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The Beauty and Logic of the 6E


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The Beauty and Logic of the 6E

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  #1 (permalink)
 Aragorn 
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I trade the 6E exclusively. It's all my brain can digest. I respect those who can watch, analyze, monitor and trade multiple markets. I can't do it.

For years I've kept notes and journals. I review them often and am surprised and often impressed with how far I've come. I'm also impressed with varying degrees of insight and wisdom I've had over the years. Some points and distinctions have remained while others have gone by the way side. Those that remain must be the pillars upon which my personality and style of trading suits me best.

I am starting this thread for purely selfish reasons. While I certainly hope it helps others, my main hope is that through explaining, articulating and answering others that the trading principles and concepts I present will become better ingrained in my own head. "When the student is ready the teacher will appear." Teachers always learn more than their students.

More than once of late I've thought how beautiful the market is. How logical it is. There are reasons for what the market does. Oh nothing so cryptic as Supply and Demand. I'd go blind looking for that. No, I am a Support and Resistance trader. In one of my better displays of intelligence I wrote down the other day that "Support and Resistance are not the same as Supply and Demand." Said I, "Support & Resistance is where the market responds. Supply and Demand is when. Supply and Demand is confirmation of Support and Resistance." Without Support and Resistance how do you know where to look for Supply and Demand. Doesn't everyone trade Support and Resistance? Is there ever any long trade put on without it being an area that is hoped where Buyers aggressively lift the offer? Isn't that the definition of Support? Demand overcoming Supply. Conversely, is there ever a short trade put on where it isn't hoped that Sellers will aggressively hit the bid to drive the market lower? Isn't this the definition of Resistance? Supply overcoming Demand.

I trade Support and Resistance. In fact, I have my own definition of market activity. An uptrend, by my definition, is Support is holding and Resistance is failing. Conversely, a downtrend is Resistance is holding and Support is failing. A sideways range is both Support and Resistance are holding. It's more practical for me to define the market in this way. My tools allow me to identify potential S/R levels. Unfortunately, my tools are proprietry and are not available to the public. But that's not the point. The point is there is beauty and logic to the market.

This thread would be grossly incomplete without here including respect for the US Dollar (DX). Of late, I have concluded that S/R on the USD is more important that S/R on the 6E. Over and over again I have witnessed how the 6E responds to S/R levels on the DX when there are no S/R levels on the 6E. At least not on my charts. And since I can only trade what's in front of me, I need to stick to my assessment until I can prove otherwise.

For example, today's 6E low was 1.2570. Why did it stop there? Is there a reason? I say, "Yes". But I am getting ahead of myself.

I trade Support and Resistance. I also trade Moving Averages. Moving Averages, imho, are the best indicator of mass market sentiment. They begin to define the areas where I can begin to look for my Support and Resistance levels. I want to be on the side of the masses and I want to trade where they want to trade. I also want to trade with the least amount of risk and heat.

The Market is telling a story. It's my job, as a technical analyst, to listen. Every market has it's own personality. For years I traded the ES. I don't even look at it now. I don't even have a chart for it. It's taken me a long time to ferrot the ES personality out of my head so I can see the 6E.

Orientation is important to me. I need to know where the market is trading within the larger picture. At the Most Recent Highs? At the Most Recent Lows? Or, as usual, somewhere in the middle? Where are we in relation to the Moving Averages? Which Moving Average has been "satisfied"? Which hasn't? Where is the market trading in relation to yesterday? The over night trading? The day before? Orientation tells me a lot and can offer clues as to what the market is doing or trying to do and more importantly to me as a trader- when.

One nugget I realized just a few days ago. My Moving Averages tell me that after Thursday's and Friday's bolt higher, the market was in an uptrend. However, and this was key for me, like an epipheny, how could the market ever reach my slower moving averages without it moving lower? At some point, the market must move in a downtrend in order to reach them. I used to only look to trade on the side of the Moving Averages. I was cutting myself short. If I know where the Moving Average is at, then what must the market do to get there? That tells me what I should be doing as well. That was foreign to me. Why should I take a short trade when all my Moving Averages tell me I should be looking to take long trades? Answer: Because the market has to trade lower and I know where it is trying to get. If I know where it's going and I know what it needs to do to get there then those are pretty big answers to the puzzle. What a concept! Counter-trend trading! Has anyone else heard of this? lol!

This is way long but hopefully worth the read. I hope you can benefit from it. I look forward to sharing my journey into the beauty and logic of the 6E.

PLEASE DO NOT QUOTE THIS POST IF YOU REPLY TO IT. IT"S TOO LONG AND I KNOW TO WHICH POST YOU ARE REFERRING!

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  #4 (permalink)
 TheWizard 
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A pictorial representation (chart, marked up with S/R, Supply/Demand, Moving averages) would be helpful.

After all, it's what you learn AFTER you know it all, that counts!
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 supermht 
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Yes, Chart please

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  #6 (permalink)
 Aragorn 
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The MA's are converging and crossing. This tells me we are in for very low range trading until it breaks out. Very choppy.
I have Resistance on the DX at 82.10- 82. 25. I also have Resistance a little higher at 82.065-82.075. The MA's on the DX are Red and the higher Resistance levels are just above the slower Red MA. I also have Support on the 6E at 1.2591. There is also a lot of Support on the 6S (I'll explain this later- suffice it to say it is a correlation market for now) at 1.0494 and major major major (Get the point?) Support at 1.0490-1.0487.
Let's see what happens!

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  #7 (permalink)
 Aragorn 
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TheWizard View Post
A pictorial representation (chart, marked up with S/R, Supply/Demand, Moving averages) would be helpful.


supermht View Post
Yes, Chart please

Charts are coming. I promise. I will put it all together. Here's one for the DX over the last several days. The levels on the charts are levels to which the DX could potentially respond at, of course inversely the 6E responded as well. It's a moot point now but I had them on my chart. I promise. Of course the only thing that matters is the right edge of your screen not some hindsight after-the-fact should have done this nonsense. But it was actually these types of things that motivated me to start this thread.

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 Aragorn 
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As a precursor, and warning, I will say that most will probably hate my charts. It has multiple time frames. Some fast and some slow. The tools are linked to each one of the time frames I use. I have them to display three but they could display up to three times that. Too many levels. Just when I think about reducing the number of levels on my charts the market goes off and does some crazy thing like majorly responding off the level I was going to delete! So most will think I have too many levels on my charts. But to narrow the universe down, remember, I only need concern myself with those levels at/near the MA's.

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 Aragorn 
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I hate hindsight trading. And I hate putting up any chart after-the-fact. So to show where the levels today came from on the DX. This is the chart that had them. They came from June 29. They are displayed differently than some of the other levels on that first chart because the market had already traded through them so they weren't technically "naked". However, as the markets have memory, I want to display them so I can at least be aware that there was a previous level at that price.

