Although the more steep DL here is broken, this type of behavior makes me almost favor a breakthrough. Hmmm... mind you, I remember months ago Db saying that on this one day, traders tried overnight for over 18 hours to break through a level and couldn't so they went in the opposite direction. But at any rate, this break through 96.50 or bounce off and then going lower should provide a good opportunity.
It looks so simple now, but unfortunately, I wasn't decisive at the open. I did say that I favored going up, and then I actually favored going down and was unfortunately hunting for the short. This is what prevented me from going long, always coming up with excuses. When it was going up, I spent too much time being worried about missing out, and then not knowing how to get in, but at the same time, thinking that its going to turn around real soon because of so much resistance up here, and hence that I should have already been long from earlier if I was going to go long, so any place to get into the long was now too late. My brain is usually stuck in a loop, a badly written program that needs a rewrite! O - I mark the opening here. A - So we start going up, but I just didn't see a clear RET. I consider my first DL that broke and led to a tight trading range before the open to put us into a neutral state. So then any move would require a clear RET (although I know I cheat by looking for it on the 15 sec chart). This move up was fairly quick though, so I kept looking for something clear and just didn't see it down here around 96/97. On the one hand, I am waiting for the opening range to present itself, call it the first 5 minutes perhaps, and today, after the first 5 minutes, price was already on the move up and I thought the best opportunity was already gone. B - Here is the first SLA long I see, but the excuse for not taking it is the level at 3807. Thinking about it now, this wasn't a strong level of resistance, it was just one instance of where price turned around, the high of yesterday, which was even achieved overnight, and I should know better by now than to worry about what might happen in a few minutes, I just need to focus on what is happening right now. Also note the slightly fanned DL I have here. C - Here is a second official SLA long. This one doesn't go anywhere, and then the DL is broken. D - Above here I see a possible short in the 15 sec that I want to track. E - Here is the official SLA short after a clear RET. It would be filled 2 bars later, and unfortunately this would have to be a scratch. Also note that I eventually draw in the thick pink and blue lines here, more so to outline the range we are now in. After the two shorts don't go anywhere, we should really wait for price to go either above 3809 or below 3804. F - So we break above, no clear RET, and then enter another range, outlined by the heavy lines again. Drawing in a DL is tough, and if we fan the one from the open, price is too far away from it. I will say this though, the initial first DL or SL is usually quite predictive. Its tough to trade from it, but an hour later, price often catches up with it and it is the deciding factor if the trend continues or reverses, so keeping track of the first DL or SL that is drawn in is important, I just can't use it to place trades. And lets face it, I am tuned out by now. I have missed the already 20 point move, and given that all I have are excuses, with things even less clear now, there is no point in hunting for a trade. CONCLUSION So restating the obvious, being stuck in a bias is, lets just be politically correct here, unprofitable. (What I really wanted to say though is that its messed up!) The first trading range between 3804 and 3809 might have caused me to exit the long anyway, protecting whatever profits I had, and a short may have even caused me to scratch for a few points loss. I will note that it is 5 points wide, and I have already mentioned the filter I am developing that says a 5 point range in the middle of a trend is acceptable and more than likely just a regular RET. Any more than 5 points of price moving against the trend I have seen to end up being a change of trend. We see it here, and we see it at the next range slightly higher. Now here is the thing, there was no way to know how far it was going to go today. We are now at 3826, almost a 30 point move you can say. Many DLs are broken, except for the initial fanned one, but because this isn't all that steep, we can probably go for another hour before price touches it if price just keeps going sideways, so this DL makes it somewhat difficult to base decisions on. Based on the data feed that I have, the first long that appears doesn't go far, the second is a scratch, and of the two shorts I see, only the second being the official SLA short, also go nowhere. Now I'm not saying all of this to make myself feel good (ok, maybe just a little), just saying it to show how in the moment, it wasn't as clear as it is now. Going up perhaps was more obvious than how far we would go, so I still should have been in a long as early as possible. The only regret that I think I have is not getting in right away. I would be happy if I exited for a 10 point gain but missed the next 20 because it wasn't as clear after. But when I look at this opening, I was already favoring going up based on what I saw, but my bias had me favoring going down (what I saw differed with what I thought... and mind you, what I saw was also just a thought that price usually penetrates a level that it keeps bumping up against). Right at the open, we go down for barely a point before we turn back up again, and the next bar barely retraces back down 2 ticks. What I mean is that going down was rejected at the open, and I am trying to develop a means to get into a trade fairly close to the open so that I can avoid any problems by having gotten in at a better price. I know that I have a problem with reconciling looking for SLA trades and yet also looking for trades based on rejections, and trying to put this all together, so hard work is definitely what is needed. On top of thins, hinges and trading ranges come up so often, and I think that I should just test the idea of buying or selling once price penetrates by 1 point, just taking the trade in the direction of the break and not waiting for a RET. Today, breaking the tight range at the open puts me in a long, and each of the two ranges up above would also put me in a long, so testing out this strategy is homework I have put off far too long. (I find it hard to do back-testing because I just don't know all the context that I might have used at the time, not in the same way that I have context in my head before each day since the previous day is very fresh in my mind and the overnight context I would have just looked up) Anyway, so it appears as if I missed out on a fairly great long opportunity, but hopefully I have at least gained some wisdom that I can use next time.
