his information will help traders understand how I personally approach the markets each trading day. In addition, you'll learn general information about my edges
within my trading plan
that involves many things working together as a team
First of all, my consistent profits are not solely because of my trade signals or technical analysis as a price action only trader (no indicators)...it's because of my trading plan
that involves +20 years market experience, psychology of trading, discipline, money management, proper capitalization, position size management, stress management, proper broker platform, proper trade workstation, proper at home trade environment, team collaboration, wrb analysis, trade signals et cetera. It's all that stuff that most system designers, backtesters or academia do not want to talk about with profitable traders because they prefer dealing with codes or mechanical systems in a false belief that complex markets can be defined via codes...ignoring that it takes a good trading plan to endure the markets year after year.
Sports Analogy - Pretend you're a good quarterback (a.k.a. trade signal)...you will lose all your football games if your teammates (market experience, psychology of the trader, discipline, money management, proper capitalization, position size management, stress management, proper broker platform, proper trade workstation, proper trade environment, team collaboration et cetera) don't do their job (a.k.a. trading plan). Therefore, it's impossible for a good quarterback to overcome or compensate for the poor performance of those on his offense or defensive unit in order to consistently win football games.
Thus, I do not
use a automated nor mechanical system and if someone wants to test why I'm profit...they need to test my entire trading plan
and not one component of it. Therefore, do not ask me for codes to my trade method so that you can test the merits of my trade method while ignoring the fact it's my trading plan as a team
that's behind my consistent profits and not my trade method all by itself. In fact, the main reason why I don't
use computer codes because the markets are too complex, uncertain, ambiguous for such via all the intermarket relationships and global economy/political relationships. Thus, we as traders must understand market context
that's often complex prior to the appearance of any trade signals regardless if they are based upon technical analysis or not.
A simple method that's consistently profitable is accomplishing such because the trader has a deep and complex understanding of the markets via context.
However, if you want to ask questions or talk about market experience, psychology of trading, discipline, proper capitalization, position size management, stress management, proper trade environment at home/office et cetera...go to our trade talk
section of the forum. Also, you can send me a private message or email via our forum contact info
. How Do I Understand Market Context?
I use a market analysis called WRB Analysis Tutorials
to identify key changes in supply/demand and changes in volatility that results in what I call WRB Zones
. The price action in the tutorials are rule-base (objective) although applied discretionary
via that each trading day I'm using different WRB Zones from the tutorials. These WRB Zones are not trade signals. Instead, they help with my understanding of the price action
(the context) in combo with my market experience. In contrast, I also use rule base (objective) trade signals with no discretion but they must occur within WRB Zones outlined by the WRB Analysis Tutorials. Simply, if/when I get a trade signal...I do not take the trade unless it occurs within a WRB Zone that has given me the understanding of the price action (the context). Key Market Events
I'm not talking about trader psychology. Instead, I'm talking about what really moved the markets that produces fear or greed
in the price action. To be specific, I read every trading day something from one of the following: FED actions and speeches, economic reports and crisis events, geo-political decisions, regular schedule market events, market tendencies and seasonals. This helps me with my WRB Analysis and that prepares me to take action (buy, sell or sideline) when trade signals appear.
Simply, I'm analyzing how the price action reacts
to these key market events. WRB Analysis Tutorials
The discretionary players
of my trading comes into play when applying the rule-base (objective) WRB Analysis Tutorial Chapters (understanding the price action prior to the appearance of any rule based trade signals) because each trading day I may be using a different tutorial chapter or different combo of chapters for what ever reason as I concentrate on what caused a change in supply/demand. Simply, the market changes every trading day and it's the price action that tells me what type of WRB Zones I should be looking for and monitoring so that I'll know what to do when/if my trade signals appears within those WRB Zones that represent key changes in supply/demand.