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 Aragorn 
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Last post and then I'm off to bed... Did anyone happen to notice that the 6E traded down to 1.2592 and is up over 20 ticks? Did anyone happen to notice that I put that in almost a half hour before it got there? Did anyone notice that it didn't get to 1.2591 but was one tick shy of it? Does anyone know why it didn't get there? My theory is because the other aspect of that post was that Resistance on the DX was between 82.010-82.025. The DX was already at Resistance (82.015) before the 6E got to Support. I said in my initial post that S/R on the DX is more important that S/R on the 6E. Food for thought. Now it's off to bed.

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 TrendTraderBH 
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Another option instead of price having to go down (counter-trend) to a moving average, is that price consolidates for a while until the moving average catches up to it. This is one (not only) negative to going counter trend - that price does nothing but wait for the moving average(s) to "catch up" to it.

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 Aragorn 
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We are in a pretty narrow Balance area over the last two days. A cornerstone of Market Profile is that Balance leads to Imbalance. Between the the 4th of July holiday and this range may not get much movement. Hopefully Friday's Unemployment Report can generate a directional move.

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  #13 (permalink)
 Aragorn 
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TrendTraderBH View Post
Another option instead of price having to go down (counter-trend) to a moving average, is that price consolidates for a while until the moving average catches up to it. This is one (not only) negative to going counter trend - that price does nothing but wait for the moving average(s) to "catch up" to it.

I use Moving Averages that stem from Range charts. The market would have to consolidate for a long long time for the moving averages to "catch up". The Moving Averages I use are an 8R 25 SMA and a 14R: 25 SMA; 75 SMA and 150 SMA. Having 25 14R bars consolidating seems unlikely. You do make a good point however that price will either move to it's average or it's average will need to move to price. It seems to depend on the time frame and size of the moving average however for the latter to occur.

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 TraderSU 
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Yes - I also observed the same. Dollar rules! I trade DX sparingly but take help from it for trading 6A, 6E and even ES.

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 Fadi 
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Market trades inverse to the dollar these days; until that relationship brakes, yes DX rules!
I always have a chart of the dollar on my screen, an absolute necessity.

Successful people will do what unsuccessful people won't or can't do!
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 Aragorn 
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Aragorn View Post
We are in a pretty narrow Balance area over the last two days. A cornerstone of Market Profile is that Balance leads to Imbalance. Between the the 4th of July holiday and this range may not get much movement. Hopefully Friday's Unemployment Report can generate a directional move.

OK! Why wait? Why put off until Friday what you can do on Wednesday? lol

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 Fadi 
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Well Friday's report has such a low expectation this week that I am kind of sure we will overachieve :-)

Add light volume end of week and holiday extension to the mix, and you can already foresee probably the lightest volume of the year - which usually ends up floating up all day long.

In such low volume days, it is much easier for "them" to manipulate the market and push it up into the weekend.
I won't be surprised if we flush on opening and float all day up in the case of bad report, but the most probable scenario is just float up all day long on Friday.

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 TrendTraderBH 
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Good point! Range bars (and other price based charts) moving averages interaction with price is much different than time-based charts moving average interaction with price. Thanks for responding to my reply post.

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 Aragorn 
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Here is a screenshot from todays trading. I use Stochastic and the MACD to help but I'm most interested in price. Price is the truth. Some hate standard indicators. I learned them from Dr. Barry Burns so I use them. I like Stochastic. I've seen some use it as a momentum indicator. I use it as a cycle indicator mainly but there are times when it can be used for momentum as well. I like divergences on the cycles. If it comes all the way down to the 20and starts a new cycle I consider it now a momentum indicator- especially if price can't get to the previous high.

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 Aragorn 
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This thread is about honesty to myself and to make myself accountable to myself. To discover the truth and to discover the lies and falsities I often tell myself. My last post displayed a chart from yesterdays trading. I was arrogant. I wanted to show everyone how great my tools are and all the great things they're capable of. I wanted everyone to see that they can capture every little move and every turning point in the market.

Here's the problem and here's the moment of truth. The problem is: where in my initial post did I ever say I was a volatility trader? Where did I ever say that I was out to capture every turning point? How many times did I define what type of a trader I was? My own Trading Plan identifies my trades- what I look for and when and where.

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.

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 am a Support & Resistance at Moving Averages Trader. That is who I am. And that is all I need to be. The sooner I get that through my thick skull the sooner I can begin to make the money I'm capable of making. To make matters even worse, much worse, I wrote down these exact words on a piece of note paper several days ago. I wrote, "I AM a Moving Average Support/Resistance trader."

I write this in the hopes that someone, at some point, perhaps a new trader, can learn from my experience and be wiser than I am. Know who you are as a trader. Knowing that is the first essential step.

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 mokodo 
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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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 Aragorn 
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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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 Aragorn 
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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.)

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 josh 
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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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 Aragorn 
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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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 Aragorn 
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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!

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 Aragorn 
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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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Allistah
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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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 Aragorn 
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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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 Aragorn 
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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.

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 Aragorn 
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@ Big Mike- is swearing permissible in this forum? Because right now I have a real hankerin' to let some sailor vocabulary fly (as it currently trades at 1.2292...).

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 Big Mike 
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@ Big Mike- is swearing permissible in this forum? Because right now I have a real hankerin' to let some sailor vocabulary fly (as it currently trades at 1.2292...).

There are no word filters, use your judgment.

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 Aragorn 
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There are no word filters, use your judgment.

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Big Mike I was just kidding! I am just kicking myself...

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 salisem 
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Big Mike I was just kidding! I am just kicking myself...

Don't fill yourself with regret. The past is the past, and there's not a damn thing you can do to change it. Just think of what you can do better next time.

"Within every conflict is a lesson" - either the Buddha or the Dalai Lama (I can't recall which one).

Good trading,
Melissa

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 Aragorn 
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I found a few months ago that I had a number of conflicting beliefs and attitudes. For example- I trade Support and Resistance levels that are based, I think, on volatility.

What they are actually based on I can't say all I know is that at the end of the day- they work. Same with my car. I can't say exactly how it works I just know that it does- so I use it.

In any event I had two conflicting beliefs. One belief was I wanted confirmation that a Support or Resistance level was going to hold. Then, when I got confirmation I said that it was too far away from my level and it could move against me so I wouldn't take the trade. Well, um... not to put too fine of a point on it, but how was I ever supposed to take a trade? Obviously it had to move off the Support or Resistance level for it to confirm. That's what I was wanting. But for some irrational reason, when the time came to pull the trigger, I came up with a conflicting belief that I wanted it closer. Well since it had already confirmed it wasn't going to get any closer to the level and I would pass the trade.