Man oh man, what a day we had yesterday. I wasn't around to see the drop after, but my gosh, so much opportunity. I spent the whole day wondering why it was that I completely missed out. I feel pretty bad about it, but at the same time, other than seeing that it was going up, I didn't exactly see where I would get in. I must have done a good job of practicing discipline of not just getting in with a market order. This rule can I'm sure be broken when you know what you're doing, but I'm obviously not there. This, combined with the short bias, left me being the deer in the headlights so to speak. PREP FOR JUNE 25 After a climb to 3828, we ended up right back in the same range by the end of the day from which we left. Overnight last night, we hit a high of 3795, and then as a result of some news release, we had a quick drop down to 3783. Other than outlining this, there really is no point in more analysis. I either get into a trade that is going up or going down, or I don't. I can talk till the cows come home about waiting for it to clear this range or blah blah blah, but it all pretty pointless when I don't do anything about anything I see or plan. Anyway, I've had a couple of stressful weeks with so much stuff going on but that should end by this week so hopefully this weekend I can really hammer out something solid. So back to price, the news release that caused our quick little drop has now retraced up a bit and we are in this range where price has been stuck for weeks. I had a mean line of the overnight highs marked in at 3789 from yesterday, and it looks like I can pretty much keep that same line here today as this is roughly the mean of our overnight action today as well. Lets see what happens!
No trades today. The opening was rather quick. I did have a short bias, and the opposite happened, and when it came back down again, it once again turned to go up, so I just wasn't prepared for the moves. Showing a compressed chart because I want to include some of the overnight action. I had a SL drawn in and we were below the midpoint of the overnight action, all favoring a short for me. O - At the open we shoot straight up 5 points, breaking the SL. (the double bottom just before the open was missed. Sure I had the blue line drawn in as the overnight low, but since I had a short bias, I didn't think we could go much higher) A - Although we retrace back down, we ultimately go even higher to hit A here. B - As we are coming down to B, my short bias seems to be confirmed. We have exhausted all over the buyers to get us to 3789 at A, and now we can start making our way lower. Something curious happens though. Our low is still above the opening. The next bar can't break the highs of A, but the low isn't as low. C - Above this bar, I place a thought to go long. I don't put it on because I am somewhat in a short bias, quite worried that we will form a double top with A, and we are still below the midpoint of the overnight action. Who the heck wants to be buying into a double top I think? Contrary to this, we have a series of bars now with higher lows (the wedge I outline many time), and this type of behavior always has me favoring a breakthrough. Perhaps if I had a bit more time to think about it I would have placed the long, but before I could make a decision, price shot up. D - Drawing the DL for the up move, we break it a few minutes later, and now I can start to think about a SL which I draw in. E - Because of the DL break, and a new SL, I think about placing a short, but it never gets triggered. F - Here would be another good area for a long, very similar to what happened earlier at C. We have a series of higher lows on the bars, and the fact that the short never triggered should say something. Its also interesting to point out that this SL I had, and then this new DL as well together form almost a hinge, and getting in at F could be considered a breakout from this hinge. G - So having missed that, the next place to go long is here at G, which isn't triggered. I did actually have this trade placed but price came down instead. H - We do eventually make it above G, but that trade was clearly already cancelled. Here at H we have a series of higher lows on the bars so I draw in a SL, but I don't think my DL is broken yet as I could have fanned it down a bit once price went higher than the highs at G. I - Here we have a ledge, which breaks out the bottom, and this would also be where the DL from before would break if it had been fanned down to include the little break below. J - Just for the heck of it, this looks like a good place to go short. DL isn't broken yet, but this sure looks like it could be a double top (forgot to draw it in with a think pink line across the tops). The trade works pretty well. SUMMARY So the opening surprised me quite a bit. The move up was quick. The move right back down was quick. Getting into the first long I mark wasn't taken because I feared a double top since I was trying to confirm my short bias, although price is showing that it doesn't want to go lower. Because of this, I just wasn't in the frame of mind to be taking trades. I kept of course wishing I