Past experience. What stopped me from closing out those long-term swings when they were down in the dumps is because of what I had done in the past, only to watch the trade eventually work out. Just as you say, in daytrading it can print x-number of points, hit your stop and then reverse. I got really really tired of that noise, and because I also at the same time burnt-out on staring at charts all day, took the fire-and-forget swing mode. March 2020 was the final blow, when I closed out my positions because I thought "yep, this is it." Only to watch it all recover to profit IN THE SAME CONTRACT MONTH. There are older, bolder traders here who would say "Man, just think about 1987! Think about the 2008 MBS crash! The dot-com bubble!" Sick of those blowhards. After all of that bullshit, where is the market now? All-time highs. AGAIN. Are we ever going to again get a multi-year bear market? It doesn't seem likely because the foundation of our economy has changed since those times. The risk factor is now too low in my eyes to not simply try a buy-hold-roll strat, while spicing in a bit of short-term (or even daytrading) into the mix.
The above indicator is available on the MetaTrader platform, and there are similar scripts in TradingView and ToS as well. I'm familiar with The Strat and am currently back testing some of the strategies.
After I read your first post. I looked up "The Strat." I don't think indicators are necessary. It is a reversal strategy. No? Your trades do not look like Strat trades. From what I have seen of strat. Most strat traders do not trade 1 minute candles. Do they?
Ah I see. I think as long as you manage can manage the drawdown then swings can be worthwhile. It depends on personality and goals etc. Ouch on the stop out during the March crash. The markets as of late always seem to find their way back to ATH. Every one screams it is the end of the world and within weeks the market is back ripping upwards. I will consider taking a swing if I see a long term pattern develop. It would be within risk as long as I get a good entry. That way I can take advantage of the long term and short term trend. I agree with the comment about noise and all the manipulation that happens throughout the day. It can really tire you out and take a beating on your emotions. Hopefully 2022 has some more good action for your strategy.
I will have to check ninja trader for that. I think that comes in handy when doing a quick analysis of the market structure. I like the strat because I find it simple and straightforward. I am curious how it will perform in your backtest.
You are right in that indicators are not necessary. I do keep a 9 EMA indicator up as a general guide on how the market is moving. Thats a personal choice and not a part of the Strat. The Strat is a system that breaks down price action and helps show who is stronger and helps gauge magnitude. It is based on Rob Smiths idea that price discovery happens all the time and the price creates broadening formations. In those broadening formations at the top or bottom you can see how it reacts. It can be used to identify reversals and it can also be used to identify continuation plays. My trades are not always perfect Strat entries and that is something I am working on becoming better at. I am trying to stick to those well known plays. It can be traded on any time frame. I personally use the 60, 15, and 5 for intra day broadening formation setups and watch them on the 1m or 3m for entries an exits. It is more of a lens to view price action then it is specific set ups. I am going to work on writing down the specific setup so I can track how effective they are. It is just difficult to do that with the amount of trades I take sometimes as I confuse myself lol.
So after reading this reddit you referred to. The method is "all eggs in one basket" as you said. But it was shares only, no options. Also, cash only, no margin. It was his self directed 401k money. And only the part that was his bonus for 2019. So not near as high risk as it would be if he "yolo'd" his entire net worth into TSLA calls one day. GME calls the next. He only started with $35,000. He said he started at the pandemic in March 2020. Said no way he could repeat it. The market being as bull as it has been let it happen. He acknowledges much luck. I set aside a small stake. Not even $35,000. Less than half that. In a Think or Swim account. It is margin. I am going to try. Something similar. No plan yet though. Will work on plan in next week or weeks. I don't think shares only is enough. Probably need futures. Or options. Fun side game to talk about with the boys at the office. They all still own Game Stop and AMC. I think can be smarter. I will do separate journal. Not to take away from @GenZFuturesTrader's journal. Good Luck, GenZ! Great success to you I hope!
@GenZFuturesTrader, You might find the following info useful in helping to pinpoint a turning point or reversal in price. I took a snapshot of your top chart in your post #16. I made annotations on it. All session long price is probing. Looking for areas of more transactions. Bullish and bearish pressures at play. It goes up for a bit then goes down. Then back up. This is done in waves or back and forth motion. Like the waves in an ocean as they hit the beach Not all waves are equal in height and in the distance they travel inland. In the markets volatility affects the height of a wave thus the distance price travels. Markets cannot go straight up and down without respite. There is a way to sort of calculate (in a graphical manner) were a wave will likely end and where the undertow pulls it back into the ocean. In the markets this undertow is seen as a reversal in price. Look at the snapshot of your chart. The broad yellow is a tracing of the waves on your chart. Actually it is a composite of several waves on differing TF’s, because the market are complex and composed of many waves (no noise) ROFLMAO. The gurus are wrong on the noise thing. LOL But your chart shows how the composite wave looks on the TF that your chart reflects, factoring in all of the minor smaller waves too. Together they draw your chart. Take the first opportunity label #1. There is a move up (blue trend line). Then I look to the left and see a significant previous high and draw a horizontal line. The two lines converge and form a triangle. At the point of their intersection is the most likely place the bar will appear that will start a reversal. That in itself doesn’t tell you which direction price will go next. Up or down. It only tells you WHEN price will likely change. It the timing factor. That is, on “which bar” the reversal will start. So we got the “when”. Now we need to know “direction”. The way to do that is look at the last direction before the target bar shows up. Is that direction down? Then the reversal direction should be up. The red arrow line shows the last direction. The idea is to get in on the low or as close to the low as possible, of the target reversal bar, AS that bar is forming. In this first case the reversal bar was a doji (purple arrow points to it). The blue E is below the bar signifying it is the bar (reversal bar) and the bar to make the entry on. The blue dot is the long entry in the lower part of the reversal bar. Why long? Because the previous move was down (red arrow). The broad green line depicts the profitable move up after the entry was made. Check it out! It ain’t perfect but is a tool to help pinpoint “timing”. To help a trader pinpoint on what bar a price change is likely to take place on. The triangle is drawn in before the target bar appears live on the chart. If this interest you I can show some more entries on your same chart.
Thank you for that that is very interesting. I will need to study it some more in order to be able to apply it. I assume this is part of the infamous ‘volpri method’?
I have taken a break from trading and will now be updating my results weekly on Friday instead of daily. I am adjusting my method as I have been disgracefully unprofitable and came close to blowing up my account. I will update on Friday and may get back to daily journals at some point. I am going to take longer swings and I am no longer scalping.