To be sure it can be in the eye of the beholder. Right where i started the gray range box is right where believed the channel was starting to morph into a range. So 20 or so bars later we are at the point where I would identify and call it a range and use range tactics. I see the channel getting flatter prior to my entry bar. To me that is the transition from channel to range. And that observation was confirmed many bars later after my entry and the session dragged on. Yes it could be drawn higher up. But it would be the most logical thing to do? Nevertheless, you can have ranges within ranges. I see them quite often. And based upon the bars my premise was I would see a push at least as high as the top of the range box. Yes, it was an extrapolated range box extended out. Another side to this or shall I say another way to look at it is bear channels are bull flags (on a higher TF and the likely resolution is a BO north of the channel that will become a successful BO.) The channel has been going on for quite some time. Every BO attempt top or bottom has failed. The bull bar before my entry bar was the biggest bull bar in over 45 bars. At some point a BO of a channel will succeed. Of all the previous attempts this one was the most likely to succeed. We got that larger bull bar closing right at the top of the channel and closing on it’s high. I could delete my gray range and trade it as a successful BO of a bear channel. It doesn’t matter which way I trade it. I drew the box in to help me see if there was a transition into a range. My eyes...brain...perceived there was (which was proven out afterwards) and so I traded it like a range trade from the middle. However, I could have traded it as a successful BO of a bear channel and done the same trade. Trading discretionary is subjective. Your last two low points on your lines and the sideways action right after those points is where my eyes can detect a flattening of the channel hence a good time to draw a range. The top and the bottom of the range should the logical width of say DT’s and DB’s. Where I drew the top and the bottom of the range made the most logical sense to me. It is important to identify when I think a possible range is beginning because I need 15 to 20 bars after that to then call it a range and use range tactics. Since I traded it as a range I needed to use range techniques for my entries and exits. If I would have traded it as a channel I would use channel BO techniques. But I didn’t trade it as a channel. In this case it was probably coincidence that both were right there together and either could have been used. Remember, I go by larger context...market phase...individual bars...MA’s related to price...relationship of bars to other bars to determine buying selling pressures.....gaps..time gone by....size of bars...sequence of bars....open and closes of bars...and sometimes different TF’s. Finally, I look at all this in the immediate patterns that are forming or that have formed. Then I look for specific setups based on all of the above.
Its a good explanation, but I just don't see it. Even the way you draw the top of the range that you state, meaning the top of the gray rectangle. I mean that top attached to nothing significant. I like the top of a range to be a bar that sticks out, and then a test of this which shows that its a range because price hasn't been able to get past that level twice. But your top is a small insignificant high in my opinion. When you change where the top of the range now its, its hard to say if you are buying in the middle of the range or not. To me personally, even if we are in a range, buying in the middle of a range is deadly because it can either move up, or down, but if it tests the low again, the risk it too great. But like I say, all of this is just my opinion with what I see with my eyes. The trade worked great for you and you make 1k today which is fabulous!
and you gained all that experience without blowing an account. You've got foresight like no other person on this planet.
Remember, I didn’t actually draw that range until just before my trade. I slept late. I didn’t draw it off that one bar and extrapolate it out before the fact. It was after the fact. Just seemed about right to me for sideways action and placed me buying near the middle. I figure price would reach the high of the range. Buying or selling in the middle is usually not done but can be if I got a big bar. Like the one before my entry. That, I tend to see, would indicate price might be carried to the top or near the top of the range, most likely.
Nice illustration of your averaging down technique - keep the examples flowing. An observation: a proponent of All In (AI) as opposed to Averaging Down (AD) may point out that all of your trades 'won' with reference to you initial entry point for each of the 7 trade groups - so would argue AI would have given a better net result if the AI trades had been entered with the same average number of contracts you used for AD. Two questions: 1/ if any of the 7 trade groups had kept going against you, how many more times would you have averaged down? I think the maximum from your set of 7 trades was twice plus the initial entry. 2/ If any of the 7 trade groups had kept going against you, at what point would you have pulled the pin and taken an actual loss rather than continuing to AD?
Here are a few trades in MES I took this morning. The first two trades were 2 contracts each with no averaging down. The last trade was averaged down each entry 2 contracts at a time. Total in this last trade was 6 contracts. These trades taken mostly in the middle of the range using other techniques. Maybe I will have time to explain it later. Not sure if I will take any more trades today. I have something else I need to work on. But even a small account can make some jack if the trader can read price action well, design techniques to exploit that PA by scalping the PA. So you don't have to have a 50,000.00 account to make a couple hundred bucks a day. Well, if you know what you are doing I might add! You see I have to have tactics that are generally static to give me structure but in the end I am watching the "dynamic" price action on each bar as my structured trade plays out and I will often, and do often adjust, the structure live as I "see" how the trade is playing out. For instance, I was trying to see if I could get a little more 100.00 out of that last averaged down 6 contract trade. PA went down there multiple times but I didn't exit. There was buying and selling with some force on each move down and up. Both sides were pushing trying to get a BO. Bears would win then bulls on each bar. Finally I decided to best just exit on the next push on any bar by the bears. So, I did. PA went on down a little more after I exited so I could have made some more but that is the market. At least I locked in a profit. Can't cry about what could have been.
