{"id":49465,"date":"2016-02-21T02:39:47","date_gmt":"2016-02-21T10:39:47","guid":{"rendered":"https:\/\/brookstradingcourse.com\/?p=49465"},"modified":"2016-02-21T02:39:47","modified_gmt":"2016-02-21T10:39:47","slug":"perfect-trade-setups","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/ask-al\/perfect-trade-setups\/","title":{"rendered":"Ask Al: Perfect trade setups"},"content":{"rendered":"

BPA trading room Q&A: August 17, 2015<\/h2>\n

About the 15-minute chart, I find watching the inside bar breakup to be reasonable with a 15-minute chart, what do you think?
\n Audio duration: 8min 54secs<\/em><\/p>\n

 <\/p>\n

A perfect trade setup on the 15min chart?<\/h3>\n

\"ES<\/a>So he\u2019s saying, like, bar 6, maybe it\u2019s a reasonable buy. Bar 17. I think it doesn\u2019t matter what chart you trade, and if I get rid of the session breaks and the time scale and the price scale, you will not be able to tell whether this is a 15-minute chart or a 5-minute chart. I guess you would because of the gaps down, you just count and say, \u201cOh, okay, every 26 bars is a 15-minute bar.<\/p>\n

But in general, the price action is the same on the 5-minute chart, the 10, the 15, the 14-minute chart, the 27-minute chart, the 31-minute chart — pick any timeframe — a tick chart, a volume chart. The price action is the same on all of them, and some computers are trading them. Some timeframes, others are on others — one-minute chart. It doesn\u2019t matter, right? And sometimes, it will seem like for several days in a row one particular pattern will work very well on one particular timeframe, and then it will stop working and you start losing money all the time. And then you\u2019ll see that pattern working well on another timeframe — an hour chart or a 5-minute chart.<\/p>\n

Everyone\u2019s in search of a God, everyone wants to believe, everyone is in search of hope and they\u2019re in search of perfection. They want that perfect trade where they know if they take this trade, they\u2019re going to make a lot of money, and everyone wants that, and if it were true — if a perfect trade did exist, every institution would quickly discover it, and then no institution would take the other side, and all of a sudden the perfect trade would not work.<\/p>\n

For you to be able to buy above 6, or to buy above 17, there has to be an institution willing to sell to you. If that institution knows the odds are really high he\u2019s going to lose money, he\u2019s not going to sell to you. And if there are no sellers at this price, your perfect trade is not going to work. There would be no one willing to sell. They\u2019ll be willing to sell up here [above 24 higher high], but you have to buy it to get it up there, and there aren\u2019t going to be any sellers here so it\u2019s not going to go up there.<\/p>\n

But perfect trade setups are out there—right?<\/h3>\n

Basically your question is a variation of the perfect trade setup: does the inside bar pattern work well, especially while on the 15-minute chart? And my belief is that it does not work any better on the 15-minute chart than it does in any other timeframe — although sometimes for several days in a row, it will work really well on a certain chart — 5-minute chart, 15-minute chart. Remember, all the high-frequency trading<\/a> firms use their algorithms for two days, five days, and then they switch to a different algorithm because whatever was working for the past two, three, or four days is working less well now, and something else is working more well now. So at times, it seems like a particular pattern works very well, and it does, and it might work very well for another day or two, but that will probably be the extent of it. It will stop working. The computers will detect that something\u2019s working really well and eventually, they will not take the other side of the trade, and too many of them will start taking the same side that you\u2019re taking, and the trade cannot work unless someone is willing to do the opposite, and it will quickly stop working.<\/p>\n

The Golden Goose<\/em> syndrome<\/h3>\n

So I would not think about \u201cDid I find a goose laying golden eggs? Did I find something really special that nobody else knows?\u201d I wouldn\u2019t think of it like that. I would think, \u201cIs the context good? Is the setup good? Can I structure a trade with a good stop and a good profit target?\u201d Doesn\u2019t matter [about] the timeframe. Can I structure a trade where the math makes sense and not worry about finding one particular setup that is really reliable — because you will not find it. You might find it for a day or two, but then you trade it on the third day and the fourth day, and you lose money and you gave back more than what you won on day one and day two, and you wonder \u201cHow could that possibly be? It was such a great setup.\u201d And it was a great setup for a day or two, and then it stopped being a great setup and some other setup was great, like doing the opposite of what you\u2019re doing. So instead of buying above that great-looking, 15-minute inside bar, it became more profitable to sell above that great looking, 15-minute inside bar.<\/p>\n