By the way, you can request free access
to the basic
WRB Analysis Tutorial Chapters 1, 2 and 3 to learn more about how I identify price actions that are key changes in supply/demand, key changes in volatility and price actions for profit targets. Yet, if you want support (answering your questions as you begin to learn WRB Analysis)...you must join the TSL Support Forum because I will only respond to questions if they are posted at the TSL Support Forum. More information @ http://www.thestrategylab.com/tsl/forum/viewforum.php?f=5
To pay for the advance
WRB Analysis Tutorial Chapters...I highly recommend you first determine the merits of WRB Analysis via learning the basic
tutorial chapters prior to making payment for the advance
tutorial chapters. More information about the advance
tutorial chapters @ http://www.thestrategylab.com/WRBAnalysisTutorials.htm Trade Signal Strategies
The objective rule base players
of my trading involves what I call trading reports AJCTR, APAOR, STR and the VTR strategies. As a group, they help me find trade opportunities in any type of market condition regardless if it's trending, ranging, high volatility or low volatility although I prefer not to trade in low volatility range periods.
Fee-based info about the strategies @ http://www.thestrategylab.com/TradingReports.htm Simply, I use a discretionary market analysis (understanding the price action) prior to the appearance of my rule-based pattern signals.
With that said, the main purpose of this message post is to inform you about commonly asked questions that's aimed specifically at my personal trading that's part of my overall trading plan because some visitors to my website have mistakenly believed . Thus, the info below is very helpful to prevent responding to the same questions because you'll have all the answers here (e.g. what's your average position size per trade).
In addition, if you have any further questions about my trading habits or routine, they must be posted here at the forum although I may share details about a few components of my trading plan at other forums, chat rooms, twitter et cetera. Therefore, encouraging those interested in my trade methods or trading plan to ask their questions here at the forum or in my own chat room helps me to give answers without interruptions from those that don't have a sincere interest in understanding nor learning what I do as a trader. This also allows for me to maintain documentation of the questions & answers so that others can read whatever is discussed at the TSL Support Forum. My Brokers
First of all, I never make broker recommendations due to the fact every trader has different needs and that there's not one perfect broker (they all have their problems). Also, I strongly believe in having a backup of everything (e.g. ISP, computer, realtime charting, broker et cetera because nothing is 100% perfect).
I do not put all my eggs in one basket. With that said, I use the following brokers:
* Velocity Futures (X_Trader) http://www.velocityfutures.com
* Infinity Futures (Infinity AT) http://www.infinityfutures.com
* RJO Futures formerly known as Zap Futures (RJO Vantage)http://www.rjofutures.com
* Saxobank (Saxotrader) http://www.saxobank.com Chart Intervals used on my Monitors
My real-time charting programs are QCharts, FutureSource and Sierra. I prefer candlestick charts instead of bar charts. On my monitors I have 30sec, 1min, 2min, 3min, 5min and 15min intervals. Further, on specific types of trading days (e.g. FOMC Announcement) I will favor one interval over using another interval.
I only use the 30sec and 1min intervals during high volatility trading conditions and the trades are almost like scalping and I tend to exit at a WRB pt1 profit target if I think volatility is declining after my entry. My trades posted in #FuturesTrades
First of all, all my trades are posted in real-time in a free
chat room called #FuturesTrades. More info about #FuturesTrades @ http://www.thestrategylab.com/ftchat/forum/viewforum.php?f=5
The chat log archives are posted @ http://www.thestrategylab.com/ftchat/forum/viewforum.php?f=20
#FuturesTrades is a free
chat room used by traders that want to document their trades as they occur in real-time. Therefore, because it's not a signal calling chat room nor is education being provided...it attracts traders that's using their own methods or using methods by someone else. In contrast, fee-base clients have their own private chat room or talk to me in real-time via private message. However, #FuturesTrades members are not spammed with information about purchasing our fee-based strategies and we have a strict anti-spam policy that applies to us and our members. Position Size
The trades you see posted in #FuturesTrades always have one of the following designations...Large size, Medium size or Small size position. It simply means that my large size position is between 6 - 10 contracts, medium size is 4 - 5 contracts and small size between 1 - 3 contracts. Also, I usually follow the above commentary (large, medium or small) in #FuturesTrades with the exact number of contracts
actually in the trade as shown in the archived chat logs.
