Thanks for the feedback guys. Gringo, I see what you're saying, although I think every single one of us isn't on the same page with which entries we're talking about. I went ahead and numbered them. We've ruled out #1 by drawing in the demand line, but you're definitely right that in order to continue to grow and optimize my performance, I'm going to need to stop treating #2 like the plague. I can see that I'm leaving a lot on the table if I'm passing on those every single time, but I still need to fine-tune my discretion in order to begin working more of those into my sessions. I hadn't thought that this might be a subtle fear issue in part, but I will definitely have to pay more attention to that notion as well. As confidence and understanding grows, it seems natural that my risk tolerance should as well. #3 literally has everything going for it so it isn't a problem at all to take it. However, you both have pointed out that taking #2 has increased positive expectancy, and I can see it as well, so there's really no reason not to take them. Thanks for the push; I'll have to get on capturing those more frequently. If I see one live that gives me pause during a session I will try to remember to bring it up afterwards.
Actually, since they don't occur that often, here is the last time I can remember doing it. Lately, I would've kept waiting once price passed back through the blue demand line, just like I passed on #2 in my sketch after it broke the red supply line. Do you guys notice any common cues for differentiating the situations or do you think the slightly increased risk of failure just a necessary evil if one wants to get in sooner?
Regarding your chart, the red SL is way too far away from price for my taste. The long entry would have been activated around 99 at 9:15 or so with a tighter line. I think also that given the parabolic rise of price after that time, a new and tighter DL would be in place. If you tighten the lines, the story will change dramatically, give it a try.
Heroic, What do you think about entering as I indicated in green on your chart, especially since a db was just made?
Traders waste too much time trying to insulate themselves from failure by coming up with sub-subrules to their subrules to their rules. The primary consideration here is the cost of failure. A point? If the possibility of losing a point is unacceptable, then pass on the trade and move on.
DB, In my learning of trendlines, I was taught that a trendline must have at least 3 connected swing points to constitute a trend. Only 2 points constitute the basis of chop, as a second point will happen with or without real meaning of a trend. Do you see any analogy to the establishment of a Dl or Sl?
Since one doesn't have to draw lines at all, no. The purpose of this is to track the balance between demand and supply. The lines are only an aid. If they become the object, their usefulness is lost. I suppose I should also point out here that Heroic's last chart, the one five up, could not exist in real time unless he waited until after 1000EST to open his charting program. If this chart were traded in real time, and if the first short were taken at the open, the supply line would be turned downward sharply in order to track price. This would then be broken shortly after 0940EST. Afterward there would be no long entry opportunities because there's no retracement. One might re-short that tiny retracement at the top of the swing or he might not. The point is that this chart would look very different if marked in real time, so to spend much time on it as a hindsight analysis won't be of much benefit.
What about trading it with small size, say 1/4 the size, so that the cost of failure is acceptable, say a quarter, and demanding 1 point as a reward?
If one can't stand losing more than a tick, he shouldn't be trading at all, at least not yet. As for demanding a reward, that's not possible. The reward is whatever the market chooses to give.
Imbalance between demand and supply leads to a line in the price-time space. Is that the main point? Could the imbalance lead to other curves such as parabola etc. What is the meaning to the imbalance when the curve is a line?