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The Beauty and Logic of the 6E
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The Beauty and Logic of the 6E

  #21 (permalink)
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Bravo Aragorn,

Brutally honest post, well said. I've been tracking your journal (as I trade the spot EURUSD) and am enjoying reading it agreat deal.

Don't be too hard on yourself. The beauty of trading is that tomorrow starts afresh and today will just be one of thousands of days in your trading story.

Good luck to you

know thyself
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  #22 (permalink)
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July 5, 2012

This is today's screenshot of the USD (DX) and the Euro (6E). Note the moving averages and where the levels and price traded around them. The Dollar is a critical component to understanding the Euro. I am going to be most interested with how the Euro responds when the USD trades at 82.860 and 82.785. I need to mention there is a possibility it may respond around 82.810 but the stronger levels will probably be 82.860 and 82.785. My job is not to predict. My job is to let the Euro and price dictate. I have several levels on the 6E as well but as there is no telling where the Euro will be trading when the USD gets to those levels mentioned I don't want to just throw out a bunch of 6E levels.
On second thought, because I hate after the fact kind of posts I'll mention three zones: 1.2414-1.2417; 1.2425-1.2429; and 1.2436-1.2440. Those will be the areas I'll be looking at especially when the USD trades at it's levels.

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The Beauty and Logic of the 6E-7_5_2012.jpg   The Beauty and Logic of the 6E-7_5_2012-2-.jpg  

Last edited by Aragorn; July 5th, 2012 at 07:24 PM.
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  #23 (permalink)
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In an uptrend, by my definition of Support is holding and Resistance is failing, Resistance can temporarily hold so that Support can hold and Resistance eventually fails.
Conversely, in a downtrend (Resistance holding and Support failing), Support can temporarily hold so that Resistance can hold and Support eventually fails.
Today's charts of the 6E and the 6S bares this out pefectly.
(I just noticed that the 6E chart is rather messy. The reason is that I have longer time frame charts and they don't extend to the right edge of the screen until the bar or the time frame is complete. To compensate for this I needed to use the levels on a "HLine" setting (Horizontal Line) and they really clutter up the chart.)

Attached Thumbnails
The Beauty and Logic of the 6E-7_9_2012-6e-.jpg   The Beauty and Logic of the 6E-7_10_2012-6s-.jpg  

Last edited by Aragorn; July 10th, 2012 at 06:34 AM.
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Aragorn View Post
Nowhere in my plan has it ever said I should try to capture every turning point. I have been racking my brains trying to do that. Always asking, "What do I need to see to capture every turning point?" That is the wrong question. It is a question that isn't designed to follow who I have defined myself as a trader to be. It would be the right question if I was a volatility trader. But I am not a volatility trader. You have no idea how long I have asked myself that question. Too long. I'm embarrassed.

Good thing you do not want to capture every turning point, because no one can. It's silly to even imagine.


Aragorn View Post
My anger and my being disgusted with myself is because I missed this entire move down. I could have caught the entire move down if I had followed my plan and followed through on what type of a trader I am. Instead, I was too busy freaking trying to do something and to find something that isn't who or what I am as a trader. Nor is it what I ever, ever defined myself as a trader to be.

Right now, my DOM reads $0.00 and it reads it in red. It should read more than that- a lot more in green. All because I was trying to do and be something I am not.

I'd rather be flat and missing out, then on the wrong side. Capital preservation is #1. Sure, you'd love to capitalize on a nice move, but you didn't. So be thankful you didn't try to fade it. You keep your money.

Trading is filled with coulda, woulda, shouldas. When I used to trade crude I'd witness a 200 tick move happen in 30 minutes, and I'd think, "if only..." ... or, I'd be away from the computer for a bit and miss a good move and think the same thing. And it's doubly frustrating when you had a premise that aligned with the market, yet you didn't execute. But that's what separates the men from the boys. How do you know you wouldn't have chickened out when you saw the first bit of profit? If you didn't even have the cajones to enter the trade, do you think you could have possibly had the cajones to ride it all the way till it was done? It's so easy with a hindsight bias to imagine that we would have played it perfectly, but rarely is it the case. I've been in at the high or low many times, and yet did not have the maturity to hold onto it. My point is that it's not as simple as, "ok, just follow the plan" -- there's a whole range of roadblocks to a good successful trade that only time and experience and maturity can bring. The fact that you missed this opportunity is simply evidence that you, like all of us, need to grow.

