I'll have more comments coming, but I want to start with this: One of my favorite ET quotes from handle123: "I don't use bias as that always lost for me, I can't back test bias."
I wish I were as Zen about trading as DbPhoenix and gringo, but I'll tell you what - there are plenty of times I find myself sitting and watching and yes, getting a bit pissed off 'cause I missed the move. It happens. It is ok. It is ok. The market will still open for you tomorrow and it will still let you trade - so no problem, right? Right. So to business. First, I assume you mean HL? "Higher Low," and not LH = Lower High, right? Second, what is your trigger for price "stopping short" of a level at which you plan to trade? This, for example, does not sound like what we've been working on: "I was positive that the level was going to hold so I hit the long button." I know you have struggled with the fear of missing out on a move. Is it possible that today you may have given into this fear and in the attempt to avoid missing the move you all but assured you'd miss it? What was your trigger for the short? Tell me the story of your short. I have a few pretty charts with lines I'd like to share with you, but I will wait to hear from you first.
Further review of the day's noise and you were definitely just about 6 minutes early on the long trade. Good choice though on direction. Nice read.
Would a "danger point" stop have perhaps been 3-4 points beyond the S level to keep one in a trade in case price didn't remain on 'this' side of the level? I have to admit that I'm still not good at this. I watch the right tick, but can't seem to put it all together about where the transaction occurred or perhaps if price went from .25 to .75 - I either don't notice the specifics or I can't remember and therefore the significance is lost on me. For that reason, seeing price print - even if in a 1min bar - is helpful as it's a visual representation. I do know it's flawed though as a 1min bar will represent prices that may not have been traded. I'm not sure I'm following your "interval" questions. Would you elaborate? <I would have responded sooner, but I've been traveling.>
Yes. I'm not sure why I sometimes seem dyslexic with regard to my notations of LH and HL. Yes, I meant HL. Honestly it JUST hit me as I was reading your comments. I took the trade today as if it were a range trade, not a REV at S/R. I feel like I just smacked myself in the face. You're 100% correct - I didn't wait for the tell/behavior (HL after S or LH after R). I sort of can't believe I didn't realize it until just now. I have to say that makes me feel a bit better. And not that I'm looking to make myself feel better - I was trying to figure out why I did what I did and didn't have a conclusion rather than jumping the gun. Pretty charts are welcome!
This is exactly right. You were just a tad early. If entering before the reversal actually occurs (anticipation), you would need a larger stop since one doesn't know how far the market will move below the level you saw until it happens.
Before moving on from this, I will point out to those who are following along that if one focuses on the state of one's trade rather than on what price is doing, he will most likely miss the opportunities being provided by the market. This focus on one's self is a behavior that is difficult to extinguish, but if one does not in fact extinguish it, the behavior's presence will result in continuing frustration. Given that these interactions are more like passing notes in class than face-to-face exchanges (and sometimes like relying on messages in bottles), they can go on so long that the point is lost. Therefore, like a soap opera that's been cancelled, I'll attempt to wrap this up, and those who are interested can make of it what they will according to their circumstances. If one is trading reversals, an entry at 37.5 is late. One knows it is late because the market says so by triggering the trader's stop. If one were to note what price is doing in the "rejection bar (or interval)", particularly if he were following the right tick, he would see the advantages of entering just above that bar, perhaps 34 or 34.5 (the danger point here would be 32+/-). If he missed this or if such an entry would be outside his risk tolerance, he might also note the right-tick-retracement noted by the arrows and enter at 36 +/-. To wait longer, however, while decreasing the information risk, increases the price risk since other traders will be being given the opportunity to react (which they do). (the context for this chart will be found in the Hindsight Thread, yesterday's entry) But even if one enters late, if he is focused on the fact that he just got stopped out instead of the continuing opportunities that the market is providing, he would like not see at all the next opportunity in the very next set of intervals: 0946, 0947, 0948, 0949, which together constitute the next retracement. This, however, involves trading retracements rather than the reversal, and the market is not always so accommodating as it is here. If one is going to trade reversals, he needs to assume the additional information risk and trade reversals. If he will not assume the additional information risk and prefers to wait for the additional price risk represented by retracements, he is entitled to do so but he must also be willing to accept the possibility that the market may not make a retracement available, in which case he will "miss it". There is, in other words, no "risk-free" trade; there is only a choice of what type of risk and how much of it one is willing to assume. This choice must be based on a thorough knowledge of the territory and thorough competence in mapping it rather than on what one has to do to assuage his fears. If one can't focus on price behavior rather than on his trade and whether or not he was right to take it and whether or not he's losing money on it or might lose money on it, whatever success he enjoys will more likely be random rather than deliberate. These fears are nothing more than shadows on the wall and must be put in their place if one is to progress. The second mouse often winds up with no cheese at all.
About "Zen": You cannot apply the principles of Zen until you know the game perfectly inside and out. Having the proper attitude of Zen calm and confidence does no good if you do not know the game. Zen will not make up for, or offset, incorrect play. As a result, there is a certain amount of ordinary, old-fashioned work involved in mastering the game, a certain amount of sweating the white beads before the days of tranquility come along. Good [trading] is not a "mood", it is a series of individual decisions. It does not occur by "Buddhistically" meditating ourselves into some dreamlike mental state, but rather by knowing the game well and being in synch with it -- by inserting ourselves correctly into the flow of what is going on in front of us. No Zen attitude will make up for this lack. You may be quite Zen-like and have all the attributes of Zen calm, but if you play incorrectly, the result is that you will get destroyed. Practice, and long hours at the table, are indispensable.
The funniest thing to realize is if these folks were presented with completely random charts ( within market parameter random, of course). This same breathless descriptive diatribe would be occuring about the "action". Man, this is the wrong way to approach the market and shows faulty thinking. I pray for your accounts. Please rethink for your own sake. Peace. Surf PS-- DB. You should give credit to authors, like larry phillips from whom your above post came from.
A bias is a must before you place a trade. Don't be fooled by rhetoric. Sure, your bias may be wrong, but it is a must to have or you will never enter a trade. Use your intuition, observation and skill or even chart ( if you must) to create a bias for the stock, day, or whatever-- ACT on the bias-- if proven wrong, reverse or quit for the day, if not, enjoy your profits and manage with care----if you don't have a structural edge that is------ be warned --this other material is psychobabble. surf