E Charting

Hello RTT, I just joined the forum after a few months of reading all the posts from 2011 to now and getting to know you and your journey to success. I've been looking at your strategies while re-listening 2-5 a few more times trying to hear new words from Gary that I missed in the past and think I'm ready to begin practicing again while we move thru earnings and transition to the summer zone. I'm in a position now to watch the mkts all day and want to take advantage of intra-day plays on Qs, DIA, and SPY, and stocks that move with small spreads.

I use TOS and have Darcy's E charts configured in the flexible grid mode (very versatile for sizing/placement) on a large flat screen TV hooked up to my laptop. It has enough screen size to display all of them nice enough to see the MAs clearly as well as the watchlist page on the left. The laptop screen is then set to look at options express's chains (most readable in streaming mode) and my virtual acct.

Would like to pose a few comments if I may as a new member that's been reading the forum for a while;

Darcy, I'm deep in to chapter 12 in TAD and the E charts make total sense now. Do you use simple or exponential averages? I've played with keeping the 10 and 20 as an SMA and made the 5 an EMA to see if a crossover is emerging sooner. Sometimes it looks like a better predictor but can't tell for sure. Have tried a EMA/SMA mix of all three but think EMA is the right call because GW's MACD is an EMA-thoughts?

Rookie30, I have enjoyed reading all your posts from a few years ago to now, and your journey is inspirational to anyone that wants to keep doing the work and succeed. Between reading about your highs and lows over the years and listening to 'Gary's story' again, I'm ready to take full advantage of the new time on my hands to reach choice in the next few years.

Robert; truly amazing script-thanks!!!

I use simple moving averages on my Echarts. If EMA works best for you then I think that is fine. I just like keeping things as simple as I can. The moving averages GW uses are simple so I kept all my moving averages simple.

moinnorf,

Welcome to RTT!

RaleighTrader

Moinnorf,
Good stuff..... You are on the right forum to learn, grow and develop. Ask questions and document what works. When I joined this forum, I was just learning how all this worked. I have worn some folks out with questions, but I have never been turned away or told to get lost. Regardless of how stupid my questions might have been, I always got responses. I appreciate that. I gained confidence and grew from the genuine support from people I call my friends on this forum.

I wished AAPL was one of my stocks I was presently trading. Whew, that was a beautiful intraday trade- with the picture perfect "E"! I could have chilled for the remainder of the week after a trade like this. I will always watch AAPL, and might start back trading later, but for now, I am sitting on the fence. As I look at my charting techniques, I see the following....

Broke previous day's high
Trade is going in the direction of the market.
My "Fat Period" has set up perfectly for a trade at 9:50 and a run of momentum until my indicators show me an exit point.
HRFP on the 13 and 21.
E has formed on both charts.
Candles above the 8MA
Candles are full of fuel
The ADX is up on all charts-including a slight elevation on the 55 (strong intraday indicator for me).
MF is climbing in the direction of the trade- some might be a little concerned about possible overbought conditions. My rule is if the ADX is up on ALL relative charts-including my largest intraday chart, the possible overbought condition is disregarded. I just have safe guards in place to identify when there is a reversal. Anytime I enter a trade when the MF line has reached 80 on a call and 20 on a put, there are specific indicators that I take a close look at, helping me make an informed decision. For the novice trader, this is a point that an intraday move can turn and punish someone quickly.

My entry and exit
I would have entered at 9:50 off the 3rd candles on a 10 minute chart that only has 3 moving averages, DMI with ADX and MF indicators. I have found that 5 minutes after Amatuer Hour is when the oppourtune moments present themselves. My entry would have been about $578 ( on 3rd candle). My exit would have been $590. When I ride a trade at this point, I stay on this small chart. I am simply riding momentum.I enter on the height of momentum and exit when I sense momentum slowing. I do not ride intraday waves. I ride it up or down- period. Yes, it does take a unique skill set to pin-point the perfect entry and perfect exit. Some exit when the 5 crosses the 10 on the moving average chart. For me, that is too late. I exit when I have a second negative, candle paint, MF line drops below specific levels, charts indicate fading momentum, or I am happy in seattle. I have to exit before charts start to turn over. I miss bonus money on my trades. Example: If I would have waited for lines to cross on AAPL today, I would have gotten out at about $588. I would have left $2 on the table. That could be the difference in profiting $2000 and profitting $2300.

