Here's my advice to you. If you do not absolutely need to trade to make a living, if you think you have an alternate way to making a living other than trading, do that. There is a reason over 95% people who start down this path fail. I know you probably wont listen to me because I didnt listen to those that said the same thing to me when I started down this path a long time ago. Even if I am successful at this profession, if I could go back and change things, I would.
OK ... as a previous poster mentioned - you must move further "above" the Price Action. 1 minute charts are
I use 5min, 15 , hourly and daily.
You must know the context of the market.
What happened yesterday? What happened in the Globex session?
Once you have a feel for what the macro forces are trying to do, it makes it much more simple to then
"trade with the trend" or the sentiment. Why? When you do latch on to a mover, the impulse will be
much stronger - quickly putting you into the money and BE / profit. Then you can begin scaling in.
Lose all the indicator voo doo ( except the price pivot and volume type I will mention in a minute)
and begin learning Price action at support and resistance levels. This is the key
to the whole game. Candle sticks are very telling and a language all their own.
Learn what consolidation looks like when it forms at SR. Learn how Volume Profile interacts
with the reversals and pull backs. You will discover an amazing pattern - Price reacts to
High volume nodes AND Low Volume nodes. I called them the "top of the mountain", "edge of the
mountain" and "in the valley trades" before I even knew there was a technical term. These were simply descriptive terms of what Volume Profile looked like to me turned flat - mountain ranges.
Learn to place limit orders at the "outside" edge of these areas to bet on reversals. or "inside" edge if you are betting on continuation ( a pull back "in trend") . Let price come to the level "YOU WANT". My gauge for how far
I place the order "inside" is whether my stop will remain "outside" the PA and remain within my risk tolerance.
The farther "inside" , the better to get filled but more risk. ... simple..
If you are wrong , the stop is tight. If price breaks out hard and stops you out- use the "what was once resistance, now becomes support" gag to immediately place a limit order at the top of the consolidation, waiting for
the very common pull back test. ( example giving is for a bullish move)
1 to 2 ticks above works well to make sure you get filled on a classic start to a trending pattern.
This leads me to the second trade I always use. Same concept, different application.
The Stairstep trending pattern. As soon as a third layer of HH, HL or LH, LL forms -
A trend is confirmed. - Your goal is to enter on that third
pull back, which should be near the bottom of the previous mini consolidation area ( 2nd tier)
in the down trend - in this example.
Add to your position in the same manner.
ONLY AFTER THE FIRST TRADE IS SAFE AT Break Even / PROFIT........ NEVER ADD TO A LOSER.
Boom - your in the Break out on YOUR terms.
You mentioned chasing. This is very common. It was my nemesis also, and was directly linked to the "fear of missing out"
After two severe meltdown days in a month, in which I found myself chasing "inside" PA (not trading the edges),
I stepped back and watched. The live account was armed, but I just watched ...and watched... for days... then weeks....
I used to get very depressed and angry when missing a big move and would shut it down. (which you must do the second you lose your cool)
Now I was learning.
Yes, the markets still give opportunities after a missed move !! .. all day !! all week !!
I could now actually learn how a strong move is structured - how to get in (never pick a top / bottom on a strong trend - NQ has trended for hours )
I watched until the "fear of missing out" demon was crushed.
You must never chase.
"chasing" should be relegated to entering on retracements if you missed the source. Check your Volume to make sure you enter at the Peak or
beyond. These little volume nodes will form on strong moves, giving you wonderful pull back areas.
Trading is very simple, but it is the hardest thing I have ever done. Why?
Because the fear of losing money / being wrong / missing out, cloud your judgement.
and what is that? Emotions. The best traders have ice water in their veins.
Small winners and losers all day then boom, you latch on one that moves.
You add to your position throughout the day because it never seems to end. !! Now you have thousands $$
This leads me to targets. After scalping my early trading days away -
needing a 50% win rate to make a living, I am firmly convinced the
following classic trading phrase is the absolute Holy Grail.
"Cut your losses short and let your winners run" You must have a tight - Price Action based stop
that is absolute. (In my case "outside" of each swing)
The targets are a whole different bag.
a.) You must give yourself enough room to scale into a big mover - and you simply NEVER KNOW when these will happen
Never take yourself out of a break out by having some random, close by target.
