Truth101 Honestly now, after reading 10 posts to what you desire, are you ahead now? do you know now, what are some essentials needed to be mastered in order to become marginally successful and profitable in trading? Like to hear from your perspectives, if you have the time, K? Thx
Could be anything, but assuming an open, a close and each bar being of either three: wide, narrow or nil (compared to a mean volatility or desired threshold), you've got 10 permutations of meaningful variations. Statistically profitable bars would be 2 wide body bars in opposite direction. Areas of consolidation in this frame of sampling (4 values per sample, OHLC) would be where open and close are near eachother (consolidation). Am I close?
You've taken the biggest and hardest step, well done. Thinking through the concepts assist in building LTM. First we start with an image to get the basic definitions. Then, let's add some geometry. Copy this diagram until you can see redraw it without having to look at it. Most bar to bar migration of price opens and closes within the "body" of the previous bar . Starting at the leftmost two bar combo, we have a Symmetrical pennant. From there price can do two things, either becomes a FBP or a FTP. Once it commits to one, the other cannot be. Following price through the matrix, there is a flow, a sequence. This sequence repeats itself. A PV chart just shows the artifact of the market's system of operation. This is a building block. Out of the ten cases, which ones make money? Set aside the idea of a bar being short or long. We are just looking at the form atm.
@Sprout More power to you, trying to help out new traders. Perhaps, you could start out stating the objective first, like the objective is to.... that will help readers focus on what you have to said.... chow
The two directional extremes makes money to a significant degree (what we're after), ie. beyond short-term volatility. So is this a kind of simplified model of both price volatility and movement? Two bars enough for assuming a channel/trend. Breakout is from previous bar extremes, except for FBP, but maybe the lack of symmetry with FTP is an error? This could provide ideas on how to scale in / out, set partial stop-losses, trade management of "trend breaks", etc., depending on what system one wants to make (assuming this is for system-builders and not copycats). Ie., when at one extreme, combined with a very long body (double extreme combo), better be on lookout for some pullback / short-term reversal. Entries would be natural to look for within the horizontal center, except maybe for OB which could be too late or too indecisive for an entry. OR: FTP and FBP look like the best setups here, leading to the extremes (HH+HL or LL+LH). Although these are just patterns and not necessarily signals by themselves. Not sure what LTM stands for, though seems to stand for some kind of "light bulb moment". Flow is always from left to right during build-up of bar ("escape-path" of price).
Thank you for the request for clarity. In any group there are 5 roles. The ones with the forward intention. The ones who supports the forward intention. The ones who challenges the forward intention. The ones who non-confronts the forward intention. The ones who are a control problem. My personal objective is to fulfill a promise of paying it forward. If it were not for the generous giving of lifetimes of experience found in this forum, I would never have had the opportunity to build my mind and create a spectrum of differentiation that allows a clarity of viewing market operation that has transformed my trading and supports me in every aspect of my life. Reading will not change one's perception of the market; engaging in civil discourse, performing MADA, doing drills, annotating, logging, debriefing and thinking will. As a seasoned trader, I'm sure you would agree, the Market is always right and always has the final say. Why not learn to SEE the market in a way that the majority do not? In other words, the objective is to support open-minded traders in the pursuit of excellence.