Day Trading

[tech/a]

Wayne/Mit.

Your charts look very similar to those of Frankie 's or Deelite at Reefcap.
Are you aware or familiar with Frankiee's work?

Re forward projection type zones,Fib Gann,Trendlines Support and resistance.

My personal view and one through observation and testing is that these areas are no better than a 50/50 proposition re any trade setup and its result,being in the direction you expect it to move.

Now before you all yell BUT BUT proof is in the pudding I/We find the results is way over 50%---consider this.

ANY setup entry or exit will have a mean (That is a standard value between extremes).So often you will have results moving toward either extreme.
A run in your direction even over a year or so doesnt mean that the "mean" will not be visited or the extreme in the other direction,tested.

Technical analysis I think is the ability of the tactician to identify and exploit moves and in particular extreme moves away from the mean of ANY form of analysis,be it predictive or regressive in nature.

To be able to RECOGNISE firstly the mean then the move away and then being able to extract the most from that shift----being the ultimate decider in profit.

As a Systems trader I find that quantity of information in and combination of methodology gives a result which I can then 'Place the odds" more in my favour---in exploiting these extremes.

In your case Wayne when exploiting these extremes in one or a few entities you can and do become familiar with both the mean AND the extremes in them.Experience will and does allow you to exploit those moves which we think we see as amazingly repetitive when in actual fact they are nothing more than a point on a chart expressed mathamatically. Repetition of a mathamatical extreme is simply a swing in the direction of the extreme which will not be perminent---as is the case with extremes in the other direction and the mean itself.---The ability to identify and exploit---being the point here rather than the analysis itself.

As an example Ive always been a Commodore man I bought 4 Fords for the Company and I cant believe how many Fords are on the road.
If I drive my Ford to a Ford dealer then I'll find lots more Fords.

If I see an accumulation of indicators that point to a move away or further away from the "mean" then chances are I'll be able to exploit it.

My way of handling the Efficient Market and Random Market theories!

 

[mit]

Tech,

Take your point and that would have something to do with it*, but that means that retracements should reverse (if they reverse) equally likely at any point between 0 and 100%, but if you even checked statistically you would find turning points more often at the main Fib points than at other times. So I think that it is another tool.

I was skeptical until I spent six months on a forex forum with people making live calls. One thing I have found is that before I can disregard some methodology, I need to look at it and the way it is traded for a period of time rather than disregard it out of hand.

Like the Efficient Market theorists who have done "exhaustive" studies which shows that it is impossible to beat the index over time. Well if that was true then there is not point for this forum. Or some of the discretionary traders in the Wizards books who say that after "years and years of testing" it is "impossible" to get much of a return from mechanical trading. These things I know are incorrect. So if these otherwise smart people can be so wrong, who am I to tell somebody else that what they do doesn't work (leaving out the astrology people).


MIT

* It's also called the full moon affect. People always believed that more babies got born at a full moon. This came about because midwives would notice a full moon more than notice not a full moon so it would stick in the mind.

 

[tech/a]

Mit

Not suggesting that trading fib is wrong or infact not a valid method.
Simply stating that its not the fib thats at play BUT the distribution of positive and negative results (regardless of what analysis tool you use ---fib or otherwise) that will determine result. How you recognise and take advantage of these moves toward extremes.

Think about it a while and you'll see what I mean takes a bit to get your head around.

Ponder-----
Do you take the .32or .5 or .618 levels in a retracement?

 

[Bronte]

Ponder-----
Do you take the .32or .5 or .618 levels in a retracement?

That should be:
0.382
0.50
0.618034
1.618
2.618

Fibonacci Series
1 1 2 3 5 8 13 21 34 55 89 144 etc
(1.618034 x previous number)

 

[mit]

Tech

I was more responding to the quote

My personal view and one through observation and testing is that these areas are no better than a 50/50 proposition re any trade setup and its result,being in the direction you expect it to move.