Another instance of conflicting beliefs I have in my Trading Journal that my daily goal is to make $500/day. But after I make, say $150, I wouldn't want to put it at risk. Well how am I going to make $500 if I am not willing to trade past making $150?

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 tihfa 
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Aragorn View Post
In any event I had two conflicting beliefs. One belief was I wanted confirmation that a Support or Resistance level was going to hold. Then, when I got confirmation I said that it was too far away from my level and it could move against me so I wouldn't take the trade. Well, um... not to put too fine of a point on it, but how was I ever supposed to take a trade? Obviously it had to move off the Support or Resistance level for it to confirm. That's what I was wanting. But for some irrational reason, when the time came to pull the trigger, I came up with a conflicting belief that I wanted it closer. Well since it had already confirmed it wasn't going to get any closer to the level and I would pass the trade.

Another instance of conflicting beliefs I have in my Trading Journal that my daily goal is to make $500/day. But after I make, say $150, I wouldn't want to put it at risk. Well how am I going to make $500 if I am not willing to trade past making $150?

How did you resolve S/R and confirmation the conflict? I have the same conflict basically. Still working on it. I am think I'm heading down the route of anticipating the bounce, having a smaller stop.

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 Aragorn 
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tihfa View Post
How did you resolve S/R and confirmation the conflict? I have the same conflict basically. Still working on it. I am think I'm heading down the route of anticipating the bounce, having a smaller stop.

Trade the confirmation signal. You must trust the signal and take the trade. Know where you are wrong. Personally, I wouldn't anticipate. Anticipating a bounce is the same as guessing. Guessing is gambling and we are not gamblers. We take signals and let the probabilities of our signals make us money. Just my advice.

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 Aragorn 
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I thought I would take a second to explain my avatar. It's similar to yin and yang. There are always two forces working on us. We act on whichever force is the strongest within us. If the negative forces are strongest, fear, doubt, loved ones's peeing in our ears, prejudice or whatever, that is the force that we will act on. These negative forces are stronger than our positive forces of goals, dreams, hopes, aspirations, drives etc. These negative forces are seen on the left. When our goals, our commitments our drives, whatever it is that is motivating us, when those forces are stronger, then we overcome our fears and all the doubts and all the negatives that are holding us back from achieving what we set out to accomplish. When nothing, and I mean nothing is going to stand in our way between our drive and our goals, then we are on the right of the avatar.

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 Aragorn 
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As a new trader I was always fascinated with complexity for some reason. I had to make it harder than it was. It seemed that the more complex something was the more I thought of myself as a trader. Unfortunately, that complexity also showed on my trading account. It's not just coincidence that the complexity of a method and the struggles of an account go hand in hand.

Note, for example, the power of a simple straight line- a trend-line. Look what it does! My trend-line tells me two things- First, potential entries and second, when the trend is over and either consolidating or reversing. Just a simple straight line.

A word of caution on the 6E- there is usually one break of the trend-line in which the market breaks the trend-line by a little and then resumes the trend. That stray peak or valley then becomes the more important trend-line to gauge the trend from.

Look how low the risk is on a simple little tool like a straight line. I mean, how hard is this? As hard as you want it to be! I've tried it hard (complex) and I've tried it simple and I like simple a whole lot more.

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 Aragorn 
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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.

Here it is.

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 Aragorn 
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While this thread is about trading the Euro (6E), I have a very strong affinity to the USD (DX). Tonight I am going to be looking very closely at the DX 84.190 area as resistance. It's almost there. It has to react in that area. Let's see what happens.

Um... damn. that's quite an open! lol No I wasn't in a trade. I was waiting for the DX to get to my area. wow!

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 Aragorn 
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Today has been a long time in the coming. I began learning to trade in April 2008. Learning to trade is relatively easy and doesn't take too long. I'm referring to the Technical Analysis aspect of trading. Learning when this line crosses here or this bar changes to this color or these two lines cross or this line hooks etc etc etc. that's Technical Analysis. Learning does not take 4 years. But understanding does.

I turned the corner today. It is a historical day for me.

First, I used to trade on impulse. I traded what I saw and entered trades on knee-jerk reactions. No thought just reaction. The market has a knack for making you pay for those decisions. I entered because I was afraid of missing the move. Not only did I miss it, but I got in at the tail end of it. My short entry was the lowest tick of the day. Now, I enter trades on my terms and not the Market's. I know what I want to see and I wait until I see it. Gone is the impulse and fear of missing out. I enter trades patiently, methodically and above all, calmly.

Second, I used to trade without planning the trade. I simply expected it to work out so why have a plan if it doesn't go my way when I want it to? Do I exit with a 6 tick loss if it goes against me? That was how I used to trade. Loss loss loss loss loss. I had no plan before I got into a trade and I can assure you coming up with a plan when you're in a trade is definitely not the time to be planning the trade. Emotions are not your friend when you see red on your DOM. Just see my post a few days ago. For the first time- Ever! Before I got into the trade I planned. This is where I am going to enter the trade. If the Market moves against me I am going to watch but not react. I know where I am wrong. If it trades against me several ticks but doesn't hit my stop and the market shows me another signal to enter a trade I am going to take the trade. My stop remains the same. I am adding to a losing position. Something seems right about this under these conditions. I am not exiting on impulse. I am letting the Market dictate what I should do.

I bought $10 in gas the other day at $3.55/gal. It filled my tank about 1/3. I drove a few miles down the road and saw gas was $3.43/gal. I stopped and put in another $10. I could have gotten to everywhere I needed to go after the first time I put gas in. I didn't need to put more gas in. But I saw an opportunity. Did I waste money by putting more gas in than I needed? I don't think so. I saw an opportunity and I know that I will need to, at some point, put more gas in my vehicle. I saw value and that value may not be there tomorrow. I see the same thing with what I did.

I knew where I was wrong and all my stops went to that price. But now, I had what potentially could be a better price to trade. I am well aware of the cardinal rule touted by many to never add to a losing trade. This was not a losing trade. This was a planned trade. I wasn't averaging a loser. I was following a plan of action that I had already deemed I was going to follow if conditions warranted it. Was I wrong on direction? Or was I wrong on my entry price? Or was I wrong on both? Whatever the outcome I was going to follow my plan. And I did.

Three- the market moved 7 ticks in my favor. I was elated and wanted to exit early with my prize. But 7 ticks was not my target. I had a plan and I had a target. The market moved against my position. I saw every tick of profit disappear. And then I saw red on my P&L. But something happened. Something that has never happened before. I did NOT panic. I was relatively calm and relaxed. Or at least as relaxed as we usually are when money is involved. I has calm and relaxed because I had a plan. Nothing had changed. I still knew where I was wrong and I still had not reached target. Now my plan was coming into play. I followed my plan. The Market moved 6 ticks against me but wasn't at my stop. I saw the market was putting in a divergence and entered three ticks higher than my first trade. I was following the plan I put in place before I ever put on a trade. The stop on this second trade went to the same price as the stop on the first trade.

