Big Chart Mindset

Good evening folks,
I just felt incline to flap my jaws a bit about some recent "Ah Ha" moments regarding Big/Small Charts. Most know I have spent the past 3 years trading SC's. The process of watching so many indicators everyday started to wear me down. As of about maybe 5 or 6 months ago, I have been studying and trading off BC's. This transition has been really, really tough both financially and emotionally. After lay it on the line and giving it to God, things started to become clear- BUT I NEVER STOPPED WORKING TO LEARN MORE! If you are a new driver and you are tethering between BCs or SCs charts, no problem. Just commit to one approach and go in with both feet. If you have been training and trading off BC's and want to transition to SC's, WATCH OUT! If you have been training and trading off SC's and have interest in trading off BC's, WATCH OUT!

I have a few things that I will suggest.....
First, if you are transitioning to another technique that involves smaller or bigger charts, you have to commit to a trading style of "in today out today" or traditional Swing Trading, or "in today out whenever my indicators tell me to get out" (normally overnight). I had to really abandon all technical thought process about SC's. I needed to stop looking at small charts, place my SC Trading Plans in archives, and lose the "rapid fire thinking". Trades for me were always quick and precise.

Big Chart trading requires the "old professor looking over the glasses" kinda thought process. With BC's, a couple of indicators will not cut it. You have to know some stuff. For an example, I went back and studied all indicators that were taught. I mean really studied them. This alone has helped me tremendously. When you REALLY know what the MACD is all about, your BC trading will become clear. When you REALLY know about the ADX and Oversold/Overbought conditions, your BC trading will become clear. Studying those indicators opened my world up to a new beginning.

You must know something about the stocks you trade. You can't just trade a stock because it moves. You have to know how it responds to various reports that come out monthly. You have to know how it reacts around Expiration Friday. How does it react to earnings, Big Fat thanks to RTT for that!! How does it move around the holiday season (RTT). What about the summer? I have found that learning to trade BC is not something that happens overnight. It takes time. When you study this stuff long enough and "burn the midnight oil", you start to see your stock(s) move as you expect. That is fun because now all the hard work has been done. Now, you enjoy the fruits of your labor with minimal effort. There are times that everything line up regarding the charts, but based on your relationship with that stock, you know it is not going to do what indicators are demonstrating. I will say, most of the time, indicators, RTT, and candle formations, provide all the guidance I need. There is no magic formula for BC trades (well, I do not have one).

Last thing,
You have what it takes to do this. Start by truly learning to understand the indicators. This is a big part of the puzzle. Now I understand why BC trading is favorable by so many. I really do not need to spend much time each day hovering over my position. There are so many techniques that produce the same consistent results-profit.

I have been struggling on where to post this: Trades of Encouragement vs. Big Chart Mindset. I decided on this thread because the reason for posting has to do with the psychology of trading and letting go of the anxious crap between the ears. I have struggled off and on for years with the feelings of missing out, left “X” on the table, and at times feelings like I am between the market makers crosshairs. I finally had to go back and re-read Trading in the Zone and a few other books on mindset. I even started meditating again which I haven’t done in years and have spa type “Zen” music playing as white noise in my office. You laugh but I am serious :-) Even then old habits and fears still creep up.

I have two live trades to offer. Each had different outcomes based on mindset at the time. The reason I finally decided on this thread is that I read early on that some short chart traders in this forum got tired of being up at the close using big charts, have news come out, and then close their position for loss when the indicators could have still been going their way. They got frustrated trying to use big charts and having to deal with contra moves so they gravitated to shorter timeframes. That’s okay as we all have to do what works for us. The trades provided below are decent examples of being able to read the big charts through chart study, knowing I was ok, but ultimately losing on the first due to the fear of losing.

