+2.5pts today… so a bit better. Maybe I am adapting some to the recent action. Very very choppy, still, for the most part. In this video, I talk some more about PnF charts (and by association, range bars), and some of the things I like about them. Now that I’ve seen that the main eotpro indicators seem to function on them, I am really liking the idea of using them.

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I had a rough day yesterday, to the tune of minus R 9. My feeling was of trying to catch up. I wasn’t looking for momentum moves, 2 B tops, or 2nd time through trades….I was trying to dig myself out of a hole I made from trading the open. I was trading chop, trying to guess tops of swings. The very thing I swore I wouldn’t do. I looked for a good trade to post, I found one, out of 30 or so. Then I felt sorry for myself and ate chocolate instead of posting it. I knew a day like that would come. And I welcomed it…. after I pondered my lessons. I need to concentrade and trade the charts. Plus R 2.8 today. I was down for most of the day, but I was calm, and looking for quality setups. So, day 8, and I am still up R 10.7 trading the indices. Charts on the weekend….of what I saw today. Discipline = moola.

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This is the best blog post ever on the subject of trading.

To quote Dr. Brett, “…And I have a feel for bullshit.”

Another notable quote, “…But if you don’t have concrete goals, concrete ways of working on goals, and specific routines to research markets and prepare for the day, you don’t have a passion for trading. You have a passion for making speeches about being passionate.”

And the absolute best quote ever - from the best post ever - “…Mmmmmk. So you have no prior experience or track record, you have $20,000 account, you’ve read some books and attended some seminars, and you’re going to sustain triple digit annual gains against experienced market pros. That’s a great business plan….And you wonder why I don’t take on wing-and-a-prayer traders for coaching. If I have to participate in a delusion to get paid, I’d rather do without the income.”

“You know, trading is a craft. It’s something you hone over time. It’s not a place to act out one’s wildest fantasies or basest fears. If you’re not taking a logical approach to trading success, perhaps your motivations for trading are psycho-logical. That, is the saying goes, is an expensive way to learn hard lessons about yourself.”

There’s no psychobabble going on over there! Love it!

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I guess DT, Richard, and Ugly are right. Not only are the bots taking over trading, but they will soon dominate areas you haven’t dreamed of (if your into that sort of thing).

I’ve just signed up for the model that can trade too! I think I’ll sit at home while my bot trades for me, cooks for me, and well — you know.

Since we can now stop debating over whether or not bots will take over trading, we can move to more serious discussions. Is sex with my robot cheating? Will I risk serious injury in the event of a power surge? Will I ever leave home again?

I still can’t figure out why MtM scored so low on the blog reading level. It must be Richard’s videos.

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I was away from my desk almost all day, and only made a small trade in the morning (+3/4 pt). Not worth making a video over it. Depending on how much there is to talk about tomorrow, I may go over the ugly-looking action from today in tomorrow’s video.

• Analytical Market Trading Chptr 7: Range Bars
  An article about range bars
  (tags: trading range_bars)

Stopped the bleeding and at least won a little today.

… and I do mean a little!

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Half the reason I post these trades is to get me away from staring at the charts after I have identified and traded a setup. So here I am. I saw a momentum push with volume this afternoon, and waited for a setup to follow…which it did. Momentum precedes price.

SPY Scalp:

2 more…

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

Looks like a breakaway gap today for a “rally”. 2 wins, 2 losses. Kept my losses small….about all I did right today :/. Plus R 0.7.

SPY Scalps:

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The eotpro.com folks have been investigating the strengths and weaknesses of range bar charts. Tradestation doesn’t have range bars, but it does have PnF charts. And, you may or may not know that PnF charts are an extremely close cousin of range bars. The only difference is that a range bar chart will split up a long directional move into multiple bars. This means that most indicators will move over to range bar charts pretty smoothly, while indicators are usually pretty hit-and-miss on PnF charts.

Still, I applied the various eotpro indicators to some PnF charts tonight, and about half of them seem to do really well! And, importantly, the GCycle_Stochastic and GVol_Oscillator seem to be useful. Those are the two main indicators I use in my recent trading.

So, I may investigate that further, since as many of you know I am a big fan of PnF charts. They were a big part of my stock trading setup. For futures, I haven’t been using them as much, except for reference. Maybe that will change…

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I found this link at DT. I would post his blog address, but by the time you click the link, he’ll prolly be on hiatus again. Besides, I never got the kickbacks for the 17 people that visit his site on my recommendation.

