Volpri, With kindest respect to your opinion about advantage to be discretional trader, I must say that ideas presented in this thread are also useful for algotrading as well. I can state this for sure because I did it (for my domestic markets, not for ES, e-mini is evil and dangerous like vespa mandarinia). I already had the strategy for these markets oriented to high reward/risk, now I have separated strategy oriented to high win rate. You presented here the trading style for all phases of market cycle (according to Brooks definition). For algotrader seems to be better to choose only one phase and hunt for it for multiple markets and timeframes. My choice is ‘tight channel’, for me game begins after breakout pullback and ends with first signs of ‘broad channel/range’. My working horses are implied pullbacks and ‘short-term’ pullbacks (looking as group of 2-4 bars almost equal +- on context timeframe = micro range/micro channel on faster timeframe). Since me is algotrader, ‘implied’ and ‘short-term’ pullbacks are 100% formalized. Bottom line is: in my opinion for the beginner, it’s better to start from only one type of context and do not spread the focus until consistent profit for this context. This is true for wannabe algo or subjective trader as well. Trying to simtrade all contexts from scratch may lead to informational overload in beginner’s head. And than, after practicing ‘one context trading’ on backcharts, replay, sim, a trader can decide whether he wants to be subjective or build algo. Just my humble opinion, nothing more. I hope this awesome thread will be continued for everybody’s benefit.
I have no plans for a course. I am not interested in selling anything. I just hope the journal helps traders grow their SIM accounts. Happy trading!
There is nothing wrong with focusing on one phase of the market cycle and learning to use techniques and setups for that particular phase. The only downside is less tools in the tool box. That means less trades. For example, in your case focusing solely on tight channels will by definition exclude broad channel and ranges. BO’s and tight channels percentage wise are lessor market events. Strong BO’s and tight channels are maybe 10% of the market action. The markets spend way much more time in sideways PA and broad channels PA than strong BO’s or tight channels. And tight channels have large risks. SL’s have to be larger. That is counter intuitive. But they do have higher probability.
I am going to take some time off from this journal. I am not sure how much time or when I will be back but there are enough concepts therein that can be practiced on a SIM for many months. I hope many become very successful SIM traders. Good and happy trading! There is a reason for hoping. Wear those SIMS out!
I believe that statement *this much*. Enjoy your break Volpri. See you fairly soon. Here's a song for your rest period.
I am taking a break from this journal but I do believe @kaizer has made some valid points here. I do want to share some thoughts to Kaizer about this algotrading. He might be able to make it work since his focus is pretty precise and singular. I have just never see anyone able to program PA. There are so many variables to deal with. An algo is going to do exactly what it is programmed to do and I don’t know how it can make adjustments like for variable momentum…(how price is made), variable price range on same volume or on variable volume, on basically the same PA, on same the TF, for same technique. The variable depths or shallowness of PB’s made on the same and different volume. The opening, high, low, close, and range on the same and different volume and even made in different contexts. It appears to me the data we have to work with is open, high, low, close, volume, momentum. It seems like a lot of work to fine tune an algo to do all these things, if one takes into account the variables I mention above, which are only some of them. And then for the algo to make adjustments on the fly. Adjustments of SL’s, PT’s, Measured moves, momentum…things like these…etc IMO the brain can see through this maze of variables better, sort it out, and make adjustments on the fly. But it would be wonderful if @kaizer can pull it off and make it work. There are many contexts, many patterns, many momentums, many tight channels, many broad channels, many types of BO’s many types of ranges. But the fact that he is focusing on just tight channels and using two techniques for trading them, perhaps he can make it work. I hope so! It seems to me, he will have to devise precise rules and definitions for each element and program it up. It is beyond me how he can account for just say… all the momentum variables alone, that will be embedded in the creation of a tight channel, and also embedded within the techniques used to trade that channel, across multiple TF’s. Today or tomorrow I may make some posts concerning some things he may want to take into consideration. Anyway, good luck and I hope it is a resounding success! It is intriguing!