Four- I moved my stop one tick above what I thought was the high. It was where I thought would be the high and would now be the new place where I knew I would be wrong. But wait a minute. That wasn't the plan. That wasn't where I had determined before I entered the trade that I knew I would be wrong. Now I am making a decision when I'm in the trade. That wasn't the plan. I am creating a new plan in the heat of the battle and when I'm in a trade. I've already learned that's not a good time to come up with a plan. I moved the stops back to the price I had originally set. Sure enough- the market went one tick higher than what I thought would have been the high. I would have been stopped out to the tick.

Five- I had to sit patiently waiting. I wanted to exit for a small profit. I was in the trade for an eternity it seemed. I would be justified. Right? I sat and watched and waited. I saw price gyrate for me and against me and for me and against me and against me a tick or two. I wanted to exit now with a small loss. So what did I do? I got up and left the room. I had my targets and I had my stops. Either it was going to work out or it wasn't. It was no longer in my hands. I had made my decisions and I had followed my plan. Finally, after 30 minutes, it began to move in my direction. After it had moved 10 ticks in my favor I followed my plan and moved my stops to b/e +1. Either I was going to reach target or I was going to make 1 tick. My targets were set in place. My stop was set in place. There was nothing more I could do so I left the room- permanently. No more checking. Now, the final decision was made. Now it was truly going to work or it wasn't. The trade took 50 minutes to complete. As it is, the market reached both targets for a nice gain.

For the first time ever- I feel like a true trader and not a dabbler or like I'm trying an experiment every time I put on a trade. I was deliberate. I was methodical. And I was relaxed throughout the process. I wasn't reacting emotionally like this was going to be my last trade. My biggest fear before was, surprisingly not a fear of losing money. My biggest fear was that I wouldn't be able to make it back after I had lost it. That fear is slowly diminishing. A great day for me.

I should add, as is often the case for me, and this is most surprising, while I am happy about my profit it is NOT what I am most happy about. What I am most happy about is the maturity that I'm going through. It's like there's greater stability emotionally and psychologically. This is a change that's not just a step in the right direction. It's a transformation into something or someone that's more permanent and more lasting than the outcome of a single trade. The money will be gone and spent. But the lesson will endure beyond this simple and single trade as I go forth throughout my trading career.

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  #43 (permalink)
Bharatiya
ND, India
 
 
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Congrats for your achievement.
Trading is just collection of these days. Concentrate only one day at a time....

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  #44 (permalink)
 josh 
Georgia, US
 
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I am not sure what trade you took, but congratulations on doing what you wanted to accomplish and on your good day. It feels great to have the market reach your target and have the patience to hold for it.

How long you are in a trade certainly can test your patience. I was in a sequence for 80 minutes this morning, and it required a bit more patience due to the fact that I had a losing trade just prior. So, congrats on holding as it went in your favor.

It depends a lot on the time of day and other factors, but the fact that the market stays and rotates around your entry price for a long time is not particularly a good thing. I'm not saying you should simply close it, but consider that when the market gives so many opportunities to enter, then it may have to move beyond that area to find real supply or demand (which is almost always evidenced by fast moves away from a price, not rotations around a price). Of course one side will win out, and it's usually the side that's positioned with the immediate trend, but it's a bit like gambling to simply hold a trade when you're positioned in the middle of a range. Sometimes it will work, sometimes it won't -- sometimes it's best to hold it, sometimes it's best to ask, "would I enter the trade again at this point?" and if the answer is no, then just close it. But as long as there is some reason that you are with the right side of the market, then sticking with it can offer a higher probability of the market moving in your favor.

My other caution would be: now that you have had what you consider your first "real trader" experience, celebrate your success, but realize that it's a pattern of consistency that you are looking for. "One swallow doth not a summer make" so they say. I had one losing day at the end of June that was quite bad, and if I know myself well, it was because of overconfidence. Realize that you could have very well been stopped out here, and you might be feeling bad as a result, but it still would have been a good process according to your measures. So, celebrate the good processes, along with the good results. Cheers and happy trading! (out of curiosity, it might be interesting if you would share a chart with your trade locations)

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 Aragorn 
Salt Lake City, UT
 
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I'd like to ask anyone reading this a rather weird question. "How do you combat boredom waiting for a trading opportunity?" Are you watching the market the whole time? How do you combat getting bored until you see what you want to see? I find I get so bored and then tired and then exhausted. I can only watch the market for a few hours then I have to stop. Not because I want to. I wish I had the stamina and fortitude to persist and watch it for an extended time. I thought about No-Doz but somehow that doesn't seem like a viable long term solution. Trading is boring- except when your in a trade of course. But it's like an hour or two of boredom and a few minutes of heart pounding blood pumping excitement. I wanted to join a room that is open during the European Session just so I could combat being bored. Unfortunately I couldn't justify spending that much money for that reason. Just wondered what other traders do. Watch a movie? Listen to music? Read a book? I've tried them and it doesn't work for me. Suggestions?

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  #46 (permalink)
 iqgod 
Market Wizard
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Cultivate that time with the same commitment that you use the time when you are trading.

What you do with your non-trading time actually supports your trading.

When you don't cultivate the other parts of your life, you will eventually sabotage your trading because you will fail to see the point of it.

If I hadn't done all of the above I would have gone back to taking anti-depressants (apart from losing my capital over and over again to replace BOREDOM with THRILL).

So short answer: PUT A LIST OF NON_TRADING ACTIVITIES IN YOUR TRADING PLAN and FOLLOW that plan for those activities as well as you follow it for trading.

Here is the fantastic article that drove home the point for me:

"The Bored Trader" By Adrienne Laris Toghraie


Also note that instead of No-Doz perhaps moving to higher timeframes (and putting more space between the sampling intervals where you are checking price live on the screen) would better combat exhaustion.

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 rpm123 
Green Bay WI
 
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Aragorn View Post
I'd like to ask anyone reading this a rather weird question. "How do you combat boredom waiting for a trading opportunity?" Are you watching the market the whole time? How do you combat getting bored until you see what you want to see? I find I get so bored and then tired and then exhausted. I can only watch the market for a few hours then I have to stop. Not because I want to. I wish I had the stamina and fortitude to persist and watch it for an extended time. I thought about No-Doz but somehow that doesn't seem like a viable long term solution. Trading is boring- except when your in a trade of course. But it's like an hour or two of boredom and a few minutes of heart pounding blood pumping excitement. I wanted to join a room that is open during the European Session just so I could combat being bored. Unfortunately I couldn't justify spending that much money for that reason. Just wondered what other traders do. Watch a movie? Listen to music? Read a book? I've tried them and it doesn't work for me. Suggestions?

