back and forth.

Most of the time I can get a more dynamic sort of "moving average" if you will by simply drawing a trendline. But guess what, the bible to technical analysis by Edwards and McGee, Technical Analysis of Stock Trends says that the simple breaking of a trendline is not sufficient to give a reason to buy or sell. Imagine what they might say about buying based on the crossing of a moving average?

I don't know many people that are older than me....I'm 57. That gives me what some people call "experience". That means that I've figured out more ways to lose money than most people have ever heard of it. Not too bad if you only do it once. When you do it 2 or 3 times it gets a little monotonous.

In any case, I've used all the indicators, or if I missed one it probably falls into the category of trend following or oscillator...so I've used something like it. They all work except when they don't work. Been there, done that. And I damn sure don't need to put them on a one minute chart to see if they work there!

I've been sneaking up on you guys...I admit it. I've been watching your one minute chart (without indicators). Here's what happens....the futures start down, give a sell signal on let's say the stochastics, which causes some people to act. Then the MACD kicks in, getting more people short. Then the momentum boys see an opportunity and they jump on the sell side. Now we take the recent one minute low out....trigger some stops, get some more people short. All that movement in the futures gets them to a discount, which causes the program traders to sell stocks. So tick goes negative. That process causes IBM and Microsoft to tick down a few pennies.

So there we are.....now everyone is either out or short. That's when I love to get in...when all you guys just got short, with your MACD and your 2 point stops. Ever heard the word "squeeze"?!

One minute chart...I swear. LOL.

Anyway, I have am now growing VERY fond of the one minute chart....but when the trend is up....I love to fade the one minute chart when it goes into one of those famous one minute sell signals/dives. Look back at the last couple of days to see how far any of those sell signals got you, and I don't care what indicator you used.

Nope, I'll watch my bar charts without anything on them. I'll watch where the highs and lows are, the points of support and resistance, and watch how the market itself acts, responds to news, etc etc. Know what? If your moving average gets this thing moving down in an important way, I'll bet I see it in the market....otherwise, I didn't need to know.

Anyway, good luck to you. I wish you nothing but the best with your indicators, and I mean that. They just aren't my personal preference.

OldTrader

 

Old Trader

Actually I owe you. I took 8.5 points out Thursday early and did exactly the same thing Friday when I would have settled for less and I attribute that to some of your recent posts. I trade off the 5 minute chart but enter on the one minute chart so it does have its uses. I have been battling the same problem as Tampa as far as exiting early but am improving. Your contribution is greatly appreciated.

p.s. your just a kid.

 

Good for you! Those are some decent profits...and all you had to do was sit. And that's my entire point. Now here's a confession: I've had the problem myself in the past. It's a common trader problem...we all have to battle it.

Probably my biggest objection to the one minute chart and some of the indicators commonly used with it is that it works you up, it makes you believe you need to DO something.

Here's a little secret. You know what one of the BEST indicators is? Is the market UP or DOWN? When it's UP it tends to stay up. When DOWN it tends to stay DOWN. I'm talking about after it gets open and settles down. Go back and take a look, you might be surprised. It's not perfect....but it's far from the worst indicator in the world.

Within that framework then, getting all worked up over the one minute chart seems to be a little like overkill.

Anyway, glad you're increasing your profits.

OldTrader

 

Two weeks have passed now, with no forward progress to report. On the contrary. Stepping aside, and reading back over the material, one is left with the impression of serious backsliding. This is not an easy admission to make, but it is the only conclusion one can come to.

Along the way there has been some wonderful sage advice. Heartfelt opinion offered by experienced successful traders. All of it was appreciated, and some of it was actually taken, and put to use. But to no avail.

How is that possible? How can that be? Surely the advice was good. Surely the opinions offered were of true value, and of proven merit. About that there is no doubt. Yet instead of progress, there was anything but.

Perhaps you may disagree, but from my attempt to objectively look at the sometimes pathetic record posted in this thread, there seems to be one common denominator: A lack of conviction, or put another way, a lack of belief in the method(s) chosen.

At one point, someone (I forget who) said that it appeared that the trades were taken at random. Do you have any idea how much that hurt? Yet I can understand how the poster could say such a thing, as he was under the impression that I was doing one thing, when in fact I had switched to another.

In the most common and crude terms, this is bullshit.

I am what I am. I believe what I believe. I have the abilities that I have. And there is indeed a place for me in the market place – if only I can come to terms with the above.

It is not within me to trade from a “longer term perspective”. I can not deal with the back and fill of even a fifteen-minute chart. It is not within me to sit through “reasonable” draw downs while waiting for the trade to “work”. Call it a character flaw, or call it what ever pleases you, but it is my reality.

Of course I would love to walk away with a ten point score from a single trade, but the time and risk required in such a move are intolerable.

My world is to be found in the one-minute chart. My ideal profit is in the low single digits. My preferred risk in the market is measured in seconds – a few minutes at most.

I discovered all of this quite some time ago. And I taught myself how to bang out trades taking a half to three-quarters out with reasonable consistency. I also noticed that many, if not most of those trades ran for two or three points. So I attempted to increase my objective. That’s where the problem came in. It was very hard to sit there and give the trade time to work. It resulted in more fear and discomfort than I cared to deal with.

Overcoming that, and that alone was the thinking behind this so-called journal. Along the way I have done many foolish things, as well as making myself look like a fool. Need I tell you that this does not please me.

I have also attempted to show a bit of good humor, and complete honesty in the journal entries. I assume that I have accomplished that because of the incredibly high number of “views” over the past two weeks. And that is indeed flattering. What is not flattering is the impression I have given many that I haven’t a clue as to what I am doing.

I certainly don’t blame anyone who came away thinking that – at times it surely appeared that way.

So what started off as a lark, has turned into a near nightmare – not to mention about a three grand loss. What started off as a purely selfish exercise has become an embarrassment. What started off as a good idea has become a considerable setback in confidence and discipline.

It must, and it will be corrected.

 

So what is your plan for Monday? I feel pretty much the same as you about time frames. I do not like wide stops. I have moved off the one minute chart to the five, though, to find my setups. Once it shows up there I switch to the one minute and look for my entry with the same tight stop I've always used. If stopped I'll look to reenter. The difference is that if it goes my way Im going to ride it longer if its early in the day. Later in the day I stay in the scalp mode.

 

I have but one option available to me. It can be summed up in three words: Back to Basics.

At this point in time, the only thing that matters is regaining my discipline and confidence. I will concentrate on what works best for me, with a major focus on trade selectivity.

I suspect that Monday will most likely be a narrow range day, with decreased volume. Therefor, good setups may be few and far between.

 

Your initial troubles pulling the trigger and your meltdown day would suggest that you don't have much confidence in this setup. Of course you didn't really test it after redefining the method.

Do you intend to keep trading it or are you moving on?
Personally I've only been paper trading lately. It just makes no sense to trade when I don't have a setup i really believe in.

Assuming you stick with this flag type scalp setup, I see two distinctly different versions as you've explained. One entering before the price turns and the other waiting for the price to turn. I have a bad habit of overcomplicating good simple plans, but i'm wondering if you will add any filters to this setup or trade it the way it is.