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Spar's Trading System

 
 

 

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MTrader Class (C) copyright MTrader

March 18, 2004
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by Spar


[18:28] <Gimmie> Attention! Spar has generously offered to do a Q and A about his trading in class today !!!
[18:28] <Gimmie> two minutes
[18:30] <spar> Hello fellow traders
[18:30] <sanctus> hey traderstud!
[18:30] <sanctus> teach us o scalping master
[18:30] <d> hi spar!
[18:30] <spar> I wanted to give you the two bits on trading that I know and use
[18:30] <spar> First of all, this is not a fully structured class, but more of a Q and A session as:
[18:31] <spar> Ken, Gimmie, Phil, Whale, Doc, Matt & Mike and others can far better give you the low down on the methods and mechanics of trading.
[18:32] <docneuro> hi, spar
[18:32] <spar> The longer you stay in the room, the more class materials you will receive covering basics and head games of the biz.
[18:32] <spar> hi doc...
[18:32] <spar> Iím also not sure on what questions or uncertainties need to be covered, but I believe that the single most important aspect there is to Trading is discipline or self-discipline, to be exact
[18:33] <sanctus> don't i know that
[18:33] <spar> Iím also not sure on what questions or uncertainties need to be covered, but I believe that the single most important aspect there is to Trading is discipline or self-discipline, to be exact
[18:33] <spar> This enables you to be able to stop your trades when it goes wrong. As traders youíre not going to be able to be 100% right, unless you can walk on water.
[18:34] <sanctus> can you take us through a trade that goes against you spar, mentally what happens?
[18:34] <spar> I don't even know if ken can do that at this point...
[18:34] <spar> Letting that one or two bad ones go by, can ultimately ruin you, which is a cold hard fact
[18:35] <docneuro> agreed.
[18:35] <spar> Having self discipline as a trader then enables you to push any emotions such as fear, greed, the need to be right, etc. out of the picture so that you can trade safely with what the market gives you.
[18:35] <docneuro> how often you do your trade analysis and what parameters you monitor?
[18:36] <spar> let me finish.. here doc..
[18:36] <spar> One has to be able to assume being a pro trader and doing the right trading procedures
[18:36] <spar> As regards to my background, I learned about trading in these rooms. I learned from scratch, by attending class and making myself a nuisance to the gurus.
[18:37] <spar> I would pester them with incessant questions all day long. Iím truly glad that they are very patient and helpful.
[18:38] <spar> With that, perhaps I can answer any questions you might have so they wonít be pestered as much as I pestered them.
[18:38] <spar> <docneuro> how often you do your trade analysis and what parameters you monitor?
[18:38] <spar> I do trade analysis every night and once a week for the week's performance..
[18:39] <spar> I simply chart my P&L for daily and weekly...
[18:40] <spar> I look at what actions were good and not good and list these...
[18:41] <spar> the actions taken which were bad are dropped off and try to do only the good ones...
[18:41] <spar> or push the envelope on the good actions a bit more..
[18:42] <woody> can you say something about your stock selection criteria spar, especially at the open?
[18:43] <spar> I trade from Phil's list mainly but also do dumpers and runners, which ken finds...
[18:43] <spar> or other members in the rooms
[18:43] <landlord32> spar how many monitors?and how do you keep stops with 3 or 4 trades at one time.trailing stops?
[18:44] <spar> Premarket I will look at the list stocks and determine which ones have the best Momo...
[18:44] <Gimmie> how do you determine that ?
[18:44] <spar> Momo is a good fresh horse and I will look to hop on when it has the best upside... which usually is the first low of the stock..