A way I have found to successfully fight boredom (and avoid overtrading, in my case) is to limit my time trading and staring at the screen. Thanks to @Fat Tails analysis of the most volatile times of an instrument (not always the highest volume time) I've limited my screen time to 2 to 4 hours, from approx 7am to 11am cst, and often done by 9:30am cst. I then spend a bit more time on post trade analysis. Trading the 6E as well.


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  #48 (permalink)
 Aragorn 
Salt Lake City, UT
 
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iqgod View Post
What you do with your non-trading time actually supports your trading.

When you don't cultivate the other parts of your life, you will eventually sabotage your trading because you will fail to see the point of it.

So short answer: PUT A LIST OF NON_TRADING ACTIVITIES IN YOUR TRADING PLAN and FOLLOW that plan for those activities as well as you follow it for trading.

Making money is a temporary motivator. There must be more to one's life than simply making money. There must be a balnce to making money and enjoying life. Life is what is passing you by when you're out trying to eek every penny you can out of the market. Soon the enjoyment of trading will be gone along with possibly everything else you hold dear. I've sacrificed a lot. It's a hard lesson learned.

rpm123 View Post
A way I have found to successfully fight boredom (and avoid overtrading, in my case) is to limit my time trading and staring at the screen. Thanks to @Fat Tails analysis of the most volatile times of an instrument (not always the highest volume time) I've limited my screen time to 2 to 4 hours, from approx 7am to 11am cst, and often done by 9:30am cst. I then spend a bit more time on post trade analysis. Trading the 6E as well.

I agree completely. According to my plan I try to trade in 3 and sometimes 4 hour blocks. It depend on what's happening in the market and how much movement or how active the market is.

Excellent suggestions!

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  #49 (permalink)
SteveH
Orlando, Florida, USA
 
 
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Everything you're saying is fine except for one thing:

Never add to a losing trade. It is the road to ruin.

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 mokodo 
Bridgwater, UK
 
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iqgod View Post
Also note that instead of No-Doz perhaps moving to higher timeframes (and putting more space between the sampling intervals where you are checking price live on the screen) would better combat exhaustion.

Good point made here. I trade 15 minute charts and had been tracking these with only the last day in view. This had me constantly zooming out to check my chart mark-ups which stretch back a week or so. Exhausting to do as I would be repeating this countless times a day on 10 forex pairs. Seemed a poor investment in effort as I only get a handful of signals a day and only take a trade or two per day.

Simply viewing the last week (but still with 15 minute bars) makes the tick by tick price action invisible and I can immediately see any set-up in context - and then zoom in to asses the local price action. This has not changed how I assess a set-up or effect which trades I take, but boy has it saved me a load of mental energy.

Simple change - big effect.

know thyself
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  #51 (permalink)
StayOnTarget
Leeds Yorkshire UK
 
 
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Aragorn View Post
"How do you combat boredom waiting for a trading opportunity?"


With me, boredom is one of the main reasons I suffer from compulsively changing my chart settings. If I get bored, I go searching for trades. I search on different time frames, different instruments with different indicators which (as everyone knows) is usually always a bad idea.

What I do, when I get bored, is set price level alerts and go and play a game on a different PC. If I stay in front of my trading PC it takes approximately 10 minutes before I start searching for trades and changing my chart settings. It's a real bad habbit but I can't shake it. The only thing I can do, is get away from the screen.

I guess the psycology behind it is because I feel the party isn't happening here, so it must be somewhere else, go and find the action. I only have to look at a few different currency pairs to find a great looking trade (that I've just missed) which adds to my level of frustration as now I've missed the party!

Same thing goes for when I enter a trade. I've planned the trade, set a target and stop, everything is taken care of. I HAVE to get away from the screen or there's a good chance I'll screw everything up with the usual emotional pressure.

Don't get me wrong, I've always got an eye on the charts and I always respond to alerts. I'm just not sat in front of my trading PC.

So, me? I set price alerts and go play video games.

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  #52 (permalink)
 Klausi 
Germany
 
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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!

Hi, Aragorn, this is exactly the same, I had to learn, same way, same procedure. I've tested, tested, tested and now, after a couple of years, I found and stabilized an arrangment of indis who are reliable. I've seen a lot of Webinars, spend a lot of sundays to check out a template I can work with and what the best procedure will be. Now, after years, I've found ' My way '. It is hard to realize, how much time I've lost with things like this, but now
I hope to be able to get back a bit, to make some profits.

Sometimes I cannot believe, that it has been y e a r s I have spent with all these things. It was fun to see it work sometimes, but : Whenever I thought ' Now I have reached the target, I found something to improve.

Now I leave most of the time unchanged, what I've created, open max. 3 WS with max. 3 charts parallel. one for overview to see ' Where are we ' , two to see what happens inside the markets in detail.

I n o w say the same as you :

The worst you can do ( as you whrote above )
Never open more than 3 WS
Never / only carefully change your setup from timt to time
Go y o u r way

I emphasize again :

Before I decided to develope charts, I couldn't imagine, that several years will pass, before an usefull result will help me to trade in an reliable manor.

And I have to emphasize :

The greatest and most qualified source to improve my skills was BigMikes page and all the statements of the different members, sometimes just tiny trifle read or found there made a big impact to me.

This is my experience.

I seems to me, it is very simular to your's.

Thanks for your qualified statement. It helped me a lot, to see ' Others went the same way '.

I hope, my answer does help you too.

Regards

Klaus

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  #53 (permalink)
 Klausi 
Germany
 
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Aragorn View Post
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!

Hi, Aragorn, this is exactly the same, I had to learn, same way, same procedure. I've tested, tested, tested and now, after a couple of years, I found and stabilized an arrangment of indis who are reliable. I've seen a lot of Webinars, spend a lot of sundays to check out a template I can work with and what the best procedure will be. Now, after years, I've found ' My way '. It is hard to realize, how much time I've lost with things like this, but now
I hope to be able to get back a bit, to make some profits.

Sometimes I cannot believe, that it has been y e a r s I have spent with all these things. It was fun to see it work sometimes, but : Whenever I thought ' Now I have reached the target, I found something to improve.

Now I leave most of the time unchanged, what I've created, open max. 3 WS with max. 3 charts parallel. one for overview to see ' Where are we ' , two to see what happens inside the markets in detail.