- Trade 1: $RUT
- 1/28 @ 15:45 just before the close, stock approximately $1174, 233 signaled with other reasons to do the trade, bought puts. First target 1165/1166 (expected to find some support here) with ultimate target $1155.
- 1/29 @ 1:23 not looking to bad
- 1/29 @ 8PM ( review at night after the close) – “holy cow what just happened”. Tried not to pay attention to actual option price as I am focused on trading well and learning to ignore price. That said it does not take a genius to calculate that I am down roughly $8 on my option. Note: have never been down that much and it sucked but still on the fence about exiting. Running the charts back, hours of chart study, etc. suggested I was still okay but needed to be diligent following morning.
- 1/30 @ open - going back my way. Still not worried as I thought I had accepted the risk and was okay knowing I did everything possible to make a good decision.
- 1/30 @ 1:23 – made up a lot of ground. I was near even. Made up the $8 and had been bouncing around down $2 and up $1. Yes, by this time I was paying attention to price and doing everything I was not supposed to be doing.
- 1/30 shortly after 2:00 – short charts and futures appeared to be turning up. Someone asked in another thread if anyone ever uses short charts to predict big charts. This is why I recommend not doing so. Some are good at it and I envy you but for the rest of us focusing on the big charts is the way to go. Big charts lead the way.
- 1 / 30 between 2:00 – 2:15 closed the position for a small loss (down about $1.25 on the option). There was no way I was going into the evening being down a few bucks (or down $8 again). Being down $8 at the open due to unforeseen circumstances (news) is not nearly as bad as being down $8, back to up $1, and then going back down $8. I was not going to let that happen so I took a small loss before the candle closed.
- 1/30 @ close. $RUT turned down not long after I exited that afternoon. Closed @ $1,165.39 for the day (go back and look at my original first target as I do believe this falls somewhere between $1,165 and $1,166). Puts would have been up between $2 and $3 if I had ignored the small charts and stayed in the position as I was supposed to. Instead I was caught up in the emotions of being down so big earlier in the trade.
- 2/2 opening – selling continued, low of the day $1,153.79 ( I do believe that was just below my target of $1,155 where I would have exited). Another $10 move down in price on the underlying would have given me a few more bucks in my option. This should have been a profitable trade but allowed emotions to get the best of me.


Typically at this point I would have limped away, licked my wounds, and taken a few days off. Maybe paper trade. Instead I accepted the fact that the only reason I lost on $RUT was due to the emotional side. It did exactly as expected other than a quick one candle volatile move that had me tied up in a knot inside.


- Trade 2: BLK
- 2/2 at night – while licking wounds from $RUT I could not get BLK out of my mind. Continued moving away and coming back to the charts as there were very compelling reasons jumping off the screen to consider. 233 signal with other technical reasons, seasonality, etc.
- 2/3 @ 9:35 bought call with stock price around $350.25. Option bid/ask spread of $2 so entered at the mark. Expected to see BLK stall for 2 or 3 candles around the 50MA. If it pushed through was then looking for TBBs on 233 chart and above. First target of around $360 with potential of maybe $370
- 2/3 @ 1:23 – everything okay
- 2/4 open – big gap down against me, stock drops $5 at the open. "Crap, here we go again". "No wait, be patient"… Reminded myself of what just happened on $RUT and then I needed to be patient and allow big chart candles to close.
- 2/4 @ 1:23 – gap filled immediately (this is bullish by the way). Indicators on decision and supporting charts still going my way.
- 2/4 @ close – doing as expected. Moving sideways along the 50MA.
- 2/5 @ 1:23 – trade confirmed.
- Will not go into the rest of the trade as it would require discussing tools and thought process that are covered under my NDA. Closed the position this morning with stock price around $371.50. Total move around $20. Option up $12 (roughly 90%). I got paid to be patient and wait.

To sum it up I would say trading big charts well is a combination of learning to read the big charts and how all charts work together, focusing on the most probable outcomes (not what you want but what is more probable to occur), and simply being patient. As you can see I still have problems with patience at times.

NCT

@NCTrader

Months for calls = Sept-April
Months for Puts = May-August

That's y ur put didn't work and ur call did in my opinion



Edited 1 time(s). Last edit at 02/16/2015 05:55PM by BigChartTrader.