[18:45] <spar> premarket you can observe the stocks and look for support and resistance
[18:45] <spar> and generally get a feel of buying or selling..
[18:45] <spar> the last 1/2 hour is the most important, before the market opens..
[18:46] <Gimmie> support and resistance.. as in pre-market highs and lows ?
[18:46] <spar> yes... I also study the stock's daily charts and phil's descriptions on his lists...
[18:46] <spar> as to what is expected for the stock...
[18:47] <beads> spar, what did you find were some of the biggest obstacles you had to overcome when you were starting? out?...
[18:47] <spar> I also rely on the Guru's take on what they see for the day's expectations... between Ken, Phil and Gimmie, they've been batting a high average!
[18:49] <spar> being basically human beads... having lots of fear, greed and all that stuff..
[18:49] <beads> ya, I'm familiar
[18:49] <spar> then through learning the correct mechanical actions... and perceptions just gained from watching and making small trades... I overcame all that
[18:50] <catman> that leaves youout beads
[18:50] <spar> lol
[18:50] <beads> thank you cat...as if I din't know...
[18:51] <sanctus> spar, can you take my early question now?
[18:51] <spar> sure..
[18:52] <scott> how do you determine entry and exit points on specific trades? R1, R2, S1, S2 or is it more by feel?
[18:52] <spar> <sanctus> can you take us through a trade that goes against you spar, mentally what happens?
[18:52] <spar> first of all the important thing about entering a trade is setting the stop.
[18:53] <spar> we normally enter a stock at two points on reversal and on breakout..
[18:54] <spar> you have to set the stop so that you're out of the trade, when the reason for the trade to begin with is no longer there..
[18:54] <spar> does that make sense?
[18:54] <Gimmie> yes
[18:55] <sanctus> yes
[18:55] <spar> I used to take larger stops... .25 to .30 and after 5 of these, that's over a point...
[18:55] <sanctus> bot how do you determine
[18:55] <spar> say if you're expecting the pivot to hold at 25..
[18:56] <spar> if the stock goes down past the pivot at 24.60, your expectation is no longer there...
[18:56] <spar> and you should be stopped out..
[18:57] <spar> personally I would rather re-enter the stock at 24.40 or whereever it bottoms...
[18:57] <spar> rather than ride it down..
[18:57] <spar> I will try to stop out flat or take a little loss
[18:57] <spar> and re-enter the stock at the bottom..
[18:57] <sanctus> right, but how will you know to stop -.10 or flat before it drops?
[18:58] <spar> Looking at Level 2 and the T&S will show whether it's gonna sell down, or the bids are dropping and getting hit...
[18:59] <spar> pace will show it..
[18:59] <spar> if you see an increased pace and a lot more hitting of the offers, it will generally go up...
[18:59] <sanctus> ok, so what Gimmie was teaching in class yesterday must be really studied and learned well?
[18:59] <spar> and if you see an increased pace at the bids, I instantly get out..
[19:00] <spar> yes!!!!
[19:00] <spar> that is one of the key basics of trading... as it allows you to buy low and sell high..
[19:00] <spar> how would you see the low and the high if you didn't have that skill>??
[19:01] <Gimmie> chicken entrails ?
[19:01] <sanctus> lol
[19:01] <spar> lol
[19:01] <spar> <scott> how do you determine entry and exit points on specific trades? R1, R2, S1, S2 or is it more by feel?
[19:02] <spar> It's actually both scott...
[19:02] <spar> the pivot and resistance and support give you an expectation of sorts..
[19:03] <spar> but you have to find the bottoms or tops by reading your L1 or L2..
[19:04] <spar> you cannot expect the stock to follow these expectations but they are just high probabilities of what it's going to do..
[19:04] <spar> d had a couple of questions...
[19:04] <scott> thx
