First off, I want to brag that we came in #3 in a list called: Top 100 Day Trading Blogs. MtM snipers have been dispatched to take out the owners of the top two blogs.

Secondly, everyone should congratulate Eyal, because Eyal is going pro (although he’s been trading like a pro for a long time now).

Third, I’ve updated the Blogs I Read Page, to eliminate some blogs that have gone on hiatus, and add some new favorites. Most recently: I’ve added OONR7’s blog, because I really like the trading style, and am looking at incorporating some of those setups into my trading. And, while I normally avoid new blogs, I’ve made an exception for Narrow Edge Trader, Stewie’s blog.

We posted some charts from Stewie on MtM a while back when he didn’t have a website. I guess he liked the experience, because shortly after that he started his own blog. Now, I am easily threatened… it’s stressful maintaining that #3 spot! So, I dispatched MtM agents to break his thumbs and make it look like an accident. Problem solved, right? Unfortunately, the agents thought I said “thumb” rather than “thumbs” (I really should enunciate better when ordering a crippling… lesson learned). So he can still blog with one hand, and he’s doing a great job at it, too. Why, on the post I just linked to, he already has anonymous comments implying that he’s fabricating his performance by only posting trades after the fact. Awesome.

I made some mistakes early on today. Call it lack of sleep. Call it ego. Call it “Martha”, for all I care–it sucked! But, I finished the day strong and made some money! That’s all that matters.

And check out the news clip from that fateful Monday in 1987 over on Howard’s Blog. That was neat to see, since I was 10 years old and completely uninterested when it actually happened. They sure took it calmly!

At some point in that coverage, they point out that the TRIN was at 6.44, as if it’s just another piece of data. To contrast that, I remember during the mini-correction we had in late Feb 2007, I had CNBC on. There was a reporter on the floor of one of the exchanges pointing out that the TRIN was close to 2 as if it were a major problem!

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Did Tom C ever start a blog? I think it’d be a more successful spinoff than, say, Joey.

(no, this isn’t the article I said I might write in my last video!)

I’ve been reading through the OONR7 blog this morning, and it looks pretty enjoyable.

Unlike a lot of you out there, I’ve never (to my knowledge) taken a “Trader-X” trade. I’ve just never had it in me… the profit targets always seemed too lofty (and when I saw new traders try it, they usually didn’t hit the extension with any consistency). More importantly, I’m just plain too lazy to draw the fib lines (and because I rarely do it, I can never remember whether I’m supposed to drag the line up or down–and I always guess wrong and have to redo it!). Sad, but true.

But, OONR7’s spin on this style looks a little better to me. He tends to use faster charts, and uses smaller intraday fibs. I may try this out next week, for laughs. I have a theory that the only real “strategy” is a feel for price-action, and all the rest is just a framework to help grab your attention at promising times. For instance, I’ve gone from daily breakouts to intraday reversal plays these last couple weeks, and my win rate and expectancy is pretty much the same. I went from time charts to volume charts to PnF charts a while back, and my win rate and expectancy are pretty much the same. To me, this means that the strategy you use and the charts you look at really aren’t what determines your results. Just find what’s comfortable for you to look at, and what most readily shows you what you want to see… at the end of the day, you’ve still got to guess which way price is going to go.

(this is still not the article… that’s still coming… probably tomorrow… I’m tired at the moment… netflix promised that Weeds, Season 2 will be in my mailbox if I can drag my ass out there to check… if so, watching those discs will be my main activity today.)

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

Dave over at the Trading Digest has started a chat room. I haven’t checked it out yet, but I will be stopping by this week if I can squeeze in some trading time.

After reading this post, I like where he is going with it. He is also posting calls for a futures system that he uses, and maybe we can even learn a thing or two.

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

Who wants to read on the weekend? Not me… (actually I am reading quite a bit this weekend, but it doesn’t fit with the ‘non-reading’ theme to say so)

But wait, you might object. You always post videos. To watch the videos I still need to use my eyes. Isn’t there anything I can learn with my eyes closed? Perhaps some Q&A with females?

Well alright…. Here’s two interviews I listened to today:

• Toni Hansen, who I thought made some good points.
• The always intelligent and interesting Teresa Lo, whose blog is also good.

In both interviews, I noted that they said something about taking as many signals as possible, because that’s my recent soapbox topic. Toni specifically said she used to take days off after losses but doesn’t do that anymore, and that she’s branching out into taking imperfect setups to increase her profits. Toni also says she uses price and volume and usually nothing else, at which point the interviewer remarked that he’s been hearing that lots of traders eventually gave up on indicators and go back to simple T&S. Teresa mentioned the same phenomenon I had recently talked about, where the first trade you skip seems to be the one that runs without you. All very cool.