Unfortunately, I did not trade anything today. If a stock does not materialize within my "Fat Period", I am not trading that day. I am getting like a grumpy old man. I want it my way or no way. This is actually a form of solid discipline. Sorry to get "long winded" on you.

Rookie, Please feel free to continue to be long winded. Every time you get going, I manage to pick up crumbs along the way.

@rookie30

Thank you for continuing to share your knowledge. Would you please explain what you meant when you said "I exit when I have a second negative, candle paint".

do you mean [green] [green] [green] [red] [green] [green] [red] <--- second red candle so time to get out?

or do you mean [green] [green] [red] [green] [green] [red] [red] <--- two red candles in a row so time to get out?

Also, what levels are you looking for when you said to exit when MF drops below certain levels?

Rufinatti,

I mean if I am on a Call, as long as I have white candles paint (My candles are white going up or red going down), I am 95% of the time I am staying in. If I have two red candles paint (negative candles) consecutively along with change in Money Flow and ADX changing directions, I am usually out (95% of time). Remember, I am on a 10 minute chart when I am in the trade because I am only riding momentum for a short window of time. In addition to those indicators......
If I am in a call trade and my Money flow rises above the 80 level, I stay in as long as I have positive candles painting and MF is still running in my direction. As soon as that MF drops below that 80 and I get ONE negative (red) candle, I am OUT! That baby will almost always continue to drop. If it starts back to rise, it will not rise much higher than the last session's high before dropping again. I hope this makes sense. The same goes for the 20 level on a Put trade. I will spoon feed this because it is pretty technical, but if you get it, you will be shocked how rare you are wrong.

When I enter a trade, I set a loss tolerance area based on what I see on MF. If interested, I will throw that information out as well. It is technical, but so easy, if you understand and follow it. If you think about it, an intraday trader has to be really concerned about the MF. If the money starts to flow in a different direction, you better believe SOMETHING WILL CHANGE! The reason it is critical to know when to enter and exit based on MF is because the Option Price is directly related to MF levels. Talk about a nugget! I have been in trades and the stock price has risen, but my Option Price dropped. After researching, it is apparent that Market Maker's system are set somehow to change Option Prices when MF reaches specific levels-regardless of what the stock price might be. Ha Ha! Understanding that component made intraday trading about as easy as taking candy from a baby. The issue that some might have is, I very rarely gain more than 30%, but almost never below 10% profits. The great part about this for me is, I do not watch news, earnings, events, etc. For the most part, I do not even know prices of my stocks. I do not care about anything with exception the spread and commissions price. I just see the trade and pop it. I am almost never in a trade past 11:15. I do not enter if my "Fat Period" has expired for the day. I am sorry, but if a person asks, I will tell you, but I know my approach is very different from what we were taught. Again, I am sorry, but I am not trying to confuse anyone.

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rookie30
When I enter a trade, I set a loss tolerance area based on what I see on MF. If interested, I will throw that information out as well. It is technical, but so easy, if you understand and follow it.

I, for one, am always interested in learning something new. So pontificate away.

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rookie30
The issue that some might have is, I very rarely gain more than 30%, but almost never below 10% profits.

As you are aware, I am also doing intra-day momentum trades. I'm not as consistent or profitable as either you or Darcy, but I'm getting better. The biggest change in my trading results occurred when I stopped trying to constantly get a home run (which somehow always ended up going against me) and instead became happy with just trying to get a base hit (I'm happy with a small bunt now). If I can pickup up a hundred here, three hundred there, and the occasional thousand dollars then I'm a very happy man.

Rookie, thanks for the warm welcome. I know I'm in the right forum now! Great cues that I will study. Just discovered TOS on demand and have been playing back the trades you and Darcy post to get my scan moving and see when the entries reveal themselves. Shooting to play back a day I haven't watched live and make practice plays to test the charts.

Robert, thanks again for all the script. I've used most of what you've provided to forum. I've looked back thru your posts for an audible FP/HRFP alert. Is it possible to add one to your vertical dashed line indicator? Thanks!

