First thank you so much, for your time and detailed explanation, really appreciate it. I want to highlight this “Those who are new to PA think that the more lines they have and the more levels they have, the more guidance they'll have to make a trading decision. But the exact opposite is true. Plot as little as you can. Plot only what you absolutely must have. Otherwise, you're looking at lines and levels instead of price, and if you're not looking at price, you won't be able to make any sound decisions regarding price action.” I will try to follow your advice and plot as little as possible; however the next 3 days are going to be in the same format of the previous posts because I made them before your post was published. Anyway I hope you can guide me if you see that I’m going in the wrong way again. Once again thank you so much
Is not the green dot I have marked (09:10) a valid entry per SLA? There is a break of the SL (or would this SL be too tight?) and a retracement in what could be read as rejection of the lower limit of the ON TR (3652) Thanks very much indeed.
If you're reading lines instead of price, then yes. But remember that the lines are an aid; they do not run the show. Price movement is in the market; the lines are in your head. Search the posts I've made about the story. Here you have two efforts to move above 63. But not enough traders are interested. And nobody's interested above 68. So traders look to find trades lower. One can sit back and watch all of this unfold, or he can use the SLA to short the change-of-mind, which is where the short at 61 comes in. If one were trading a 1m or sub-1m bar, then, technically, a long at your dot would be justified. But, again, there's the story. Traders have already rejected the upside. The swing point chosen to draw the SL is marginal at best. Plus price is well below the halfway level of this downmove. And it can't get past the median of the range. Therefore, there's no reason to exit the short. And if one is short, he can't go long. If one were quick, he would note that your long fails immediately, understand what that means, and trade the dog. But, more likely, he wouldn't, and he'd be out altogether. Also note the 8-minute mess that takes place between 51 and 45. If traders were eager to drive this down, this wouldn't exist. At the very least, this suggests indecision. It may also suggest preparation for a reversal, at least somewhat confirmed by the activity in the 0921 bar. Remember that few traders will see your 1m bars other than scalpers, and scalpers aren't trading charts. The movers are going to be those who are interested in longer intervals, which is why movements off daily and hourly extremes are so aggressive and often so clean. The usefulness of smaller intervals is to view price movement, not necessarily to take trades. Those who use smaller intervals for trading are essentially scalping by means that are entirely inappropriate for scalping, hence the many stopouts, small profits, small losses, big commissions, and generally wasted time and effort. Currently, the story revolves around 4440, yet few "elite traders" appear to understand this, as witnessed by all the trading in the wrong direction. Yes, AMT is a theory. But sound theory or not, shorting an uptrend and buying a downtrend demonstrates at the least a lack of understanding of the law of supply and demand. Professional traders understand this. They've understood it for at least four hundred years. Which is why the competent win and the incompetent lose; the competent understand how an auction market works. Look at this timeframe using a 5m bar interval: There are only two trades here: the short would be stopped out for a small loss; the long would be scratched due to the "retracement" not being confirmed. So one would end up with pretty much nothing. However, if one switches to the 1m at the BO failure and trades those movements within the context of the 5m, he can tote up a respectable number of points, as shown in my previous post. Note: I see that my previous post has received a half-dozen "likes" so far, even though I've made this point repeatedly. I've never advocated this over-abundance of lines. They are nothing more than a means of mapping the territory. But what fearful traders do is not so much map the territory as try to insulate themselves from failure. Thus the lines become not maps but electric perimeter fences and klaxon horns and motion-sensing floodlights and land mines and trip wires. And while they've insulated themselves in their little compounds, there's trading going on, and they're missing out on it. Get rid of all the lines. All of them. And watch price. Judge the market by its own action.
Thank you. Yes, it makes a lot of sense. I will do a search for your posts about the story. And thanks also to lajax.
April 3rd Prep - Context Plan the trades. Trades: This day was similar as the previous day, from the PA point of view the entries were late because, the downtrend began at 0900 approx, in any case I did not enter the short after the BO of the DL because the price return into the limits of the most immediate range (dashed lines), moreover returned to the MP of the hinge (1hr)
The short at 0910 approx, around the 61, although it would have been stop out, but in any case the price continues the downtrend
That's what I thought you meant, though instead of referring to "being stopped out", train yourself to think "exited". "Being stopped out" means that you're letting the market manage your trades. That's not the market's business, and when it decides to do it anyway, it's not likely to benefit you. Exit the trade because it doesn't meet your criteria for staying in, or, if it had, it no longer does. All of which is a long way around saying that the only reason why the short "got stopped out" was because you weren't willing to let price recoil more than a couple of points. But getting back to the BO and the DL, there's no BO here -- unless a couple of ticks is a breakout -- but rather a big-time reversal at an hourly extreme. The prudent Scribbler will want to see his DL broken before shorting a retracement, if there is one, but given the rejection of that extreme and the confirmation provided by the break of the DL, it's more than a little prudent to wait for a retracement that hits you in the face. The first RET on the 1m comes at about 61, but taking this would require sitting through an almost-3pt recoil, and that can be sweaty for a beginner. However, it isn't necessary to wait that long. Given the rejection of an important extreme and given the break of the DL, one can be a little more aggressive and open things up to a smaller bar interval by watching the right tick. If this is done in real time, one can be in the trade at 64 or even 65, and the forces of darkness will not even touch him. All of this means that you're entering almost 10pts higher. Or more. (The only unnecessary line I saw was the one I whited out)
Ok Db, once again thank you for your observations; I´m going to have this kind of thought process in mind, specially understand the most immediate context in order to know what is happening with the traders around certain levels.