Maybe now you are rested up enough to watch video… if so, here’s a couple:

Remember in the June 3rd edition, we had that Skynyrd-listening stoner? Well, he’s still making videos, which I find entertaining. Here’s one where he accidentally goes long instead of short, and loses $500:

Here’s a longer one (featuring more 70’s rock), where he sits around talking for a minute or so, before realizing he needs to set his stop. (I poke fun at the guy, but he does seem to know his stuff… doesn’t trade anything like I do, though):

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Watch this post's video on Youtube

It’s time for another edition of weekend non-reading. Who’s got time to read during the weekend? Not me. Let’s get started:

Video 1

I’m quite possibly stoned. I listen to Skynyrd. I trade with a lot of indicators, and my stop loss is more than three times wider than my profit objective. Here is my video:

Video 2

I mumble a lot while trading NASDAQ stocks. I have a healthy respect for whole numbers while shorting new lows on big gaps down. I don’t mention a stop loss, but I imply that I have one at some point. Here is my video:

Video 3

I sound Australian. I am careful to cover my ass with legalese about how I’m not liable for your losses. I combine fundamental and technical analysis. Here is my video:

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I was flipping through the June issue of TAoS&C at Borders tonight, and there’s an article about rectangle patterns. These are the daily chart equivalent of the box play. In it, a formula is given for selecting a price target. I’ve always just used the box height as the target, but this article suggests the formula:

t = 2.3 h0.8

… where t is the profit target, and h is the height of the box. This more or less suggests that you can safely choose larger targets for small boxes. Here’s a graph I made for the formula, against a straight line that represents the classic 1:1 ratio I have been using:

You can see that it starts out aggressive, but somewhere between 60 and 70, this profit target actually becomes more conservative than 1:1.

A couple things I don’t like about this idea:

• I was just skimming the article, and don’t have it in front of me, but I think it said that the formula did not care about units. So, you could plug in dollars, or inches on the printed chart, or whatever. You get out the same units you put in.

  But, because of the nature of this function, I fail to see how that works. For instance, if I plug in 100 cents, I get the conservative target of 91.5 cents. But, if I plug in 1 dollar, I get a target of 2.3 dollars. wha? Maybe I misread that section. Anyone with the issue care to comment?

• 2.3? 0.8 (which, when used as an exponent, represents the fifth root of the number raised to the fourth power)? Doesn’t feel very natural to me… it’s most likely the result of statistical regression. Not that numerically derived formulas are a bad thing, necessarily. But, before you believe stuff like this, make sure the sample size was very large, at least. Sadly, I didn’t read the article close enough to see how big their sample was.

So, the message I take away from this is: for small boxes, consider raising your target a little, and for large boxes, consider bringing your target in a little. That’s easier than doing the fancy calculations, and probably more reliable anyway if you are watching the action in real time.

Anyone read The Chart Strategist? It’s got examples of the 3-timeframe methodology that I really like. Seems like people call this “triple-screen” or “3-D” or whatever. It’s very regimented, and just makes sense to me.

Tales of an Aussie Futures Scalper is a brand new blog, so I don’t know if it’s any good or not yet. But, I was so amused by the way they linked to me that I had to give it a plug.

They have a typical blogroll, except they add a couple words by each entry. So, it says “Trader Feed — Trader Psychology” and “Estocastica — Candlestick and Fib Stock Trading,” for example. Naturally, I started looking for Move the Markets to see what my category would be. I thought, maybe “Classical Chart Patterns” or “Breakout Trader” or something. Nope! For us, it says: Alternative Ideas. :-) Very nice. I think that’s my favorite category in the list, so I’m glad to have it.

So, everyone go check it out. Maybe it will turn out to be a good blog. Time will tell.

It’s the weekend… who’s got energy to read anything? Not me. In fact, you are probably just skmming through this text right now. Well, you’re in luck, because I don’t have the energy to write much. So, here are some market-related videos I’ve run accross this morning.

Live S&P… stuff

In what way would this be useful to listen to during trading? I’ve read about John Carter using pit noise in Mastering the Trade, but I don’t think this is the same thing. It’s some guy yammerring at top speed, while blips and bleeps that remind me of 90’s electronica (or 80’s video games) occassionally blare in the background. Anyway, if you can make something out of it, lemme know! (Warning: the sound is rather loud on this)

I only watched the first 10 minutes, but it seems like this guy’s more of a contrary indicator than anything else. When he gets most excited about sellers seems to be right as the price is about to turn and run up a bit.

