This in itself is an observation. This should give one pause before haphazardly entering orders. The market is a vicious arean. Keep watching and start jotting down notes of what you are seeing from your chart and the DOM. After watching the YM DOM & chart for a while watch the ES DOM & chart and the ZN DOM & chart.
They are the best bid and the bests ask. When there are more 'black numbers' between them then the spread is widening. less or no 'black numbers' means the spread is narrowing. If you try watching some of the more volatile/illiquid contracts youll see a lot of 'black numbers' between the best bid and ask
Ive just read the past few pages and have a couple of observations. As always jsut my 2 cents...... 1. You seem to enter a lot of trades just as it is hitting the LL/HH of the previous wave. This should be at minimum, your first target, not your entry. It looks like you are just getting in when you should think about getting out. 2. If your not comfortable with the pace of the chart you are trading, then move to a longer term chart. It will be slower and easier to trade. Then you can stick to your fewer but bigger trades. Try and find something that has deeper waves. 3. Take the 20/40 ticks!! (or at least take out part of your position) If it goes back to your original entry then you can always get back in again (as long as it doesnt take out the original Stop loss price) 4. Forget your back test results! I tried this too. I am not bagging your programming skills at all. Its just that unless you can trade this system with your eyes closed IT WONT WORK! even then It probably wouldnt The results arent reliable as it takes every single trade. Im sure if you go through every entry on the back testedchart, you will see numerous entries that you wouldnt have taken in real life, there are just too many variables.... once again, just my 2 cents
Amitman: Have you changed to only price volume charts as per your chart in "the other" thread?. Or only for the journal exercise?. Your posted chart triggered this idea in me: 1-Most "triggers" including the 123 used in your chart can be programmed to display automatically, even before completion. 2-If one makes two PA plans, one bullish one bearish, the triggers in 1 can be filtered out. Notice how many people get "mentally stuck" trying to sell the rally yesterday, missing triggers and PA from the bullish side. I think this happens when we get mentally stuck in one PA plan and "once the direction is decided" we neglect triggers and evidence that supports the opposite plan. In other words, instead of making a PA plan and THEN looking for triggers. I propose doing the opposite: Listing all the triggers and then filtering them out with the two always present PA plans. From what I observe, you are using two PA plans already, one based on PBP and one based on SR. I responded here, as it is a more "friendly" thread.
Amitman, I saw your charts in the other price action journal. Looks like you have taken your trading to a different level. I had a decent May and June, but struggled this month. Need to go back to the basics, and not try to trade too many different methods. It is hard since sometimes there is just too much information out there.
Greddy, Notice that in some of the charts there are only suggested trades and not actual trades. But I do admit that using S/R along with PBP had greatly improved my trading. This, and improving my R/R. But I'm still struggeling many pshycolgical issues that prevents my from being as good as I want to be. I'd post a chart later showing how I've used it today.
I've noticed that a lot of strong trends continue after resuming at their previous LL/HH. That being said... Maybe I need to use a faster FastMA so it changes slope faster and I enter sooner (altho that would also give more false signals). Makes sense. I can't take part of a position cuz I only trade 1 contract at a time Two is too much risk for me right now. I considered trades I wouldn't take when backtesting (such as an uptrend resuming after a LL). Unfortunately I believe every trade has to be taken in order to experience true results. Ok say you have a die. If you roll a 1, 2, 3, 4, or 5, you lose $1. If you roll a 6, you win $7. This system obviously has positive expectancy over time. However, if you can choose to "opt-out" of a roll before it happens (the same as not taking a trade with a valid signal), you may kill your expectancy over time because you have no idea if that roll you chose to sit out was going to be one of the 6s that you needed to be profitable that day. In other words, I have no idea if a trade is going to be a winner or a loser before I enter it, but because my winners are potentially SO MUCH HIGHER than the losers, I have to take every (valid) trade in order to have positive expectancy. Thanks.
I was going through the thread again and found this. How does one trade with a 2-3 tick stop loss? There's more "noise" than that in the indices. If there wasn't, the ATRs would all be <2 ticks.
What is your definition of noise? What Mike is suggesting is not a trading method but a training exercise. You are trying to get 1 tick of profit before taking a 2-3 tick loss, you do it by moving your profit target toward your stop. Your profit target starts at entry+1 after a short waiting period, you move it and repeat. The purpose of the exercise is to become familiar with how the market behaves at the lowest level so you can develop a sense of when prices are going to move against you. Mike's trading style is that every trade starts out as a scalp. Joe Ross has a similar trading style he wants to get paid for every trade so as soon as possible he cashes in part of his position to cover costs and give himself a small profit. His stop moves to BE on the balance. Variations of these styles is not an uncommon way to trade. Bill
To keep numbers small and simple, lets say there's an instrument that's trading at a price of 5, but its in an uptrend so you think it's heading to 10. You enter at 5 cuz the chart looks good. This is noise (each line represents a new tick) 5 6 5 4 5 4 5 3 5 6 7 8 6 5 8 6 5 4 3 4 5 5 6 7 8 9 10 It almost gets there. You're at 8. But then it goes back down to 3. Then it putzes around for a while more not doing anything except taking out everyone's stops. So if you had a trailing stop, you lost out. (unless you had a huge trailing stop which doesn't seem to jive with this thread and the idea of not letting winners turn into losers). If you took partial profits on your way to 10 (say at 8), you probably still wouldn't have held as it dropped down to 3 again. So to me, "noise" prevents successfully taking partial profits. And placing stop orders (unless you use HUGE trailing stops, which, I've been reading some articles suggesting that stops actually hurt your overall profit unless they are in fact HUGE trailing stops). My point is, the only way to actually make profit and not get stopped out when using a tight 2-3 tick stop, as recommended, is to pick the absolute bottom or top. And even if you do that, you'll still get stopped out on the way up (assuming you're long) due to "noise." In other words, unless you're on the right side of a news release, price never makes big moves without retracing 2 or 3 ticks at least at a time, many times, during its movement I just opened a 3 tick chart of the ES (which took forever to calculate, seriously, I had time to make a sandwich while I waited) and there's a ton of noise. 7 minutes' worth of data stretched out across my 22" monitor in approximately 1500 bars. This is part of some bigger trend somewhere else, but it's all noise. +1, -1, +2, -1, +1, -2, +1, -1. And multiple bars are appearing per second so there's no way to scalp it (without automating and perfect fills). Actually tho, this is pretty cool. I wish I had a system fast enough to actually trade off of this chart. That always looks good when I look at historical charts. I think "gee, if I had only entered there where the slope changed, and set a stop 1 tick below each candle as they were formed, I would've made a ton of money!" Except it never actually works that way when I try it for real. I trade single contracts. I can't really do the partial profits thing. I figure I should get good at making money with one contract before I increase it. Anyway, I guess I just don't understand how scalping is possible with out picking (temporary) tops or bottoms and eliminating "noise."