In addition, as soon as I reach my profit goal of the trading day, I go into profit protection mode and reduce my position size down to 1 contract only for the remainder of the trading day. Further, it's important to understand that posting real money trades in real-time is a difficult task
especially when things get hectic, fast moving or frustrating. I've been doing such since late 1990's and it's taken many years to get comfortable with doing such.
Simply, it wasn't easy in the beginning and I often concentrated on the negative aspects of doing such instead of the positive aspects of posting real-time trades. Position Size Management
I do a lot of daily chart analysis and key market event analysis to help me decide upon my position size in the first few hours of trading. For example, if the daily charts are showing contracting volatility, I will expect the following trading days to produce a volatility spike (strong intraday directional price movement). Thus, I will tend to go heavy on the large size position or increase my overall position size in comparison to my trading in the most recent trading days. Also, if I notice I'm having discipline problems or feel like I'm having a little trouble in understanding the price action...I'll dramatically reduce my position size down to a few contracts.
Another example is that I use intraday market tendencies
to help with my position size management. For example, during Quadruple Witching week the strong directional price movements tend to occur on a Mon, Tues or Weds (free trading tip
from a new service I'm currently designing that's schedule for release in 2010). Another example, if there's distractions here at my home while trading (e.g. twice per month I have a cleaning service cleaning my house), I'll only trade a small size of 1 - 3 contracts.
My point about my position size management is that I don't use the same position size each trading day and often will use a different size from one trade to the next trade in the same trading day for what ever reasons that's trading related or personal
Also, here's something for you to think about...the markets are not the same every trading day. One day its a tight trading range day, another it's a trend day, another it's a high volatility chop day, another its a low volatility chop day, another it's a mixture of different types of price actions. Therefore, explain to yourself why should you use the exact same position size with the exact same stops or profit targets (risk:reward) if the price actions in the market are not the same...
Isn't it counter-productive to your trading to use the same position size and same fixed trade management after entry as if the price action of every trading day is the same. Answer: YES
Another concern is just because I'm consistently profitable doesn't imply I can just increase my position size while ignoring liquidity, volatility, psychological stress associated with position size increase as a discretionary trader or financial responsibility as the sole provider of the family. Thus, my position size management allows me to trade profitably without freaking out when I get consecutive losses. However, to compensate for times when I do want to dramatically increase my position size...I prefer to diversify
via trading more than one trading instrument at the same time in different markets that don't have a high correlation (e.g. trading Emini TF and Forex EurUsd). More than just Entry Signals
First of all, the markets are too dynamic for a trader to be using one strategy only as in a "one size fits all"
trading approach. One trading day the markets are impacted via breaking news, another day the markets are impacted via regular schedule market events, another day the markets are impacted by global events, another day the markets are impacted via technical reasons, another day the markets are impacted via seasonal tendencies and another trading day the markets are impacted via any combo of the above variables mentioned.
That's why its very important to understand the price action
prior to the appearance of any trade signals to be able to adapt whenever markets change because the markets are always changing
...many times each year. Traders that don't have the ability to adapt will often endure account blowups, deep drawdowns, consistent losses or develop enough fear that they begin to self-sabotage their trading. Simply, trade signals are only part of a big puzzle involving profitable trading and the "one size fit all"
one indicator/one strategy trading approaches will doom a trader whenever the market conditions change. .
With all that said, I use what's called WRB Analysis Tutorials
to give me that understanding of the price action
prior to the appearance of any trade signals.
As for my trade signals...they are via what I call Trading Reports
(AJCTR, APAOR, STR and VTR) @ http://www.thestrategylab.com/TradingReports.htm
The combo of WRB Analysis with my trade strategies is one edge or one piece of the puzzle to profitable trading. Other edges in my trading or other pieces of the puzzle is my actual trading experience (+15 years) and my market experience (+20 years). In addition, I have a close network of personal friends that are institutional traders, retail traders or work in different positions in the financial markets. Further, I have a great trading environment at home as a retail trader along with support from my family.
