HI Perry. The MACD setting you mentioned yesterday, are you just using this as confirmation of your trade setups, or for some other purpose? I addes it to my charts, it looks like a good confirming indicator. Thanks.
1. could you elaborate on what you know about "market activity" or how or what you use to suggest when is the right time to trade and when its time to stand aside? I notice your yellow line appears to be about 8am?
do you just trade around NYSE pit hours? or is there more to it?
2. Also I like your use of the 20 range chart. Having just looked at it in relations to the 4 range that i am using, it appears that it could take several hours for a method 2 to appear on the 20 range.
Is this what you have found and is it the only way you are getting possible trade signals (for the 4 range). I ask because it appears to me you could be staring at a screen for hours before getting an appropriate signal on the 20 range?
My simple mind might need some clarification concerning the usage of the MACD.
I am a little confused as to whether or not you are actually using the MACD in you setup now. As I think I understand you presented the MACD as an option???? Or have you replaced any of the original indicators with the MACD? Or are you using the MACD in addition to the origianl indicators?
These questions may be mute, but I justed wanted to be clear.
Thank you for your patience and a great trading thread. The setup fits my style!
I do NOT use the MACD. All i did was to answer someone how Boomerang traded, and I showed that it can also match my platform. PLease read carefully my answers to others. If I will change certain things on my platform I will make it official.
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What I mean by knowing mkt activity relates to just a ton of experience, and what stuck with me from my mentor. There is far too much to tell of this, so you'll need to gather your own mkt sensibilites as you make note of how the mkt behaves at certain times of day, around certain price levels, news events, time of year, volume, patterns, retracements, sup/res etc... These things combined with a good entry method such as Perry's gives me an edge. I start watching the mkt around 8 - 8:30 am ET to get a feel for what is happening, but I rarely trade before 9:30.
Yes, it can take hours between trades sometimes if I don't see a very compelling setup. You may notice as you gain experience that you don't want to be constantly trading in cash. It only increases your chances of making mistakes. If I'm good and "green" by noon, I seriously consider switching to Sim or stopping for the day. Also, if I'm at a loss for the day that is 50% in size of what I would usually expect to make, then I stop trading in cash to avoid "revenge trading".
The 20 range charts work well on a trend day. I've also been evaluating a 10 Range chart. It has some advantages, and it's almost tradable itself (stopwise). I'm not ridgid in my approach to trading, so, for instance, if price backs itself up to a fib retrace area that I like, and I get a good 4 range entry, I don't need to wait for the 20 range to confirm. I just look for multiple factors to increase probability and the aforementioned 20 range setups are another tool I use. You need to understand that there are trend days and range days. You must use different strategies to trade those days, otherwise you'll make good money some days, and give it all back on the others.
I have no problem standing by and NOT taking a trade in cash. The times I've lost the most is when I've been too eager to be in a trade. It's all to easy to get carried away, and before you know it, you're staring at a big loss for the day. Nowadays I want to see high probability on my side. I want to be and stay "green", and that's the best way I know of to do it.
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Beth thanks for the info. one of the things i seem to struggle with is the taking the " right " trades and staying out of the Choppy sideways movement.
I had just started to get my head around the DM Plus indicator that Perry uses and my trade entry is starting to improve.
Now I read this info and was looking at the 14 period DM as opposed to Perry's 5 period and was hoping you could have a look at the attached chart and comment?
It appears to me that when the ADX is trending below 25 (on my attached chart) that price movement is in more of a trend and when the ADX trends up and crossses above 25 that the price is a little more choppy.
I note in the article you referred to, that when the DM+ or DM- is above 25 (on their examples) that there is more volitility and opportunity to trade.
You will see on my chart that although i have set my period to 14, both the DM+ and DM- spend most of their time above the 25 mark, so my chart doesn't reflect what their shows.
However I am more interested in your thoughts about my observation about the ADX being below 25 (on my chart) and indicating more of an opportunity to trade?
I'm not sure if I'm seeing something thats easy to see in retrospect or something I should investigate further?
As I said earlier, I am struggling to choose the " right" trades and filter out the chop and i think this may help me. Also it may allow me to stay in the trade longer as i also seem to have my second contract stopped out on pullbacks because I am still experimenting with appropriate stop levels for my trades.
Hope this ramble makes sense
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Thanks for your comments Glen, The more I read on this forum and other websites I am feel I am gaining an understanding of the market activity. Just after I posted the question to you I found another website called Babypips I think, which has some good info on it as well.
Being a newbie and only having traded Sim I still have that urge to get carried away as you say, however I am in the middle of doing a comprehensive trading plan (found elsewhere on this site) and along with a comprehensive journal that I am starting to keep, I am confident i will be able to trade profitably and wisely