Look at your daily and hourly charts. - Where COULD price go??! shoot for the swing areas on hourly and daily charts just like you
would a 5 min chart. They are all the same. The only diffence is how long it takes to get there.
b.) If you must put in target, use the price pivots. Shoot for something logical that will make your earning requirements in the one trade. Target the R1 ,2, 3, 4 / S1 , 2, 3, 4, levels. Think big. The markets always surprise me with how far they run.
c.) I am a big fan of trailing stops. I am here to make money. Not give it back.
I have found that a trailing behind each 5 min bar works well until the first Pull back. At which point I will start hiding behind swings / volume mountains and begin scaling in. If a 5 minute bar pulls back enough to "envelope" the previous bar - 1. The trend is still in question and 2. I have bagged a few ticks.... - next setup.
I will take small winners all day to protect my account. Even if it means a move takes off without me.
See you at the retracement, my friend.
PROTECT YOUR CAPITAL
Massive risk / reward ratios
Take what each move is willing to give by trailing your stop logically at Price Action / volume based levels.
Patience - you have to wait at least that first 5 minutes to move your stop. That can seem like an eternity when starting out !!
I have found that actually waiting until after the first pull back tests an area is better for placing an order
because the the later / last test is the
one that moves off quickly- taking all risk with it
Stay in the Game
Watch the completion of every 5 and 15 min bar / what are they telling you? Even the slightest HH / HL is a clue .
Wait some more.
If you wait too long in consolidation and price moves off with out you, don't freak out !!
stay in the game and look for that first quick pull back to the edge of the area you just left from.
Is it is too strong for that?
.. great !! the market has tipped it's hand
- The trend is known . Enter on the edge of the first 5 min pull back bar.
Typically, that will be the only shot you get. The big
classic pull back may never come. In strong moves, the retracements are typically the width
of the initial pull back bar extending
to the top of the previous pull back range (bull move) if it starts a grinding trend up. You must get in !!
You must be in , to win.
I enjoy trading very much. It has made me a better person because it has taught me to control my emotions like nothing else has. I disagree with the previous post that said to quit if you have something else.
Nothing has the open ending reward of trading. Nothing. The reason why the %95 percent fail is because they let there emotions
take control . Humans are emotional . Therefore, humans ,normally, will lose is this game.
I would say that the 5% figure is common with most feats of greatness. Being a profitable trader is a true feat of greatness that is truly worth striving for - IF you heart burns for it... you can't stay away from the screens... you dream of trading..... you think about
it constantly.... little sleep . little of anything else.
Exactly when I was a recording engineer ..... you are either all in , or all out. ...
As you become expert, cutting back time spent would be prudent. But not in the beginning. You must burn
these lessons to your core. Become second nature with price action
You make the call
Get Comfortable with being Uncomfortable.
You must be cool and calculating. ... never lose your cool - the day is done the second this occurs. Walk it off and think about tomorrow
Stalk the trades - wait ...wait..... watch , learn .... thousand of hours. ....
Below are the "indicators" I use. They are all price level or volume based. The bar timer is essential so I will watch the completion of each bar.
My absolutely , cannot live without, are -
anaPivotsDailyV42 ( also PivotsWeekly for the hourly and PivotsMonthly for the daily charts )
anaCurrentDayVWAPV42 ( for keeping track of the center of PA - the vwap -
and the incredible VA cloud calculations and trend channel)
The prior day close - Y close ..... This will say if it is a buying day or a selling day in NQ
The POC is the most current, viable pivot. The London and New York opens will constantly test this level before moving on.
The next most reactive pivots are the the prior day high and low
and the Support and Resistance pivots - R1 2 3... / S1 2 3 ...
Price, levels and volume.
All the rest is voo doo.
Below is the first thing that popped up when I opened Ninja.
Notice that you don't have to look far to find trades.
( I didn't have to look at all )
This PA happens all day - Every Day.
This example is The Over Night session around London time.
My favourite. ... Very easy to read, stops are tight and you can often catch nice runs into the
New York open that can be held through - resulting is shocking profits.