had gotten in sooner, and the couple of trades I did place just weren't triggered. So although it looks fairly easy now given the double bottom at the open, the fact that I didn't do what I should have done when I first saw it, and then what I intended to do didn't trigger, makes for a day where no trades were taken but this isn't all that bad of a result. We have a pretty nice range now of 3789 to 3801, but I'm clearly not going to do anything about it. To be honest, I'm at the point where I am starting to think if deep down I am sabotaging myself. I quite want the stress free life of not having to depend on anyone for income. When you figure this out, it really is such a life changing development. Its even better than winning the lottery because you are in control, you made it happen, and unlike lottery winnings that you can lose, if you learn to trade and have a clear edge, the potential really is unlimited. Deep down inside, I might be causing myself more pain than necessary. (i'm not really in that much pain yet, just regret) I hope the inaction is simply a lack of testing, a lack of knowing what I'm looking for, a lack of knowing what to do when I'm presented with it. Essentially, a lack of a solid trading plan. SLA is a trading plan, but I clearly pass up on trades. Some I'm happy to pass on, others work well. So this random distribution of outcomes is I think what I am very well aware of and hence doesn't give me too much confidence in placing that trade. I find by combining SLA with looking at behavior, I am introducing too many factors, ones that I haven't tested. I think I'm smart enough to know that if something works 80% of the time, I will put the trade on. But in my head, I have probably a 50% hit rate with SLA (given the lack of good trending days these past few weeks or past couple of months along with trading ranges that lead to lots of scratches which should make you stop trading SLA), and although a scratch of 2 points isn't too bad, I know that I give up far too soon and hence don't let that 80% stat do its thing. Even if 50% of SLA trades work, they often do for way more than 2 points, so even a 50% hit rate on a move where the profit is much greater than a loss of 2 points is still very much a profitable strategy. See, I know all this, and yet I'm seeing that I am not doing much about it. Good news is that I'm determined and the stress of the past 2-3 weeks is almost past me and this weekend I can really devote to lots of study. Looks like we broke above 3801, so this range is no good anymore, but hey 10 points up and 10 point down, with only a 2 point loss to find the range is over isn't so bad from an accounting point of view! Ok.. enough babbling. You know how in life sometimes you just circle around what it is you really want? Going after exactly what you want it rough because if it doesn't work out, you have nowhere to go. But if you don't really go after that one thing, if you just circle around it and still fail, you can take comfort in knowing that its ok because you didn't really go after what you wanted anyway. But when you put it all on the line, if you fail, well, that's a pretty scary thing. I think I'm circling.
Db has been posting the charts for a few days now outlining the SLA trades, and although there are few a scratches for a loss, sticking with it looks to still be profitable. I haven't done an exact point out, and you actually have to pick where your exit would be, but the take home lesson is that using a method that has been backtested works, but only if you keep working it! I think I will try to dumb it down in my head today and just take the SLA trades without thinking too much. Perhaps I'm actually not doing all that bad, perhaps my analysis is quite good, and the only tweak I need is to actually put on the trades that I consider. Some don't work and then I think its good I stayed out, but this could be teaching me the wrong lesson here. I have to get comfortable with being wrong, all this difficulty I'm having could in fact be, most likely is, an ego issue where I a want to be right. Not in the sense that I want to show off to the world, the ego isn't that big, but simply to get confirmation that I know what I'm doing, thinking that if 90% of my trades work it means I'm trading properly. This is silly though, and the definition of a good trader is not that most trades work out, its the trader who has discipline, is consistent, and has a nice and steady growing equity curve. Seeing the SLA trades of the past few days go from long to short to long and short again shows that there is no room for ego. Even an obvious up trend isn't clear, but as long as you keep working it, the profit is the only thing that matters, not how often you are right or wrong. PREP FOR JUNE 25 Not much to say... in a fairly tight range of 3812-3819 overnight. We have an ultimate high of 3828 two days ago, and 3823 yesterday, so we are fairly close to the top, well above that range below 3800 we spent so much time in, but since I have to be following price, this observation will have to take a bit of a backseat to just following if price is going up or down.
