This all stems from dbphoenix's material on SLA/AMT. Observations based on the Hourly NQ chart: The NQ will often (more often than not, in my experience) form an overnight range that price will try to break out of and continue on from once the New York session begins. Or, slightly before if there is an 8:30EST report released. Sometimes the range can be larger than just the overnight if no headwind is made after two or three days' sessions. My plan of attack based on this observation: Enter on retracements after price has broken out of the range. Or, after trending out, the stride is broken and an opposing direction retracement happens, flip positions. As long as price continues rising/falling, don't exit unless the next day's session can break the overnight range/ swing point by 5 points. Still TBD: STOP= Preliminary 10 point MAE STOP... looking good so far. I'm used to just putting it behind the entry swing high/low, so this is a new concept for me. SCALING IN= Should I only scale in once after the initial position considering that the later you enter the greater chance it will fail? Sometimes it seems like scaling in on the third, fourth, fifth retracement will work fine on those prolonged trending moves and other times it eats into the profit you're sitting with by the time those later retracements occur. BACKTESTING RESULTS= Work to be done. Mental Hurdles: Not being right every time. I like to be right. I'm also a perfectionist. This will have to go. Once I have the parameters of my strategy set, I just have to execute like I'm a machine. Do this, do that. No in between. No thinking. No second guessing. There will be losers, but in the long run I will be profitable. Nobody knows what will happen next. They have only identified a particular market behavior that offers a level of predictability that provides a consistently profitable outcome over time. I also like to think of trading as sailing, just riding the waves wherever the wind shall carry me. Just typing that out makes me feel better! No trolls allowed. If I can rob the biggest casinos in Vegas, then I can rob you too. And if I can't, I know people who can. So keep your mouth shut. Any input is appreciated by dbphoenix, fortydraws, gringo, or anyone else who has Wyckoff sense and (profitable) experience.
A question specifically for @dbphoenix : Do I need to include more context to filter which trades I take, or is sailing with the currents of buying/selling pressure alright?
Hey, I liked all your movies, is there going to be an Ocean's 14? Although I trade pre-market, never found any consistency when there was sizeable edge to use highs/lows for day session, matter of fact, more than half of the time I don't realize day session is has started as am concentrating on the here and now. Do you use volume at all? As market drops want to see increase in volume at some point and if another round of lower prices on less volume all the better, and when price goes up want to see less volume at highs. I have automated system on 60 minutes and it just does trend line bounces with trend and trend line failures with trend. You have the risk exactly what I use in Nasdaq. I do all size on only signal at the time, and have one target and other half of lots seek end of trend based on breakage of pivots of smaller differences, or close beyond a pivot, longer term charts I often use wait 10 seconds before a close to get out for 60 minutes and five minutes for daily. Way too often price breaks sometime only to continue direction of trend.
Well, just did some backtesting. This isn't gonna work. Back to the drawing board. One major change I'm considering: Not taking retracements bound by swing points. A new swing isn't formed until it breaks the old one and holds, not immediately rejected like it touched a hot stove. (Can you tell I've been reading your stuff, DB? ) A bit discouraged, but willing to work. Lets do this.
Don't be discouraged; you just started. I'll repeat that the SLA/AMT is written for beginners and damaged traders. When I say "exit when the line is broken", I mean just that. Even if it's only a tick. The objective is not to rake in the bulk -- much less all -- of the move, but to enable the trader to make some money, perhaps for the first time in a long while. Once he begins to understand that making money is possible if one has a structured approach, he can then begin to loosen up on "breaks", as well as retracements and reversals. Coincidentally he will by that time have logged in quite a bit of observation time as a matter of course, so the idea of giving price a bit more room to breathe won't be something new, much less frightening. Having said that, there's no hurry. The faster you go, the longer it will take. Work on one variable at a time. Once that works to your satisfaction, add another. See how they interact. You asked "Do I need to include more context to filter which trades I take, or is sailing with the currents of buying/selling pressure alright?" Well, I'm not going to require you to include more context. I wouldn't have any way of making you do it. But neither am I going to say that "sailing" is enough. It depends on your results. If the results of sailing are unacceptable, then that takes care of sailing. Nor am I going to insist that you observe without thinking about entries and exits. You may feel that you've done enough of that, and you'll soon learn whether or not that is in fact the case. Again, the faster you go, the longer it will take. I assume you've studied lajax' journals (they won't be difficult to find). I suggest also that you pause and read this on observation if you haven't already. I'm also sending you a PM regarding work that you should see. There is also the "PA 'Setups'" thread I just started, which may or may not amount to anything, but I copied a post of NoDoji's on the first page which addresses one approach to a testing process. If you're familiar with the scientific method, your path will be much smoother. If you're not, refer back to the Developing A Plan pdf. You'll need to know the scientific method regardless of what road you choose to take. One note about this hourly interval business. Because you're managing the trade using hourly intervals doesn't mean that you have to use hourly intervals to enter. You can enter using whatever interval you like. But if the entry works, there's nothing to stop you from backing off with a wide stop and letting the trade unfold. The key to this, of course, is entering at the right place at the right time, which is where AMT comes in. If you enter at a channel extreme, you ought to be able to stay with the trade until at least the median. Otherwise, you may end up giving back everything you've gained just because a countertrend develops that takes you all the way back to your entry (this is a bummer). Consider also that there are a lot of options between 1m and 60m. Maybe 15m is just the ticket. You'll have to find out what works best for you. And that will, unfortunately, take some time. I would not, however, suggest a 10pt stop. You may find that it's necessary, but don't jump to any preliminary conclusions. There are things to say about your charts, of course, and perhaps others will say them. But I don't like to hover. I find the "process" essential as what you discover will stick with you as nothing else will (you'll note that I made very few comments to lajax' journals). I'll therefore leave you alone unless you get stuck and can't find a way to move forward.
Several issues here. --10 point stop is too large. An intraday stop in NQ should be no more than 5 points. Target should be at least 17.5 pts. ----Scaling in or out will choke off profits when you are right, but will reap full loss when you are not right. -- Waiting for price to exit the range means that you won't be able to capture any of the points within the range.--You will need to accept that it's ok to be wrong. This can only be done trading live. No amount of backtesting will help with that. This will be the hardest thing you have to do. --Good fortune to you.
Thank you for your comments, DB. You said you wouldn't suggest a 10 point stop... is that if I'm trying to enter on something less than a 60m or is that for the 60m?
Well, if you can afford to lose what 10pts represent, why not? But if you don't have to, why should you? This is why I suggest at least a minimum period observing. By going through that, you'll know what stop is required without having to ask anybody. And if the stop that's required is too much for you, then you'll know to look at 30m bars. Or 15m. Or 5. Or, if you've done what you consider to be enough observation, you may find that you need to look at where you're placing the stop: is a certain number of points away from your entry sufficient, or do you need to look at the "danger point"? Is there some way of doing both at the same time? And if your entries are correct, does the stop really matter? When does the stop matter? And those times when it matters, where should it be placed?