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The 22 Days: A Price Action Trader shares his Journey
You just have to remember that for every "bear flag" or what not, their is someone else on a higher time frame doing something different. I dont think the "players" are watching for bear flags, or wedges or MA for that matter, which I use as well. Everything we put on our charts is a response to trying to figure out where "most" of the money is coming and going from, whether we know it or not. That is, know that we should be looking for the "OTF"
I can't stress to you enough, how important I think it is for a trader to know this. To know the different "Day Types" and to mark the IB on his chart, as well as the open. Thats whats being used by the " OTF " and that's the guy that is moving your market. So you want to play his game, and his game doesn't include MA, Bear Flags, Fib, or even Market Profile. But Market Profile is as close as I personally feel "we" can come to seeing the truth.
I think if a trader hasn't yet checked out "FuturesTrader71" they need to. I don't use everything he talks about, but I did find a great use for the IB, and especially the different "Day Types". You can tell with alot of accuracy based soley on price, what will probable happen next, that is where prices "should" go to.
Thanks for all the posts. I'm not profitable trader yet, so this is just what I think today. I think it might "add" to what you already do, maybe. I just wanted to say it, because Market Profile has really helped me. I came across it once, and passed it over, looked to complicated for myself. But sonner or later if your going to make it, you have to get inline with what is "really happening" I think.
Good luck and thanks for placing yourself out their. You have helped a great many people, and given them hope.
I'll post some pictures I keep now and show some "Day Types"
Yellow lines are the IB. I've posted three, and their are 7 different day types.
iqgod, I noticed on your chart .jpgs that you were trading off of a 30 min chart. And it looks like your charts only show RTH. Are you trading stock or a futures market?
I'm not sure if that's a way Brooks recommended trading off of charts. He does look at the previous day's close but mainly as targets or high low points for reference for the next RTH session of the ES. And primarily for an intraday day trading session. You seem to be trading on the 30min looking at chart expanded over a week or so, but separated by overnight gaps? I could be wrong about this, but I hadn't seen BPA traded that way..
update: never mind, I saw that you had a 5min up. So it looks fine to me. Futurestrader71 mentioned by upupandaway has great points about the 7 different day session types. Fattails has great indicators for IB bands and vwap. He has a nice webinar on nexusfi.com (formerly BMT) introducing and explaining in general vwap. Fattails also talks about his IB band here.
I have modified this post just to avoid confusion. The following post by hegh correctly states how the range bands are built from the initial balance. Paul Colman explains it in minute 41 of his presentation.
You take the midrange of the 60 minute …
(attached .jpg showing example Brooks like setup ES with one 20 EMA and then only IB range bands (set for initial 1st hour) and vwap + std devs. All the lines can be turned on or off or set at different colors and opacity etc. to one's liking)
Exported using NT Version 7.0.1000.26
Indicator will only run on NT 7.0.1000.5 or later.
Discretionary traders: Please use the multi-timeframe version of the indicator for odd minute charts and charts built from ticks.
https://www.bigmiketra …
Exported using NT Version 7.0.1000.26
Indicator will only run on NT 7.0.1000.5 or later
The indicator displays the Volume Weighted Average Price of the selected session. It can be used on all types of charts.
You can apply the indicators to …
Alas, @GaryD. I broke my vow not to trade huge size today.
It started like this. I have been consistently following your discussion where increasing position size puts your trading in jeopardy. I have been working hard on my strategy and it is working with two shares for over a fortnight now (which again is too less, but it is also working over longer times. Caveat: My personal skill is around 10% of the possible skill set a master like Al Brooks would possess, maybe even lesser than that.) I wished to find out if I the same rules I adhere to for two shares would still be unwavering at 2000 shares (!!!!) and I wanted to find out if I would. This was a conscious attempt to scale up to a gigantic proportion for the same intraday period I used with two shares.
I have been battling with the same emotions as @GaryD lately is, day in day out - mixing up my trading full-time ambition, desire to keep my current job for the steady income, and hence confounding both in the process since the latter needs abandoning 2 or 5 minute charts and the former needs concentrating on daily charts which entails larger stops etc.
