it is said that the market is ranging or trending ,this is not exactly correct. what does happen is that the market ranges within a trend which is why the trend, which existed before the range will, most times, continue. if it does not continue then it is reversal. and Brooks ,as is his wont, calls it a failed flag. i call it macaroni but it does not matter, as Brooks himself also says, what it is called, what matters is that you trade it..correctly. the market may also trend, within a range, if the range is wide enough
a well defined two leg move can be traded as a correction. what is a well defined two leg move? it is where there is clear trendline break between the two legs. if there are two legs, where the two legs are inferred- such as when there is an inside bar which is a pause in the trend and so can be seen as a corrective phase in a smaller time frame-then it is not clearly defined and it can be assumed that, since there was no break in the trend line, it is one leg and not two.
so after a well defines two leg if there is good reversal bar then the market will reverse. the key here is the reversal bar or reversal pattern. if not after two legs there will be correction and another two legs. after which there will be another correction. so after two legs reversal or correction. this is what happens in the market. a reversal which again reverses is a correction
a wick on a bar is a reversal pattern it becomes a correction pattern once the market goes past the wick. so if you have bars with wicks in opposite direction, that is a trading range
Yes, but there's comes a point of diminishing returns for most people(phrased this poorly but I mean like their's an income level most people are at least content with or can live a decent life) and also disingenuous skill, misleading results or not being completely upfront about how you're profitable. That was my point. For example trying to make a decent living with 1 MES on a small account, isn't even in the same ballgame as trying to make a decent living with a medium to large size account where you can trade 5 MES or even potentially Mini's. Not only has your income went up, actual probability to be successful went up, likely hood of strong mentality, but your risk of ruin has gone down as well. So essentially the skill level needed to accomplish that has dropped dramatically (particularly if you use the account size / some of the edges I mentioned above). Now there's nothing wrong with this and it can be incredibly smart and potentially the correct thing to do (who wouldn't use all edges at their disposal, dumb not to). My issue is people than say how good of an intra-day trader they are and try to pass on advice to others. When they could not duplicate what they are doing if they were in the other person's situation.
Because you're using small size relative to your account size, but it has nothing necessarily related to intra-day trading a smaller account with actual trading related edge or skill. Here's an extreme example: Imagine Warren Buffet makes a user name here and he trades 10-12 Mini future contracts and over the years shows amazing profits and everyone thinks he is great. Ok but Warren Buffet can hold 12 Mini's to literally 0 and it wouldn't even effect him at all, yet people on these boards would be thinking he is great and begging for him to teach them. When in reality what they really need is his ability to take unlimited draw down, with also zero fear on taking that drawdown. Are you starting to understand now? Sure people on these boards don't do that to that extreme of a level and not all of them are doing this. But this is literally the biggest edge some of these people are using and they pass it off as trading skill.
Your success went up because you can trade a lot smaller size relative to your account, but still produce reasonable money to live a good life. This means you can survive going through a string of losers better as well both actually and mentally. So your risk of ruin has dropped dramatically. Where someone else trading a smaller account has a much higher chance of ruin unless they are going to drop there size down to the point where it will be difficult to make an income trading, than they are still losing money via time.
yes you cannot make living if you do not trade minimum size necessary...... most experts trade 100000 usd but that may be the perfect size