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Do you need charts to do this? Are they necessary beyond knowing for example what the CURRENT price is, what it was x-minutes ago?
This is basically a simple momentum trading strategy. You just need a simple intraday chart (without any technical charts for eg. moving averages) to follow the momentum, which is price action against time.
I am asking as I once new a guy who said he traded based on 'momentum.' I personally got to see several dozens of his entries, which where usually pretty good(this was years ago). He traded several instruments, and several of what he referred to as 'timeframes.' He labeled himself a chartless trader, although of course he always had charts in front of him. That is the reason I am asking. I have been interested in such a concept, but never understood myself how it works.
By "chartless" i guess he is referring "no technical charts" (eg. moving averages). (https://www.elitetrader.com/et/threads/day-trading-basics.305348/page-7#post-4383960) Momentum trading is nothing but the "timely price action", a two dimensional measure : price action and time. This is an edge over regular price action strategies that wont include "time factor". Momentum trading setup :
I think I understand what you mean by the whole idea. But the guy I mentioned made note of trading with momentum, and how he used excel for example to plot out where his 'momentum' was. With regards to what you've been posting, similar to your chart you just posted, I created a script that would plot the rallies that occurred within 20 minutes or less. So just to plot bars that had this condition, I manually am looking afterwards for the 20-60 minute windows. I actually did two versions, initially where it is just a bar count, irrespective of actual clock time. I created another that actually looks at the time, and subtracts say, 20 minutes from the current bar to compare the current price to the price 20 minutes ago, and checks if the percentage move has occurred. I wanted to do the second version so I could visually look at a range bar chart to check out the idea of the stoploss being immediately replaced with entry. It seems there are rare occasions where you could 'IMMEDIATELY' replace your stop? This occurrs sometimes, but it seems as if it is the exception. Shown in the pics are dots where the rally condition was met, you can see that sometimes it continues for multiple bars consecutively. But with the "WAIT" portion of the idea, when the xover, happens, I don't see too many opportunities for IMMEDIATE stoploss replacement.
Nice work ! I guess this strategy cannot be or difficult to automate. I do manual trading only. Replacing the entry with stoploss needs to be taken as an art to be perfected through practice rather than a science.
That sounds reasonable. But I wasn't looking to automate(as in automate a strategy), as I don't really think that's a useful thing for a retail trader. But rather just looking to highlight those times where a certain type of rally has occurred. I have tried to look at rallys/declines many times, typically with using zz swing filters(of many different types), to look for ways to enter. But I had not approached it in the way you describe so it seemed interesting to me.
Also just to clarify, you only consider the stoploss replacement as the 'art?' And not the rally identification?
Is your "Principle based day trading strategies" the only principle in your trading or several ones are possible to use together?