The immediate reason for the lack of conviction was that my decision making was colored by the losses taken on the preceding shorts. But there is another more fundamental underlying reason. It is that there is a gap between the aspiration to trade as per the gestalt and my current abilities to identify it. I realize that the conventional advice would be to look at each potential trade as one in a series of trades. But my understanding is that there is a difference between gathering probability frequencies by recording instances of fixed set ups versus having a framework to infer approximate probabilities for each unique instance of PA. It is not difficult for me to execute something with consistency once I understand the underlying. I am trying to understand the 'nature of probability'. The upside is vast freedom with huge size.
I find it difficult to summarize a few months of exploration in a few lines. Perhaps you are treating something simple as simplistic. Perhaps I am wrong. Either way, would love to see an example of the application of your concise trading plan.
Perhaps you're too concerned with gathering probability statistics and not concerned enough with understanding the behavior that's the basis for the probability assessment. In this case, yes, the losses on the short might affect your process. That is something you'll have to get over. Otherwise, the entry was "by the book", the first retracement after the break of the SL. When confusion rears its ugly head, it helps to have a relatively mechanical home to return to until everything becomes more clear. Either that or just stop. Every V reversal is different, which makes statistics a somewhat fruitless endeavor. If one can't get behind it and evaluate the behavior that's prompting the move, best to just leave it alone.
My advice is well meant. I can appreciate the effort you are putting into this. What I wrote is what I work on every day to do well. H.
Just to be clear - I am not focusing on compiling stats based on predetermined patterns. I am on board with you regarding behavior. My challenge is to store these observations into some kind of decision frame work so that every unfolding clue either adds or takes away from the LOLR determination. For example: Say PA is balanced (confirmed by visual cues of range). I assign the immediate state a score of 5 ( representing about 50% chance of advance or decline). Say the ON trend has been up. So I assign it one more point bringing the total to 6 (60% probability). This score is not compelling enough to act, although there is a slight bias on the upside. Now the unfolding PA reveals a dramatic downside Range BO Failure. I now update my score to 7.5. I enter right after the failure is brought back into range. Had there not been any ON trend my score would have been only 6.5, resulting in no trade. Something like this would allow me to focus on behavior and translate that into reviewable decisions. What are your thoughts on this idea?
Interesting POV, and I don't see why not. Today, for example, I saw that price was in a tight range premkt bet 53 and 51. That I suppose would be neutral. Then price began to climb, which is a plus. At the open it then dropped to the midpoint of that range, at 52, then rallied to 58, then falling to make a higher low, which provided a long signal. I don't know how you would translate all that into points, but the process of ticking off milestones or markers of behavior into a tradeable move doesn't seem to be that much different. It all comes back to what do you want to see and do you see it? (Of course, in order to know what it is that you want to see, you have to do the observation and the testing, which is what you've been doing since May.)
In Section 8 he writes, 'Thus, your position sheet will constitute a continually readjusted record of the latest probabilities' So yes, I am attempting something similar, not in form but in substance. I had not read that section until you pointed it out, as I wasn't interested in stocks. A mistake. That was an excellent example for me in terms of developing tools to help with control - especially in the faster paced day trading world. Reading Section 8 also reinforced what it takes to be a professional in this game. One could get some market breadth information through one of the standard A/D indicators. Everyone is looking at it. Or one could really get a pulse of the market by a constant process of updating and recording stock/sector prospects through tools like position sheets. What a difference.