Those who prefer to trade their "feelings" may infer that these two threads are striving for perfection, but that's not the case. What practitioners of this approach seek is to trade what they see, not what they want to see. This approach pulls the trader back to reality again and again. This frustrates those who continually wander off track, but those who are willing to let go find themselves developing the routine to which Hooti refers. And it's the routine, boring though it may be, that will eventually lead to profits.
The hinge thing may not be worth the trouble, which is why I've left it out of the minimalist version. Even though I've gone over this many times, it just doesn't stick. Instead it just slides down the wall. The first move out of a hinge is nearly always in the wrong direction, with the focus on the "nearly". Therefore, if one is in, he should exit at the break of the demand line. If he isn't in, he can look for a retracement in anticipation of a continuation. If there is no continuation, he should look to short, either at the first retracement after the break of the demand line or when price arrives at the apex of the hinge. Notice that 3m hesitation just above 74? And from there on it's business as usual.
Niko, The point I was trying to make was that you don't specifically need to become a master of hinges. The same straight line method with price again failing at around 80 where it had failed before alerted to the possibility of short. Now I am not saying I figured it out in real time. I don't trade intra-day. What I am saying is that the tools you have are sufficient enough already. The point raised about aiming for perfections rings true here. The whole point of the price action is to have a resilient enough plan with a positive expectancy. What you need to realize now is that you're not going to catch all the fish in the pond on a given day. To me it seems you're trying to become too mechanical and automatic, which might actually be detrimental in getting this price action thing off the ground. I know you are beginning to see price much better. I know you can see retracements now and even turns. That is quite enough to be reasonably successful. The context of where price is and changing conditions in real time is the remaining ingredient. It's going to come just by seeing enough of the price movements and getting comfortable with it. When Db, was pointing out that there's only so much you can automate regarding this method, I believe this is the kind of example he had in mind. You are looking for a formula that will tell you under every circumstance what needs to be done next and when that doesn't pan out you start looking for another set of rules to identify that event. Coming back to the hinges. You trade can very well even without knowing a hinge. I think somewhere Db had mentioned this in this thread before, but as luck would have it we got a first hand experience of it today. Had we not identified the hinge and only followed the straight line approach would we have missed the short at the top? I doubt it. So getting stuck in the 'shape' of the hinge took our mind away from the price itself and caused that miss. What do you think? Gringo Edit: Db had responded already.
You couldn't be more correct! Besides what I am posting here about the real time action, I am also replaying days from the past and trying to test my system, and adding context. As I can´t interact about what I find in the past (lots of posts that no one will read), I focus my interactions in what I find in "real time". I don't want this to become a mechanical system, believe me when I say I would like to "feel" price, but I am not there yet. I am far away from the starting point, but still in the middle of the lake (shore not at sight). At the time, my thinking was I could AGAIN be trading into the chop, then I realized Db once said that a Hinge is not necessarily the chop (for the reasons stated above by him) but it was too late for me at the moment so I let it go, and posted about the entry around 76, in order to find this kind of debate.
Great discussion as always, guys. Thank you for continuing to contribute to the thread even though so often it seems to turn into constant re-iterations of material which has been covered already. I read the introductory material of the thread again today, and each time I go back and read it, I find that it answers nearly all of the questions that I've begun to ponder about price behavior. Sometimes, it seems so simple that I literally can't fathom how I am unable to instantly understand it. I have rarely had this problem before, of having difficulties absorbing relatively basic and well-presented material. I definitely feel more and more of the materials and concepts beginning to sink into my mind, although the pace is slow. Huge thanks once again to all of the contributors to the discussions here. It's been a very satisfying journey so far, and a pleasure learning along side all of you. --- Also, niko, What are your current guidelines for recognizing price congestion that you don't want to trade in? I think I remember a while ago that you were using two stopped out trades to signal potential chop and a period of observation, but it's hard to keep everything straight with so many participants involved. What progress have you made in that area lately? I feel like if we could somehow merge our strengths we could made a pretty proficient PA trader, haha. You seem to have trouble with getting sucked into the muck a little too often, and oftentimes I will enter trades a little late or miss them entirely in order to avoid that stuff. Keep up the good work!
There is now a third thread -- Bride of If You Can Draw A Straight Line -- due to the fact that this one has over a thousand posts. The new thread is very narrow in focus, which may be just what is needed for many traders. If it's too narrow, this thread and its predecessor are not closed and anyone who wants to do so can continue to post to them.
So here we are at the top of the ES long-term trend channel, as I "predicted" last month. And at the top of the NQ long-term trend channel, as I "predicted" in July. Which isn't difficult for anyone who knows how to draw a trend channel. Or wants to learn. The Great Oz has no unusual powers. By the way, the bottom of the channel is at 1400, but it could be considerably higher by the time we get there since upwardly-sloping diagonal lines, by definition, rise. The bottom of the NQ is around 2850.