What analysis do you use for trading?

Whiskers · 2 March 2010

Trembling Hand said:
Absolutely NOT.

Please explain?... to you too! :

So you get shaken out by order book games?

Well if I'm only intending to do the day trade 'game', yes. After all if there ain't enough buyers on, or regularly coming into the bid side or at market, I'll nick off. Ain't that the nature of day trading?... Damit, no don't answer that! I knew I'd get into a damn bun fight here!

Trembling Hand · 2 March 2010

Whiskers said:
Please explain?... to you too! :

I've explained plenty of times I give very little credence to what is sitting in the order book.

But if you are happy to make decisions off what the magician is showing you in his left hand then I'm happy.

:aliena:

Whiskers · 2 March 2010

Trembling Hand said:
I've explained plenty of times I give very little credence to what is sitting in the order book.

Likewise... but one has to start somewhere, and as I implied, watch the magicans hand, ie how the dynamics change, including 'at market sales', in the Course of Sales.

PS: I thought you shed that 'Grumpy' tag, TH.

motorway · 2 March 2010

Frank D said:
A probability-based entry doesn’t need a trend to begin with, you don’t
have to be on a trend to begin with, and it doesn’t have to be successful
at the start, otherwise everyone would be running 1-point stops.

If you rounded up every trader and placed them in a basket and labeled
them as trend traders using momentum type strategies then everyone
would be using ‘trend-type’ entries based on probability associated with
a known pattern.

If I go to bed a place short trades at a dynamic 5-day or Weekly highs
or any other level that has observed phenomena associated with
it, then I’m placing my trades against the initial trends, I’m
not concerned about the initial trend of the market, all I’m concerned
is finding levels in the market that provide probability, that
will eventual lead to a reversal pattern based on markets being
linear regressive.

Trends don’t move in straight lines they zig-zag and are
completely subjective, as there isn’t a known end of a trend unless it’s being
optimized with Price based rules or time based rules i.e. I’m holding this
trade until X price is reached or until the end of the day, week, and so
on

Trend identification is extremely important, but I don’t think there are
many successful ‘traders’ that enter randomly simply because of the trend.

In my opinion this is a silly discussion until someone actually defines what
an 'objective' trend is.

And I’m not interested in text book answers of 'higher highs and higher lows' etc.

You can place that answer in the locked thread of useless analysis

You are still working with the trend JUST not BLINDLY FOLLOWING ( ALONG BEHIND IT )

eg If I go to bed a place short trades at a dynamic 5-day or Weekly highs or any other level that has observed phenomena associated with it, then I’m placing my trades against the initial trends .

Difference between BEING in HARMONY or FOLLOWING

Trends don’t move in straight lines they zig-zag and are
completely subjective,

Click to expand...

They can be Identified OBJECTIVELY with the right tools and methods
Just like anything else can be recognized

First the data must be digitalized
Second an Objective Resolution ( like an optimal signal to noise ratio )
Determined
Then the TRENDS are Objectively there or NOT

Just like the way you Film "MOUNTAIN" or "RIVER"
and then reproduce on a LCD screen

You would use a resolution that defined the dynamics of MOUNTAIN
not MOUNTAIN RANGE or MOUNTAIN DUST

RESOLUTION PERSPECTIVE then match the resolution of the Screen
for Optimal clarity...

THE smallest building block of an OBJECTIVE TREND is then ONE UNIT.

One DIGITAL PRICE UNIT.

There is one or there is not ===>OBJECTIVE
PRICE MOVES MEANINGFULLY or IT DOES NOT.

Time simply becomes DURATION
and not NOISE

Motorway

MRC & Co · 2 March 2010

I actually watched a spreadsheet for a while, which I think had a bid/ask ratio of the top 20 ASX stocks, of what was sitting in the book. So showed if the bid or the ask was cumulative larger and by what ratio. I thought it may be good for a contrarian play, but it didn't provide any edge either way FWIW.

Mr J · 2 March 2010

tech/a said:
Would you be kind enough to post a few of these Great entries as close to realtime as possible to demonstrate your point?

I probably have in my journal thread. They weren't real-time either, they were in advance. I define a good entry not be the result, but by where it is positioned in the subsequent move. I've illustrated it in the attachment.

I consider the green entries as the good entries, the yellow entries as marginal, and the red entries as horrible. I'm not suggesting the yellow and red entries aren't profitable, but they're late and not nearly as good as the green entries. The green entries by far carry the least risk and greatest reward. The yellow entries are typical for people waiting for "confirmation". Many people think that "confimation" makes the trade less risky, but I think it makes it more risky. The red entries are loser entries, although I'm sure some people profit off of them.

All of this is relative to timeframe, so while I consider the red entry to be horrible for this move, the move represents a trend on a faster timeframe, and the red line areas probably contain retracements that allow for good entry.

