Help, I've been chopped!

Not disagreeing with you…, simply presenting something to ponder

Thinking slow…, or fast – has no bearing on control


Everyone possess a natural speed at which they are able to collect…, process…, and rationally act upon – whatever information is presented


Thinking & acting deliberately, within one’s natural rhythm – is how one remains in control – and is key


To some;

day trading moves too quick..., for others swing trading does

With experience/ exposure – processing time will (or at least should) reduce, while rational decision making ability increases


eta;

The bitch about this last sentence..., first one has to become detached / objective about this stuff..., otherwise is it sound decision making.. or emotional reaction

Big ass difference - yet hard to tell when you're actually in the weeds

RN

 

Very nice thread. It's my main challenge now. Staying out of chop.

August 14th I got totally chopped up in the ES. Attached are the trades I took and mostly mismanaged .

I tend to get tons of signals in chop. It leads to over trading. It's come to the point where I don't even trade the ES afternoon anymore, cause I can't stay out.

I'd like to have some PA rules to protect me from chop .... this thread might give me some ideas ...

 

NOD, you are light years beyond me! Right now, I feel like a one trick pony since I have one favorite pattern that I wait for. My preference is the ES on a 5 min chart... but still learning the best way (for me) to use the 1 min chart in conjunction with the 5 min.

But, I'm happy to have at least one main pattern that I can rely on. For anyone who is still learning as I am, there is ton of good information on ET.

You just have to be willing to dig for it.

Now I've got to get back to more research and testing... before my wife comes in and shuts down my computer.

-Al

 

Here is a link to several posts made by NoDoji recently that discussed the NQ just before it broke out.

http://www.elitetrader.com/vb/attachment.php?s=&postid=3852723

NOD, I hope I'm not getting off topic. Even though your comments were not directly related to chop, it was a great example of how to handle a market that was coiling for a breakout.

The coiling action looks like it could be entering chop, so your analysis was excellent.

I'd recommend that others take a look at this... I found it to be quite instructive. Thanks.

-Al

 

I don't care much for micro-trendlines, especially with ES. ES is a big lumbering efficient instrument that honors levels in a "traditional" way.

Your chart is a short bar interval, and looks like my 1min chart. I suggest drawing trend lines and parallel channel lines across swing highs/lows and look to enter on pullbacks that shake out the nervous scalpers' by touching their break-even stops. I think a 5min chart (or similar tick chart) is a far better intraday option for ES, with the smaller bar interval used as a cross-reference only for pullback entries.

On 8/14, ES broke a clean trend line right off the open, but previous support appeared to hold. Right there, I perceive conflicting signals: Quick strong move down to break the uptrend line, but there's quick support at the previous consolidation low.

However, the break around 10:06 ET allows you to draw a down trend line and a lower parallel channel line. If you arrow #2 is a short position, the lower channel line gives you a target on that move around 1687.00. Price gets there and at that point I'd only be looking for short entries, or holding the existing short.

Price doesn't quite make it back to the down trendline which tells you it's getting weaker. The next dip should take price to around 1685.50 at that lower channel line, but the added weakness means a deeper dip is likely and in fact there's little bounce at all before price falls out of the channel.

I think staying out from the lunch hour on is a good idea.

 

Don't be hard on yourself, if you have one strategy that is positive expectancy over long periods, you can make money on that setup.

Next step would be to determine if it's scalable.

One does not need to know everything or even a lot to be a successful trader.

 

The link that I posted above was only for the image. Here is the correct link to the commentary by NoDoji where she discusses the coiling action in the NQ. Good stuff.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=277075&perpage=6&pagenumber=3

-Al

 

Good deal. The first thing I tell anyone who asks me for trading help is to fully define a single setup and master it.

 

Here's the whole 3-chart analysis:

http://www.elitetrader.com/vb/showt...=277075&perpage=10&highlight=gee&pagenumber=2

EDIT: Just saw that you already posted that.

 

if chopping starts, and the old trend is up. that means most likely it will reverse and go down. I will just short wheather in the dip or a little bounce. ignore the chopping.

the same holds true in a down trend.

to me, chooping is a good signal for me to enter. I noticed
SPY recently up/down around 170 a pretty much time, that is why I bought put in spy. I am not a day trader.

to a day trader, chopping actually produces massive buy/sell opportunities. some day traders even love this situation.