Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
All very helpful! Thank you for providing more insight. It sounds like you're also in it for the long haul sometimes (a few hours -- few days). It has taken me several years to get out of the habit of using the 1min, 3min and shorter time-framed tick charts for everything... This year I have graduated to 15min, 1HR and 4HR. Drawing supports and resistance lines using 15min wicks has been helpful and I use a combination of moving averages like you. I'll have to adjust mine and see what works with respect to your examples. I would like to get more into studying the daily and monthly and be able to better navigate the monthly prices. So yah, that example is great. I do find myself getting better each day at identifying the big moves.. For example, CL was slowly breaking out of the 80 range early tonight and so I watched it up to 81.30 using some basic price action evidence like higher lows, price breaking 10min 50EMA, some green bars, new channel formation, breaking resistance, etc. BUT---then I get out too early... Happens all the time. This is my biggest problem.. I'm right on direction A LOT... but I shy away from holding strong and waiting for bigger profits.. but then, of course, there are those times that I am right to get out early because maybe there is a quick breakout but it stalls and reverses direction. So there's always a battle between holding longer and getting out with a measly $100 profit.
But your examples are great because I can see the bigger moves by understanding longer time frames like the 1HR and 4HR (drawing support and resistance), and channels. When you mention longer time frames and volatility, are you using ATR? Or are you just employing Bollinger bands in that case, to measure volatility... For example, if you're looking at a 15min time frame, be it over 5 days and you're zoning in on an area... but the Bollinger is narrow, then you're not trading then. You must be waiting for a breakout? In that case you're looking for price to start pushing up on the Bollinger bands and that will tell you market is volatile, time to enter? Or are you referring to when the actual size of a 1HR candlestick is enlarged, and because of its size, it is indicating volatility is increasing and thus you are more enticed to trade during these times?
I just learned about turtle trading just right now.. but I'm reading about "Richard Dennis and William Eckhardt held the turtle experiment to prove that anyone could be taught to trade." .. So I was reading some of their rules.. is that what you're referring to when you say you're a turtle trader?
Recently I passed a couple combines, one with OneUpTrader and Earn2Trade. So I'm not holding overnight. I'm in positions between say 5min and 20min... sometimes an hour if its evening trading. But it sounds like you're holding for quite a while even for a few days? If I'm drawing a channel I'm using a 1000-3000tk on ES... buying pullbacks, and maybe using 15min to draw short term support and maybe employ the 1HR, 4HR for general short term targets... but I'm just not there yet to gauge where the market will be 2 hours from now. However, I think your ohlc examples will start to help me.
And like yourself, I do employ a 1min as well as well as several other timeframes which has helped shape my understanding of how the market moves. I can see that you have mastered this. May I ask what chart software you are using in your example? I do use TOS but was curious if you have a script that defines the color of the bars which delineate direction? That looks super useful. Also, are you buying pullbacks to previous support when you're getting into your long term position or are you waiting for a 1000tk candlestick to close and confirm it's solidly above a resistance? Sometimes not waiting for the right pullback is difficult or getting in too early can be frustrating, even if I think it's a good time to buy and the middle of a trend...!
With regard to others here who only use order flow, I did try it out today for the first time and it was helpful... because I am new at it, I can't really explain it other than the obvious.. but I set it up on ninja trader today using this video if anyone is interested: search on YouTube: "Free Order Flow Indicator | Ninja Trader 8" Click the video that pops up.
Haha no that tweet is not me, just a trader I follow. He posts some great stuff. Really thought that particular thread was relevant to to the conversation and aligned with a lot of my personal views as well.
Usually I have a really small position on all the time like a /mes or two with the longer trend. It may be just superstition but I think it helps me feel the market better. The bigger sized trades are usually less than an hour but can last longer. I make analogies to actual surfing in the ocean because I used to do that a lot. In this case my trading is like that: I go out and surf for a bit when the waves look good.
The bollinger, and candle color, and previous high/low/mid I use more subconsciously. I'm not looking for specific things. I just want to be continually aware of the current condition and notice when it changes: if there is low medium or high volatility. That means big bars (price range) vs small which is ATR but I don't care to keep track of a relative number. The big bars can be going up up up, down down down, or up down up down. Again like surfing these are the big waves they are more dangerous and I don't mess with them the same as small ones.