I n o w say the same as you :

The worst you can do ( as you whrote above )
Never open more than 3 WS
Never / only carefully change your setup from time to time
Go y o u r way

I emphasize again :

Before I decided to develope charts, I couldn't imagine, that several years will pass, before an usefull result will help me to trade in an reliable manor.

And I have to emphasize :

The greatest and most qualified source to improve my skills was BigMikes page and all the statements of the different members, sometimes just tiny trifle read or found there made a big impact to me.

This is my experience.

I seems to me, it is very simular to your's.

Thanks for your qualified statement. It helped me a lot, to see ' Others went the same way '.

I hope, my answer does help you too.

Regards

Klaus

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  #54 (permalink)
 Aragorn 
Salt Lake City, UT
 
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Thanks Klausi for sharing. It is embarassing how much time I spent changing charts. I hope most who read this will say, "Wow! Aragorn's an idiot! I would have figured out a long time ago to stop changing charts and time frames and indicators because the perfect combination doesn't exist." That is my point. I hope that others are smarter and wiser than I am so they don't have to go down the same path I went down. But, I had to learn it and figure it out through trial and error. Thankfully I learned it but I sure was "dense" in how long it took me.
I agree an the charts. I have an Orientation chart as well that enables me to see where we are in the overall market. I don't trade off it but I need to know what the overall bias is and where my Moving Averages are that I use.
Then I have a chart that has the indicators that I use. The indicators are actully on both the 6E and the USD. For some reason, that I don't understand, the 6E responds when the USD reaches S/R levels. It's weird. I've almost thought of just using the USD and not having a chart with the 6E indicators. But I'm chicken. There's a kind of security in having a confluence- when the USD reaches Support and the 6E reaches Resistance at the same time... well maybe I might want to take a trade!
I am glad to hear that I am not the only one to have gone down the path of insanity!

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 josh 
Georgia, US
 
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Aragorn View Post
For some reason, that I don't understand, the 6E responds when the USD reaches S/R levels. It's weird.

The reason is that the USD index is heavily weighted towards the euro -- 57.6%

https://www.theice.com/publicdocs/futures_us/ICE_Dollar_Index_FAQ.pdf

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 Nicolas11 
near Paris, France
 
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Aragorn View Post
Thanks Klausi for sharing. It is embarassing how much time I spent changing charts. I hope most who read this will say, "Wow! Aragorn's an idiot! I would have figured out a long time ago to stop changing charts and time frames and indicators because the perfect combination doesn't exist." That is my point. I hope that others are smarter and wiser than I am so they don't have to go down the same path I went down. But, I had to learn it and figure it out through trial and error.

Do not blame yourself too much!
I think that everybody needs time to test things, to see the boundaries of the field, to explore roads and check that they are fruitless, etc.
Perhaps that if somebody gave you your current chart at the beginning of your journey, you would not have trusted him (which is normal) or you would not have understood it. It would not have made sense to you.
Your current chart is the fruitful result of your previous change process. So this process has been useful.

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 Aragorn 
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Nicolas11 View Post
Do not blame yourself too much!
I think that everybody needs time to test things, to see the boundaries of the field, to explore roads and check that they are fruitless, etc.
Perhaps that if somebody gave you your current chart at the beginning of your journey, you would not have trusted him (which is normal) or you would not have understood it. It would not have made sense to you.
Your current chart is the fruitful result of your previous change process. So this process has been useful.

Very true Nicolas! Very true! You have to make your trading your own and not someone elses.

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 Aragorn 
Salt Lake City, UT
 
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Simplify Simplify Simplify. Trading is hard enough. If you are fortunate enough to find something that repeats over and over then you have a good starting point to putting together a methodology. I mentioned earlier about the power in a simple straight line- a trend line. Probably the oldest indicator, in all of trading, is the moving average. And with good reason. If a person was to use one moving average and trade it when the 6E pulled back to it every indication suggests they would do very well. Create a 12 Range chart over the past 30 days. Now add a 9 period Simple Moving Average to the chart. Using a simple 1:1 risk/reward of 12 ticks how many times do you make money and how many times do you lose money? I've said this before but it's worth repeating... As an SMA is a lagging indicator, how do you know where the SMA is going to be? Simple. In Ninja if you select the ray from the drawing tools (F3) you can extend the SMA and can get almost the exact spot where it's going to be.
I use the colored moving average from this Keltner Channel indicator. I make the Upper and Lower bands transparent. As the Neutral color is insignificant I just make it the same color as the falling (red).

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 Family Trader 
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Aragorn View Post
Simplify Simplify Simplify. Trading is hard enough. If you are fortunate enough to find something that repeats over and over then you have a good starting point to putting together a methodology. I mentioned earlier about the power in a simple straight line- a trend line. Probably the oldest indicator, in all of trading, is the moving average. And with good reason. If a person was to use one moving average and trade it when the 6E pulled back to it every indication suggests they would do very well. Create a 12 Range chart over the past 30 days. Now add a 9 period Simple Moving Average to the chart. Using a simple 1:1 risk/reward of 12 ticks how many times do you make money and how many times do you lose money? I've said this before but it's worth repeating... As an SMA is a lagging indicator, how do you know where the SMA is going to be? Simple. In Ninja if you select the ray from the drawing tools (F3) you can extend the SMA and can get almost the exact spot where it's going to be.
I use the colored moving average from this Keltner Channel indicator. I make the Upper and Lower bands transparent. As the Neutral color is insignificant I just make it the same color as the falling (red).

Ok...what happened to your Woodie indicator that you had settled on.?

You have provided another indicator with "potential"; simple enough...results look 'ok', but how much backtesting did you do?

What are your trading hours? You can't stay awake for 100 + hours

Allocation and money management?

You will have noticed that there has been some chop since 14.30 est ,around the 9sma, and your rules of 12/12 target /loss causes some pain. How will you handle chop that can hang around for a long time in a tight range like the last 18 hours although last trade was a profit as I write?

Something simple and crazy for you to consider.

One trade a day.

As from 10.24 est till 10.28, pick a minute in that range. Simply BUY 6e for 12/12 each day. No indicators. Run a back test to see how it looks. Not too long, as backtesting will simply give you a result and has nothing to do with the next trade conditions. Maybe someone can help back test if you cannot do it.

Run it for a month on paper and see how it goes.Tab each minute to see which provided the best result; not that it will have a great deal of significance going forward. Take note of the sequence of losers. Winners don't matter.

Too simple....beats banging your head trying to find the ideal indicator.

In fairness,although I don't 'like' indicators I do use one with a volume bases ES strategy.