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moinnorf
Robert, thanks again for all the script.

You're welcome.

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moinnorf
I've looked back thru your posts for an audible FP/HRFP alert. Is it possible to add one to your vertical dashed line indicator?

Yep. Easy peasy. Just add this to the bottom of the FP/HRFP script.

Alert(Hup or Fup, Concat(GetSymbolPart(), " has crossed up." ), Alert.BAR, Sound.Bell);
Alert(Hdn or Fdn, Concat(GetSymbolPart(), " has crossed down." ), Alert.BAR, Sound.Bell);

@rookie30,

Thank you for answering my previous question. You mentioned that you have more technical insights to share about MF if there is interest. Yes, please share.

Thanks again.

Robert, I like the baseball analogy because I can't see a good pitch to swing at yet, and all these called strikes are getting old! I have the same brick-making goals and think trading the Qs, SPY and DIA are a path; the spreads are one penny and the near the money strikes have huge volume. A small move in the underlying/index will move the trade along nicely. It's not the short time frame that makes it appealing, it's that a move in the majors should be revealing technically and fundamentally making it possible to trade a good move 2-3x a week. The contract prices on the other movers that this crowd likes are either too expensive for me or have wide spreads with low volume.

Have re listened to Gary discuss trading the OEX and Q's intraday play and now include the 55 futures for the trend, but cant make the connection from the 21 decision to the 1min action to enter the trade. Darcy's and S/Os E charts help me a lot to confirm the trend is intact but I'm not seeing the other entry triggers of FP/HRFP lining up on the main charts. Maybe they're not there but seems like they should be on many occasions as I watch the Dow or S&P take off from the dugout!

rookie; I concur with Ruffinati--the more on MF you care to share the better! MF seems to be your gauge for duration after entry; would you enter if it's already at a level you like (flat) or does it have to be moving up or down as a decision point? Have searched for MF in TAD and Market Makers Edge but did not find MF covered.

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moinnorf
I have the same brick-making goals and think trading the Qs, SPY and DIA are a path; the spreads are one penny and the near the money strikes have huge volume. A small move in the underlying/index will move the trade along nicely.

One of the other members recently suggested that I take a look at those as well. I haven't yet started practicing them, but I probably should. I currently trade Apple two or three times a week. However, I'm afraid that after their 7:1 split the stock may not work as well for intraday trading so I need to be looking for something else to transition into.

In reference to trading the Q's, DIA, SPY & I'll add the OEX - does Gary still recommend trading any of these, or even talk about them? In the early years, he loved the OEX, but the last I heard, he didn't do much with it anymore. Maybe someone that has taken the recent Survival classes can answer?

NASDAQ-100 (^NDX) 3,556.51 Down 48.58(1.35%)
He keeps talking about A FRIEND THAT TRADES 1.5 Million on his NDX option trades
but then 10 June contracts is $111000

I think Gary would recommend trading anything that you are successful trading consistently. The OEX and NDX are too far out of an initial basket's (we've all had more than one right!??) size to trade but .70 cent to 1.50 dollar contracts on the smaller three have 1-2 cent spreads and move nicely.

A reliable chart system that can spot reversals, monitor the trend, and assess its duration is key to small but frequent bricks. E-charts are essential to this style of trading if you're looking for intra-day plays.

Darcy, rookie, Robert; was rereading MME and found in chap 19, leading indicators, the traders index. TRIN, moves inversely to the mkts. I made a TOS chart of it yesterday with a 5, 13 SMA and placed it side by side to an E-chart to monitor the trend to see if yesterday, Tues, 6 May, was going to bounce back like Monday 5 May did after the morning sell off. TRIN was easy to watch and seemed to compliment what the E-chart was indicating; the selloff was going to continue because it stayed at a shallow climb all day with a value greater than 1. If TRIN began to flatten or descend the Dow would move sideways or gain back a small percent. Its value stayed flat or climbed after 1000 and the mkt stayed down all day...

Don't want to intrude on your successful systems but you got me into MME and I just wanted to share what the book provided me to consider as another trend tool. As a leading indicator seems like it could be a good one.