Whoa..you done went and opened a can of worms that at the moment I don’t have the time to explain in any kind of detail to give it justice. But....that said..here is a general answer..for one tactic.. 1) how many more times would I have averaged down? There is no set number. That depends more on the technique that I am using and the larger AND immediate context. And it depends on where my first entry took place. For instance, if I am trading in a range and say making my short entries in the upper third of the range and see no reason to suspect bulls are winning or about to win (by looking as pressures in bars) then I will keep adding to AND even through the top of the range but generally no more than another third of the range above the top. Also if I get a BO through the top of the range that has one or more follow-thru bars I am stopping averaging down, watching price very closely and getting ready to exit, if need be BE or with a loss. 2) At what point am I pulling the pin? Lets again look at the same tactic ...selling..shorting near the top of a range. I structure a trade with a logical PA stop (not monetary stop). So my initial entry has that stop in place. It is an actual stop, not a mental one. As I add by averaging down I will move that stop up based on the new averaged in position. Generally (in the ES I will add my second position when price moves 1 point against me) that bumps up the averaged price and BE 1/2 point. So, I move my stop up 1/2 point, or more if feeling really nifty for the day. The second averaged entry I like to be 8 to 12 ticks away from my first entry. That will move the averaged price up another 2 ticks or 1/2 point or so. The next average in entry I will look at making when price is 16 ticks or more against my initial entry. Bottom line I want my averaged in entries to move BE point each time by at least 2 ticks or 1/2 point. And I move my SL as I average in. In other words, I prefer my BE moving up in at least 1/2 point increments when I make each averaged in position. Sometimes I wiggle around this and add before those adverse movements are complete but to do so depends on the dynamic PA of the bar as it is forming. If the adverse movement slow and begrudgingly or a swoosh. Now to answer your question. I am killing the trade when my dynamic (not initial) SL is hit when I am done averaging in OR when it goes more than 1/3 width of the range above the top of the range OR when any BO of the range has FT bars OR a combination of either of the above. This said these are general rules I like to follow. I may be preoccupied with something and miss taking my loss on 1/3 width of the range or on FT bars. And for the same reason I miss taking profits. And sometimes I just can’t think straight as I am a diabetic and if my sugar gets out of wack I can get confused. But I do try to follow the above rules. Nevertheless, any rule I have for myself can be broken. And at some point in time WILL be broken by myself. Why? 1) Well the market knows nothing of my rules. It does whatever it is gonna do irrespective of any carefully crafted rules I make for myself. 2) the market by nature is uncertain. So, my rules have to be, by nature, uncertain. (I know that just irritates anyone that feels the need to have certainty. For such a person <<which may be most traders>> I can only say or suggest perhaps they should look into some other business.) The main rule I have and like to never be broken is: THE MARKET RULES AND OVERULES ANY AND EVERY ONE OF MY RULES, STRATEGIES, AND TACTICS. THE MARKET IS KING. I AM IT’S slave to follow wherever I can see or discern it is going. “Damn the torpedos full speed ahead!” Damn my tactics..my rules..my strategies...full speed ahead. If I get stopped out with an averaged in position then so be it. The market Rules. ALWAYS. I will look to double up or triple and and go in the new direction faster than a lizard’s tongue can snare a fly and I will get my loss back quicker than a frog can croak and soon be back in profit singing like a jaybird.
Two general rules for scalpers: Jack be nimble, Jack be quick, Jack jump over the candlestick. Hickory, dickory, dock. The mouse ran up the clock. The clock struck one, The mouse ran down, Hickory, dickory, dock I gotta go. No more posting for several hours. Have something else to do. PS alot can be learned about life (and trading) from nursery rhymes
Went for walk. Looked at markets upon arrival back. Piles of money could have been made in the chop all morning long. I love chop. Quick entries and exits. Pulling in the cash. Jingle jingle goes the cash register at the Mom and Pop trading academy...LOL. I GOTTA GO. Something else to work on. I just really like trading and like talking about it and spilling the beans (as I have nothing to hide..no secrets) but at some point I have to stop. I have other important things to do. PS I have taken no more trades today than those shown above so Overnight you can relax. I am not being selective today! ROFLMAO
why dont u trade instead of calling shots. lots of shot callers very few are ballers. you average down in a micro..4 lots a half position of 1 mini and you act like the holy grail cuz you get a fill on the tail and nursery rhymes are for children like the micro contract in gold bullion..but make it a billion