Trading Strategies Using Technical Analysis

[4xpipcounter]

I use a ruler, but only to measure furtherest points the candles has flown from the cloud.

Hi

I have two question and not any critics.

Doe's any one use tape reading for adding positions beside using charts and indicators ?

Or doe's any one use only different chart time frames and work at the same time with tape reading to make his decisions when adding to positions ?

DanPickUp

 

[4xpipcounter]

Uploaded with ImageShack.us

As per our previous conversation, I wanted to post this chart to show what not to do.

First of all, my forecast on my own thread said the GBP/CHF would decline at exactly this current level. Now, it is OS. Time to enter long. Right?
Wrong. The reason is this is still a freight train coming at you, and it is now under the cloud, which is now strong R. The weekly chart is showing strong momentum south, so the move south may not be over yet.
At this point, this is a market worth watching, but not worth the time for an entry at this point. I'm waiting to see where the final dip will be, and then get ready for a long. I do know it is not ready for a long, in spite of the fact of it being OS.

 

[S-1585]

I think it all depends on what your trade plan is. And you KNOW what you are doing and what is plan of action.

In doing this, trader may start building position the way up or until pre-defined way down or all position at one particular level.

Its all part of a plan and normally plans are result of the risk appetite and behaviour of person in particular situation.

 

[S-1585]

Hi

I have two question and not any critics.

Doe's any one use tape reading for adding positions beside using charts and indicators ?

Or doe's any one use only different chart time frames and work at the same time with tape reading to make his decisions when adding to positions ?

DanPickUp

Why the question is only related to add and not trade entry?

 

[DanPickUp]

Why the question is only related to add and not trade entry?

Hi S-1585

My post will be provocative and direct. Nothing personal.

Why is it not related to trade entry ? Because it is a specific question for the adds and not for the entries.

There is enough discussed in the whole forum about entries and this gets bored. With an entry I am only in the market and nothing more or less. So what ? With my entry I only did one little thing in the whole trading plan and there is so much time spent in the forum, endless discussing how to do this. Endless time for just searching how to do this little step.

Enough !

Now we did this little jump with little risk and now it begins. No we have to swim. No we have to stay with the flow of the market or with the water we are in. We no want to fish out money from this market. If we always talk about how to jump in the market, we never will make money from the market. To jump in is not the problem. To fish out the money is the problem.

There is only little discussed about add in in the whole forum.

I ask you know : Do you want to talk endless about how to enter a market or do you want to talk about how to fish out money from the market ?

DanPickUp

 

[S-1585]

Hi S-1585

My post will be provocative and direct. Nothing personal.

Why is it not related to trade entry ? Because it is a specific question for the adds and not for the entries.

There is enough discussed in the whole forum about entries and this gets bored. With an entry I am only in the market and nothing more or less. So what ? With my entry I only did one little thing in the whole trading plan and there is so much time spent in the forum, endless discussing how to do this. Endless time for just searching how to do this little step.

Enough !

Now we did this little jump with little risk and now it begins. No we have to swim. No we have to stay with the flow of the market or with the water we are in. We no want to fish out money from this market. If we always talk about how to jump in the market, we never will make money from the market. To jump in is not the problem. To fish out the money is the problem.

There is only little discussed about add in in the whole forum.

I ask you know : Do you want to talk endless about how to enter a market or do you want to talk about how to fish out money from the market ?

DanPickUp

Sorry, I understood your previous post in different context. (I thought, situation is clear that one has to add position, now how to proceed...Therefore I compared to trade entry.)
Now it is clear.
I just today mentioned in my thread: "Once the trade is initiated, all what I am doing is managing it and looking for opportunities."

 

[DanPickUp]

Sorry, I understood your previous post in different context. (I thought, situation is clear that one has to add position, now how to proceed...Therefore I compared to trade entry.)
Now it is clear.
I just today mentioned in my thread: "Once the trade is initiated, all what I am doing is managing it and looking for opportunities."

Thanks for your answer. Have checked it and you have my comment over there. Thanks

DanPickUp

( All my TB are gone for today. Will do it when reloaded )

 

[Smart_trade]

Hi S-1585

My post will be provocative and direct. Nothing personal.

Why is it not related to trade entry ? Because it is a specific question for the adds and not for the entries.

There is enough discussed in the whole forum about entries and this gets bored. With an entry I am only in the market and nothing more or less. So what ? With my entry I only did one little thing in the whole trading plan and there is so much time spent in the forum, endless discussing how to do this. Endless time for just searching how to do this little step.

Enough !

Now we did this little jump with little risk and now it begins. No we have to swim. No we have to stay with the flow of the market or with the water we are in. We no want to fish out money from this market. If we always talk about how to jump in the market, we never will make money from the market. To jump in is not the problem. To fish out the money is the problem.

There is only little discussed about add in in the whole forum.

I ask you know : Do you want to talk endless about how to enter a market or do you want to talk about how to fish out money from the market ?

