The Trouble With Scribbles

--06/05/15 RTH AM Position trade. Short 4475.00 basis Sep. Initial stop 4556.00
--06/08/15 RTH PM Price is 4433.50. Staying short with same stop.

 

If short on the 1 min all day, here is a place to take profit. 4431

 

IF short on the 5 min all day here is a place to take profit 4431

 

IF short on the 15 all day, I see holding short and lowering stop out to 4453

 

Stop out on the 60 min chart is 4487. Price is well outside the BB on the 60 so extreme caution would be used and a bounce would expected although not necessary.

 

The demonstration of how easy it is to post trades and be transparent has now completed. Now, we'll turn our attention back to the discussion of how the scribble method is unremarkable at best and does not incorporate prudent risk management.

 

Here we have a chart posting from one of the scribble students in hindsight. The SLA focuses heavily on Higher low as being a buy signal and as can be seen here the buy at 4452.75 is not a buy at all and the student would be forced to sell again at a lower price. The trend was clearly down here and it would have been best to just let the trade run. That is effect is prudent money management technique. Note that student places no stops until the bottom of the data where a long is proposed. Had stops been placed outside the noise from the first sell, he could have held this all the way down. As an aside, I posted the analysis of the turn here at ET indicating that several charts together agreed at this up turn. The SLA is not remarkable at all. Anyone can pick direction. The educators place no emphasis what so hoosegow on money/trade management. Students need to understand that they are not being given the correct information from their mentors.

 

This, in fact is one of the major flaws in the SLA Scribble Method. I am glad to see someone bring it up. The "waiting" until price gets there means that all other trading possibilities until price arrives are dismissed and missed. Therefore, potential profits are lost. Certainly potential losses are avoided as well, but if using prudent risk management, which SLA educators do not advocate, these other price movements could be exploited.

 

i presume you have to wait till price arrives at a certain point or area in order to confirm a hypothesis or at least improve the odds of one.

 

--And this is a major area of stagnant behavior in the scribble method. Waiting for price to arrive at an area means that you will not let it arrive at a newly defined area discoverable by the tools of oscillation, trend following etc. MAJOR ISSUE with scribbles.