Make Money Everyday - A Guide to Short-Term Trading

So did you trade while working a full time job? Did you do this on the 1M or a higher timeframe?

I did. I usually have traded the 1M, however lately I have been trading off an tick bar setting that I purchased. Settings are the same, it just takes time out of the chart & just leaves price only. It's how I started to trade forever ago when I started out with e-minis. A lot of people thought I was crazy because I would take jobs with hours that were either afternoon or evening shifts, but this let me trade in the morning. Mongolian

Good Stuff from Steve Burns at Newtraderu.com

EQUITY EQUATION

Think about it this way: Once you are done with a trade, you can put it into one of four categories:

Small losses
Small gains
Large losses
Large gains

All other things being equal, the small losses will cancel out the small gains, and the large losses will cancel out the large gains. If you trade without changing something in that equation, you’ll eventually be broke, because commissions will eat away at your account while all of these trades are cancelling each other out.
What to do? Simple. Since you cannot eliminate losses, the only thing you can do is control the sizes of the gains and losses.
So do this: Completely eliminate the big losses. Cut your losers quickly. Don’t hold on, waiting for the “the next bounce” before you exit. That bounce may never come, and if it doesn’t, you’ve just turned a small loss into a bigger one. And then it gets even more difficult to close the trade, from a psychological standpoint.

I have a request for a chart on today's EJ. I haven't traded this pair in a while, so this is just my observations on how I see how price action went today.

Basically if you notice on the chart I have highlighted the quarter levels and you will see how price did a nice job today of moving between the quarters. If you look @ #'s 1-3 - Those are areas that are before London's open and as such price action was not something I would have been interested in messing around with. #1 - I could not have gotten that long move up given what price had done previously and honestly probably would have been stopped out trying to short there @ 138.5. #2 and #3 are kind of partners in crime as price just kind of floats along there @ 138.625 - at first above it, then it flips down below. Again, I wouldn't have been trading before London was open, but someone may have been. It looks like a big chop fest up to that point.

Then London opens.

#4. Getting that short between 138.5 and 138.25 would have been tough for me. Honestly, only way I could have gotten that was if I had gotten short @ #3 when price flipped to the bottom half of 625 - otherwise I most likely would have missed that.
#5 Looking to re-enter a short here I would have been stopped out as price was moving back up to the 138.5 mark. Now given how strong that initial short down from .5 to .25 was - it doesn't surprise me that it came back up to that mark. I have seen it many times, a power move one way will be followed by a quick test back. I do not have an stats to back that up - I'm just saying what has happened to me many times. Now given that #5 I would have been stopped out, I still would try to short @ 6. Not sure if I would have been picked up there, but since price fell through 138.5 so easily, I would still try to get short there again. Same @ #7.

The rest of the day, price settles in and behaves like I normal in my opinion. Moves between the quarters nicely, uses the 12.5 pip lines as nice retest areas. #8-13 are textbook entries. Easy. Price moves past, comes back up on the test, That's where my order would be, good for a good trade.

#14 is at the end of the day - The trend had been down all day long. There was very little money to be made buying however, it does provide a nice long setup on the retest back to 137.5.

I hope this helps. Today's price action was SPECTACULAR in my opinion. Hope everyone banked some pips. Would love to see some similar volatility to finish the week!

Mongolian

Here's some notes on today's action on the kiwi. This pair has been a thing of beauty lately. Low margin requirements, low spread, nice nice moves. One thing that I see over and over again is when price comes off a whole number, like .7900 in this instance, it will often times be good for a 50 point move in the other direction. Here is actually went more, 62.5-ish, and then proceeded to come back up 50 as of a few moments ago. There have been some nice setups in my opinion. Only chop I'd take would be when price came up to .7850 - trying to re-short there, obviously it blew through that and started a new direction of going long. No problem, just get in on the retest. Love the volatility!!

Mongolian

Been waiting here for the past few moments - waiting on AUD to come back up and pick my short order up @ .86969. Would the market cooperate? Order in. Walked away, got some water. Dropped 15 pips. AHHHHHHH!!!!!!!!!!!!!!!!!!!!!!!!!! Stupid rules.

lol.

Before the first opportunity to go long that you marked, there appears to be a short still waiting there. Would you have an order set there? It was at a tested support that was broken, below a higher high, and still part of a movement down. Am I reading that correctly?

Are you referring to .78500?

I sent you a PM.

No. I was taking about 0.78625. It was support to the left on the chart and would make a logical sell point.

Is this where you are asking about?

I believe he try to refer at around 14.55pm your chart....where the THIS...should act as a resistance as it was strong enough support just few hours before.
Also at around the 14.55 peak your current downward move is valid, ie. still lower highs/lower lows, and no valid sing that it is turn around and not a pull back.

But this may be my guesswork only, and capstone might refer/see something else.

Yes, around the 14:55 time. That is what I was referring to. Would you have had a sell order waiting there?

Ok - I gotcha now. The first move up after it pushed through to it's low. I've tackled this a few different ways before.
1. Have sell order first @ .78500 since that would be the first leg back up. Obviously - would have been stopped out.
2. Have sell order @ 0.78625 after getting stopped out. Reasoning being, the move down was so strong, that even though I was stopped out @ .78500 I could get short on the next leg up. So yes - there could be a short there.
3. Since price is right around a half number - I am not surprised if price turns and moves back in the direction it comes.

The short @ 0.78625 would only move to .78500, and then @ that point, I need to determine - is .78500 the floor? Is price going to be range-bound here? Or is it going to move long?

So there you go - the long answer to yes.

Mongolian

This is a really good post talking about creating and leaving our mark, building a business. The part that really struck out to me was where the guy was talking about climbing a mountain. "...there’s no other way to get up the mountain than taking a hundred thousand steps." So true with trading as well. Enjoy. http://www.farnamstreetblog.com/2014/11/make-your-mark/

Mongolian

M, have a great 2015.

Thanks! You as well!

Is this method still good? I'm asking because I'm not sure whether I need to start reading from the beginning. Also, it looks similar to what I'm trying to learn (trade off round number support and resistance lines) Please answer, thank you

It works for me!