Excellent article Toast........Now if i can digest it all........My buddy was telling me about those "bait" orders u see and i dont know if i will be able to notice them, but this at least gave me some valuable insight into their mindset and confirms some of my initial thoughts. Thanks!
Interesting points in this thread. About the idea that trading is a zero-sum game and one is hoping some other fool will take your trade. I try to not think like that, it gets me too depressed and see day trading as maybe some evil gambling game I've heard other people call it with myself contributing as a guilty party having signed up as a retail trader. I would rather think as a retail trader among millions I am along with others providing liquidity to institutions and corporations who are positioning, purchasing futures contracts for needed resources for their businesses, and hedging possibly on higher time frames. And that we retail traders are rather riding on the coattails of big money who are accumulating and distributing their positions and making the real moves of the market.
About the idea posted that "most" of the trading is not done using charts are we talking about professional and commercial traders bidding and selling block orders (over 150 contracts) for their respective firms with some of them on the CME floor, or the majority of retail traders? If so, how are they doing that? Mainly watching the tickers and volume?
(I just saw the article through your link Dionysys, thanks. The "further reading" list in the article is helpful too.)
I would agree the R:R ratio can be fluid. Depending on the price action I would trail and adjust my stop. When a volume indicator ,for example, shows more contracts are going the opposite way at this point, or for another example, a big bear candle broke through the bottoms of more than a few small bull candles or dojis, I would tend to get out sooner and not wait for price to return to that one or two more ticks to a target, unless I can gauge the trade could continue on for more profit with more compelling reasons. It's the same discretionary quandary, how much to give the trade a chance, should the stop stay the same all the time, or when to get out with profit before the trade sentiment completely reverses with no hope of follow through or continuation. And there is always the important goal of limiting losses and not losing money during the session, that I find myself having to settle for a bunch of scalps much of the time. And of course price could continue on after one gets out from a head fake, and then it goes several times farther in the direction of the trade after the fact , and all one can do is watch it..
I've been a full time retail trader for three months now. I mostly sim only on historical backplay now. So I'm still a newbie in the live trading retail world, though I had been simming and had live mixed results in positional stocks and options trading for a few years beforehand. About dealing with emotions during live trading, the emotional ups and downs are tremendous. For example last week, I had a loss within 10 minutes , that got me upset enough that I doubled my contracts and went for the retrace which was probably not wise trading. I did get what I lost back and more after 15 more minutes or so, but the stress was more instantaneously emotionally acute than any other activity I've experienced except for maybe a physical scare such as an impending possible threat of major injury or death like from a possible car crash, roller coaster, plane dropping in turbulence, or fight, or someone sneaking up on you with "Boo!" when the heart felt like it stopped. (I would never do bungee cord dropping, or sky-diving. I don't trust the "safety" odds).
Last edited by Cloudy; November 6th, 2011 at 11:55 AM.
Hey guys.....just thought id give you my initial results on my live trading .....yesterday tried to watch charts, my moving averages, and looked for setups......made three trades....1 correct, 2 wrong....lost 50 bucks plus commisions.....This morning just watched price in cl......made 6 trades quickly buying and selling...moved my way 5/6 , quickly came back my way on the incorrect call....up 580 minus commisions.....really not sure what it all means other than i dont know how to analyze very well yet...happy trading..........bottom falling on oil as i speak.....
Update: Caution to new live traders..learn the keys VERY well before u start....I hit "sell" instead of "buy", didnt even realize it at first..when i noticed I sold agn to try and cover and got stomped! Wonder if my broker will reimburse me for such an honest error.....grrrrrr
Last edited by skinlanta; November 8th, 2011 at 02:10 PM.
just my 2 cent's you dont really need anything on the chart to trade,what you need indicators for is to teach your subconscious mind what it is suppose to be looking for in order for you to make a informed trade.after your subconscious mind is trained you only really need to know what time important news will occur and not trade at that time and you can also look at vol,if you have studied that and understand it. i normally just use a ma so i can see where the balance of the market is and then just trade...sharky
KILLING THE MARKETS DAILY
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I would agree Sharky, that training the subconscious has a lot to do with successful discretionary trading. Kind of like driving a car or learning to play tennis well. Skills that are partly active subconsciously but yet require precision and experience from practice.
Btw, are you still using Supertrend arrows/dots in your "real world Sharky" method? or is that template version mainly for beginners? I like the use of the jhltdsetup lines as a filter too.
70% of trading is done by computers and that is especially true of the big firms that move the markets. One thing is pretty obvious for anyone who has traded long enough is that support and resistance is clearly defined at all time levels (minute, hour, day, week, month) and that is only apparent with charts, unless one has a supernatural memory. Trading without charts is a scalper's game, but talk to any broker and they will tell you that the retail scalper is the one that invariably gets wiped out. So in order to be consistently profitable year in and year out, retail traders need a strategy that enables them to go for bigger moves than scalping. That usually requires charts or some form of written data. But to go hunting for 5 or 6 ES ticks with a DOM histogram or T&S and a standard retail size account is not a long term profitable strategy. Ask your broker, he will confirm this.
Basically, you are not going to beat the computers and big traders at their game over the long run. Trade the bigger moves, that is your only advantage. And that it is really hard without charts.
Last edited by crosscreek; January 1st, 2012 at 11:38 PM.
This is true - but the fewer intraday swings an instrument puts in, the less you need a chart.
For example, the US treasuries can be day traded with just a numerical volume profile on the DOM. The CL in my opinion cannot be traded that way. Perhaps the ES can but if it can, it's not something I can do.
For me - US treasuries is DOM only. ES is chart + DOM for the reasons you mentioned above - I have the memory of a Goldfish.
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I would agree that Retail Scalpers put themselves at a disadvantage to the machines by trading a similar strategy. However, I know two traders who have done well scalping. One guy worked in the CME pits in the 90's and scalped up to a seven figure income. But that isn't an example of a Retail Trader. Automation took his job with most of the others on the floor, and he hasn't made the trasition to charts successfully. But he's working on it. He's been working on it 5, going on 10 years. The othe scalper I know has made up to 100 tics in one hour scalping. That's not an average, that was her best. She doesn't have much draw down either. She even had C# code written for her method. But she is going back to the charts. Out of all of the current traders that I know who are profiable, only one is a scalper. And she is going back the the charts. There is less stress and more profit using charts, I think. But I'm just a Duck, with a memory slightly larger than that goldfish.