Hi Mark,It looks like we are all learning the same way, through a bit of study and trial & error. I really enjoy your posts!I recently took the TMTT 3 day class and learned about the use of technical indicators and TMTT philosophy of not making a trade until 3+ "high probability indicators" signal getting into a position. In looking at some of your trades, I am not sure I have been able to discern your signals to get in or out based on the technicals, but I do see you using the technicals to set up your stops. Do you use the 3+ high probability indicator approach?Also on that note, do you use the "Trade Seeker" software? Is it worth the purchase price or can i get as much using say stockcharts.com's scans?Just would ejoy another enthusiast's thoughts!Hey, keep on having fun and best of luck in your trading!Regards,T
Hi, thank you for your compliments on my blog, I'm glad you're finding it interesting. It seems that all indicators are almost always lagging and give the signal late. I focus heavily on the source of those indicators: the price action. I look at what institutions are doing and volume characteristics for confirmation. I also prefer to see the Stochastics hitting stronger peaks or valleys on the previous swing highs or lows. I glance at Chaikin Money Flow, but it generally only reflects the price action and doesn't offer much actual insight into where the stock is going. I look at the broad market charts to help me determine if I should be selling, because the market is at retail price, or buying because it's at wholesale price. The broad market charts factor in heavily to individual stock price movement. I also look at where the stock is on it's weekly chart (retail or wholesale) as that time-frame also helps determine how likely the expected move may be.
There are various strategies and approaches to trading. The one thing that I completely understand at this point is that you must have a trading plan and you must trade the plan. Having a system will give you consistent results. If the results are consistently bad, then the system must be tuned. Emotions are a battle, one that I think I'm gaining control of. Even though my trades have been virtual trades, I'm mentally coming from a position of "that's my money!" and although I don't think the pain on the losses is quite the same on paper trades, it is with the intention of using real money that I practice systematic trading.
All systems must be evaluated based on current market conditions and this is where black-box systems will all eventually fail. The hard part is that just about when you think you've found a really great system to rely on, the market changes enough to cause your system to no longer be as valid. I know, it seems like a contradiction in and of itself, but one thing in your system must incorporate is the idea that "anything can happen" and you should be prepared for anything. Playing both sides of the market, keeping your cool when others are panicking (read: systematic approach) and having the patience to enter the trade you want -- not feeling the urgency to place trades just for the thrill of doing so. Patience, discipline, and a consistently calm approach with a plan will do wonders.
With all that said: part of the reason you've been having trouble figuring out what system I've been using is that I've been a bit inconsistent. My exits are based on price-action. If the trade has made the initially anticipated move, then I'm likely to put a reasonably tight trailing-stop. I'll definitely do this if I think I'm seeing an exhaustion gap. Also, on extended range candles I'll look for some sort of intraday support or resistance to set my stop. Exiting is something that I let the market do for me, when the trade is showing signs of weakness.
Now, for your question about Trade Seeker. I don't know what scans are available on StockCharts.com. I just now took a quick glance to not have to speak to something I know nothing about :-P. I find Trade Seeker to be very easy to use, especially in combination with The Trade Center, since it flows the symbols over into The Trade Center software and I find it very easy to sort, scan and otherwise go through a list of thousands of charts a week (> 100 every night and more on the weekends). I'll probably end up settling down on my watchlist maintenance routines eventually as I get better at everything. It seems StockCharts.com has some good things going and I think the custom scans could probably be used to emulate Trade Seeker's built-in facilities. I really do like Trade Seeker, and it is the source of my watchlist (of course I filter it down from the original scans).