"Trading an Engulfing Candle at Support & Resistance provides greater conviction." https://elitetrader.com/et/threads/...t-right-here-baby.335635/page-10#post-5014575 engulfings, hammers, strictly associated with support and resistance levels are worth a good look. ymmv.
I don't scalp. I have a scalper that is a >3 Sharpe, but I am simply too busy to implement it. It can be automated so I'll probably do so this year/next.
I day trade ES. I suggest seeing how your strategy performs in various conditions. During periods of high volatility (Feb-Mar 2020, Dec 2018, Feb 2018, etc.) many strategies work and trading can feel kinda easy. Periods of very low volatility (Oct-Dec 2019, Jul 2019, Apr 2019, Jul-Sep 2018, most of 2017, etc.) ES can be a bit agonizing as there's just not a lot of movement and may need to switch to a different instrument for a while. The important thing is that your strat is actually robust enough to average profits out of all the various market conditions (not just the last few months, which are a bit of an outlier in terms of historic volatility). Hook it up yo
Try and prove your set-up doesn't work. Look for times it failed. If you can't find them, then maybe you are on to something.
When I've looked into strategies using Thinkscripts most of not all use Heikin-Ashi style candlesticks. https://www.investopedia.com/trading/heikin-ashi-better-candlestick/ here is a strategy using this for trading what is called a super trend.
Here are 2 words that are important in the above sentence: 1. Simple. Just because something is simple that doesn't mean it is bad or can not work. A 50/200 moving average crossover is simple, yet can keep you in the trend. A double bottom/top with RSI divergence is also simply yet it works. 2. Long term. Well, you have to realize that nothing last forever, so be aware that just because something worked in a 3 months backtest, it may not work in the future. In short, don't worry about simple and forward test it with small money until it still exist.
Hello my friend ! It's not stupid, it's very good topic. But a bit complicated. First, think about few things. 1. We live in system, where most people are very attached to money. 2. Trading is in fact very hard profession, where success rate is not so high (in fact it's low). 3. And, if you succeed you can make some good money. So adding that to ubiquitous moaning "how difficult it is", you can get false impression that you can't make money using something simple. And that's not true. Of course if your "toolbox" is better equipped and you have wider knowledge you can use it in more ways. BUT. Do you really need it at the beginning ? You need to be careful to not get into a trap, where you implicate yourself that you need to deserve for it very much, so that only if you will be the smartest and most knowledge then you will do it. This is self-sabotage, that tons of people make. There is one very nice sentence about it in this forum, that I very like. Not quite quote but: You don't need to build large, perfect modern boat with atomic drive to go for some small fishes. Another thing - it's not the strategy what is most important, everybody wants set ups, strategy etc. But if you are discretionary trader it's about psychology and money and risk management the most. And attachment to money. If you think about it like earning and loosing money, you will have a problem. Of course trading is about money, but money is outcome of you doing your job well. It's like with sportsmen, most of them choose to be pro basketball players, football players etc. not because they wanted big money, they just love what they do, wanted to be best in it and that money, that everyone desires is just an outcome. Don't get me wrong. I'm not saying that you will take some red dot/ green dot system, or some technical indicator and that's it. Because "simple" doesn't mean "easy". If you are involved in market, so you have any "basics" and you use it to analyze markets with your brain, and you try to spot patterns etc., that really can be enough for start. I observed something interesting among some good ballers, they dig into topics, they have really good wide knowledge but finally they end doing something really "simple". I remember long time ago, the best guy in office shared with us how he looked at the markets. And you know what ? We (me and other new fellows) was like, "Yeaaa, for sure. Management forced him to tell us something so he just tell us something shitty to have it done". But after long time, when I get more knowledge etc. I realized that he was really telling us how it worked, and it was that easy (it was coffee calendar play). He was not rocket scientist. He just spotted something simple that worked and was mentally able to use it as along as it was working. When it doesn't work, you spot something else (or in meantime). And there is a lot of stories like that. I think many robust ppl here saw that too in their lives. And one more advice, try to don't listen to comments why you can't make it doing simple things. It usually comes from people, who can't do it themselves. If you are not a complete idiot, you have some basic knowledge and you want to do all the hard work, just try. I'm not saying that you will for sure make it this way but it's a good way. You will learn most just doing it (but only if you are able to make observations and draw conclusions).
An edge is a mathematical advantage. To arrive at that you have to consider three things. Probability, reward, risk. The latter two are set by you and can be known to start with as you structure a trade. The first (probability) is your best guess on price reaching your target before it reaches your SL. It will always be a guess and the number you assign to it is your best guess, given the circumstances, as you can never know all the variables, and that is why the markets are uncertain. Contexts, the larger and the immediate, are factors that need to be considered to arrive at a probability figure. Way more important than any single candlestick pattern is the context in which that pattern is located. Way more important than any single PA pattern (such as wedges..flags..BO’s etc) is the context in which that pattern is located or happening. Example, in a strong bullish move I have seen wedge tops fail successively over and over again. Likewise, in strong bearish moves wedge bottoms will fail over and over again. In real estate the word is location..location..location. In trading it is context..context..context. Context in trading is location. Finally, you have to be watching the dynamics of “how” a trade is unfolding. That too affects the accuracy of your probability figure. It is important to see PA but it is of equal importance to read “how” that price action was made. Why? Because on the fly adjustments may have to be made in probability, reward, risks for the trade to be successful or you can have a good paper profit and muy pronto see that disappear into the wind and see your SL get hit. Adjustments cause the gurus to groan.....