[19:05] <spar> <d> my questions are:1. do you make expectations ? or just only what you see? on a trade. 2. the tape reading is sufficient for you to make a deciosion on a trade, or you follow indicators also? 3. you like stocks that have news? so will be more predictability?
[19:06] <spar> I don't formulate concrete expectations, but expect a rough idea of what the stock is going to do, based on how much Momo it has..
[19:06] <spar> I will hop on the stock and ride it until it shows me that the Momo is gone..
[19:08] <spar> In addition to tape reading... I monitor Nasdaq Tick, Nasdaq Futures and Comp... to see what the market is doing..
[19:08] <spar> this also will indicate if the stock you're in or are watching has Momo...
[19:09] <spar> strong stocks like TASR this morning will rise, even if the Nasdaq is tanking..
[19:10] <spar> I do play the stocks having news as that creates Momo... but you will have to watch as above...
[19:10] <spar> Did I miss anyone else's questions?
[19:11] <jorosv> when 500 and when 1000?
[19:12] <calyx> your posted trades are usually pretty close to perfect bottom and top entry and exits....can you explain what you technically look at to identify tops and bottoms? do you use any of the technicals sobek uses? if so, how?
[19:12] <spar> 500 for stocks ranging from 30ish to 60ish, 1k for stocks below that...
[19:12] <spar> I use sobek's indicators on my charts...
[19:13] <spar> however, these are secondary indicators as they are a little laggy
[19:13] <spar> but are confirmations for bottoms/tops..
[19:13] <spar> I use the methods as outlined by Gimmie yesterday..
[19:14] <spar> except I look at Level 2 and the T&S window which Realtick is set up to show..
[19:14] <calyx> gotcha
[19:14] <spar> it just takes a lot of looking and practice and paper trading to get tops and bottoms
[19:15] <spar> you can get quite good at doing it... but just to simply do it and get practiced...
[19:15] <spar> I don't know that there is a shortcut to getting this skill down..
[19:15] <Eubac> what realtick time and share, just the one alongside L2?
[19:16] <spar> yes
[19:16] <spar> I use a 15 tick Realtick chart and a 3 min chart as well to show the overall trend..
[19:16] <spar> and sobek's indicators..
[19:17] <Eubac> hwhat is a 15 tick compared to a bid/ask chart"\?
[19:17] <jorosv> please,can you repeat sobek indicators?
[19:17] <Eubac> how do you set 15 on what chart?
[19:18] <spar> it just show candlesticks an a 15 tick time interval instead of 1 min... or other time interval..
[19:18] <calyx> why do you post your trades? what effect, if any, does posting here have on your trading?
[19:18] <Eubac> so it's an interday chart?
[19:19] <spar> you set up Tick Bar on the time interval and set interval to 15 Eubac..
[19:20] <spar> I like to post my trades as it tends to enforce my discipline on stops and so on....
[19:20] <spar> I don't wanna look bad in front of you guys.... ;)
[19:20] <Eubac> ok, I see "tick bar" as a choice, thx
[19:21] <calyx> why do you post your trades not in real time?
[19:21] <Eubac> dia is diving, why?
[19:22] <spar> <sobek> screen setup is as follows: %R (period 12), %K (per 14), % D (per 14 / 3)
[19:22] <spar> [09:49] <sobek> +DI (per 14), -DI (per 14), BB ( 14 and 1.85 std dev)
[19:22] <spar> [09:50] <sobek> OBV, EMA (per 8) SMA (per 20), SMA (per 35) , SMA (per 50)
[19:22] <spar> [09:51] <sobek> MF, Pivots (S1, S2, Pv, R1, R2)
[19:22] <catman> any room for a stock on there
[19:22] <spar> lol
[19:23] <spar> calyx... I use two different keyboards for entry and chat...
[19:23] <spar> there is a lag between going between the two..
[19:24] <calyx> ok
[19:24] <spar> and whatever else I'm doing..
[19:24] <Eubac> two kbds because different computers?
[19:25] <spar> yes...
[19:25] <spar> I have a computer with it's own ISP for realtick..
[19:25] <spar> and another computer for chat, news, research etc...
[19:25] <Eubac> why plural isp?
