I was going to post a chart in DB's thread and then decided that I'll start my own thread with my attempt to apply SLA to intraday charts. Db just posted this 15m chart so I thought I'd start with that. (green dots are long entries, red dots are short entries, black dots are exits) If I had been trading this 15m chart during Europe, I think this is how I would have applied the SLA method: -After the market broke out above the range, I would have perceived that as bullish and entered long on the first retracement -When the first demand line was broken, it wasn't that worrying because all 4 bars after the break, even though they didn't make much upward progress, closed well off their lows indicating to me that the balance of s/d still favored the bulls, I would have stayed long -The market tried to break out at B but didn't get very far...in fact, the bar that made the high reversed all of the gains and closed back below the high at A....this is a false breakout and makes me think the balance of s/d is shifting back in favor of the bears -When the demand line (the 2nd one) broke on the next bar, it was broken by a narrower range bar with slightly lower volume so I would have held long -The next bar started looking like we were going much lower, volume picked up and it took out the swing low at 4257...this would have shaken me out of the long -After seeing my exit bar turn right around and close on its high (on stronger volume), I would have seen that bar as a spring (or false breakout of the swing low) and re-entered long when the market went above the high of the spring bar -The RTH opened and the market sold off and broke the 3rd trend line. If this 15m chart was all I was looking at, I might have exited the long since the market took out the minor low at 4259....if I had been watching the 1m or 2m chart, I'm not sure I would have been so quick to exit though. The market traded down to the low at 4259 and clearly stalled out. When it took out the low, it was only by a few ticks and it didn't look like the bears were in firm control...also, it wasn't a very significant low anyway -If I had exited the long on the opening bar, I would have re-entered long when the market took out the high of that bar -I would still be in the trade and up quite a few points I'd be grateful for any comments and critiques.
The CouldaWouldaShoulda is fine as long as it has a purpose. It's part of the observation phase and can be used to formulate hypotheses, or "what-ifs". Reduce it all to the essentials: price "bounced" off the mean of the trend channel and returned to its upper limit. That's it. Now figure out the best way for you to take advantage of this movement, i.e., what-if.
You're talking about the median line on the 60m? How does that affect the way you trade the 15m chart? Since it's holding the median on the 60m trend channel, does that mean you wouldn't consider going short on the 15m or 5m? Or if you did take a short, maybe you'd keep a tighter stop? I've always had trouble reconciling different signals from different bar intervals.
These are questions you'll have to answer for yourself since the answers will depend on your goals, your objectives, the market you've chosen, etc. Begin by characterizing your market. If it isn't mean-reverting, the trend channel stuff won't do you much good, if any. If it is mean-reverting, then study the AMT material. You will then have answered the above questions.
When you say, "characterizing your market," do you mean "the NQ," or "the particular way the NQ happens to be trading today"? I don't know what you mean when you say characterize your market in order to figure out if it's mean-reverting.
Not all markets behave in a manner that's equally suitable for SLA/AMT. The logic works but the risk/reward is skewed in a manner that requires major deviation from the clean method of thinking.