Trader

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 Aragorn 
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Moving Average is for location. Initial post made it clear I trade using moving averages. Nothing's changed. Trade Management is 1:1. I still use Woodies CCI. What's your point? I have no idea what your post is suggesting. It appears as though you want to trade using your "gut." Thanks but no thanks if that is what you're suggesting.
My methodolology has as it's basis answering three questions:
What? Direction. What side of the market should I be on- Buy side or sell side? The color of the MA answers this question.
When? Timing. When the market does this or trades here I look to take the trade. A pull back to the SMA answers this question.
Where? Price. Where am I going to engage the market? At the SMA is the simplest. For those less daring can use Woodies CCI.

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 Aragorn 
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This thread is not a vendor review so I am going to walk lightly on this subject. I am, however, a Support and Resistance trader. I humbly recommend anyone so interested to give Pam Ludwig's levels a trial. The chart speaks for itself. I am not a vendor nor am I affiliated with her in any way so I have nothing to gain.
https://www.ludwiglevels.com/index.html

I wrote this in my personal written journal last year:

April 30, 2011 I want to join Pam Ludwig's room. Unfortunately she raised her rates from $150 to $225. That $75 jump knocked me out for now so I'll have to go solo until I can get enough money to join her room. I think it will be worth it. I tried Rick Vinecki's room and hated it. I wasn't interested in joining- I just wanted to see how he read the Market Profile charts. It was mainly about trading high volume nodes on the 30min. I didn't see much success in it.
May 17, 2011 Pam Ludwig closed her trading room! That is a tragedy and a shame. Pam is/was an awesome educator and trader.

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 Aragorn 
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Just thought I'd share.

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 Aragorn 
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1.3040 is the area of a market reversal. The USD is at major support at 79.370. Let's see what happens. Unfortunately I missed my fill at 1.3036 after it confirmed on the rejection. Played it too tight. Dangit. Hit my entry but didn't fill me.
This was what I was looking at on the USD and where the 79.370 came in. It was the last line in the sand and it came in the area at the same time that the 6E was at a Resistance level. If you look at the screenshot from earlier up in the right corner you'll see that the red line says 1.3039 and then you'll see a blue line a bit higher. The price of that blue line was 1.3040. It was perfect storm scenario.
This is where the title of this thread comes from. The 6E follows the USD beautifully.

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 Aragorn 
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This is the other chart I look at to give me market orientation, moving averages, etc. Trading is a beautiful thing!

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 Aragorn 
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I said in one of my initial posts that a balanced market is trading between support and resistance. This is what I was talking about.

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 Aragorn 
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Here's what i'm seeing

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 Aragorn 
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Some day I may turn my attention back to the ES.

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 Aragorn 
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Since it's been a while since I've added to my own post I thought today may be a good day to start it back up. And what better way to post the most recent chart of the 6E. This is a Range chart. I then look at the way price responds around those levels on a 250 Volume chart. Buy on strength (buyers) sell on weakness (sellers).

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 Aragorn 
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Thought I'd throw one up on Crude just for fun.

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 Aragorn 
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Nine hours ago I posted the Crude chart that showed 90.76 as a level the market could react at. The Market went to 90.74 and so far has rallied to 91.20.
I once heard someone advise to not trade the over night session. This is nonsense. Support and Resistance knows no time. It's possible that their charts or their method just sucks.

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 Aragorn 
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Today's trading during the European and US Sessions.

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 Aragorn 
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And Crude...

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 Aragorn 
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In my initial post I redefined an uptrend, a downtrend and a trading range. I believe that an uptrend is Support is holding and Resistance is failing. Conversely, a downtrand is Resistance is holding and Support is failing. A trading range is both Support and Resistance are holding. Look at the following chart of the Euro. I've circled several trading ranges. Note how both Support and Resistance are holding. Notice how when the market moves higher, Support always holds (as seen by the wicks even on this rather large range chart) and Resistance fails. And when the market moves lower Resistance always holds and Support always fails. All markets trade this way- 6E, ES, CL and the NQ (these are the markets I started to track). It is also not uncommon for the converse side to hold until the dominant side also holds- meaning in an uptrend Resistance can temporarily hold until Support holds and Resistance ultimately fails and vice versa. If you look at the chart I posted yesterday of CL you can see this same concept. When trading in a range both are holding. When the market reversed you can see the shift When it was in an uptrend earlier this week Support was holding and Resistance was failing. When it reversed to the downside (after trading in a range) it put in a double bottom and resistance held trading lower. Note how beautifully Resistance held and it went down. When it went to a range both held and resistance continually held until yesterday. Once again you can see the shift as Support started to hold and Resistance started to fail and up we went.

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 Aragorn 
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The last several days trading

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 Aragorn 
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The last Several days trading.

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 Aragorn 
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And the ES

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 Aragorn 
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6E is a mess today. A day to step aside and spend time with the kids. Seeing where we are on the daily shows this is a big area of indecision. Not worth it.
The strategy for trading a Range is to trade the extremes and to stay out of the middle.

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 kronie 
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Aragorn View Post
6E is a mess today. A day to step aside and spend time with the kids. Seeing where we are on the daily shows this is a big area of indecision. Not worth it.
The strategy for trading a Range is to trade the extremes and to stay out of the middle.



it would help, if the interval, bar type and analytics that you use, be shown, on those posted charts, otherwise its just so pretty, but can't be duplicated, and hence the point being made substantiated or proven on our own platforms.

hey, I understand some guys feel sharing is not caring but watering down, but these markets are just so huge, its not likely we will dull our edge or weaken your approach

I would have benefited if I could understand what you're showing here in the chart...

thanks

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 buddy858 
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Aragorn View Post
6E is a mess today. A day to step aside and spend time with the kids. Seeing where we are on the daily shows this is a big area of indecision. Not worth it.
The strategy for trading a Range is to trade the extremes and to stay out of the middle.

All I see are a bunch of horizontal lines everywhere that resemble something similar to Floor Pivots... Entries? Exits?

