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Brent wrote:
The one thing that
>bothers me is that you are concerned about novice traders being taken and
>at the same time those novice traders may read your post and think that
>what you do is what they should do.
Over time, I have become very dogmatic over price action being preferred to
conventional indicators. But, I say than in the context of day trading the
T-Bonds. For clarity, let me say it again, DAY TRADING THE T-BONDS. For
me, when you are talking about a market which regularly trades half a
million contracts a day, some times much more, and on occaisions over a
million, there are going to be unique factors. Notwithstanding this
fantastic liquidity (one tick spread, hardly ever any slippage) the daily
range is pretty small compared to, say, the S&P where indicators will react
very differently, no doubt. There is wonderful, controlled (by comparison
to most!) movement in the T-Bonds. Ultra- boring for some people. But up
and down the chart once or twice in a day for $500-$1,000 per contract is
good news for some people. The point is, the set ups and the price action
tell you what the T-Bonds are likely to do next. For me, (I have to keep
saying this, apparently, because it is my opinion and not everyone will
agree!!) that is mainly, if not only, what I need to know to trade the darn
thing.
Conventional indicators, as I have said many times, may and probably do work
very well for position players. They may work day trading some other
instrument - I haven't a clue. Now, some newbie traders will be starting
out position trading and may find an indicator or three just the job. Other
newbies, with less capital and looking to earn a living on a daily basis,
will, so far as I can advise, based on my experience (does that qualify it
enough?) be better off learning to trade, through reading the tape - which
is what price action is all about. They will be learning in a market which
is receptive to the beginner, for a mass of reasons, too numerous to go into
here.
I have survived long enough to know that it would have been very nice to
have been able to come to my conclusions, now, right at the beginning -
rather than learning from very hard knocks. The newbie still has to learn
and we all no there ain't no Holy Grail, but wouldn't it be nice to learn to
read the tape, rather than be conned by all the system vendors, gismo
marvels and wonderous indicators - all of which, as far as I can see, lag
the market.
Yes, I do think the newbie would be better off taking the route I suggest -
or I wouldn't suggest it. But, of course, it is not the only route to
take. Of course not. Absolutely.
Bill Eykyn - in a hurry, before the market opens.
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