time frame Archives - Financial Occultist
Archives of “time frame” tag
Recipe for catching a reversal:
#assumption #breakeven #Breakout #declarations #discretion #dish #expressions #failure point #few days #initial entry #instances #market moves #next morning #parboiling #prognostication #pullback #sentiment #time frame #trading forum #trailing stop
Ingredients: For this recipe you will need one (1) well-known or “classic” technical chart pattern on a daily time frame, preferably near the high or low of the mid-term price range. When your pattern of choice has been observed, you will then need to collect at least two (2) or more instances of public expressions of sentiment which confirm the prognostication of said pattern: pre- or post-market media bytes, business news website headlines, confident/fearful declarations on your favorite trading forum, or any other variety of before-the-fact assumption.
Preparation: When the above ingredients have been secured, wait for a daily close which would confirm “ripeness” of the pattern. Next morning, enter a stop order at the confirmation price in the opposite direction of pattern breakout to initiate position. If stop is triggered, immediately enter protective stop at prior low/high.
Parboiling: If market moves quickly in your favor, take profits on at least a partial portion; mentally “set aside” closed profit for re-entry if market pulls back towards initial entry price with next few days. If pullback manages to hold above prior high/low, re-enter full position at your discretion.
Cooking: Set protective stop for entire position at breakeven and let sit undisturbed for a few days or more if possible.
Presentation: Dish is ready when “failure” point of pattern is breached; serve at market or with trailing stop, whichever you prefer.
#automated trading #common sense #faith #fear #greed #hell #last two months #losses #making money #odds #probability #realities #single day #time frame #worth hundreds
Common sense can be brutally honest sometimes. As traders we get so focused on the little inconsequential detaisl sometimes that we miss the world around us. I have had this discussion with too many people over the last two months that told me they were bearish on the market and were taking a beating on the “high probability” that the market would reverse. Who sets those odds by the way? Are trends more likely to reverse than persist? If so, why the hell are we studying technical analysis?
Take a look over these trading rules I stumbled across last year and see if there are any realities that surface from them. Each time I look these over it reminds me of the realities of what we do here.
2. If it were really possible to “Buy Low Sell High” or “Cut your Losses and Let your Winners Run”, then almost everyone would be making money rather than losing it.
8. Waiting for the perfect trade is “chickening out”, and caused by your lack of faith in yourself or your system.
9. Any hardwired, automated trading system sold that truly works 70 or 80 or 90 percent of the time in every market would be worth hundreds of millions of dollars and would not be for sale at any price. (more…)
#cause losses #COMMODITIES #easy money #laziness #learning curve #mentor #moving averages #profitability #resistance levels #risk management #social networks #support resistance #swing trade #three elements #time frame #trader psychology #trading losses #twitter #Wheat
Trading Losses: There are two types of losses, one loss is caused by the market simply not being conducive for the profitability of your system. The other loss is due to your lack of discipline causing your system not to work. If you followed your trading plan and had a loss that is to be expected. If you are trading a proven and tested method then you have simply learned that taking a loss is simply part of trading. However if your breach of discipline caused your loss, whether not taking a stop, over riding your plan, not taking an entry, trading too big, etc. then it is time to learn why you had the loss. Ego? Fear? Greed? Overconfidence? Laziness? and many other things cause losses. It is crucial that you learn why you broke your trading plan so you do not repeat the mistake again.
Charts: Studying the past price action of charts is very educational. It will show you how prices have reacted at support/resistance levels in the past along with moving averages and any other indicators that you may choose. It is important that you understand how your market has historically traded whether it is currencies, commodities, stocks, or bonds. It is crucial that you learn how to identify a trend, a swing trade, and a range bound market. (more…)
How close are you to perfect?
#absolute value #array #big fish #calculators #impressive system #net profit #profitable trade #programming language #step 1 #swing traders #time frame
Becoming the perfect trader is no easy task, and I daresay that nobody has been able to achieve this great feat. The perfect trader buys at the absolute low of the day and sells at the absolute high. And depending on whether the high happens first or the low happens first determines if he is long or short for the day. It’s really easy to calculate this metric. It is simply the absolute value of the daily range or the high minus the low.
To get an accurate handle on the concept, we first ask what time frame we will be using. For end-of-day traders or swing traders, the daily bar is your competition. If you day-trade off the five-minute bar, well then use the five-minute bar to gauge your performance.
This concept is used in system trading and because vast amounts of data are typically used, we system traders need to resort to our super-duper calculators, also referred to as our programming language. This is an example of what code looks like for our daily perfect trader. The language is TradersStudio’s version of Visual Basic, but you can get the idea and use it with any program you wish. It’s the basic loop function.
For i = FirstBar to LastBar step 1
PerfectProfit = PerfectProfit + Range [i]
You’ll need to dimension your PerfectProfit variable as an array if you want it to tally up daily ranges. (more…)
Trading Notes for Traders
#confirmation #correlation #factor 1 #failure #follower #knife 2 #level questions #niche #patience #probability trades #rules of engagement #simplification #stock #subjectivity #tendency #time frame #tops
Traders should work on replacing subjectivity with cut and dry analysis.
Keep yourself in a box and stick with what you know.
The markets are complicated enough without our tendency to over analyze. All a trader needs is to learn how to read a small number of indicators and trade them well. Find a niche; your own niche. Simplification not complication makes a successful trader.
When contemplating a trade think first and foremost about how much you are willing to lose before you attempt to calculate your expected gain.
A stock is, at any given time, in the process of testing a specific price level.
Questions that make a trading decision valid: WHY are you considering a trade? WHEN will you enter it? WHERE do you see it going?
Multiple time frame correlation is important for high probability trades.
Let the chart tell you its story.
OBEY your rules of engagement…ALWAYS.
Be well paid to be a follower.
Loss of mental capital (drive, will, confidence) is greater than loss of monetary capital.
Let the price action CONFIRM your trade analysis. Example: let a break-out test the break-out first.
Trading Errors: The “Fudge” Factor
1. Trying to catch a falling knife.
2. Picking Tops
3. Failure to wait for confirmation.
5. Lack of a clear strategy.
6. Failure to assume responsibility.
7. Failure to quantify risk.
risk management emotions successful traders money stock finance dow jones industrial average game Anirudh Sethi Investment trades economics financial markets discipline confidence greed Economy stock market losers india psychology futures contract Baroda losses profits risk stocks Business_Finance fear Financial economics