I learned about them many years ago (when I was in my 20's). I'm not an actual turtle but I loved the story and the idea that anyone can trade successfully. Eventually most of them blew up when they thought they were better than the system. It was inspiring to me as was Reminiscences of a Stock Operator, Richard Donchian, Ed Seykota/trading tribe, Martin Armstrong, John Carter and many others. Again like surfing I trade because I am inspired to do it and the market fascinates me not just because of money or independence. It isn't just the chart and the trade for me it is also the people and the interconnection of everything.
I use TOS and have since before Ameritrade. In the last few years I also use ninjatrader and tradovate (just switched back to ninja web). I have fun programming on both but to me TOS is quicker for new ideas because I have been doing it so much longer.
My trading is with the longer and mid term trend but entered/exited on the short term. Like right now for /es the long term (last couple weeks) is flat, mid term (last couple days) is up so I am looking to trade the short term long. That means when/if the last couple hours are going up so: I try to catch lows (low tick, bottom or lower than bollinger, big volume bar, pulling away from bollinger, whatever).
That part (the entry) is not really important (maybe the least important) and mostly a guess as to where the "wave" is peaking to hop on for a ride. Eventually you get better at it. You can make strict rules about it which I have in the past but I don't do that now. What *is* important (after correct position size) is to know is where I am wrong (previous mid term low) and how to react (get out) and in fact actually react and not question or hope.
The candle is colored if the middle of its bar is above or below the moving average. In thinkscript it looks like this:
def bbSignal =
if hlc3 > MidLine then 1
else if hlc3 < MidLine then -1
else 0;
def bbColorR = if bbSignal == 1 then 0 else if bbSignal == -1 then 130 else 120;
def bbColorG = if bbSignal == 1 then 100 else if bbSignal == -1 then 0 else 100;
def bbColorB = if bbSignal == 1 then 0 else if bbSignal == -1 then 0 else 0;
MidLine.AssignValueColor(CreateColor(bbColorR,bbColorG,bbColorB));
def upBar = close > open;
def upColor = if upBar then 70 else 0;
- the longer term trend is up/flat same as it has been for a month. Sure it could change any minute and it feels a little strange the last few days but that doesn't matter at all. Recognizing what it *is* doing currently is what is important to me:
- the medium trend is up with higher highs and higher lows. A big hourly drop or sideways for a while changes that but anticipating that isn't important - reacting to it is. Price *is* going up so long scalps are still good.
- the short term was going down since open so don't swim against that wait for it to go flat/up for entry:
- zoomed in it is easy to see when: the negative tick, the relatively extreme low, the volume:
After that it is a matter of managing the trade. Two things can happen: it can be a wipe out (going below the previous low 4150) or continuing up (move stop to profit and ride it).
The most important part is that the wipe out point also determines the risk and position size. How much can I stand losing if it moves 20+ points against me? There is an amount of contracts where I am worried about it and an amount where I don't care. Right at the edge of not caring is perfect size. Easy to figure out with time and trial and error: try 1 micro es and see how it feels.. work up to 10 emini and at some point having a position on starts to get scary then back off. In one trade $100 loss vs $10k If $100 is still too much to now days with free commish you can do 1 share of SPY and make a 20 point es risk a couple dollars.
All of this can be incorporated into a system and backtested and I have dabbled in that with limited success over the years but I enjoy doing it manually. The nuance and feel of it is hard maybe impossible? to capture in strict rules and I have been programming since I was 6 years old.
This is just one of many ways to trade but the specific parts are universal:
1) What to buy or sell? (markets)
2) How much to buy or sell? (position sizing)
3) When to buy or sell? (entries)
4) When to get out of a losing position? (stops)
5) When to get out of a winning postion? (exits)
6) How to buy or sell? (execution)
(by only trading s&p futures in a simple way I don't worry about #1 or #6)
Here is an interesting question: Why is price bouncing between the high (green line) and middle (blue line) of yesterday. Trading robots? Group psychology? Sector rotation?
I have no idea why but it does happen so I like to watch it.
By this time, the trader is in big drawdown following their "setups" and "entry rules" and starring at Realized Losses of all those trades taken by "setups". The only thing on their mind is How do I recover this -$2000ish loss of the day because my "setups" was not reacting well to the "market conditions".
The trader will NOT just "let the day go without trading". The trader will think about those losses and try to recover ALLL day long. We are talking about real trading here with real losses with real money in the account that can be used for vacations and family fun.
Of course it's easier said than done. But someone who takes it seriously enough will learn to do it if s/he wants to stay in the game.
Your straw trader didn't have a plan or didn't stick to it, de facto same thing.
So what's your answer?