DanPickUp

Adds are not considered or discussed in many forums because most traders don't add. Our method should be complete with entry, adds,trailing of stoplosses/profit booking levels, definate plan of money management and position sizing,plan for sitting out of the market when it is sideways. All this is important when you graduate from "buy here and sell there" stage to more advanced stages of trading . There is no doubt that our entry method has to be good but other aspects are equally important in trading success.

All I have said above is equally valid for short timeframe trading such as daytrading and also longer term trading as swing trading. We must add in our winning positions and stay with our positions as long as the trend lasts. But the reality is most do not come out of their "which entry method" dilema and hence do not go to the stage of considering other aspects of trading which are absolutely essential in making a shift from " marginally profitable trader" to a trader who is pulling out serious money from the markets.

Good that you created awareness of these things being important....

Smart_trade

 

[4xpipcounter]

I think unless the trader is really savvy to what is going on and understand the nature of trends and margin management, adding can be very risky. There are many examples, but I'll name a few:
1. Trader enters the trade, and then it starts to get gains. It pulls back, then he decides to add a position. It continues to pullback, and both positions are stopped out. One ends in a gain, and the other in a loss, and more often than not, they balance each other out.
2. Trader loads up, and position moves in his favor. He's excited, so he loads up some more. Trades go against up him and his account margins out.
3. Trader enters a trade, and he knows he got it right, but the trade goes against him. He loads up some more after it continues to pull against him, and it continues on its contrarian path, and then gets stuck with a horrible loss.
4. Trader adds a position, market goes sideways. Equity is tied up, so he cannot enter other opportunities.

I tell followers of my blog if you have to ask about adding to a position, then you are not experienced enough, so don't. It is not to say I condemn adding. I have thrown quite a few extra logs on the fire in my time, but I have the experience and a very conservative lot size on my trades.

Adds are not considered or discussed in many forums because most traders don't add. Our method should be complete with entry, adds,trailing of stoplosses/profit booking levels, definate plan of money management and position sizing,plan for sitting out of the market when it is sideways. All this is important when you graduate from "buy here and sell there" stage to more advanced stages of trading . There is no doubt that our entry method has to be good but other aspects are equally important in trading success.

All I have said above is equally valid for short timeframe trading such as daytrading and also longer term trading as swing trading. We must add in our winning positions and stay with our positions as long as the trend lasts. But the reality is most do not come out of their "which entry method" dilema and hence do not go to the stage of considering other aspects of trading which are absolutely essential in making a shift from " marginally profitable trader" to a trader who is pulling out serious money from the markets.

Good that you created awareness of these things being important....

Smart_trade

 

[Smart_trade]

I think unless the trader is really savvy to what is going on and understand the nature of trends and margin management, adding can be very risky. There are many examples, but I'll name a few:
1. Trader enters the trade, and then it starts to get gains. It pulls back, then he decides to add a position. It continues to pullback, and both positions are stopped out. One ends in a gain, and the other in a loss, and more often than not, they balance each other out.
2. Trader loads up, and position moves in his favor. He's excited, so he loads up some more. Trades go against up him and his account margins out.
3. Trader enters a trade, and he knows he got it right, but the trade goes against him. He loads up some more after it continues to pull against him, and it continues on its contrarian path, and then gets stuck with a horrible loss.
4. Trader adds a position, market goes sideways. Equity is tied up, so he cannot enter other opportunities.

I tell followers of my blog if you have to ask about adding to a position, then you are not experienced enough, so don't. It is not to say I condemn adding. I have thrown quite a few extra logs on the fire in my time, but I have the experience and a very conservative lot size on my trades.

You are fergetting some basic principles here which are to be observed while adding to your positions. They are :

1) Adds to be taken ONLY when the market is going in your direction....not when it is going against you....

2) Adds may be taken when stops move in your favour.

3) Add quantity should be such that it does not put your total positions in jeopardy.

There is a possibility that with 1 add...market may reverse and the total trade becomes a scratch trade....but we have to decide early in the game whether we are playing for small moves or we want to capitalise on the trend fully and make may be 5 or 10 times what a trader without adds makes from the same move......when market goes 2 adds and more in your favour it is practically impossible to loose on the trade even if it suddenly reverses.

I will add a 5th possibility to your 4 already mentioned by you ....you enter into a position....mkt goes in your direction...you add.....the trend continues....take 2-3 more adds.....hold and stay with the trend....then at some point it ends and reverses......cover your existing position for a huge gain ( may be 5-6 times of the points made by others ) and take an initial position in the new trend....process continues.....it it not a great possibility ?

Adds and holding positions ( profitable positions...not loosing positions ) till the trend reverses are the key areas which most traders neglect. You have to tune your mind to handle these ....and unless one is good at these....he does not go higher in trading .

These are difficult areas but unless we start somewhere these areas will always be unchartered areas for us. Make an habit of adding let it be 50 % or even 25 % of our initial position. Another advantage of adds is we don't get the urge of booking small profits and exit the position prematurely for no reason....

Adds and holds are good trading principles and let us make a small beginning towards applying these in our trading. Otherwise we continue discussing whether RSI is better or Stochastics is better and whether money can be made in trading etc etc.....

Regards,

Smart_trade