You'll probably suggest that I can't know the different zones until after the move. Probably not, and this is why I take the green entries. I don't know how long a move will last, and this is why I think it's important to enter early.

Frank D said:
A probability-based entry doesn’t need a trend to begin with, you don’t
have to be on a trend to begin with,

Every move is a trend on a faster timeframe :.

motorway · 2 March 2010

Mr J said:
You'll probably suggest that I can't know the different zones until after the move. Probably not, and this is why I take the green entries. I don't know how long a move will last, and this is why I think it's important to enter early.

Every move is a trend on a faster timeframe :.

Well Since you only know that green is Green in hindsight
You are saying that you know good entries in hindsight

eg You think it is green ++++>
but the the prevailng move continues <+++++++
So it really is a yellow or red in the other direction

Every move is a trend on a faster timeframe

This is a more interesting observation
and leads somewhere
But that "timeframe" is a problem
price moves in ticks not units of time

so
every move is a trend at certain scale YES
even if it is a one tick trend

But it might be or not be on different "timeframes"

motorway

$20shoes · 2 March 2010

Mr J said:
You'll probably suggest that I can't know the different zones until after the move. Probably not, and this is why I take the green entries. I don't know how long a move will last, and this is why I think it's important to enter early.

Mr J, are you constantly attacking the green zone in anticipation of a move? That is, I assume these "green" areas show some sign of congestion.

Do you not get whipsawed out of your position several times? I assume you anticipate a significant R multiple that will account for being stopped out, say 3-5 times in a row on that same trade while you wait for momentum to kick in.

And because you've been taken our several times while you wait for the price to move, I wonder if you end up with a better R/R play by entering with more momentum in the yellow zone?

Mr J · 2 March 2010

Well Since you only know that green is Green in hindsight
You are saying that you know good entries in hindsight

I can't know until there has been some movement, but certainty isn't an issue - I don't trade certainty, I trade probability. I know that over time, I'll make enough 'green' entries to making trading worthwhile. These zones are just a personal standard for me. Typically I'd just describe them as good or bad, good being early, and all the rest being bad.

eg You think it is green ++++>
but the the prevailng move continues <+++++++
So it really is a yellow or red in the other direction

Doesn't matter, it was an entry that didn't work. Whether it was a bad entry depends on perspective.

All I'm really doing with my 'green'/'great'/'early' entry talk is advocating picking tops, bottoms, swing highs and lows.

But that "timeframe" is a problem
price moves in ticks not units of time

True, but I don't use the literal meaning. It's the term I've seen used for describing different scales. Anyway, change in time almost certainly leads to change in ticks :.

Trend Hunter · 2 March 2010

Hi,
Everyone trades with different systems and are looking for different signals in the market, as there are many ways to skin a cat, so to speak.....

I like to keep things simple and uncomplicated, I like to use one simple system which is based around the Williams R% indicator (plus a few secondary indicators) and it helps me define exactly what price mode a Stock, Sector or the Market is in.

This system helps me quickly quantify each chart in into 5 different Price modes Bullish, Mildly Bullish, Neutral, Mildly Bearish, or Bearish.

It also helps me define initial entry and low-risk retest entry into positions to the cent.

My Systems Purpose.

So firstly I define what Mode the Market is in.
This helps me assess whether to have a Bullish, Bearish or Neutral Bias or to take money off the table and step to the side lines for a while.
I also use this same system to define entry into individual positions in Stock, Indices, Currency, or Commodity.

I find by keeping my approach simple and consistent I am able to be disciplined to follow it, and therefore learn and improve its execution.

Hope this helps,
Cade

Ps. Also use other indicators to confirm what what my main system is telling me.

lukeaye · 2 March 2010

Client said:
It is interesting to me what kind of analysis you use to make a trading decision. If it's technical methods, tell us what exactly, like Bill Williams methods, candlesticks, classic methods or Elliott Wave Principle, etc.

Getting back to your question. I think most people use adapted strategies of their own. I doubt anybody could say they purely use ellitowave strategy on a daily chart, Or they buy dragonfly doji candlesticks formations.

Truth be told they may be used as an idnetification tool, but then, to confirm an entry or exit, other things need to be used. So to enter a position they use a momentum shift indicator, like volume and spread, a retracement level. Then for an exit they may then use an ATR stop, or fractional risk based stop with a fibanacci extension profit target. In short there is no simple answer.

I can't say to you, i just use EW principle, because there is more to it. Everyone uses different techniques, which may work on different timeframes and different stocks/currencies etc, so there is no holy grail if that is what you are searching for.

Its funny that nobody asks what money management techniques you use?

Just tell me how to pick the winners with a tool that i dont have to understand to make money. (no disrespect to the OP intended.)

Mr J · 2 March 2010

lukeaye said:
Its funny that nobody asks what money management techniques you use?

