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The static chart reading exercise is coming to an end in the journal "AR01 Our Journey." Please give me your thoughts on the best way for someone to learn to read and mark up a moving chart from a price reading perspective (HH, HL, LL, LH, trend lines).
Do you mark it up and leave it that way until the end of the day then mark it up with hindsight to see what you did wrong? Or Do you adjust as you go and somehow denote your changes as the market develops?
Andrew, static chart reading is good but i don't think you need to indulge in that practice. This is the easy part. Identifying a HH or HL is not difficult, a more difficult task is learning to identify where to enter into a trade and where to exit a trade and developing your ability to click buy/sell at the appropriate time without sweating. How are you going to address this issue ?
I'm still enjoying to keep up with your progress. I think it is still useful to mark HH and LL etc. and trend lines as they develop on a live chart. And I agree with Big Mike that it is more useful to mark them by hand than with an indicator. It keeps one actively engaged with the chart as the market structure develops.
Have you defined your trading plan? Enter on breakouts, breakdowns or the troughs and peaks of pullbacks? Sure you can practice labeling live for awhile, but I think that you might be close to actually defining entries and exits and practice looking for those.
I highly encourage anyone interested to review Market Geometry's free webinar from yesterday. Tim uses no indicators, just manually drawn lines. He gives a very easy to follow, but thorough explanation of market structure.
So, in light of what I just said about Tim's webinar, we also need to keep looking left on the chart to put things into context as the right edge develops.
I would suggest advancing the chart one bar at a time, and marking up the chart in "real time". This is what I do for placing price action markers. I would say that probably only 5-10% of time do I change a marker after I set it (say for instance 2-3 bars later), so with time I think I would not be concerned with that. The most important thing is 'now' in real-time trading, so the emphasis should be on "what do you see, as of this bar? what will you do with this information?".
I would encourage her to 'take trades' on the right-edge, in "real-time", advancing one bar at a time. When she feels she wants to go short or long, put a "S" or "L" on the chart, and also have her identify her "SL" and her "T" on the chart that very same bar. Then as she advances bar by bar, lets see how she does. She'll also get instant feedback this way and learn to improve just solely based on that. Last, I would suggest having her put a reason as to why she took the position, at the time she initiated it (the same bar). This way she can learn from that as well.
I appreciate the replies. Based on the consistency of the comments it looks as if it is time to develop the trading plan. That makes sense based on the exercise. Off to do that with the spouse over the next few days. I'm going have her keep it to one or two types of entries for now. Let's do those well and then we will expand. Awesome.