The link tells you what reading level is required to understand your blog. I typed in MtM, because its filled with rocket scientists, Level 3 programmers, fighter pilots, software engineers, and me - the token tard.

Thanks Richard for keeping the blog at a level that I can understand!

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

So I had a trading identity crisis today in VMW. I sized it up on the 15 min chart, seeing a gap up, retrace and then a high volume green candle. I thought it could get to $79.50 with some luck and a good uptrend day (alas, it was not to be):

My entry was poor. Far removed from the 5-ema, I was chasing rather than taking a conservative entry. I got lucky that I didn’t top-tick it and it went up more. I took my 15′ target and used a $1.00 stop, and watched on the 5 min chart:

This chart shows my late entry. Once up 1R, I moved the stop to breakeven. My $1.00 initial stop was sized to allow me a significant swing. I was setting up for an all-day trade, if it took that long to hit my target. Then, I got punchy watching that 5 min chart and seeing the NR7 candle at 11:00. I thought that we might be stalling out. Did I sell there? NO. I raised up my stop to $76.50 like some kind of schizophrenic dual personality patient. I wanted to play it like a momo scalp on the short timeframe by raising my stop, but also like a long-term intraday swing trade by letting it retrace a bunch. Instead, I got out pretty near the worst-case price that VMW offered during my trade.

My trade would have turned out better if I had either taken it all at the pause in momentum (a break of the low of the NR7 candle) or if I would have just held with my stop at breakeven. I would have gotten a better exit price either way. However, my position was small since I was playing with that $1.00 initial stop, so I should have stuck to that plan. If I was scalping, I should have taken a much tighter stop and a bigger position, and got out at the NR7 when price paused. Or, if I were intraday swinging, I should NOT have trailed my stop but left it at breakeven.

My takeaway is that it’s easy to mix up and change timeframes during a trade based on what we see, or think we see. The best thing to do is formulate a trade plan, and STICK WITH IT. As a trader, if you’re mechanically scanning for setups and simply taking the signals and executing a defined system, it’s easier to execute and stick to it. But if you trade in a discretionary manner, you have to triage every stock you come upon, and come up with a plan on the spot. Trade it, or not? Which direction? What timeframe? Size the position. Exit criteria / target? What type of move are you shooting for? Then, as the trade progresses, you have to check and recheck according to this plan, and change and adapt as necessary. It’s easy to let your initial triage diagnosis and prescribed action get modified, especially if you watch a different chart than the one that your decisions were based on. Note that watching the stock for symptoms and taking appropriate action is different than changing the plan. If I were momoscalping, I should have watched for a stalling, and bailed. The swing should have been watched if it reached the target or not. But the nature of the move I was stalking shouldn’t have changed! I hope that is making sense…

All of this has to occur very quickly, in a matter of seconds sometimes. You have to make a decision and act. The ability to do this right comes with experience. It can’t be studied or book-learned. So my advice to newer traders is to stick with one timeframe chart for a trade. If you pick a setup on the 1 min, stick to it. If you see something on a 15 min, watch only that chart. Then you will be less likely to change your strategy based on a change in paradigm, rather than a change in actual market circumstances. It’s best if total newbies trade a mechanical system, watching and learning about price action in the meantime, IMO.

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Markets not obeying me, two days in a row. I’m going to have to put on my stern warning face.

I’m noting that we did over 2.5million contracts in ES today… and I’ve just checked the 6765 share bar chart, and seen that the bead signals were much cleaner on it. You may have heard me say before that the bead signals on 2584 are harder for me to read… so maybe I need to shift up to 6765 on high-volume days (or get my act together and learn how to read the beads on faster days).

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Here is a shot of my setup. I plot S/R lines on my 5 minute chart (not shown) before the open. There is a trade right as I took the screen shot, but I didn’t take it. NYSE ticks pulled back (up for short), momentum is down on all timeframes, out of a decending triangle of sorts on 2 minute chart. Market made an impulse move down from here.

Setup, and a trade I didn’t take:

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This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I looked after 2 pm eastern today (volume picks up then), to see a momentum push down on SPY 2 minute chart to support. A bear flag formed, and support failed the 2nd test of the day from a bear flag. Played pullback to 8 ema on the bear flag, waited for momo to shift down, and captured 18 cents.

SPY Scalp:

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