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 Aragorn 
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I started this thread with the best of intentions. It was intended to be my journal, not a "How to" manual. It was intended to chronicle my own struggles with trading, the issues that I faced, my strengths and weaknesses etc.
While a lot has changed, some things remained the same.
I no longer trade the 6E. No particular reason except to say that I have enough trading opportunities during the day that if I want to make more money, I can trade more contracts on the one Market I trade.
I trade the ES.
I am still a Support & Resistance trader. But I had to put it all together. I was, and still am, a student of the Markets. It is my life, my love and my passion. So much so that it cost me a marriage. I hope that I never come to the point that I become unteachable.
I left my job in mid December to become a full time trader. Let there be no mistake, I am still in "Survival" mode. I need to trade and will either sink or swim.
I continued to try this indicator and that indicator. This time frame and that time frame. Even when I knew it was not the solution. I did it because I needed to find my niche. I needed to find what was right for me and my style of trading.
I have a low tolerance for risk. I laugh when I say that because it's like saying, "I am a blind umpire." there seems something contradictory about it. Unless someone was watching the Rams/Saints game in the NFC Championship. NOT a fan of either team but it's clear, someone was blind and then to wave off the other official's flag? A disgrace... But I digress.
So if I have such a low tolerance for risk, then I needed a pretty damn good methodology. Damn good....
I have a propensity for Market generated information. Gomi's work and the additions by Zondor to gomi's work were fascinating to me and I knew I wanted to incorporate them into my trading. But how?
How it seemed was the least of my questions.
I had wanted to incorporate Woodies CCI as well. But I stopped using it. Yes, one more indicator discarded after too many hours to count.
There was so much time lost. lol If I'd been working for a trading firm I'd have been fired a long, long time ago. Too stupid, stubborn, wanting the Holy Grail etc., etc., etc.
But there is something about the sink or swim that is rather motivating. I certainly am NOT suggesting or recommending it to anyone. I did say trading, or rather my decisions in regards to trading, cost me a marriage, right? I don't recommend doing what I did and jumping in with both feet.
People will still, absolutely hate my charts. At first they are overwhelming. Until... you know what to look for.
I am still learning. Just the other day I discarded, yet another, indicator. After a couple of losses last Friday I realized that my beloved Keltner Channels needed to go. The way I was using them was as a trend following tool. But I am not a trend trader. I am a S/R trader. Both losses came because I was trading the trend (not who I am) and not from trading S/R. I would have been fine if I had stuck with S/R.
It was a defining moment.
Consider for a moment, this chart...
Just a simple 4 Range chart. Now consider the next chart. Just adding Keltner channels provided a kind of context. The Market became contained. There is something about trading in the direction of the colored SMA that made trading the ES, dare I say it,(?) "easier".
I like Keltners. It was one of the first (and there were several) methods that I studied. Giving it up was difficult. But here, the last attachment, is a little more difficult. Yuk

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 Aragorn 
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So, what did I trade my beloved Keltners for? I traded it in for this... A chart that buddy858 clearly points out as a bunch of "horizontal lines everywhere." Fair enough. The first attachment is a 10 Range chart. The second attachment are the same "horizontal lines everywhere" but on a 3 Range chart.
But that's not all. I wanted another layer of identification. So, what does someone who is obsessed with "horizontal lines everywhere" do? They add more levels of course!

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  #82 (permalink)
 Aragorn 
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And finally, putting it all together... I got this...
So where would someone who has a low tolerance for risk take his trade?
Hint: Remember I am a S/R trader

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  #83 (permalink)
 Aragorn 
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Hmmm, I suppose I should start another Journal since "The Beauty and Logic of the 6E" isn't accurate.
I was, again as a S/R trader looking at the DX and the 6E. As the DX was coming into Support and the 6E was coming into Resistance (and vice versa) I was looking to take the trade.

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 Comeback King 
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Aragorn View Post
I am still learning. Just the other day I discarded, yet another, indicator. After a couple of losses last Friday I realized that my beloved Keltner Channels needed to go.

This part really stood out for me. Maybe it's just the way you worded it but 2 trades mean nothing. Making a decision on what you look at and what tools you will use to make trading decisions require more than 2 trades. I realize that you are trading SR and not a trend trader so maybe in the end Keltners have no place in your tool box - fair enough. But this kind of statement along with the general context of your post is very concerning.

An edge is defined over a large set of trades. What is large depends and is relative to your frequency. I don't know that you'd want to draw any conclusions about anything with less than 100 trades and even that's a very low number.

I wish you luck. Relying on income from trading as a sole source of income when you are still figuring things out will definitely add pressure to something that's already next to impossible. Obviously you know how hard this is.

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  #85 (permalink)
 cory 
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Aragorn View Post
.....
I like Keltners. It was one of the first (and there were several) methods that I studied. Giving it up was difficult. ...

the question I always ask myself is which indicator(s) help me to make up my mind, overtime only S/R levels and Gom CD MA make sense (for me)

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 Aragorn 
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This was off the Open...

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 Aragorn 
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And this was off the only significant pullback

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 Aragorn 
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The chart shows significant Support at 2740.25. If it gets there in the OVN I'll take it long with a 4 tick stop to challenge the HOD. I have an alert at 2741.

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 Aragorn 
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cory View Post
the question I always ask myself is which indicator(s) help me to make up my mind, overtime only S/R levels and Gom CD MA make sense (for me)

While I too trade with Market generated info, the COT has come to play an important role in my decisions. Came upon a glitch maybe you can answer. I want to use the UniRenko but it leaves gaps in the COT. Would you know why?

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  #90 (permalink)
 cory 
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While I too trade with Market generated info, the COT has come to play an important role in my decisions. Came upon a glitch maybe you can answer. I want to use the UniRenko but it leaves gaps in the COT. Would you know why?

for this renko if there is a gap in price it will fill the gap with make believe bar, why? so that you can see a nice looking chart. So no data for the make believe bar.

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 Aragorn 
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cory View Post
for this renko if there is a gap in price it will fill the gap with make believe bar, why? so that you can see a nice looking chart. So no data for the make believe bar.

You are awesome! Thank you.

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  #92 (permalink)
 Aragorn 
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I tried to bump the settings from 1,1,1 to 2,1,1 and it's a completely different looking chart.

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 icu219 
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Aragorn View Post
I tried to bump the settings from 1,1,1 to 2,1,1 and it's a completely different looking chart.

The truth is that TA does not work. Period. Is that simple.

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Ozquant
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icu219 View Post
The truth is that TA does not work. Period. Is that simple.

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For you clearly , thats the ONLY absolute you can make on that subject

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 Aragorn 
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icu219 View Post
The truth is that TA does not work. Period. Is that simple.

Are you suggesting that Technical Analysis does not work?

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  #96 (permalink)
 Aragorn 
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cory View Post
the question I always ask myself is which indicator(s) help me to make up my mind, overtime only S/R levels and Gom CD MA make sense (for me)

Hey Cory, how did you get your Cumulative Delta to plot in bars?

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  #97 (permalink)
 cory 
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Aragorn View Post
Hey Cory, how did you get your Cumulative Delta to plot in bars?

change gomcd setting to

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FalseProphet
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icu219 View Post
The truth is that TA does not work. Period. Is that simple.

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Rubbish.

It's not the tool. It's the tool user.

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 icu219 
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FalseProphet View Post
Rubbish.

It's not the tool. It's the tool user.

post it again when you make consistently 3 years profit and move on making living by trading. chances are not in TA analyst's favor. It doesn't mean it is impossible to be a successful trader, simply TA doesn't work.

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 Aragorn 
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cory View Post
change gomcd setting to

Your Settings box is different from mine. Is there another offshoot out there of gomi's work?

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