Price Action Journal V1.5

Piscuy:
"I am going to try to explain about another of the setups I like a lot. I like it because it provides a small stop (usually) and some good moves afterwards. The problem with this setup is that it is a bit harder to define and has a few more variables to take into place, which means there is more discretion in the selection of the pattern.
The market represents buyers and sellers and their sentiment towards the price of the particular instrument you are trading. This sentiment is determined by the fear, greed and expectations of all its participants. So if you think in terms of an uptrend (just reverse for downtrend) if the instrument is moving swiftly it will keep bringing in buyers, after a while the perception of those buyers will be that it cant go up more, so the move either takes a small break or reverses. These CONGESTION areas are what we look for. Usually define a box with a lid (2 well defined lines) or just the lid (1 line). If you find just the lid the placement of the stop is a little bit more difficult therefore it requires a more discretionary approach.
If you define the box with horizontal lines it should be a box that covers but a few bars, it can usually be from two to about eight bars. One of the rules I put on myself is to allow each of the horizontal lines to be touched at least twice so that the sides of the box are really horizontal. When the range of the box is small (difference between the top line and the bottom line) it usually gives a small stop which is great for scalping. I don’t like it too much when the range of the box is determined by long bars; it gets a bit harder in terms of the stop placement. For an entry and a stop I select one tick beyond any of the two horizontal lines, if its long one tick above the top line for entry and one tick below the low one for a stop. Reverse for shorts. Don’t forget to take the trades within the context of the price action it is presented in, take risk measures according to your risk tolerance in each instance. Find examples attached (sample 1-5) with today’s price action included on the NQ 1000 V (Sample6).
Note: Anek made a post about two weeks ago in which he mentions a Piscuy trade and I replied to it that that was charting poetry, that is the perfect example of a box trade. .
In my opinion boxes are of a higher degree of difficulty but well worth the effort of learning to find them."

samples:
http://www.elitetrader.com/vb/attachment.php?s=&postid=1705529

Piscuy trade:
http://www.elitetrader.com/vb/attachment.php?s=&postid=1690055

 

Shakira,

Thanks for posting this document.

 

ITR -

Thanks for tracking this down.

BYF

 

5 trades. 1 winner, +7

 

Two trades, two winners (Sim). NT Isn't displaying my trades on the chart correctly so I print screened the orders log.

First trade I should of held, but I thought it would bounce. Would of been a HUGE winner. Didn't trade the afternoon really. Super wild.

 

6 trades +13.75
5 losers
1 winner

1.Short -loser
2.Short –loser -full stop
3.Short – winner 22 pts
4.Long – loser -full stop
5.Short – loser
6.Short – loser – full stop

Traded poorly from 11am on…wasn't paying attention and I ended up missing some opportunities....tried to force my last to shorts.

 

...afternoon

 

Thanks go to BYF. From me as well.

 

BYF, what was your reasoning for those two afternoon trades?

 

Hey Andas,

Good analysis. I didn't see the inverse H&S. Good to see you're up even with 6 trades not working out.

JW