[19:25] <spar> back up...
[19:26] <spar> in case one goes down
[19:26] <spar> I do believe in redundancy... I have UPSes on each computer..
[19:26] <Eubac> so if rt usp goes down, other isp becomes rt?
[19:26] <spar> yes..
[19:27] <spar> takes me less than a minute to get back underway..
[19:27] <Eubac> good, if got backup, might as well put to use
[19:27] <docneuro> maybe we should share Realtick trading pages
[19:28] <spar> sure doc, dcc
[19:28] <Eubac> what mean, docn?
[19:28] <docneuro> just set up a directory on IOM
[19:28] <docneuro> so we put our trade page file there
[19:29] <docneuro> we can see how others set up their daily trading operations.
[19:29] <woody> I think its a good thing to do too
[19:29] <docneuro> trade pages don't have your account info or positions
[19:29] <docneuro> so nothing to worry about
[19:30] <Gimmie> I bet david could set up so that we could post to each other.. maybe a message board where you can post files.. have your own journal.. type of thing
[19:30] <spar> OK, any other question..?
[19:30] <Eubac> can you put am exa,[;e on your IOM? sounds very informative
[19:30] <spar> no marathon here...
[19:30] <Gimmie> to share pages
[19:30] <woody> spar, can I press you a bit further on stock selection?
[19:30] <spar> sure..
[19:31] <spar> what would you like to know?
[19:31] <woody> for example TASR today. Was pretty flat yesterday, so what attracted your attention to it on the early break of yhod?
[19:32] <woody> the quick pullback and pullup pre 9.45?
[19:33] <spar> TASR was gapping up slightly when the futures were neg..
[19:34] <sanctus> yeah but that' not new, TASR gaps up EVERY day
[19:34] <spar> [09:14] <Phi1l> Continuing uptrend: TASR OSIP SWIR
[19:35] <woody> I was watching it then too, but got distracted when it moved down and missed the fast climb out
[19:35] <spar> also phil mentioned it yesterday afternoon. that he was expecting a break out..
[19:37] <woody> you are very fast! Do you do a systematic scan of your own shortlisted charts?
[19:37] <spar> [14:11] <Phi1l> what looks good about TASR is that the daily range has been contracting each day hte last several days ... indicating that it is probably resing in prep. for a big move...
[19:38] <spar> phil is known for some awesome calls...
[19:38] <woody> how right he was!
[19:38] <spar> I have TASR on one of my L2 windows on watch in front of my nose, woody..
[19:39] <woody> so do I!
[19:40] <spar> I personally would not look at trading on my own...without Phil or Ken and gurus wisdom and perceptions backing me up...
[19:40] <spar> how else could you endure the slow times without drivel?
[19:40] <spar> any other questions?
[19:40] <drknight71> Spar - could u provide a synopsis of the nvec trade..ie. pre-market, what alerted u?
[19:41] <drknight71> if not now..after closing if u not 2 busy
[19:41] <catman> I absolutely will not pull the trigger on a trade without my Sponge Bob Square Pants doll by my side
[19:41] <spar> lol cat..
[19:41] <drknight71> lol
[19:41] <jorosv> EXTRAORDINARIO ------GRACIAS MAESTRO
[19:41] <beads> You told me I couldn;t tell them that!!!
[19:42] <catman> Spar this was a supurb class Spar Thanks much
[19:42] <spar> drk, basically phil's comments... and it had found support at 42 premarket..
[19:42] <spar> thanks cat..
[19:42] <jorosv> class for the history of mtrader thanks a lot
[19:42] <beads> Absolutely spar, very much appreciated, VERY much
[19:42] <spar> thanks joro
[19:42] <drknight71> thnx Spar
[19:42] <woody> good stuff spar, many thanks indeed!
[19:42] <spar> thx woody..
[19:43] <spar> thx beads
[19:43] <Gimmie> thanks spar !!!
[19:43] <michael> thanks spar
[19:43] <Gimmie> was very interesting
[19:43] <spar> very welcome..
[19:43] <dan409> thanks spar
[19:43] <glenn> thanks spar
[19:43] <spar> welcome..
[19:43] <sanctus> thanks!
[19:44] <Eubac> very nice 

 

     

 

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