Rev Strategy version 1 Conditions to use in: Trading Ranges greater than 6 points. Trend meeting major S/R level Reversal confirmed by either: Ability to create a meaningful DS line in the direction of the Reversal Making of LH or HL Crossing of last swing point Entry tactics: Break of DS line RET should occur on the opposite side of the DS line Either straight Reversal or entry on RET. Straight is more aggressive via more information risk. Time & Pace: Should not occur after an extended period of consolidation. That would be a breakout strategy. Exit options when trade is working: Break of DS line. Break of swing point Pulling back down to MP of range. Reaching end of TR Breakout failure out from TR. Exit Options when trade is not working: DS line break Crossing of short term S/R formed by RET or by the last LH or HL level. If HH or LL is made All other relevant tactics and context factors applicable from RET strategy.
Day 1 of 20 http://www.sierrachart.com/image.php?l=1370500403889.png Summary: The first day of using 5 lots. What a difference in terms of reducing fear and hope. Helped me stay engaged with the entire move. The missed long opp was interesting and something I need to think about. This is a situation in which fast buying pressure is exhibited in bringing back the RET. However, R was anticipated overhead due to the action around the previous swing at this level. So I have a RET situation that is anticipating a breakout. These can be taken as long as the anticipated S/R does not manifest with force. If there is congestion or bounce back, trade can be quickly exited with full size. The strong buying pressure against the overhead R is setting up compression - which is always good.
Something I posted years ago regarding this scaling out business: There need to be criteria for exits. But the nearly universal problem that beginning traders have with regard to exits is a desire to trade all in then all out. Add to that the fact that they are nearly always trading with one contract or one lot, and you have a doomed setup. The solution to exits is a simple one: trade as if you were trading five contracts or five lots and abandon the idea of being able to exit with all of them at the exact top or bottom. The goal is to make money, not to prove to oneself what a superior trader one is. Then determine in advance where each of those contracts will be sold. For example, if one is trading support and resistance, sell the first contract at one or the other. Sell the second contract, for example, at the lower high or the break of the trendline, whichever comes first. Sell the third at whatever you didn't sell at for the second. Sell the fourth, for example, at a breach of the last swing low. Leave the fifth, for example, at breakeven. Then sell the first contract at whatever point you predetermined and paper trade the other four. Do this for several months. When it becomes second nature, carry the second contract for real. Sell the first and second contracts at your predetermined points. Paper trade the remaining three. And so on. Simple. No wringing of the hands, no thumb-twiddling, no head banging. For example: Note that (as stated on the chart) this particular sequence is used for those situations where R is indeterminate. If R has instead been determined, the remainder of the trade is exited at the target. Then preparations are made for the next trade, either a continuation into a new range or a reversal back into the old one.
dbphoenix, 1) how would you go about scaling in on the very same chart with 5 or less contracts? or do you not recommend scaling in? 2)or would you do combination of both scaling in and scaling out at the same time with those 5 contracts? thanks very much to both game and dbphoenix for the thread. regards, tihfa
On an intraday timeframe, particularly the first 90m to 2h, there's no time for that. And the logistics can be so confusing that one winds up doing the wrong thing at the wrong time and fucking himself up. And then he loses his internet connection . . . There's no reason to scale in if one is crystal clear on his entry criteria. If he isn't, scaling in isn't going to save him.
Day 2 of 20 http://www.sierrachart.com/image.php?l=1370559814282.png Summary: Yesterday's experience led to a craving for movement, resulting in some trades that while falling within the strategy guidelines, were not very high probability within the larger context. Better skill in exiting 5 lots when trade is not working would have minimized losses. I am also aware of a tendency to ignore price movement occurring against the direction of the trade. During shorts, I want the price to go down, causing me to ignore what is happening in the present and thereby not recognizing the clues to exit the trade.
Day 3 of 20 http://www.sierrachart.com/image.php?l=1370630346301.png Summary: A lot to think about trade management from today. Other than aggressive Reversals, it is fairly obvious what the general direction of the move is since the entries are based on pullback of the main move. Direction isn't the issue here, unless a big entry mistake has been made. This method is based on immediate timing of the move and the trade management will have to address whether the range, pace and time of the entry is meeting the expectations derived from observation of successful moves. My plan has the following rules for exiting a trade that is not showing much promise: Exit tactics when trade is not working: 1) Breaking of immediate DS line 2) Moving past immediate S/R zone formed by the pullback Instead of scaling out 1 contract on break of DS Line, I could scale out 3 immediately and leave 2 for the next exit level. Err on the side of caution when things are not showing promise. There will be times when the trade works despite showing a lot of weakness in the beginning. But I have to exit these based on initial weakness. No hope or regret. I always have the option of re-entering. The premise here is timing. So if I cannot time it, then I get out. If it goes up later, so be it.