All the above are variables or pieces of the puzzle to my edge that allows me to be a consistent profitable trader.
Traders that consistently only talk about their entry/exit signals are either new traders or losing traders. Trade Management after Entry
I do not use fixed profit targets nor fixed initial stop/loss protection.
I'm not a fan of fixed risk:reward ratios because the markets is always changing and traders that are too fixed tend to have deep drawdown periods.
Instead, my profit targets, initial stop/loss protection, trailing stops and contingency plan (position reversals) are always different from one trade to the next trade. Yet, they are all determined via WRB Analysis
Further, regardless to my profit targets or stops, if the price action looks bad after my entry and before a profit target or stop is reached...I'll dump the trade because I don't believe in getting married to a trade position which is why I have fast trades that are mistaken as scalp trading when in fact I did not enter the trade with the goal to scalp. Initial Stop/Loss Protection
I use a - 2 point emergency hard stop and a - 1.0 point mental stop while trading the ICE Russell 2000 Emini TF ($TF_F) futures. The hard stop is just in case an emergency happens like my computer crashes, ISP disconnects or broker execution platform freezes in the middle of a trade that's moving fast against me. Further, the emergency hard stop is auto set immediately upon entry
in any trade so that I don't have to worry about clicking any more buttons to set a stop...allowing me to concentrate on the price action and my trade position. Also, more often than not, I will know if the trade is a stinker when price reaches -0.8 which is why most of my losing trades are closer to -0.8 instead of -1.0
Simply, regardless if it's a hard stop or mental stop, I'm constantly monitoring the price action after entry for signs of trouble prior to any stop being reached to allow myself the opportunity to minimize a losing trade prior to the stop being reached. Profit Targets
My profit targets are either WRB's that form after entry (as discussed in-depth the trade management section of the fee-based strategies) or prior WRB s/r zones. Also, if I want to catch a big trade and stay in the trade beyond the formation of WRB pt1...I'll often use price action info from Oil and Gold (intermarket analysis) to help me to manage my trade beyond WRB pt1. In addition, during high volatility market conditions, I tend to look for profit targets beyond WRB pt1 in an attempt to capture points (not ticks).
Further, during a market seasonal tendency
price action, I'll stay in the trade and increase my chart interval for exits well into a WRB pt3 to WRB pt7. ADDing to an Open Position
It's not common for me to add to a position that's profitable or at a loss.
However, when ever I do add to a position, it's only because I got another trade signal regardless if the current position is at a profit or a loss. Yet, if add to a position at a loss (rarely do I average down as in maybe once every few thousand trades), I do such with the initial stop/loss protection still in place (no adjustments). Also, regardless if the position is profitable or at a loss...I now only add when the trade signal occurs within a WRB Zone whereas in the past I would add to a position even if it was not within a WRB Zone. Yet, I usually dump the add for a profit when the first WRB pt target is reached after the add. Position Reversals
You probably notice via the #FuturesTrades chat log that I do position reversals. First of all, if price retraces back to my mental stop during a volatility spike (not a breakout) especially after contracting volatility...I tend to reverse my position if the price action of Oil and Gold supports a position reversal. Yet, if it's a volatility breakout..I tend to exit the position for a loss at the mental stop.
Also, you'll notice in #FuturesTrades that I do more position reversals during high volatility market conditions whereas in comparison if its normal to low volatility market conditions...I tend to exit a problem trade (no position reversal) prior to the initial stop/loss protection being reached.
Trader and Founder of WRB Analysis
(wide range body/bar analysis)
Price Action Only Trading (no indicators)
@ http://twitter.com/wrbtrader/ and http://stocktwits.com/wrbtrader http://www.thestrategylab.com
Phone: +1 708 572-4885
Business Hours: 8am - 5pm est (Mon - Fri)
Skype Messenger: kebec2002 firstname.lastname@example.org