I haven't posted anything in quite a while so I thought I would post some trades today for consideration. First I will state some concepts about todays trades. 1) The goal here is to show how a trader with a small account can scalp and make over $100.00 net in about 1 hour of work. 2) The goal is to maintain a high win rate. 3) The goal is to do this on a 2 min chart and correlating it with a 5 min chart 4) MES will be used because the account is small. Of course the same thing can be traded on ES or in larger contract size for more profit if the traders account is large enough to do so. But I am going to assume this instruction is for a trader with a small SIM account. ROFLMAO 4) The method is to trade PB reversals. Let me explain. You got a down move, it can be 3 bars or 20 bar bars. The idea is; there is a bear move. Then there is a PB, trying to reverse that down move or it (i.e. the PB) can be caused by profit taking by the bears, from that down move. Now, the PB is an attempt at a reversal or profit taking. Now what I want to look for is an attempt to REVERSE the PB! That is a reversal of the reversal attempt. In essence it would be a continuation of the down move after the PB ended. 5) That is, I want a signal bar to show me that the PB is reversing and the original down move will likely continue down enough for at least a scalp of 1 to 3 points in MES. 6) I will be taking profits on a quick slice out of the middle once the down moves continues. I just grab the profits and don't worry about what happens later. The goal remember, is to have a high win rate and net at least 100.00, within about an hour of trading. It is trading small size because this is a small account. So, I don't worry about what happens afterwards. Good saying by yours truly.. LOL: "The previous bar is gone, over with, the future bar is a mystery, but the present bar can make a difference." So, I just don't worry about what happens afterwards. If you are a trader that hates missing out on bigger profits there is a way to do this by going for measured moves that render bigger profits. But that isn't the goal for these instructions. These instructions are for quick scalps, in a small account, with a high win rate, making enough money within an hour or so, to send the wife or girlfriend on a small shopping trip, or to buy some fishing bait to go fishing. 7) Here is the tactic. I want to look for a signal bar showing me the PB is likely ending and there will be a subsequent move at least enough for a 1 point scalp. On slow days that is usually the PT. On med volatility or larger volatility I can go for 2 to 6 points scalps. More often that not, it will be 2 or 3 point scalps, when there is enough volatility, or when there is a larger contextual move down such as a bear channel, or successful BO of a TR (trading range). Look back in my posts to see a definition of a successful BO of a TR. 8) So, here it is: In a down move I want to see a PB. It can be a 1 bar PB or it can be 2 ,3,4 or more PB bars. So, the PB is a reversal attempt of the original move. Now I am looking for a reversal attempt of the PB. In other words, I want the PB to fail and the original move down to continue. So I am looking for a PB reversal signal bar. Here is what I am looking for. a) In the bullish PB from the down move I am looking for a bar that closes below it's midpoint and is closing below it's open. It is a sell reversal bar. It is not only a sell reversal bar but it is a BEAR SELL reversal bar. I would enter short 1 or 2 ticks below the low of that signal bar on the next bar which is my entry bar. It is a high probability trade for 2 to 3 points and maybe even more, depending on the context. It is even higher probability if there is a tail on top that is 1/3 to 1/2 of the height of the bar, no tail on the bottom, or if one, a very small one, The odds are also higher if the larger context is a downtrend such as a bear channel or successful BO south of a TR. And odds are good if the signal bar is at a DT top or top of a TR or top of a bear channel. It doesn't have to be but if it is, then the odds are increased for a successful scalp of 2 to 3 points or more. b) In the bullish PB from the down move I am looking for a signal bar that closes below it's midpoint even if still a bull bar at it's close. I like to see a tail on top that is about 1/3 to 1/2 of the bar size. It is a sell reversal bar but NOT a sell bear reversal bar. Instead it is a sell BULL reversal bar. That is, the reversal attempt by the signal bar is failing. Therefore, it is a bull sell reversal bar, It has has good odds of rendering at least a 1 point scalp. Bigger odds especially, if the larger context is bearish such as a bear channel and it is at the top of the channel (although it doesn't have to be it can be in middle of the channel ...just lower odds). Also, higher odds if it is in the context of a successful BO south of a TR. Or DT a the top of a TR. But it can take place in the middle of the trading range with decent odds of a successful scalp. If it takes place in a TR it needs to be a TR range as least as broad as 5x the size of a min scalp (1 point). I will short 1 tick below the low of this bull bar and try to capture at least 1 point maybe 2. Below are two charts depicting trading a reversal of a reversal. That is, a reversal of the PB in a bear trend with the PB being the reversal and the signal bar reversing the PB for a scalp. I took these trades this morning and hastily made some annotations. If you think through what I have written above, and look at the charts, you will see the opportunities, some of which I am sure I missed out on. It is hard to trade and at the same time write my thoughts down, as the session progresses. It was 12 trades in total. All winners. This requires quick decision making and it is tiring for someone my age so I am good for about an hour or two trading like this on a two minute chart. After that I need a break. A younger person, full of boundless energy, might could trade this technique the entire session and send the girlfriend to SAKS Fifth Avenue in lieu of Wallmarts! ROFL. The technique is good for any time frame so it can be traded on 5m or 15m charts etc. I have included a 5 min chart so one can see the trades within that context but understand the 5m chart isn't necessarily showing the technique. It is just posted only as an additional perspective of how the trades went down. The TF one trades on is the TF one looks for the technique. Enjoy or deny the technique I don't care. Means nothing to me. I am just posting showing how a trader with a small SIM account can trade 1 contract and make 100 bucks in an hour or so. Pretty sure that SIM money won't go over good at WALLMARTS LOL. Want more money and have a large account? Trade bigger size, maybe bigger TF or go to ES. It is all the same. Gross was +$148.75 Net after commissions on 12 winning trades +$132.50
Equivalent to about 2 warehouse Walmart assistants, the difference being, Walmart employess are guaranteed a stable income and are not expected to think much. Sorry Volpri, couldn't help myself, I saw the cheese and ran with it in my maw, hehehe
Volpri - i am pleased as punch to see you posting again. I always enjoy your post and learn a lot from you. I bet theMickey likes it too. He's just feeling his oats and couldn't help himself. All good