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Good Luck and never give up...
"Life On The Edge of SR"
The following 12 users say Thank You to tderrick for this post:
Since AJ did a good job with showing you one possible road ahead, let me show you another possible road ahead by backing up my advice with evidence. When I see PMs like these, it breaks my heart. Therefore my advice. The choice, of course, is yours. Consider yourself informed.
The following user says Thank You to LogicalTrader for this post:
The published , supposed odds should be warning enough.
Anyone with the guts to try, should be given all the support possible. You keep warning all the newbies
of ruin, I will support them with other possibilities. Most of us went through very hard times learning this gig.
Realistic is one thing, Negative is another.
You posted supposed evidence of a cat in pain, like we all have been.
I can show you evidence of successful traders.
Winners and losers, baby .... play the game.
"Life On The Edge of SR"
The following user says Thank You to tderrick for this post:
no matter how you look at it, you have to learn before you earn. this pertains to any performance related endeavor. the structure of the learning process is of critical importance. most learning efforts fail because there are too few cycles of "performance-feedback-goal setting-corrective effort, for the time invested in the period of study, and no clear progression guiding the content of those cycles. there has to be a structured process of expertise development to guide one from the novice stage, to competency, and on to expertise, which includes market knowledge, mental and emotional preparation, methodology, and money management. and, it must be relevant to the current trading environment- not yesterday’s.
this forum operates on some level where useful information is transferred from the knowledgeable to the uninitiated, but all too often it functions more like a support group. people believe what they want to believe, see what they want to see, and hear what they want to hear. they tend to avoid information that contradicts what they already think or believe, tend to seek out other like-minded people, and rarely venture out from their comfort zone. this herding behavior is evident in the collective participation in individualized threads and its participants' dogmatic adherence to it's precepts. the cult-like phenomena fosters a "follower mentality" that inhibits one from reaching reasoned conclusions based on a reasoned process, and from having an "open mind". it only serves to reinforce a self-limiting behavior and a parochial view, that is not much different than the one-sided, collective sentiment of market participants.
the result is that 80% of the ideas that are freely exchanged on this site are invalid. they are misguided, anachronistic, simplistic, irrelevant and often just plain wrong. the dilemma is, how does one separate the wheat from the chaff. logic would dictate, and it is confirmed from my personal experience, that the best place to seek knowledge is from someone who is extremely knowledgeable and experienced. so for starters, i would question the quality of the sources of the advice you are seeking, and look to those individuals who have already, successfully accomplished what you seek to achieve.
even after +40 years trading professionally, i still seek to improve my trading through the acquisition of market and trading knowledge, especially in the areas where i feel i am ignorant. i accomplish this by exposing myself to people that are even more experienced and knowledgeable than myself, experts-in-the-field, if you will. at the same time, i continue to be a student of the markets and trading. it is no different than being a doctor, lawyer, or accountant; knowledge quickly becomes obsolete and must be kept up-to-date, so i strive to read all the topical and relevant material i can find. the problem is you can never know the accuracy of the information you receive, nor the motivation of it's provider. behind any source, may hide self-interests, ignorance, or bias. the value of any piece of information you read or listen to, must be questioned, and the noise must be filtered out. this an acquired skill unto itself, (like being a good researcher) that come with experience, and trial-and-error.
i realize this is very theoretical sounding and not very practical in nature, but it is not without its reason. learn to think critically (& on your own) and don't be a follower. the way you choose to learn and acquire expertise in trading is as important as the actual process. so, give it careful thought and approach it logically - develop a plan and then execute the plan. forget about popular opinion and don't take anything at face value. organize and filter your ideas and determine what is relevant, but allow conflicting ideas to generate new conclusions. keep in mind, that in theory, there is no difference between theory and practice, but in practice there is.
Last edited by tigertrader; February 8th, 2014 at 03:14 PM.
The following 17 users say Thank You to tigertrader for this post:
@tigertrader makes a post that is worth the $5,000 you paid for your last mentor, or system with the secret settings. The 3rd paragraph might be worth a million bucks. This should be required reading for every member. Thanks G
The following 6 users say Thank You to wldman for this post: