Volpri, I really appreciate your effort sir. Very good write up. One question please: When you state context, you are referring to ....who is in control based on price at the current time, Bullish or Bearish, correct? For myself, I think of context as who is in control at the current time I am starring at the chart, I hate looking alllllll the way left (i.e., more than10 hours left). Thank you,
When I say context I am referring first of all to the market cycle within the TF (time frame) I am trading. That is usually a 5 minute chart. I will also look at this on say 15 minute chart or 30 minute for a quick orientation. So, what phase of the cycle is the market presently in. It goes like this: Market is in a range or sideways movement generally 20 bars or more. Then we get a BO. That can come in the form a big and strong spike with successive bars closing near their highs. Or it can come slower with several bar that are smaller but staying outside the previous range and moving away from it. Once we get a PB (pullback) price tends to morph into a channel. The PB starts the channel. Otherwise, without a PB it is still a BO. The BO and channel together form the trend. So first phase of the market cycle is a BO Second phase is a channel Third phase is when the channel morphs into a range. Once I see a BO I will trade it with BO techniques. It can be a BO of 1 bar or multiple bars. If the BO starts with big bars and price is moving in a hurry I won't wait for confirmation but will immediately trade in the direction of the BO. If it is a slow BO out of the range or the channel I prefer to wait for 5 bars to see if price goes back into the range or the channel whichever it broke out from. Because most BO attempts fail. I have discussed this recently in some posts. You can review those posts. Once I see a channel still moving in the direction of the BO (The BO has ended and we are seeing PB's) I will trade it with channel techniques. Once I see a channel morph into a range (15 to 20 bars sideways movement, otherwise it is just a PB in the channel) then I will use range trading techniques. So again, the larger context is BO...Channel...Range. The market does this, then repeats it, over and over. It is important to know what phase of the cycle the market is in at the moment. What phase it did it come out of? That is, the previous phase or two. How did price act in those previous phases? Volatility? Tight channels? Broad channels. Tight ranges? Broad ranges? Strong BO's or weak BO's. So yes, to see the larger context one does have to look to the left. All of the above is the LARGER context and it is generally repeated over and over in that order with some exceptions. BO...Channel..Range. Now the INTERMEDIATE context are the chart patterns found WITHIN the larger market phase above. Patterns such as WEDGES tops..bottoms..micro wedges.., TRIANGLES..ascending..descending..symmetrical ..expanding, FLAGS bull bear etc... TRENDS ...mini trends...bear trend ..bull trends. DT'S and DB's...micro DT's and DB's too. CHANNELS..micro and larger. RANGES....micro larger ranges larger than just a PB...HEAD AND SHOULDERS....etc So FIRST I look at the larger context mentioned above. Where are we in the market cycle? What phase of the cycle did we just come out of? How was PA in the previous phases of the cycle. Then I look at the chart patterns within the present cycle we are in. Finally, the IMMEDIATE context. This is 3 fold. a) This is an attempt to discern who is controlling the market at this present moment? On the last few bars. Who is winning? Who is likely to continue to win. Where are the pressures? Bullish? Bearish? The chart patterns of the intermediate context reveal this to some degree. They are graphical representations of buying and selling pressures. B) The individual bars bear or bull bar? How many bear bars in sequence? Bull bars in sequence? Size of the bars. Large bars indicate easier price movement. I look at bear bars as bars being won by the bears. Bull bars being won by the bulls. But it is needful to look at these bars taking into consideration the immediate and larger contexts. C) Finally, the setups for entry and exits that are forming. Which one will I utilize? There are many setups. which one fits the larger..intermediate..and immediate contexts best? Which one grabs my fancy to utilize for the moment? It is like grabbing a hammer or a screwdriver out of the tool box. In short: Larger...Intermediate..Immediate. Sounds like alot to learn and then observe and identify but once a trader learns how to read the market it generally takes only seconds to locate and identify all three contexts. Then which setup will I use becomes the question? For instance, say price in the larger context came out of a bull channel and is now in a range of 20 bars sideways movement. Prior to the channel it had a very STRONG BO. So we now know in the BACKGROUND is a strong BO followed by a rather steep channel followed by the range we are now in. The bias therefore is still bullish. Up to 40 bars or so in a range. After that the subsequent BO can be north or south 50/50. Why? the previous strong BO followed by the strong bull channel held some sway until we reach 40 or 50 bars sideways movement in the range. They have now lost most bullish their influence on the market. However, between bars 20 and bars 40 of the range they still hold some sway and it is a safer bet to use setups that favor a bullish bias. Things like fading BO attempts out of the bottom of the range and perhaps holding for more profit as price heads towards the middle or top of the range. If fading BO attempts at the top would be safer bet to grab 1 to 3 points in the ES as the bias in the LARGER context is still up because we have not reached 40 to 50 bars of sideways movement. Fading the outer limits of a range is one setup. I have discussed this extensively in previous posts. Trading and implied bull PB's in the middle of the range is another setup. I have discussed implied PB's in previous posts. Trading a wedge bottom at the bottom of the range is another setup. All in a larger context of first a strong BO followed by strong channel, followed by a range that is within 20 and 40 bars of sideways movement. Just reverse everything for a bearish larger context. Trade wedge tops in the range..maybe bearish implied PB's in the middle or top of the range. Triangles in the middle or top....Hopefully, I have said enough to get folks thinking about the three contexts and correlating the setups within these contexts and picking which one to trade or use and which one not to trade or utilize. Real Estate: Location..Location...Location Trading: Context...Context...Context Think about which patterns are bullish or bearish in nature and which setups fit them best to trade them in the larger...intermediate...and immediate contexts. I know this sounds complicated but once a trader learns the three contexts well and has accumulated several setups to use and practices trading those setups it becomes second nature to trade PA. It is far more complicated to write it up like I have attempting to explain it.
"We mold our own reality in the markets. No one else does." (From @volpri on his profile page) "Real Estate: Location..Location...Location Trading: Context...Context...Context" (From @volpri -- Shared Brilliance") BTW works consistently profitably for @volpri -- and it works for me -- at least for several days -- and no reason if understood and disciplined followed will not work for most of us. Much Gratitude for your kind, generous efforts @volpri !
I have been profitable -- The techniques presented have provided insights, to improve consistent trading profits, and now I need to also learn from @volpri to garden without a green thumb. Thanks and now back to trades of Context at this time.
I gotta go tend to the garden while still a little cool outside but I want to highlight a couple of trades I took this morning. Specifically context. And the technique of doubling up and reversing directions on an averaged down position. First the context: Shortly after 5:30 a.m. we began channeling up. By the open at 8:30 a.m. price was in the middle of the channel. It promptly traded down on the opening bar to the bottom of the channel. So by the opening of RTH's the LARGER context was a bull channel with price trading down to the bottom of the channel. Remember, most BO's fail and within 5 bars price trades back into the channel, or at least towards it. On channels that failure stat is 75%. However, it must also be remembered that at some point a BO WILL succeed. So I have to keep that in mind too. The intermediate context was a small bear trend within the channel (I am providing a 2 min chart so this can be seen better than on the 5 min chart. It was also an expanding triangle on both the 5 min and the 2 min chart. The larger context then is a channel beginning in the overnight session and about 40 bars long on a 5 min chart. Price is in the lower 1/4 channel which is a long entry area for me betting a BO out of the bottom will fail. Now lets look closer at the IMTERMEDIATE context. This context is any price patterns within the channel. A trend down within the channel began on the 5 minute bar before the RTH's open (bar 8:25). This trend is a price pattern. Are there any other price patterns? If you look you will see and expanding triangle. To see the intermediate patterns better it is often helpful to dial down to a smaller time frame for a quick look. So, I am providing the 2 min chart. OK looking at the two minute chart we see the bear trend better. Note the gray circle. Also we see the expanding triangle better. OK now for the IMMEDIATE context. The pressures from bar 8:25 are bearish. The bears won bar 8:25 and the opening RTH's 8:30 bar. So we got selling pressure down within the channel. But in the LARGER context (a bull channel) so buying pressure from the larger context. So, we have an expanding triangle price pattern in the INTERMEDIATE context. And the intermediate is twofold; the expanding triangle (which makes it reasonable for a long position) AND the bear trend within the channel, coupled with the fact that the bear trend carried price to the bottom 1/4 of a bull channel. So now the IMMEDIATE context is ripe for a long position especially considering that 75% of BO's fail it was therefore also a reasonable bet to go long at the bottom of this channel and average down, if necessary. The setup is long in the bottom 1/4 of a bull channel (on the 5 min chart) and average down if need be. So that is what I do. Look at the first chart which is the 5 min chart. I take a long position on that top green triangle. As price goes against me I average down even more (the next lower green triangle). But remember, while there is a 75% chance that this BO of the bottom of the channel will fail and price within 5 bars will likely be back in the channel there is ALSO a 25% chance the BO will succeed and I will have to dump the long position. Also, bull channels like this one on the 5 min are actually bear flags on a larger TF, with a likely BO south. Check that tidbit on the last chart I post here which is an hourly chart. I know the naysayers will say (after the fact LOL). But I ask how can I explain a concept that occurs over and over in the markets without waiting for it to happen so I can SHOW it and explain it? Just check the concept out in future price movements and you will see LOL. Bull channels act as bear flags on larger TF's with likely BO (when it comes) south. Bear channels act as bull flags on larger time frames with likely BO north. Just look at the picture on the last chart and admire! ROFLMAO Now another tidbit that I alluded to last night. Once a range has 40 bars the BO it is 50/50 that a BO will be north or south. Well same thing with channels. Once a channel has 40 to 50 bars the influence of the channel larger context pressure begins to wane. In this case a bull channel for around 40 bars. The bullish effect is getting less as time goes by. Plus bull channels are bear flags on a larger TF. Look, the goal of PA is to see ALL the pressure in the market within the three contexts and even dialing out to are larger TF or a dialing down to a smaller TF to discern the pressures better. Then make an informed decision, followed by taking a position on a likely movement of price. While all the time understanding that the market, by nature, is uncertain and things can go the opposite way of what you think. If that happens I have to adapt and quickly. The market changes my plan. Changes my tactic. Now that one gets the guru's railing. They all shout let your plan work out. LOL The market is known for disrupting our fine and well thought out plans, even to the point of destroying our entries and potential profits before we can finish chewing that first bite of that fresh garden tomato sandwich..as we are counting the $$$ before they appear in our accounts. ..ROFLMAO. That possibility always exists, no matter the analysis. I have to have a tactic in my mind for when that happens. I must know what I will do when it happens and be ready for it, beforehand. So, I take a long position but I must be cognizant of all the above at least in the back of my mind. I average down. Immediately after averaging down we see the biggest bear bar in many many bars. This is a likely a strong BO south of the range. The 5 min chart shows it. The 2 min chart shows it. And of course the 1 hour chart is showing the BO as from a bear flag, so a continuation of the bear trend on that 1 hour chart. Now notice one other thing. The SPEED of the BO south. That I call that the dynamics. Not just the fact that a certain price was made but "how" that price was made is just as important maybe more so than the fact that it was made. I have previously alluded to this concept of dynamics in several previous older posts. Look it up. So, when I see an unexpected BO (but cognizant of the possibility of such a BO happening because of the 40 bar LONG channel on the 5 min chart so bullish pressures are waning somewhat AND there being a bear flag on the hourly chart) I have to mentally be ready, in case such a thing does happen. In this case it did. It was a fast and unexpected BO and I am caught with an averaged down position because I placed a bet on the long...the ..intermediate and immediate contexts, as likely panning out. They didn't. When the dynamics are this fast there is "urgency" in the markets. The bears are pressing their positions. I am not gonna wait for 5 bars to see if price goes back into the channel. There is too much urgency. Too much bearish pressure. Largest bear bar in many bars. BO south of channel. Bear Flag with continuation of bear trend on 1 hour chart. NO sir. The dynamics says I gotta dump this averaged down long and I had better make haste and do it NOW. And, in addition, since there is SUCH bearish urgency I need to double up and recoup my loss quickly, and soon be back in the money. So look at my red triangle (on the 5 min chart). I dumped averaged down position and at the same time I double up that previous position and now I am short with twice as many contracts as my losing position. Now I want to highlight how such action helped me out of a quandary. I got a loss on my hand. But by doubling up position size and reversing direction I have just re-positioned myself to recuperate my loss and POSSIBLY make some money at the same time, killing two birds with one stone. Now look at the two red arrows and the green arrows. The top red arrow graphically displays the DISTANCE price traveled from my initial long entry until by exit of the averaged down position (my loss). That exit is ALSO my doubled up entry but now short or south. That second red arrow is 1/2 the distance price needs to travel (compared to the distance travel for the loss to occur) to get back my loss. Why less distance? Because it is a double up position over my losing position. So I am double up and holding. Urgency...price continues south...I am at BE (breakeven) i.e. I have now recuperated my loss in 1/2 of the distance. Now look at the green arrow. My loss was X amount in terms of money. By the time price reached the end of the second red arrow I have totally recouped my loss. But by the time it reaches the end of my green arrow I have not only recouped my loss of X dollars but by my exit of that doubled up short position (lower green triangle) I now have 2 times the amount of profit as my loss was. To see this lets pretend my loss was $200.00 on the average down position. By end of smaller red arrow I have recouped that loss. BY end of green arrow I am $400.00 ahead. In essence my doubled up position made me $600.00 I wanted to highlight this graphically as a picture is worth a 1000 words so they say. This is a lot to digest but you want want to print it out and think about it, mulling over it. I have mentioned concepts I have previously alluded in posts going way back. I am done typing now. I did take another trade after these trades. It was a short trade. It was profitable. I will post it in the next post with very little comments. Even after this last trade which I will show in the next post I just checked and see the market went on down. I stopped trading so as to think about how to explain these concepts to the readers of this journal and to type them up. That takes a lot of time. I see there were more shorting opportunities but I could not trade and type all this up at the same time. I have not made it to the garden yet! Now I gotta work in the hot sun. Bye.
Here is my last trade. A short and profitable. As the BO continued south I shorted the second leg at 4353.00 and covered at 4348.75. Then I had to stop trading to continue typing my long drawn out post above. Guess what I made 3 trades. One LOSER for those who doubt I lose and question whether I ever do LOL. Two WINNERS for the fans who perhaps visit my jumbled up journal occasionally, and of course two winners for me! Notice the urgency of the BO; bearish institutions are pressing south. Bullish institutions are giving up and joining the bearish so price slides south. Who says a body can't change their plan? They do. We should. But the gurus say don't change you SL or PT let your plan work.......PS most people lose...ever wonder why? I do! Uh the market doesn't know about your plan or my plan! ROFLMAO We gotta get with the markets action. If that means changing our plan...changing our SL ..changing our PT's or just pure changing our mind about the market's direction. PS again. The market is NOT random. The pressures MAKE the market. They are purposeful. Not random. One side wins, the other capitulates. For a while. Then the other side wins. Learn to read market pressures. Structure trades but be ready, at all times, to do the exact opposite of your structure. Now to the garden and the hot sun. I should have crawled my carcass out of bed at 5:00 and finished my duties in the garden before RTH's.
Thank you soooo much volpri for your time, effort and energy in explaining the context to me. Thank you. And very good print out and read for me. I understand now. You are right, it takes practice, time, and for sure consistency.
Hope my explanations do indeed help. It is hard to explain things well. I try. I do believe understanding the contexts of the market (larger, intermediate, immediate) is useful because these things occur over and over every day, on every time frame, in every instrument. They are not 100% profitable as nothing ever is with the markets. There are always the uncertain factors. But that doesn't make it random, as some declare. These contexts and their patterns occur often enough, and orderly enough, to make profits. I just develop strategies to use for when it doesn't work out, so well. The key to them working is inertia. The market tends to keep doing what it is doing until acted out by some outside force that changes that inertia. Humans are like that too. Say you get up in the morning contemplating putting on a pot of coffee, sitting in the recliner sipping coffee and reading your favorite book for a couple of hours,.... when suddenly your wife gets out of the shower and hollers at you. She says that if you don't get up off your lazy bum and cut the grass first thing this morning she ain't cooking breakfast, and maybe no lunch too. So, reluctantly your adapt and get out the lawn mower.......An outside pressure changed things! Why does a range keep acting as it does and extending itself as time goes by? The same could be said of a channel. The market is not random, in the strictest sense. What is random is "when" an outside force becomes the force that changes the inertia. You never know when that wife is gonna start throwing her weight around, making demands! We cannot know "when" such a force will appear. Until then the market chugs along making patterns ...etc as the bear and bull institutions exert their pressures on the market, in a sort of orderly and frequent way. Generally, they trade off each other, back and forth taking money from each other, in a sort of orderly way. One side wins for a while then the other wins. This interaction basically draws the chart and creates the contexts mentioned above. And these contexts are there in every TF. And because of inertia, which is a reflection too of human nature, as humans like order...tradition...the market too needs some sort of order to make it tradeable therefore, tends to continue doing what it is doing. Inertia. Imagine if all day long it just shot straight up and then straight down. It would be psychologically a roller coaster ride. Not that it couldn't be profitable doing so…ROFLMAO. Most traders would stay away from it. There has to be some sort of order if people are going to become market participants. That order in the markets in rooted in human psychology, nature, and behavior. It has to be because it is humans not monkeys or chimpanzees that are trading the markets. All market participants are humans with human nature encoded within our DNA. We don’t respond to events as frogs or insects or any other creatures. Each has it own nature. And that nature leaves it’s fingerprint on everything it touches. Whatever we, as humans touch, we leave our footprints. Even the algos we write for trading will reflect out human nature. That is why the markets have always had PB's, triangles, trends, BO's, channels, wedges...etc ad nauseum.. and they ALWAYS will. We humans cannot long survive in total chaos and complete disorder. Wars may start. They will end. Riots may start but they will always cease as time goes by. Riots and wars in trading will start but it will always come back to order. Do you catch my drift? It is human nature. We need order. We need tradition. We need habits. We need customs. Without these things we would be so stressed out we would become neurotic. Some do any way day trading LOL. See, our minds create shortcuts and bias to help us so we don't have to analyze everything, every time, down to the minute detail. Can you imagine if you were trying to decide if a restaurant is a good eating place that you would sit up a table outside the door taking an extensive survey from everyone going in, and coming out, before you could make up your mind that it is likely a good eating place? No, our mind tends to make assumptions thus it looks for shortcuts. It relieves us of tremendous amounts of stress that would be created when making decisions. Life would be unbearable if had to focus so much extreme attention, on every little detail, about everything, before we could make a decision. The flip side is not enough focus on detail can be just as bad. These mental shortcuts. Take for instance, a dining experience. We drive by a restaurant and a visual glance ...the building looks clean and in order...parking looks orderly...many many cars are there...people waiting outside to get seated...our mind passes judgement and then rather quickly makes assumptions that the restaurant must have a) good service and b) good food and c) decent prices so we wheel into the parking lot and await to get seated. Now, that doesn't mean we will have a good experience! It just means that a good experience is a likely POSSIBILITY. We could get seated and get a new waiter that doesn't know how to do his job yet. The cook could overcook our steak. The customers sitting next to us could be loud and boisterous thus ruining our meal. They might run out of our favorite beer. See, any amount of variables can throw a monkey wrench in the gears of a good dining experience. Well it is the same thing with trading. The clean building...nice parking lot...amount of cars...amount of people in line to get in.. these are the contexts, if you will, in trading. This is reflective of the inertia. When I get in the restaurant and actually get down to ordering and eating well these things are the dynamics of my dining experience. Likewise, when I get in a trade (i.e. placing my dining order) now comes the dynamics. How is that trade panning out? How is that dining experience going? Anything could go wrong and ruin my dining experience. Anything could go wrong and ruin my trade. It doesn't mean the restaurant is bad. It doesn't mean the context and patterns are useless in trading. It just means something happened that generally doesn't happen and it ruined my dining experience and my trading strategies. So I leave in a huff and refuse to eat at that restaurant again. Furthermore, I tell my friends to never eat there. In addition, I get on a forum about dining experiences and blast the restaurant. Others respond saying how they had a wonderful experience there. So, I leave day trading, get on a trading forum and blast day trading ...talking about it, how it, with all it's patterns and setups, is worthless and at best a 50/50 proposition. Sound familiar? Inertia. See, until a strong enough force acts to change the inertia (the tradition, the customs) tend to prevail. Things just move along in a sort of orderly way. Channels form and appear as containers of price action because of institutions trying to exert themselves and take money from each other. It isn't that they are all sitting there looking at 5 min charts. No, they are looking at other TF's. Some daily. Some weekly. Some monthly. Some hourly. Some maybe 15 min. Some HFT's trading even less TF's than say 5 min time frames. Some aren't looking at charts at all. They just doing what they are doing filling orders but ALL that action, together, appears on the charts, in the forms of patterns and the different contexts that are being created on different TF's, as the session rolls along. For instance, a bull channel on a 5 minute chart may simply appear as a bear flag on a one hour chart that has price in a bear trend. I trade the patterns and the contexts on the time frame I am looking at. If I am trading the 5 minute chart I will trade the channel using channel trading techniques and setups. If I am trading the one hour chart I trade is as a PB showing up as a bear flag looking for a continuation south. Once that hourly PB resumes south from the bear flag it will show up on that hourly chart. On the 5 min chart, it will show up as a BO south of the channel. I occasionally will glance at a larger TF just to see the 3 contexts in it but I like trading the 5 min because of the amount of trades it renders me, during a typical trading session. I am a scalper. So 5 minute charts fits me. By trading size on smaller price movements (what many consider as noise) I can extract profits often very fast, and quit for the day. The way I see it is the longer my money is actually in the market the longer it is at risk. It can't be at risk when it is out of the market. Many folks have lost their life savings in mutual funds..etc. Others have made a lot of money. Both had their money at risk over large periods of time. I prefer to just extract quick profits and be flat at the end of the session. Others hate the attention and time and energy invested in details to day trade. Neither side is right or wrong. But usually one side will denounce the other as untenable. Granted intraday trading does require more understanding, and more attention to detail. And more decision making. Each decision has stress related to it. Some folks aren't cut out for it. But that doesn't make it wrong for everyone. Going to garden. Have a good weekend. PS while learning to trade using PA (price action) techniques may seem complicated , detailed oriented, too complex, chaotic, and an energy sapper. But remember, that the more one learns how and the more one PRACTICES the more it becomes second nature, and the less energy it takes to decide. It thus becomes easier to read PA and to make a decision. And the stress comes from the energy expended to make a decision and face the dynamics that come after that decision is made. I have no fear losing any edge. Or telling how I trade. Most are never going to put in the PRACTICE necessary for day trading to become second nature for them. It took me a long time to buckle down and get serious about it instead of just monkeying around with it.
