<i>"So do you use an anchor and entry chart, or just one chart for your trading?"</i> I watch two charts for any symbol I'm trading. As purely an intraday trader, the filter chart can be 5min to 15min or a similar volume / tick chart setting. Main thing there is I want to see the bigger picture for gaps and various S/R areas at a glance. The filter chart shouldn't require more than five to ten seconds of viewing to make decisions from. Longer than that, and we're trying to see things that don't exist. The smaller chart can be 610(ish) tick on down to 89 tick, 1min, 30 seconds, etc. Really doesn't matter... trader's choice. That chart identifes the smaller patterns = waves unfolding visible in the bigger chart. * Trading is never black & white. It is one big kaleidescope of gray tones. The longer I'm at this profession, the more open-minded and accepting I become. My personal charts only have tools that measure support and resistance created by prior price action. No moving averages, no oscillators, no tick - trin - adv/dec - volume or anything else. Just lines on a chart created as a direct result of historical price action. Some may call them "indicators" and others may not. To define exactly what an indicator is would be yet more gray-shade semantics. A close friend of mine attended a 3-day workshop with Constance Brown several years ago. At the time she was managing accounts somewhere in the $100mm range if memory serves me right. She traded the S&P and Bond futures. Her chart tools used to run a nine-figure account were Fib studies, Gann and macd. A personalized arrangement of those tools is what she use(d) to see the market and make trade decisions. I'm not sure how many ET readers work bigger size than that, but it's a fact that a number of "professional" traders rely on various indicators to see the market. Does that mean they are lessor or inferior to traders who work with naked charts only? Hell no. The important thing is for each trader to use whatever means necessary to see price action clearly as possible. We are all at vastly different stages of experience and skill level. I know for sure that traders just learning to read pure price action alone on a chart will definitely, without a doubt see what they want to interpret there. Nothing wrong with trading price action alone. Nothing wrong with trading one chart alone. Neither of those approaches are superior to any other. Just personalized, that's all
Thank you for your chart, this is what I thought she meant but wasn't sure. I myself can't mentally trade any S/R and I wait for more confirmation (espcially DT's and DB's at the S/R or failure breakouts), but it seems to work for some of you so I wish you the best of luck.
Austin, I suggested her the 5 second chart (with volume) to look inside the entry formations of the 10,000 but she thinks multiple charts will just reduce concentration so scaling into her entry is the only thing I could think of to avoid the no fill runs that screw with her mind. Personally I like to zoom into the entry formation to TRY to get the best fills possible and obtain an overall feel of the formation itself but at the same time I also scale into the entry because sometimes we just don't get our "wish". Attached a very defined bullish 5 sec PA inside a successful bullish entry formation of the 10k. You can clearly see how price is doing what is "supposed" to do assuming you picked the long side in your analysis. Anek
Hi Anek, Always a pleasure to read your posts. I'm right now in the middle of deciding what's better, scaling in or using two timeframes, one for formations and one for entry, can you please elaborate on how you use the 5sec chart?
I use something a little different from what is talked about here but had not considered the entry process you refer too. Thanks for the input, much appreciated.
Amitman, I don't use the 5sec chart interval myself but I can perhaps help you to understand the need for using a shorter chart interval. Let's say that you watch a 10K Vol chart and begin to see signs of Susana's 3BR (also very similar to an Evening Star/Morning Star Candlestick pattern) forming. A much shorter chart interval will confirm whether there was a significant change in market structure (LH's and LL's taken out to the upside and vice versa). It also confirms just how solidly S or R has held by the number of times price penetration was contained or allowed. A benefit of the shorter chart interval is earlier timing of entries while the 3BR is forming on the 10K Vol chart; thus possibly allowing for more favorable price runs if they exist. But all taken with far less Risk being as though you'd be risking fewer ticks on either side of S/R during entry. I hope that this makes sense. Much luck to ya, Tex
The 5 second chart is very fast and unless you have mastered the PA of the slow charts it will confuse the heck out of you so I strongly suggest you give it a lot of screen time. Some would even call the 5 second chart the "tape" nowadays. I won't even touch volume in this illustration that's a whole new chapter but this should suffice in what to look for when you are looking to scale into the entry or close it altogether to reduce risk. Hope it helps and remember, lots and lots of screen time when practicing on this baby. Anek
I use the Ameritrade platform just for charting. In the morning when there is less daily pattern to look at, I use the 1 hour chart, then for the 2nd hour I use the 2 hour chart. If I still trade after that, I use the 4 hour chart and open a chart with the 1 day chart to check if I might be getting caught in a smaller trend within the larger one.
you could use the same principles of PA to stocks less than $5 with avg. volume > 2mm. price would react the same way? The only thing I can think of this is those stocks would be more "irrational" and would adhere less to S/R. is this correct?