Haven't done one of these in the long time so why the hell not. Sorry the chart is so wide, you might have to open it in a new window for the resolution to be nice and crisp. Will try to keep it brief and just expand a little bit on the notes that are on the chart. Keep in mind that although this is a 5 sec chart, I'm always glancing at the 1 minute (and 5 min). This 5 sec chart just helps the moves be more apparent. The levels I'm obviously not taking from this chart, but if on the 5 sec you have a triple top as an example, which would only show as one rejection on the 1 minute chart, the fact that price was turned away 3 times at exactly the same level is I think good info to have. A - Came very close to overnight high but no real sign of weakness yet. This is where I still struggle. Do I want to wait for confirmation and actually see demand dry up or do I just want to play the stats of possible bounces from important levels??? B - Weakness apparent now, but too risky to sell here. C - Best places to short are at the top of a buying wave in a down move (ie. once its trending). You have no idea that it will work (I guess you never do of course), but can keep really tight stops. Almost shorted the second buying wave I point out.... sigh. D - Came very close to overnight low and there was very strong buying outlined via the arrows. Even the 5 sec chart looses this behavior a bit but it was obvious watching the right tick. Great place to go long. Given that its at a prominent level, its a good place to take the trade early and keep a tight stop.... which of course I didn't pull the trigger on again. These moments of strong buying or selling do happen all the time, but if its in the middle of the day and not close to a level, I think its just those damn algos putting offers to force some stops being run and scoop up some contracts on the cheap. So its really important to put this into context. E - Price goes only a few ticks above the 50% level of this down move... lets track this level going forward if price should happen to come up again. F - Initial bounce 1 tick above OL. Good enough to try for REV trade with tight stop me thinks! G - Finally shorted, although not the best place given that things looked clearer to me earlier. Saw retest of the OL from below, but of course I'm shorting as price has dropped a bit further. Sucks when your trade goes against you right away and hence the quick exit for a tiny profit. H - Given that price has re-penetrated the OL and gone back into the overnight range, I am looking for longs, but no good place and price does try down again first. (its obvious later that yes, price went above the OL and hence re-penetrated, and never once dropped below again, so when price re-enters a range, this is a good sign usually) J - This may be minor, but on a 1 min chart, the swing low is there, and this little penetration here might just be stops getting run. So to me, this is a good place to go long! I'm always trying to think the opposite of what I used to think before. K - So price comes back to where we turned before. It is a swing point that we can see on a 5 min chart, but this is stretching it. It certainly does provide a bit of resistance, and price only goes higher by 4 ticks so a REV trade could work, but ultimately there is too much buying a few minutes later. 2nd chart So as I'm about to post, I see this juicy opportunity for longs. Why I don't pull the trigger I don't know. The risk can be very small, which I like. I think the reason is that I'm scared that if it doesn't work the first time, I won't be wanting to try again, so its like I have to make sure it works the first time, but of course I need a series of trades. This clearly is not conducive to having a proper trader's mindset. I could literally take 5 instances of these trades (REVs off important levels), each with a 2 point stop, hence risk 10 points in total, only $200, and I know that after 5 trades I will be ahead, but alas, I still struggle. Usually I skip the first few, that worked, then I take one, that doesn't work (because of course you don't know how these come up in the series), and then I just shut down for the day. The idea isn't to scalp (although I am obviously starting like this), its to get into a good move, but a good move starts with a good entry, and a good entry starts with the idea of where you need to enter and where you will get out in case the trade isn't working. So everything I do now is just focusing on entries, knowing when to get out, and of course being able to move on to the next trade regardless of what happens.
I will assume you haven't tested any further than where you were a couple months ago. That said, why not try out your "fade the extremes" entries on sim? Doing it on a go-forward basis ensures you cannot impart any hindsight bias. Make yourself trade every occurrence, use an initial stop loss and even a profit target. Prove to yourself you can follow some simple rules consistently and who knows - you might learn something along the way and bolster your confidence without doing further psychological and financial damage.
In some ways, many ways, you're right. I could test the overnight level and previous day levels as those are objectively on the chart before the clock hits 0930. But as the day progresses, that day creates its own levels and if I'm to test on a chart, I would see how the day works out before seeing if the level is significant so a bit of hindsight would creep in. Hmmm... although this I guess is just an excuse in some ways since I could just pick this same contract from last year and start in December and I doubt I'd remember, I just would have to make sure that after the entire contract loads, to scroll very quickly to the beginning. The other issue is that I am still stuck between watching behavior and looking at this from a purely statistical point of view, and replay just doesn't capture the behavior all that well... price doesn't move the same. I'm not exactly entering at prescribed places (ie. 2 ticks before a level), as price sometimes doesn't reach the level, so then I feel like I'd chase, and so I've been waiting exactly to enter at market at that moment of hesitation, right where I think price has retraced enough and should now continue the drop. (I realize the "I think" part is a huge problem, but this is why I mention shorting at the top of a buying wave as an example and I can so easily picture this moment of hesitation where there is just enough time to get your orde in before it either shoots up or down) As for why I don't just do a week in SIM... I have no reason... no excuse. I want the money if I do well, and if I don't do well, well, naturally this will have me go back to the drawing board (and more psychological and financial damage as you points out). Aye... you know, this whole reply is crap. I clearly need to either SIM with forward testing or prove to myself via backtesting, even if on just static charts. Jesus.... I make myself sick sometimes you know.