BCT,

Appreciate your feedback and all opinions are welcomed. I think the misconception is that anyone reading the post on $RUT might think I was expecting the big charts to turn over as you do not have access to my trading log, entry notes, etc. That was not the case. The Weekly was clearly showing a sideways trading range. Weekly had rising toward the top of that range testing CCG as resistance with weak looking indicators. The 233 and big chart that now replaces the daily (we no longer use the daily) were showing clear signal down. My only expectation was to stay within the trading range on the Weekly with a drop down to the 50MA area on the Weekly. A blip on the chart? Yes. Should I have considered the trade given the way $RUT moves? Maybe not as the total expected move when entering was $20 bucks. The actual move was $20.94. I just went back and checked the option chart. My puts would have been up just under $2 at the close on the day I exited. Those same puts were up $6.20 the following morning when my price target for $RUT was hit. The "one size fits all" don't buy puts in FWTZ in no longer taught. We are supposed to trade what the market provides when the market provides with the knowledge of all other pieces (seasonality, time of month, binary events, etc.). My trading log fully acknowledged that I was still n FWTZ knowing that any downside could be muted because of FWTZ regardless of what the charts were telling me. That is why I set a conservative target of $1155 and to stay in the trading range when I entered just under $1175. I lost because of a one day news event that created anxiety I had not experienced before. If I had the candles turned off the trade would look exactly as I expected except that I was looking to see the CCR on the "Daily replacement chart" move sideways into CCG before continuing down to my target. I did not expect an aggressive turn up on some of the indicators. That said the MACD was still in my favor. I contemplated staying in due to extensive MACD research over the years but the anxiety got the better of me.


On a side note I decided to provide a bit more color on my thought process on BLK for anyone that reads this post. My trading log indicates that once we pushed above the congestion area on the 233 (or 50MA for those not using the current charts) that my next targets would the TBBs on big charts (Weekly down to 233). I also knew that once we reached the TBBs on 233 and "Daily replacement chart" that the Weekly could be turning over from a rising 21MA which supports additional upside. If that occurs then I expected the upper bands on 233 and above to expand and see the price start walking the bands. I exited when I did due to my schedule - not because I had any type of exit criteria. For those that still use the Daily and a little FYI.. no reason to exit a trade when the MACD looks like it did on 2/11 and weekly turning over. Daily was still screaming up. I only throw this out for the benefit of those that still use a Daily as it was never part of my thought process. I exited because of my schedule. I knew I would not be able to monitor at the appropriate times for at least 2 days (4 or 5 233 candles). Decided it would not be a bad idea to be disciplined and take what the market provided and not push the trade without the benefit of seeing a chart for two days.

Hope everyone has a successful and profitable week!

NCT



Edited 1 time(s). Last edit at 02/16/2015 10:42PM by NCTrader.

I go back and read previous posts on big charts (far and few between-comparison to small charts). The one thing that I read that probably helped me with my emotions as much as any is , do not toggle back and forth from my account. It has always been about the money, the money, the money. Now after continuing to read mindset books and gain more patience, I clearly see that I have shaken myself out of so many trades and finished with small loses or small wins because of the money. Small wins and losses off big charts are like big wins and losses off small charts. It has to be about trading well. If you concentrate on trading well, the money will come and in amounts that will baffle you. I have struggled with this mindset thing for months. I am winning overall, but I am still fighting this monster. Most folks on this forum know I am a ball of emotions on steroids. Trust me folks aspiring big chart traders, if you cannot calm that beast, you WILL NOT trade well off big charts-PERIOD! If you are trading from a very, very small account that you cannot afford to lose a dime, you are going to struggle with big charts. I am just calling it like I see it. I pray and practice, but until I started to read again, I had been beaten down pretty good. This is the thing, it is one thing to have a gain of 50% on a trade. It is totally different when gaining 50%, but you do not know why you exited the trade. That my friend is not good. Yes, you might trick yourself to thinking, "I am happy in Seattle", but you have no real exit strategy. That was me as of couple of months ago. I had to really understand how big charts worked from entry to exit.