I think that it is better than 50/50, but everyones experiences are different. The guy I used to watch on the forum used to trade the 0.618 retracement which was pretty cool to watch.

I don't directly trade fibs but look at the overall asx200 to guage any pullbacks to get a feel for the market. In the asx200 there seem to be a lot of 50% corrections.

I definitely would for FOREX (I like my sleep though) as it is a retracing SOB and TA that works on shares doesn't seem to be as effective on Forex.

MIT

 

[mit]

That should be:
0.382
0.50
0.618034
1.618
2.618

Fibonacci Series
1 1 2 3 5 8 13 21 34 55 89 144 etc
(1.618034 x previous number)

Isn't there one between 0.618 and 1?

 

[Bronte]

Isn't there one between 0.618 and 1?

Yes 0.786

 

[It's Snake Pliskin]

Weeeeelll, straight off the bat is not quite true, as I've been in the market since '86, so knew all the basics.

But two things happened. I discovered t/a, and I buggered up my back, so couldn't continue with my then business. This happened basically at the same time.

So I thought, right, I just jump in the deep end here. Read a few books, bought metastock, and away I went.

The key was that I already had my psychology, money management etc. sorted through punting, so it was just a matter of picking trends and climbing aboard, set stops, exits, and learning a few new tricks as a I went along.

Wayne,

Thanks for the info.
I must admit day trading is not for me yet. I'm more comfortable with short term trading, as in days or weeks. If there are opportunities there though I'll take them and close out before the end of the day.

Cheers
Snake

 

[wayneL]

Wayne,

Thanks for the info.
I must admit day trading is not for me yet. I'm more comfortable with short term trading, as in days or weeks. If there are opportunities there though I'll take them and close out before the end of the day.

Cheers
Snake

That the best way to play it Snake, I don't JUST daytrade either, I have other strategies I do as well, so the pressure is off as far as HAVING to make a profit from the daytading.

Funnily enough, this makes me more profitable on the daytrades.

It's all a bloody mind game, eh?

 

[wayneL]

Wayne/Mit.

Your charts look very similar to those of Frankie 's or Deelite at Reefcap.
Are you aware or familiar with Frankiee's work?

Re forward projection type zones,Fib Gann,Trendlines Support and resistance.

My personal view and one through observation and testing is that these areas are no better than a 50/50 proposition re any trade setup and its result,being in the direction you expect it to move.

Now before you all yell BUT BUT proof is in the pudding I/We find the results is way over 50%---consider this.

ANY setup entry or exit will have a mean (That is a standard value between extremes).So often you will have results moving toward either extreme.
A run in your direction even over a year or so doesnt mean that the "mean" will not be visited or the extreme in the other direction,tested.

Technical analysis I think is the ability of the tactician to identify and exploit moves and in particular extreme moves away from the mean of ANY form of analysis,be it predictive or regressive in nature.

To be able to RECOGNISE firstly the mean then the move away and then being able to extract the most from that shift----being the ultimate decider in profit.

As a Systems trader I find that quantity of information in and combination of methodology gives a result which I can then 'Place the odds" more in my favour---in exploiting these extremes.

In your case Wayne when exploiting these extremes in one or a few entities you can and do become familiar with both the mean AND the extremes in them.Experience will and does allow you to exploit those moves which we think we see as amazingly repetitive when in actual fact they are nothing more than a point on a chart expressed mathamatically. Repetition of a mathamatical extreme is simply a swing in the direction of the extreme which will not be perminent---as is the case with extremes in the other direction and the mean itself.---The ability to identify and exploit---being the point here rather than the analysis itself.

As an example Ive always been a Commodore man I bought 4 Fords for the Company and I cant believe how many Fords are on the road.
If I drive my Ford to a Ford dealer then I'll find lots more Fords.

If I see an accumulation of indicators that point to a move away or further away from the "mean" then chances are I'll be able to exploit it.

My way of handling the Efficient Market and Random Market theories!

Now we're getting way too intellectual!!!!