Firstly here is today's chart:
First the good news:
I traded in the same way as I did with 2 shares. The analysis was correct and I read the market correctly without any pressure. I was calm, relaxed and outwardly at peace.
The bad news:
I did not take the next trade of the day inspite of anticipating it, expecting it and being ready for it. I became disoriented not because of the large size but something came over me and I did not take the trade.
Side note: I had already made an obscene profit.
But I am happy with this experiment nevertheless.
The experiment is not conclusive, and I still might be a ticking time bomb. (Risk of ruin calculations, etc.).
But it gave me something to live off for the whole next fiscal year even if I never trade this size for the entire period again.
"But it gave me something to live off for the whole next fiscal year even if I never trade this size for the entire period again"
The above is your qoute. I'm just curious, because I dont trade stocks, but how much money do you make on 2000 shares? What was your profit? I am probable reading this incorrectly, but I'm looking at the above qoute and thinking your "saying" you made enough money today to not trade for a full year? Is that right?
I doubt I am reading this right. However would you say how much you made? If not, no worries, I was just interested in how much money 2000 shares brings, on whatever price move it was.
Unfortunately, you have misunderstood the above post. And I am to blame for the confusion.
After factoring in the commisions etc I definitely did not make much scalping 2000 shares of a 850 ish stock. Definitely not even enough to survive for a day in my current conditions (though the sad reality of India is that less-fortunate people below the poverty-line ARE living off that amount for an entire month.).
The reason I used the word 'obscene' profit was because what I did today was 1000x in comparison to my daily 'practice volume' which is all of 2 shares.
Also I missed the best trade of the day which WOULD have offered me a truly obscene profit of Rs.9,000 on a base capital of Rs.40,000. @GaryD I know you are coming for my hide, but believe me this is the last time I am trading such a large size. And I am withdrawing my remaining funds too.
The above statement, more simply put, means that I will have something memorable to remember (just because it turned out nicely, mind you, NOT because it was the wisest thing to do, rather the opposite!) mainly because I was able to retain the calm state of mind I had while trading 2 shares.
a personally response and personal opinion: @iqgod
i just read and reread your post with the greatest empathy ever. and at the end, i tried to put myself into your circumstances and attempted to discover, personally how would i treat, respond, react or bewilder at each of the same sets of obstacle and predicament.
here is what i would do personally. so what you are going to read is just what another trader would react to the similar circumstances, OK? my personal responses are just my personal reactions to your circumstances, they are not meant to be better, more superior nor more appropriate in any shape or form, alright? besides, it might even be full of even bigger and more meaningless holes, thoughts, experiences and outlooks; so pls do keep this realistic fact in mind, if you will, while you are going thru my responses, K?
1--iqgod....Is Trading Profitably (capitalized).... after having used many strategies, even seemingly great ones which are based on price action, it took me just a fortnight to give back all my profits and go deep into red. you mentioned that you were trading for 4 yrs and whence was that pls?
there is a shut down setup in my trading plan; if and when three consecutive losses are incurred, that would be the end of my trading session for that day. and that is just me alright. others have different setups which are altogether perhaps much better and much more effective as well.
2--....The random luck did not last. I lost more than I had ever made over a period of two weeks in five minutes. Needless to say I had become cocky and had increased my position size manifold. i am hopeful that at this point in time, proper trading mechanisms, setups and trading plans are all in order for you to again propel yourself to the front of the class, correct?
3--I discovered trading books. I ‘learned’ that this was a necessary phase – that I need to pay the market its ‘dues’ before I could beome profitable. And how could I become consistently profitable? By learning the ‘secrets’. That was how most trading books were titled anyways. It sank in that I had to be on the ‘other’ side to make money. I couldn’t be an ‘insider’ nor could my money be ‘crooked’ or ‘manipulative’ but I ‘realized’ that everybody in the game making money ‘knew’ what was going to happen. by now, i also am hopeful that we recon that, that is also whole bunch of hot air as well--whatever most merchandizers were trying to induce the wannabes, right?
3--Enter technical analysis.
The crystal ball.
The ‘secret’.
