Update: I've been studying douglas still. It's taking a while. His 5 fundamental truths are great. I've read them before. There is a huge difference between reading them and literally believing them. I'm working on the believing part. I've traded a couple of days in NQ in past days. I've also spent a couple days simply observing. I've felt MUCH more relaxed and not feeling like I'm missing big moves or leaving money on the table. Question for anyone...there is an exercise at the end of DOUGLAS book. Has anyone done it? It sounds legit, like a good method making approach. I'd like to do it, especially if it helps drill home the 5 fundamental truths, and the things he is teaching. Thoughts? Thanks to slug I've also added volume to a 1 minute chart. It's interesting watching price around volume spikes. Sometimes it continues in original direction, and sometimes it doesn't. I have a lot to learn there. That's for later. For now, If I do the exercise, it kind of requires me to bang out a single signal with simple defined variables for entry, manage, exit... All in all, still here, just "regrouping"... -JS
Update: I keep saying this, but I'm still in the Douglas mobile. It seems this might be something, or IS something, I will have to consistently work on, and can't master immediately. I know. Poor me... In keeping up with the psych, I'm going to trade the exercise in the book. I'm choosing the one signal now. I'm very interested in simply trading the opening range breakout of the first 5 minute bar. In reviewing past charts, I've grown to like it. I haven't defined the specific variables yet, because I'm still reading the book, but when I do I'll embark on the test. In SIM of coarse. I wanted to try this signal today and it did quite well. I had to wait almost 30 minutes for the opening range to break, but when it did, took 2 points heat, and off it went. Not quickly though. I had to sit for almost 50 minutes. But I was ok with it. Managed it well, and probably would still be in it, if it weren't for all the chores I need to do. Chart attached. +12 points 1. Entry 4335.5, open range b/o signal 2. Stop, 4331.5. Break of D/L and support. Price in fact broke many DL, only to range a little. 3. Target was 10-20 points or Breach of DL and previous support. Had to close for chores.
As with everything it'll work at times and lose at times, it's knowing when to exit and when to hold, which is pretty much impossible. Somedays it'll get 10-20pts others, it'll go 1 then reverse on you. Set Stop Limits either side of the range if need be, I did try it years back someone was selling the break out numbers LOL had free demo, only worked if you lied about having the perfect exit every day LOL
Thanks TD. Ever test it yourself? Like hit rate and p/l ratio on it? I haven't but intend to. Well see. This journey is filled with so many questions i must answer. I enjoy the challenge. I also despise it at times. And I choose to get it. Hopefully soon.
I like the strategy of trading the opening range. Lately I have been thinking about developing my own system based off the first 5 or 15 minute range. The markets open 5 days a week and they breakout one way or another every single day. The last few years it seems like the vast majority of trading days consist only of that first move or two outside of the opening range and then price just drifts around the rest of the day. Sure, when volatility is there, the opportunities are great, but it seems rare anymore. I like trading ES and NQ, but I just feel like I am spinning my wheels when it doesn't bounce around like I want. Another big bonus about trading the opening range is you are done trading earlier in the day, unless you are riding a nice winner. Why sit in front of a computer for an extended period of time if you are not riding a winner? I think it is a great idea and I wish you well with your journey. Oh, and great job taking 12 pts on a day NQ only had a 21 pt range. Keep up the good work!
Its more about nowing when to exit, i couldnt get my exits high enough to cover the losses. Got to be prepared to hold all day and accept the risk with a SL below the range i think. The challenge is what keeps me going!
What about the earlier failed break out. It crosses below the magenta line marking the Low's of the opening range? Do you (or anyone else) know of any ways to avoid getting stopped into an unwanted entry there? There needs to be equality in the rules for taking bo's of the opening range. Even though it fails, it was indeed a bo. Btw, great post! Thank you!
You need a buffer either side to allow for this, about all you can do. You can apply this range breakout to any ranging period on all markets.