One thing to notice about indexes. They don't often trend cleanly intraday. Anyone trying to trade trends on indexes (intraday) get's hammered.

ALL successful index daytraders (and most swingtraders for that matter) trade off levels of some sort. Even if it is only a 50% proposition, the risk/reward is much greater than trying to pick up trends.

The indexes are extremely wippy. Now, everybody knows that, and the pit traders invented levels. Why? So they could trade off them. Take last nights chart. It sold off quickly to a level and then rallied all day.

Now, a trend trader would have picked it up and had a nice day, but would still have made less than the guy who bought off the levels...risk/reward.

They might be imaginary lines. But there are in the imagination of a great number of professional chicago futures traders. I'm talking big money here, not the puny 5,10,20 contracts of the private traders like myself.

Re Frankie:

Yes I have read his work, and anyone using that particular software will look similar. Frankies work is based on what all the big traders have done for years, so he has basically collated those works. It is through Frank that I trade this way.

The software was designed by Robert Krausz, one of the Market Wizards. Why does it have all these levels as standard in the software? Well he let the cat out of the bag didn't he.

One final comment. If anyone wants to daytrade stocks, forget this. It is peculier to the futures markets.

Cheers

 

[Milk Man]

The indexes are extremely wippy. Now, everybody knows that, and the pit traders invented levels. Why? So they could trade off them. Take last nights chart. It sold off quickly to a level and then rallied all day.

Now, a trend trader would have picked it up and had a nice day, but would still have made less than the guy who bought off the levels...risk/reward.

They might be imaginary lines. But there are in the imagination of a great number of professional chicago futures traders. I'm talking big money here, not the puny 5,10,20 contracts of the private traders like myself.

Seems like pretty good psychology to me. Maybe it works that way in part for Gann too. It does sound like BS, but it is well known, and if enough buy because the moon is tipped up or something stupid.

 

[malachii]

Sometimes I wish my trading decisions were as technical as which phase the moon was in! Maybe then I wouldn't make such "clangers"!!

malachii

 

[wayneL]

They might be imaginary lines. But there are in the imagination of a great number of professional chicago futures traders. I'm talking big money here, not the puny 5,10,20 contracts of the private traders like myself.

Some comments from the biggest index trading room on mirc

 

[wayneL]

For those who are interested, I have been blogging my daytrades for the last few days. Have a look.

Cheers

 

[Pat]

Hi all

It really does'nt take a great brain or tons of books, software and seminars to daytrade.

It does however, take focus, attention to detail, patience, belief and courage. Your powers of perception are trained by use. So yes you do start to know when a stock is likely to run. The hardest part about daytrading is you need to know and act quickly when you are wrong.

Cheers
Happytrader

The above is so true.

Seems to be a dead thread here...

I would like to know how and what other ASFer's day trade? What kind of strategies and rules used, sectors, index’s etc?
I’ve been pretty successful day trading with the few trades I have done. I trade mining species only. Price action and market depth are my… well only indicators to buy and sell.
I have 3 rules I always stick to.
1. always sell when it hits my stop. Usually set at a $200-$300 loss.
2. whenever depth indicates sell side is strong, DON”T buy.
3. If the depth turns during the trade, sell, or be prepared to sell.
These rules have worked great, and have stopped potential loss of capital and unrealised profit.

But when to sell? Never happy with my sells, a few times I have sold on my target only to see the SP rise another few % and missing out on some good gains. But that’s trading eh?

 

[tech/a]

I more short term trade of late.
Since closing all longterm portfolios.

Trading purely technically.
Using a combination of Advanced get for stock selection and exit targeting and Tradeguider for timing of entries and combining for timing of exits.
I have a live trade going over on "The Chartist" if interested.

http://www.thechartist.com.au/forum/ubbthreads.php?ubb=showflat&Number=67639&page=1#Post67639
You'll have to register.

Placed the trade more so for those interested in Tradeguider Real time than to show case trading short term.