Last thing.... This transition from SC to BC is about as tough as learning how to trade. I know that sounds pretty crazy, but the shift of mindsets can be a psychological nightmare. That 55 chart has been my nightmare. I simply could not stay away from that chart. I entered trades, but allow the 55 tell me to get out because it was going to tank. Yes, it is much better to not be glued to the charts, but that overnight thing can crush you. Waking up to see your position appears to have tanked is pretty tough on the emotions, but I had to trust myself. I had to remember, I have not lost a dime until I close the position. I had to calm the emotions and deal with the roller coaster. I had to go back and check all indicators.

I want to help others really bad, but now I understand why it is so important for a person to go through this mindset mud. It is one thing to tell someone how it is or try to teach them how to trade, but it is totally different when you have to go through those emotional ups and downs. There is no magic formula for dealing with your emotions. I love the books, "Trading in the Zone, The Power of Focus, Superself by Charles Givens. I do not think Superself is on the booklist. I found a lot of value in that book.

Have a good day!

We no longer use the daily chart? There is a replacement for the daily? WOW, Gary has really changed his teachings since I took his courses. I thought the 233, daily and weekly was the foundation that he made his fortune on, why did things change?

PastorP

I would highly suggest, if it's been a while, to get in to the Survivor classes this year and see what's changed and why.

All,

Obviously I opened up a can of worms with the "replacement chart" comment and for that I apologize. My only intent was to be clear that what I was looking at on my screen may not be what you see in front of you. That doesn't mean a trade is not present on the charts you use. I know from experience that if I used "Daily" in my description then someone would pull out their T-square and calculator for the sole purpose of pointing out that what I described was not showing on their charts. This forum is not about being right or wrong. It is about people coming together to help each other out. Unfortunately we have various levels of education and I think that is forgotten at times. What was taught early 2000s in 1-5 was slightly modified by mid 2000s. Anything taught in any 1-5 class along the way was expanded on in RTP 2006-2008. An RTP student at that time would see things differently than a 1-5 student. Anyone that has taken the new Survivor Series knows that the core basics are still being taught but more emphasis is being placed on correct trade setup, entry, and exits with a focus on big charts only. RTP students in 2014 learned that the basics from prior RTP classes are still being taught but once again more emphasis is being placed in certain areas. Yes, a few things have been added along the way. GW recently made very minor changes to the Survivor III class by adding a small piece that he felt was a good introduction into some new things being introduced in RTP 2015. To make things worse you can have two students with the same level of education but might not have the same level of experience. Finally you can have a successful 1-5 that simply figured it out on their own and is doing quite well. I do not mean to go off on a tangent but I think these points are forgotten at times. I decided to be clear about he chart because I knew someone would say "but...". Again.. sorry!

As for the new stuff, yes, things can and do change - even in class. There is not one perfect way to trade and then once you figure it out you stop learning. I think as a trader you have to continue to evolve. I do not know GW personally. I do think he continually strives to get better and when he finds something that he feels makes the trade better then he will share. So some of us no longer use the "Daily". Big deal. Any successful big chart trader should be able to see the correct components for my BLK entry using a Weekly, Daily, 233. $RUT is a different story and would be a bit fuzzy looking at the Daily so I decided to be clear. I will refrain going forward.

Finally for those that might be trying to learn big charts and following BLK the Weekly down to 233 still have not signaled an exit following the rules. Had I been able to follow end of last week I would still be in as knew 379-380 was a possibility. I would not blindly stay in trying to get 380 or greater but would have followed candle by candle. At this time I would have an itchy trigger finger looking for any qualified reason to exit. Trade starting to look tired. GW says that the most successful could have seen the charts last week and knew they were okay to stay in for another few days without being able to monitor the charts. Huge difference between knowing and hoping. I am not there yet. Still need to be able to see each 233 closing or I am gone.

I meant no offense. No matter your level of education or charting platform overrides the path of least resistance. you can find any type of trade any day, I was simply stating those paths of least resistance.