I locked myself up and I toiled hard with the books (too many to name, literally hundereds of books have passed under a pair of eyes multiple times). I learnt that indicators are ‘evil’ and ‘price action’ is the way to go. And when I actually tried out my new found knowledge it all seemed to work.
Armed to the teeth. Ready to go into battle.
Except.
I had forgotten that a good soldier needs chinks-free armor.
Such was my confidence that I entered and lost. Entered and lost. What would appear to work on paper suddenly became an anxious ‘please work, pretty pretty please work’ plea to the markets.
Money flew even more from my account to the market – the confidence gained with bits and bits of knowledge was turning me into a desperate person with a desire to get rich quick.
ooooouch.... and more oooooouch....
It would work once twice thrice and then I would get cocky and take it another time (where I would have increased my size four-fold) and immediately go under water. It was freezing down there. No stops. No sense of reality. Just looking frozen eyed with hands turned into cement blocks unable to click, eyes unable to cry for the fear of missing a reversal – it will come now, soon, and I will be richer and free. yes, you were in a trance with utter disbelief and.... you did not know what to do next.... so you let your positions sink even deep and deeper with even greater disbelief....
4--In fact I gave away all the freedom in the world in this nauseating quick ride to ‘riches’. I became a walking ghost, unable to think rationally. A possessed man who would think of nothing but the markets. Perhaps the direction was right – I was learning the ropes, but I was learning nothing about myself. All my dormant negative qualities had come into play. The market exploited all of my insecurities.
I then entered a Utterly Confused phase. I had such acute knowledge which I was sure no one in the world possessed (really? With all the books bought from Amazon?) I would enter an order and quickly take a tiny profit and convince myself that I did the right thing because so many things were looking dicey about this trade. I would not give it time to move at all. My five second trades became a joke at the brokers’ offices when I was on the phone. A surprised female voice would say ‘But sire you JUST bought this and now you want to sell. The market is still open for another four hours – why don’t you wait?) But no, the evil forces would get me. By this time I was using stop losses. But they KNEW where my stops. Or so I thought. Why else would the market momentarily slide off a cliff, dive into my stops and then go straight up to its platform where it had bungee jumped from? SOMEONE was tipping off SOMEONE and all these SOMEONES had greater resources, were closer to the market forces, or were somehow scheming and were on cohorts with each other to get me. They would always be there lurking and trolling and would personally empty my wallet, just like a mugger on the lookout for a single lone person walking down an empty alley.
Finally I thought of giving up. it was a losers game anyway. All who made profits were insiders anyway. Industrialists. Or politicians who made interest rate cut announcements. Or manipulators and operators who sold stocks in round-robin spirals and then suddenly brought them down by ‘bursting the bubble’. What was I doing in their world donating my hard earned clean white precious limited money? <many of these incidents did occur many years ago, or am i incorrect as usual?>
I became the butt of jokes of my colleagues. ‘So how much money have you LOST this week’ (Chuckle!)
Now I wish to thank them for their insults. They were what kept me going when no hope was left.
I discovered many things all at once. And they had nothing to do with technical analysis though it was the bedrock and could be trusted because all of these people used it. And these people were no ordinary people. They were harbingers of hope – messiahs who had the power to heal my wounds.
I healed after long therapies.
The words of some people became precepts, tenets. They were conduits who enabled me to make the LEAP OF FAITH. That something as flaky as technical analysis could be trusted as a framework to take decisions. They made me write a plan. They became my Drona (a guru in Indian mythology) in self-study. They made me learn money management. I however kept avoiding a few things here and there and thought I could ‘beat the markets’. I do that till this very day. I am not yet a trader. I just think that I need to overcome a ‘bit of’ a psychological weakness. I disobey my rules I have laid down so firmly. The markets then teach me sternly. Sometimes they reward me for breaking the rules, but I soon realize that I am a goose who was being fattened for thanksgiving.
I discovered dbphoenix, Wyckoff, Semantics of Magee, various members of the James16 group, deep and hard to decode Al Brooks (but priceless and rewarding when you have the ball of wool unraveled and woven together again!). I ACQUIRED them but had no taste for them (they were all bland, not nearly as exciting as all the ‘secrets’ trading books) ,earlier until I tasted these bitter truths.