Just tell me how to pick the winners with a tool that i dont have to understand to make money. (no disrespect to the OP intended.)

Unless someone is trading overly aggressively, money management is pretty irrelevant. It changes the scale of growth and fluctuations, it doesn't turn losers into winners, or winners into losers.

lukeaye · 2 March 2010

Mr J said:
Unless someone is trading overly aggressively, money management is pretty irrelevant. It changes the scale of growth and fluctuations, it doesn't turn losers into winners, or winners into losers.

Yes but it is equally important, but gets not a proportionet amount of attention. Consider you use no money managment and on average win 50% and lose 50%, and on average you make the same amount as you lose. Where are you? your behind given brokerage. So it is MM which helps generate profit.

Synergy · 2 March 2010

Money management won't compensate for a fundamentally flawed system.

Mr J, while I understand the logic behind your entries, I too feel the start of the yellow sections would be more efficient. Or even a quick correction back from the yellow to the green perhaps. How much time do you spend in trades that go nowhere? And for those that do move in the right direction how long do you have to wait for the move to occur?

I would rather be buying into the start of a move, at its very early stages, than to be buying into something on the hope that it will move in the near future. Even if i had more losses, and probably larger losses, I could have a much higher turnover of trades, as the failed trades would show themselves much sooner.

If you feel your entry is somehow predicting moves in advance then thats another thing. A very good thing.

lukeaye · 2 March 2010

Synergy said:
Money management won't compensate for a fundamentally flawed system.

Im not arguing that you can have one without the other? Im saying you need both? Im saying nobobody seems to give it enough importance

MRC & Co · 2 March 2010

Mr J said:
Unless someone is trading overly aggressively, money management is pretty irrelevant. It changes the scale of growth and fluctuations, it doesn't turn losers into winners, or winners into losers.

Exactly, and relating this to account size. There is nothing much else to say about money management!

Learning to trade is much more important!

tech/a · 2 March 2010

Mr J said:
Unless someone is trading overly aggressively, money management is pretty irrelevant. It changes the scale of growth and fluctuations, it doesn't turn losers into winners, or winners into losers.

Exactly, and relating this to account size. There is nothing much else to say about money management!

Your kidding!!

Learning to trade is much more important!

This is top class drivel

It can and does have an enormous bearing on controlling loss you can and should adjust it. You can have a dramatic effect on your RR.
Why set a stop and just sit there and wait for it to be hit IF you can clearly see that your analysis is incorrect.
Why not add to your trade if clearly its screaming buy me.
Why not turn a trade into a free trade.

It can and does turn losers into smaller losers and winners into bigger winners from an R perspective.

To many people work on MM theory and not in practice.
If they did they wouldn't be making stupid statements like yours.

Back to your entry arguement.

You still haven't answered the question.
When is a "great entry deemed a great entry"
When you place it?
At 1R profit
At 1R loss
When your at B/E
When you've closed the trade?

Frankly its just ANOTHER entry.

You may think its predictive just as Franks convinced his method is predictive. Its not. We all place trades in anticipation of a move in "A" direction. If Franks method was predictive there wouldn't be the need for 27 Dilernia principals.

Same with Gann/Elliott/Steidlmayer/P&F/Weinstien/Williams------

MRC & Co · 2 March 2010

I think your getting confused between trade management and money management tech/a.

tech/a · 2 March 2010

You see them as totally seperate aspects.??

Yet another difference in how we look at things.

So in business the way we keep the books has little bearing on the way we produce our income?

MRC & Co · 2 March 2010

tech/a said:
You see them as totally seperate aspects.??

Yet another difference in how we look at things.

Completely seperate if we are talking about the theoretical definitions.

Trade management includes all exits and entries after the initial entry still relating to the original trade/position (whether that be averaging up/down or a subsequent entry in another market that relates to a spread with the original position).

Money management takes into account your account size and puts that trade into context and gives it relativity, ultimately to ensure damage control on an individual trade level.

But we are once again bordering on semantics here.

Learning to trade, or 'top class drivel' (typical insults used by those with little man syndrome), includes trade management and original entry.

There is some 'black and white' for you!

What analysis do you use for trading?

Whiskers

It's a small world

Trembling Hand

Can be found on the bid

Whiskers

It's a small world

motorway

MRC & Co

Mr J

Attachments

motorway

$20shoes

Mr J

Trend Hunter

lukeaye

Mr J

lukeaye

Synergy

lukeaye

MRC & Co

tech/a

No Ordinary Duck

MRC & Co

tech/a

No Ordinary Duck

MRC & Co

Similar threads

What analysis do you use for trading?

It's a small world

Can be found on the bid

It's a small world

Attachments

No Ordinary Duck

No Ordinary Duck

Similar threads

Privacy & Transparency

Privacy & Transparency