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  #25 (permalink)
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josh View Post
Good thing you do not want to capture every turning point, because no one can. It's silly to even imagine.



I'd rather be flat and missing out, then on the wrong side. Capital preservation is #1. Sure, you'd love to capitalize on a nice move, but you didn't. So be thankful you didn't try to fade it. You keep your money.

Trading is filled with coulda, woulda, shouldas. When I used to trade crude I'd witness a 200 tick move happen in 30 minutes, and I'd think, "if only..." ... or, I'd be away from the computer for a bit and miss a good move and think the same thing. And it's doubly frustrating when you had a premise that aligned with the market, yet you didn't execute. But that's what separates the men from the boys. How do you know you wouldn't have chickened out when you saw the first bit of profit? If you didn't even have the cajones to enter the trade, do you think you could have possibly had the cajones to ride it all the way till it was done? It's so easy with a hindsight bias to imagine that we would have played it perfectly, but rarely is it the case. I've been in at the high or low many times, and yet did not have the maturity to hold onto it. My point is that it's not as simple as, "ok, just follow the plan" -- there's a whole range of roadblocks to a good successful trade that only time and experience and maturity can bring. The fact that you missed this opportunity is simply evidence that you, like all of us, need to grow.

Well put. Trading is about taking your slice of the pie. While there is differing opinions on the subject, I hold
to the belief that one should make their money and walk away.

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  #26 (permalink)
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One of the worst thing a trader can do is continually change charts and change indicators. I cannot tell you how many hundreds of charts I've looked at. Time based charts (15 sec., 30 sec., 45 sec., 1 min, 90 sec., 2 min, 3 min, 5 min and yet higher); Volume charts (every 500 volume interval from 2500 to 15,500 volume); Range charts (from 1 Range to 12 Range).

I've tried every indicator I thought would give me the best advantage. Every time I tested an indicator it was back to testing it on all of the time frames listed above. Over and over always testing, always looking for that perfect chart with the exact indicator. Testing setting after setting and chart after chart. When that didn't work I started trying different combinations. Starting all over again using different combinations of indicators and different settings all on the different time frame charts. Looking and testing and looking and testing.

I never found what I was looking for. That perfect combination of chart and indicator and setting- It doesn't exist. Some learned that a long time ago. Me, I had to spend years to learn it.

And even now, I find myself still changing and still experimenting. How foolish! How naive! Too small of a chart and you get whipsaws. Too large of a chart and you get in too late.

You have to decide- and stick too it. Every change is a new change in probabilities and a new change in variables. Simplest really is best. Become an expert using your tools. Learn it's quirks and nuances. Learn it. Study it. But stop changing it. It does no good. There is no advantage in it.

I posted charts that showed Stochastic and MACD. I learned it from Dr. Barry Burns. For the money, there are few good educators as Dr. Burns. Sadly, I am not using Stochastic or the MACD any longer. For the education I learned a lot. I've studied several educators over the years. The first was Todd Mitchell. Todd taught me about Keltner Channels and Fibs. (There were others that I won't mention.) Suffice it to say I spent more on educators and indicators and trading rooms than I ever lost trading in the market. By far. Either way, the result is the same. I lost money from my pocket.

Some may disagree and I'd be hard pressed to argue, but even though I don't use either of what they taught, I would not be the trader I am today without them. I spent a lot of time studying and not enough time pulling the trigger. I often had analysis paralysis. And fear of losing money. Not a good trait for someone who delves into the world of uncertainty.

No, after several years I have decided. No more changes. No more experimenting with charts and indicators and settings. Resolution. This is the result of years of screentime and getting to know the ebb and flow and personality of the instrument. The timing chart I have decided on is the 2 Range chart and the sole indicator is Woodies CCI. I looked at Woodies CCI and studied the information from some guy named Jeff. I've never been in Woodies Room. I don't know how or what instruments he trades. But I like his CCI that comes with NT7. Jeff covered a lot of material in his paper. A lot of different setups. For me, there are 4- 2 reversal patterns (1 long and 1 short) and 2 continuation patterns (1 long and 1 short). My goal is simple but clearly defined- I am going to become a Master CCI trader. I am going to study and learn and eventually understand. I want to know it inside and out. So long as I kept changing charts and changing settings I could never learn it. It kept changing because I kept changing it! If I kept changing it, and it kept changing as a result, how could I ever learn it?