Like life I learnt that the values in markets remained the same. The teachings became a religion, the books became scriptures, analyzing the markets was a stream of consciousness thing. All the wisdom that parables taught in the real world was applicable to the markets manifold.
And this is what happened in the past four days. The ominous rumbles of getting to a blown account were almost apparent, but I have been unable to stop the destruction. No amount of technical analysis in this world can help me if done in such a hotch potch, bit by bit, patchwork methodology. The plan has to INTEGRATE all the necessary things and tie them into an elaborate knot - a proper unambiguous strategy for entry and exits, money management and many elements of discipline defined to their very minutest details. One loose thread and the parcel of your pile of money goes down the never satiable black hole of the markets.
5--I have blown yet another trading account in the past four days. And I know that I can’t love myself because I have no one left to blame. in the last 4 days, meaning from when to when, pls? and also in india or in us market, pls? many do realize that trading in the pacificrims are much different and much more prone to error in general as well?
Sigh! Sometimes I wonder if the investment of so much time, energy and concentration will EVER payoff (a voice in my head says ‘It will, it will, you need to …..’ ) Many voices start talking here. A mind becomes a schizophrenic entity before it reaches a pure state of realization. How far beyond that state is I do not yet know. But all I know is that I have made my journey much harder than it needs to be by being stubborn. By not flowing with the markets. Like a stiff oak tree which comes crashing down in a gale rather than like the reeds which bend with the wind in the willows.
I can hear the market burp greedily and whisper to me ‘So long and thanks for all the fish.’
I am posting my charts of entries and exits, where it is painfully obvious how I entered at the exact wrong times, had no stop losses and donated teh maximum amounts of money that were possible in the range of the day just because I thought that the market would 'come back' and its 'just another pullback before the major reversal'. I have been too depressed to post for the last four days.
6--Your warm comments will be most welcome. Even if they are a friendly way of telling me I am an idiot. i am also beginning to bewildered, what are your real setups, strategies, trading plans et al behind your posted charts, pls?no way, sir/lady iq, you are far from being an idiot of any sort.... and i do not believe either.... that you were telling the truth and the whole truth here, nor that you are seeking any real remediation or redemption here for some unknown reasons.
but i did finish reading your trading story with even more puzzling trading questions that before though.... anyway, that is my own personal pitfall trying to read into more than what the author vicariously intended.
sincerely hope you'll recover and become a great trader soon <if not already>, so we all would enjoy reading your success story with even greater revenge. cheers, iq.
Umm, you might be using a slightly rough dialect of English or English may not be your first language, but the above comments seem a bit impertinent / rude. But that is okay. Too many people have helped me in harsher tones but the effect has been positive - if it takes harsh language to reform, change, learn then so be it. The proverbial surgeons knife. Sir IQ would not have posted a journal had Big Mike not held a contest but Sir IQ's castle was defended by many Kinghts of Unknown Armor nevertheless and Sir IQ has come out alomost unscathed and even wiser after meeting Merlin himself (@GaryD and many others!)
Thanks for your encouragement. I hope to be more sincere with myself and understand me and my problems very deeply now. Taking action is a problem. I do not know what CONCRETE steps to follow to improve. Some have suggested engaging professional coaches etc. I keep feeling that my current attempts are HALF ENDEAVOURS. Trading still falls into the HOBBY category. I feel I would die destitute if I make it my sole profession.
just waltzed away begrudgingly and pulled the plug, turned off the light and locked the door, before heading to the andaman shore to refresh.
had i not implemented and rigidly followed this routine, perhaps i could be in worse shape than our friend.
if anyone have any doubt about one's own ability to self-shutdown and walkout ability, it is perhaps best as you mentioned, to engage the broker to do it on you behalf.
but then some could not resist but call up the poor broker to beg for just another chance to get even.... LOL
if you are to instruct the broker, then perhaps you ought to use exact dollar amount which would be best for all concerned, otherwise the process could get bogged down unnecessary or could be carried out untimely with dubious results at best. cheers everyone.
