Thursday, 3 June 2010

We're All Watching the Same Movie

Earlier today I replied to a comment to yesterday's post.

This stuff is not hard but it does require you train yourself to look at the market -  not indicators, but what the information is that the indicators are telling you.

I wrote:

Guys, all these questions are looking for mechanical answers. We all sit in front of our screens and watch the same movie. We see different things because of the way we have trained ourselves and the things we watch for. I keep saying that I look at a "picture" and make my decisions based on that. The charts I post are the same charts I use so there is no magic in that. It's the WAY I look at what is happening. I'm not looking at indicators, but at what traders are doing. This can be learned but requires a change in attitude to what you have now. When I taught Kiki to trade, it was this concept that we spent time over, not indicators.
You can see from the trades marked on the chart, I traded the gap down - short at 1103.00 against the top of 27 May. I scaled twice and did not wait for the gap to close as there was too much buying. I covered the last piece at 1099.75. I then went long at 1101.50 and exited at 1104.50. My mechanical signal markers also found this exit.

So what do you do now? There was a a nice trade short at 1102.00 still going for a gap close. It broke support nicely so there was a possibility of more than just the gap.

All this was like Tarzan swinging from vine to vine, following what the traders were doing through order flow. This is basic electroniclocal stuff. It's what we did on the floor. Each of the trades gave a nice profit and an hour after the RTH open we could all head for the beach. I know that I stopped trading and went to the park with the dog. You don't need to work long hours if you make a plan and trade the size that meets your requirements for earning. Of course you need the capital to do that but it's a matter of the maths.

There are probably lots more good trades still available today. If that is your plan to trade more often with smaller or even the same size, that's fine too. But there should be a plan that you have made and tested that the numbers stack up. Test driving it all in SIM is important until you achieve CP. Once you know all the numbers, most of the uncertainty is gone.


  1. jenrique42
    I've been reading your blog for some time and I find it interesting though I do a question, I believe it is important to have a trading plan, a methodology of trading, which will have more discipline, which in this world is main however this can be seen reinforced by a financial plan, however the only thing you have mentioned about this question is the daily target of around about 1,000 € and nothing else with regard to this question

    I would like to make this point in subsequent post, if you have weekly goals, monthly or even yearly. His way of calculating this figure etc .... It also made me interested in the subject on managetmen money and whether you take that into account and if so, as it applies to your daily trading

  2. Hi EL,

    For the ES market profile, are you watching the RTH or the full day?


  3. Great observations. Just wanted to say again - thank you for posting your methods and thoughts. Almost always very helpful. Cheers.