I forgot to mention... ok honesty time. Why do I like Woodie's CCI? It looks cool! Come on. Don't we like all the different colors and all the different lines? Doesn't it make it seem like it's more technological the more colors we have on our charts? Never mind that it's free... it just looks cool! After all the money I spent on indicators that didn't look cool, this one does. So I use it! I don't have all the vertical lines and I don't have the "turbo". That's just messy. But the 0 line and the +/- 100 and +/- 200? Well they just look damn cool to me! lol!


Last edited by Aragorn; July 18th, 2012 at 01:47 AM.
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  #27 (permalink)
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One day, with Big Mike's permission, I'd like to post my Trading Plan on this thread. If you don't have one- GET ONE. I will admit, it's probably a bit more elaborate than most, but I'm proud of it.

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  #28 (permalink)
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I'd love to see it when you do post it. I like your journal because you talk about what you were thinking and why. Then you go back and talk about what you should have done.

It might also be helpful to talk about a few things that have gone perfectly with a few trades so that you reinforce the good habits as well as trying to 86 the bad ones. :-)



-Alli

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  #29 (permalink)
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This chart of the 6E on a 2 Range chart demonstrates the 4 patterns. Do not think I traded them all. I did not.

The purpose of this chart is to display them and to present the idea. The skill and mastery of them begins with first, recognizing them.

Much of this will be the result of your own aggressiveness and risk tolerance.

(A) Is a short continuation. Note the CCI did not reach +100. This is your first warning of weakness. Note the "Hook" and the fall after that.

(B) Is a long reversal. Note it is a divergence showing strength and also note the "Hook." The CCI is coming off the -200 area.

(C) Is a long continuation. Note the CCI did not reach -100. This is your first sign of strength. It breaks the horizontal peak but no "Hook."

(D) Is a short reversal. Note it is a divergence and breaks the horizontal dip. Note the "Hook." It did not reach +200 at (D). I prefer it at the extremes but trading is not an exact science. Let the reader decide what rules s/he will follow. I am just showing the idea.

(E) Is a long reversal. I hate this pattern. Yeah, it hooks at (E) but that's just hindsight. It looks like a low probability trade set-up to me.

(F) Is a long continuation. I hate this pattern as well. That it hadn't reached the +100 level is a sign of weakness to me so I'd skip it.

(G) Is a short reversal. Note it is a divergence and breaks the horizontal dip. Note the "Hook" and it had reached the +200 level.

(H) is a long reversal. It had not reached the -200 level. It did break the horizontal peak. (H) is a "V" pivot which I don't like to trade.

(I) Is a short reversal. There is no divergence. It has reached the +200 level and there is a "Hook" but there is no clear cut dip from which to draw a horizontal line and it breaking.

(J) Is a short continuation. It stems from the CCI being between 0 and +100 but does not reach +100. This is weakness and breaks below the dip.

Once again, do not think I took all of these trades. The point here is to present an idea of how to potentially trade it and some suggestions of what you might look for.

It may not even be a matter of taking a trade but might rather be a matter of deciding to stay with a trade that you are already in.

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Last edited by Aragorn; July 18th, 2012 at 05:43 AM.
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I am no hypocrite. While I am probably not going to do it I should change my DOM setting P&L to something other than "Currency". I exited too early because I was watching every flicker of $ gyrate on my P&L. I saw every tick. I felt every tick. I held and I watched it come one tick in front of my target. I saw it. I felt it. Wait for it... Wait for it... Almost there... Yep. As soon as I exited for a measly 6 ticks it dropped to my original target... and 12 or so ticks further already. I exited way way way too early. Most might say that it's better I got 6 ticks of profit and not 6 ticks of loss. And that's true. It's also not the point. The point is I let my emotions of watching every tick decide my trading. I knew that the 1.2336 was a big area (it went tp 1.2335) I let my emotions dictate my trade. I got in at 1.2327. My target was 1.2315 and twice it went to 1.2316. I'm pissed off to say the least.


Last edited by Aragorn; July 19th, 2012 at 05:31 AM.
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