Well that’s something that turns traders schizo. There’s a thousand ways to read price action. 1) The market can’t be domesticated 2) We’re always going to be fooled 3) There is no ULTIMATE way Someone taught me to read turning points such as … A close below the highest low is a bearish signal. A close above the lowest high is a bullish signal. Because a box is simply an horizontal area of consolidation between two turning points. Livermore would simply use a 6 points retracement from the previous high or low in order to define turning & pivot points. There’s always this information / noise trade off. Between 2 choices I want to optimize for information. That’s why I settle for the most difficult option (Price & Volume wise). I had headaches about .. Wicks ? No Wicks ? This ? Or that ? Well … Harder to take out wicks. I have a simple way to read the market right now. Not the best but we have to pick & choose. Because there’s simply no holy grail. Settle for something good enough. We can’t turn shit into gold … What and when is more important than where. No need to read price action when the market isn’t plentiful. Every candle is a box in itself, When a candle closes outside the box, It’s just another box that is being in play. Sometimes a tight candle can contains 10+ candles. It’s an interesting box in itself. If the box has been moving up and we reverse, Then I have my big and fat resistance. Support is drawn the other way. That’s how I draw my box. I like being able to be systematic, And not having to think too much about it. Whatever your method … It needs to spot real opportunities, Most system will recognize real opportunities. The secret is how we handle them The reward to risk we make. I am glad you’ve learned some stuff from Al Brooks !
Hello Dollardogs, You ask me a honest question, I gave you a honest answer. You ask me "What's a more reliable setup, box breakouts or triangle breakouts?" My honest answer was I do not know. Start a new thread and let other ET members help you with that answer. I do not know the answer. Would you like me to Lie to you?
Appreciate all of this but especially your point about settling for good enough and letting that free your brain up for other things. I'm at that stage where my system is pretty much complete and it seems clear I have a demonstrable edge based on about 18 months of backtesting the one stock I trade. I'm now 100% systematic on exits, and only discretionary on the entries for one of my 3 trade types. Despite all this, I keep neurotically backtesting to see if I can squeeze in a few minor tweaks to improve the win rate by a couple percent and/or get the R:R just a teensy bit better, but these backtests aren't adding anything substantial. Time to finally trust the system and just work on executing it flawlessly, rather than the endless brainstorming. Surprised how hard it's been to stop tweaking and just trust the system.
I appreciate your honesty. I just also get the impression you're mainly here to banter back and forth, and I'm not.
It’s good to keep an open mind ! Just be careful not to fall for availability / recency bias and curve fitting. That’s not because something would have worked better this week that it’s true for the entire year. Sounds like most of the hard work has been done. Pretty sure you can trust yourself and your system. We need set in stone core principles and the more we automate around it then the more consistent we’re going to be. + As you said it free up our mind to more important, valuable tasks. It’s a number game. It’s about the next thousand trades. Even a small edge can build the patient trader a fortune.
Good points again, but I'm actually prone to the other version of recency bias: if something DOESN'T work recently, I convince myself it's flawed and needs to be tweaked, forgetting all the months of data showing it does work over time but can have rough patches. Need to stop doing that and be patient.