Perfect trade setups—a sure way to lose money!<\/h3>\n

So the takeaway is: Don\u2019t worry about perfect trades and don\u2019t go thinking that something works especially well on one timeframe. It doesn\u2019t. It will work well on any timeframe some of the time. But you never know in advance when it will, nor do you know how long it will. So I would not be thinking in terms of perfect setups. I think that is a sure way to lose money, looking around for that perfect setup. I still occasionally see articles and websites that basically talk about perfect setups and perfect trades, and whenever I see that I know the person who wrote it is either dishonest or stupid. And since there are so many dishonest people out there, in general, I assume the person is dishonest.<\/p>\n

Making money is hard work. Everyone wants it to be easy. They want a savior, or protector, right? A perfect setup, right, where they know that, yeah, they might lose sometimes, but they\u2019re never going to lose much and they\u2019re never going to lose often, but they will win a lot and they\u2019ll win often. And they\u2019ll have something that will work, not just for today and tomorrow, but forever. They want a perfect setup. And what they\u2019re saying is, \u201cI\u2019m afraid of all of this. This is hard work. I don\u2019t know that I can do the work. It\u2019s hard to do it every minute of every day for year, after year, after year,\u201d but that\u2019s what you got to do. And you can do it, right?<\/p>\n

Just do the work—that’s all it needs<\/h3>\n

If you put the work in — there\u2019s nothing magical to trading — there\u2019s nothing magical to making money trading, right? You just got to do the work, and — I occasionally get e-mails from people who are doing extremely well. When I say \u201cextremely well,\u201d I mean you can just put the number of zeros that you want after the number. The trader\u2019s doing extremely well. They often ask me, \u201cWhat do I do next?\u201d and I say, \u201cNothing. You\u2019re doing what you\u2019re supposed to be doing. You\u2019re consistently making money,\u201d and it can get boring, but the key is to stay in the zone, continue to do what you\u2019re doing and not worry about doing a whole bunch of other things, making a lot of changes, right? If you\u2019re Tiger Woods and you got a great swing, don\u2019t change it six times. If you\u2019re Usain Bolt and you\u2019re running whatever — 9.59, 100 meters — I would not be out there changing a lot of things. I would just try to continue to do what I\u2019m doing as well as I possibly can do it and not worry about going to another level.<\/p>\n

And that\u2019s life as a trader. You get a bunch of tools and they work reasonably well, and if you\u2019re one of those people who sends me an e-mail telling me, \u201cAl, I made $4,000 yesterday,\u201d or \u201cI made $25,000 yesterday,\u201d or \u201cI made $15,000 this week,\u201d and you ask me, \u201cAl, what do I do to make more?\u201d I\u2019m telling you right now what the answer is: Just keep doing what you\u2019re doing, stay humble<\/a>, don\u2019t start thinking that you can overpower the market and outsmart the market. Just continue what you\u2019re doing, and don\u2019t get greedy, and stay comfortable, and have fun, and be happy. And it\u2019s magical. It can totally change your life. But don\u2019t get bigger than yourself. Be humble. Say, \u201cHey, I\u2019m just a guy or I\u2019m just a gal, and I\u2019m doing it, and it\u2019s working, and I don\u2019t have to go to some next level. I can just keep doing what I\u2019m doing day after day. I like doing it year after year, and that\u2019s my career.\u201d And that\u2019s the reality. There\u2019s nothing beyond that, so it\u2019s not as if you can keep adding, and adding, and adding, and adding, and getting greater, and greater, and greater, and richer, and richer, and richer. You don\u2019t have to. All you have to do is — you have a basic set of tools and use them consistently well. You don\u2019t have to be hitting homeruns. All you have to do is get up there and just put the ball in play. Just try to keep hitting singles, and that\u2019s all you have to do. And if you\u2019re able to do that, you\u2019ll do just fine.<\/p>\n

So that is the end of my long answer to the question about a perfect setup, or an especially good setup. Okay, I hope everybody has a good night.<\/p>\n

Al Brooks<\/em><\/p>\n

Information on Al’s Online day trading room<\/a><\/p>\n

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BPA trading room Q&A: August 17, 2015 About the 15-minute chart, I find watching the inside bar breakup to be reasonable with a 15-minute chart, what do you think? Audio duration: 8min 54secs   A perfect trade setup on the 15min chart? So he\u2019s saying, like, bar 6, maybe it\u2019s a reasonable buy. Bar 17. […]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[159],"tags":[],"class_list":{"0":"post-49465","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-ask-al","7":"entry","8":"has-post-thumbnail","9":"override"},"featured_image_src":null,"author_info":{"display_name":"BTC Admin","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/richardhk\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/49465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=49465"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/49465\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=49465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=49465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=49465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}