A Simple Trading Technique

Essentially, the message is: trade with the long-term trend when the medium-term cycles roll over. It’s very similar in spirit to the “triple screen” technique, where oscillators are used on the middle screen, to know when you want to get in a trade in the direction of the overall long-term trend.

It annoys me that they didn’t really talk about stop losses, except for one mention of an arbitrary .50 stop loss.

Short it… NOW!

This one’s worth watching just to hear his voice get all strained when he finally pulls the trigger on his trade.

If trading doesn’t work out for him, it seems like he’d be a shoe-in to do TV commentary on golf tournaments.

You Call That a Scalp??

Here’s a “scalp” of the S&P e-minis… You know, everyone has a different definition. I believe the rigorously “correct” use of the term is when you enter a trade with hopes of exiting immediately to make the bid-ask spread. I guess decimalisation of the stock markets has made that a much more rare practice. I use the term “scalp” when I want to capture a single thrust of momentum in a direction, and won’t accept any move against me. Here, we have a much more easy-going “scalping” approach with a 3-point stop.

I wish I could stay that calm and easy-going during my scalp trades! Once again I notice that this trader is buying a dip, rather than a breakout. It bothers me sometimes, that by playing breakouts I am getting in once a little bit of a move has already happened. Jumping on a longer trend at turnaround points does make a bit more sense. I need to think some, about when it’s sensible for me to try that kind of approach out.

Here’s another one:

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For the past hour, I’ve been listening to mp3 interviews with traders from traderinterviews.com. So far, they are really enjoyable! I especially liked the one from Teresa Appleton. She talks about how no one ever seems to sit down and figure out how much money they need to make every day to comfortably trade for a living. I was so glad to hear that, because that’s one of the first things I did, when I started seriously considering it. I still have the spreadsheet, where I totalled up my monthly expenses, and figured in taxes, and the number of trading days, etc.

You can subscribe to their interviews as a podcast, which is cool, because right now iTunes is downloading the whole set for me, so I can listen to them from wherever on my iPod. Interviews with traders are often a lot more educational than books on technical analysis, once you know the basics. Interviews help you absorb some of the wisdom people have picked up from years of watching the markets. Very cool.

Don’t forget there’s a bunch of great textual interviews at the StockTickr interview series as well!

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

Babak has written an interesting article about the Cook Cumulative Tick Indicator. Be sure to enter his first Trading Blog Contest while you are there.

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

In the always excellent TraderFeed blog, I just read about a trading exercise that I would love to try for a few days. It’s about midway through the linked article. Here’s an excerpt with the gist of it:

Select a time frame to practice. You can do this by trading in simulation mode and setting your charts to 1 minute, 5 minute, 15 minute, 30 minute, or 60 minute bars. You have to stick with the setting you choose throughout the trading session. No toggling to shorter or longer time frames. Then set your alarm clock for a random time in the next few minutes. When the alarm rings, you have to enter the market within the next bar period (i.e., if you’re trading 5 min bars, you must enter in the next five minutes). You can either sell or buy the market, but you have to enter, and you have to manage the trade at your chosen time frame. Moreover, you have to hold your trade for at least one entire bar period (i.e., if you’re looking at 5 minute bars, you hold for at least 5 minutes, etc.), but no more than two. That means being prepared, in advance, with support/resistance levels or indicator levels that can serve as stops and as profit targets.

Sounds like an interesting experiment… I am often watching for patterns to show up, and say to myself “I could make 10 cents easy if I just went short right here.” But, I never do it, because I always want to see a defined setup. It does seem like I’m often right, though. Maybe that’s just how it seems… by doing a bit of a structured exercise I could gather some stats…

Only problem is I would prefer not to waste trading days sitting in demo mode making scalps at (literally!) random times. And, I don’t use a broker that does an after-hours replay of the markets like Cyber and others do. So… maybe I will just be on the lookout for a day when I’m pretty sure I won’t be making normal trades. Don’t know yet.

Check out the interview with the HighChartPatterns Group on the StockTickr blog. They have a great service–as I pointed out in my review of them.

After you check out today’s trades, why not go read Zoomie’s Interview over at StockTickr! It’s good stuff.

Today, Zoomie made two trades that turned into losses by the end of the day. It was pretty flat and choppy out there today, so it was hard for me to find opportunities I liked. Zoomie’s description is on the charts, as always.

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