. Hi Volpri, This journal is a unique and invaluable resource in the forum. I always enjoy reading it whenever I check in, and though my more indicator-based momentum trading methods are different, they have a lot of similarities too. Agree strongly with your comments about the importance of short-term market inertia and about the benefits of regular practice when performing a cognitively stressful activity. The latter always reminds me of something I read about years ago that apparently is now called the Tetris effect. People playing the game of Tetris burn a lot of sugar in their brains early on, but with practice their energy consumption goes down and their performance goes up. Perhaps it’s the same for price action day traders… The Tetris effect - “Dr. Haier found that volunteers used more energy when they played Tetris for the first time. After practicing for about a month, however, their scores improved sevenfold while their brains burned less energy. The Tetris players' PET snapshots changed colors accordingly -- light yellow among the neophytes to green among the Tetris-enlightened.” From: https://www.nytimes.com/1992/08/26/news/campus-journal-think-of-the-brainy-as-fuel-efficient.html Later studies saw similar benefits of practice on brain energy usage, e.g., https://archive.nytimes.com/www.nyt...tris-could-be-good-for-your-brain-s-6445.html
Thank you for your comments. I am glad you enjoy reading the journal. Interesting. I will have to read these articles you posted. My understanding is the brain uses 20% or so of the body’s energy. Any way that we can reduce the energy consumption and improve production (in this case of trading…profits) is more efficient and a worthy goal IMO. I have heard different figures set forth as to how long it takes to form a habit and to subsequently cause the habit to become automatic or lifestyle. The latter level reached is where a lessor amount energy consumption would be achieved. Some speak of 21 days to form a habit followed by 66 to 90 days for automatic/lifestyle level. An interesting take on it is in terms of repetitions (as opposed to days), to form a habit. IF the RIGHT THING is practiced from the very beginning it is said to take 300 to 500 repetitions to form a fresh new habit. To BREAK an old habit it is said to take 3000 to 5000 repetitions. Seems excessive to me, but if it is true, the implications are huge and it does spotlight at minimum a couple of concepts, namely; 1) The power of tradition or deeply ingrained habits. They can be tenacious. 2) The importance of practicing the CORRECT THING from the get go. Maybe that is why it takes so long to get price action trading to what I call a second nature level. The automatic level. Just take one thing about PA. Say, trading the outer edges of an ESTABLISHED range by fading those edges. Look at the process. 1) KNOWLEDGE. First, I have to understand the principle: 80% of BO attempts will fail EVEN IF price does go outside of the top or bottom of the range within 5 bars it will head back towards the range or even be in the range. This is the knowledge. I have to know this or learn this and at least initially accept it as possibly being true and factual. 2) BELIEVE IT. To arrive at the conclusion that the principle is true I need to SEE it take place enough times to make me believe it IS true. 3) PRACTICE IT. For it to become a habit I have to practice it 300 to 500 times. Why? It is counterintuitive. When price races to the top or bottom of a range the brain and emotions NATURALLY “see” BO coming. So, if the move is north I place an order to buy at the top of the range when the principle says I ought to be selling there, not buying. Therefore, I have to practice doing enough times so that it becomes habitual to think of shorting, not buying, as price approaches the top of the range. 4) AUTOMATIC OR SECOND NATURE. To reach this level once it becomes a habit (300 to 500 repetitions) then the more I use that “now a formed habit” every time I see a channel, on any TF, then the sooner it becomes an automatic response for me to trade ranges this way. Once it reaches this second nature or automatic level I cease to consume so much brain energy “thinking” about it and just “do” it. And my stress level goes down (as decisions cause stress) because I have trained myself how to react while trading price ranges, by fading the limits. In essence, I have ALREADY decided what I will do as price approaches either the top or bottom of the range so therefore, I don’t have to expend energy deciding. I just implement. NOW imagine! Think about it! Fading tops or bottoms is only ONE way of trading ranges! And it took this LONG …this many repetitions..this many times of habitual action… for it to become second nature. Then there is all the other ways to trade ranges…for instance techniques for trading in the middle of ranges….you get my drift? Points 1-4 above have to be repeated for each one of these techniques. And I am just talking ranges! What about all the techniques for trading channels? All the tactics for trading BO’s! GOOD GRIEF! No wonder I just toyed around with PA trading for years, never getting that serious about it. Intrigued, yes, but not serious about learning it. PA is not something that can be monkeyed around with. No wonder Brooks said it took him 10 years. Finally, I have to develop strategies or techniques to mitigate damage when the core concept of fading the edges of ranges does NOT work. That is, price does indeed have a SUCCESSFUL BO, and not just an attempt at breaking out. That starts with defining what constitutes a successful BO, followed by what will I do when it happens…….then back to forming a new habit to become second nature (1-4) for mitigating purposes when the concept of fading edges doesn’t work. ROFLMAO. It is no surprise traders search for that easy simple indicator and devise easy simple rules to follow. It is just TOO much work to learn PA and to make it habitual and second nature. Plus it is subjective and discretionary! That fact right there is enough to make a body spit it out of their mouth faster than a double dose of castor oil! BUT IT CAN BE VERY LUCRATIVE.