http://www.traderslaboratory.com/forums/wyckoff-forum/ He didn't say much these past few weeks.. can't blame him as its the same thing over and over again. But what he is doing is posting charts... and for the guys like me who are struggling with simple rules, he is showing where the entries would be if you just follow the damn rules! He also posts charts of the macro view, since once you get past knowing where and how to enter, AMT is what guides you in the macro sense. Plus this trading business is mostly about having to find your own way, so in essence, the less said, the more a person will actually learn themselves.
Not the worst day, but stupidity did keep me from making a huge profit, but at least I got something out of today! A - 2 minutes before the open, we have a DL break, a RET, and a place to go short, so I'm drawing in my SL. I'm not trading before the open yet, but often I see that you're placed into a trade clear of the jitters of the opening range which then give you either more space to exit, or gives you more points profit, so its not a bad strategy. O - Red "O" denotes the opening. Notice how we only go a couple of ticks above. B - Here would be the first SLA short. Its a bit tricky because the SL, a new steeper one, gets broken a tad by the next bar, but since price came back down, I felt it proper to leave the sell stop in place. C - I get filled above this bar, and although price does go against me after 10 or 15 seconds, the SL that I have drawn in with the little spike up gives price room now since it makes the SL be higher. The next bar also offers an SLA short as marked in. D - Sadly, I'm out here at D, which is horrible when you consider there was no real hesitation, no threat, and price instantly dropped further. The reason I think was just fear. We have nicely broken the overnight low, we are far away from the opening high, and hence my exit was purely to keep 2 points profits. Once again, protecting myself from loss is no way to make money at this. If anything, it cost me at least 15 points more profit. E - Above here is another SLA short, but I hate getting in on RETs further down. This move down was clearly strong, and a good place to add to the contracts. Took a bit of time to recompose after the terrible exit, and of course the CWS. F - Another SLA short.. not taken. If I did take it, price would have moved against me 3 points, even broken the SL just a tad before I could fan it, so no idea what I would do here. G - Another SLA short... kind of taken! I have no idea why my stop to enter is so low. It should have been 97.50, but instead it was placed at 96. I think I was in the process of fanning the SL since the one I had broke just a bit and there just wasn't time to place it where I should. H - Price drops like a rock, and you know, I felt uneasy about not getting in where I should have, so once I saw a bottom hit and come back up, I just exited. Partly to protect profits, but also because my entry wasn't where it should be, so I think its good practice to be disciplined. As it turns out, I got out just less than 2 points above the ultimate low, so a good exit indeed. We can say this drop was almost parabolic as well, so it shouldn't be a surprise to reverse up. I have this blue dashed line drawn in as well. When we look back at yesterday, this level at 89 is the mean of the overnight range, so it makes sense this would provide support since price spent quite a bit of time meandering around this level. I - On our way back up, we break the SL, so draw in a DL, which breaks as well. J - Here would actually be an SLA long. We can fan the DL down a bit if price hits the entry because price would have gone higher than the previous high. The trade works for a bit, but eventually price comes back down and breaks this new DL. After this, I am no longer all that interested. I see the range developing, so time to stay out. K - I should note though where the limits of this range might be so that I can look for the exit if it comes. Here at K we have a fairly good upper limit at 99. L - And here at L, we have a lower limit at roughly 93, but the next low is even a couple of ticks higher. M - We have an exit here that goes up for a few points, but its not all that remarkable. SUMMARY Its tough to believe that its only been an hour but I think I had enough. I have a busy day today, and I want to protect my profits of course. Following rules today would have resulted in about 18 points, so $360 if I held the first short until the SL broke at roughly 94. This also matches my rule quite nicely of letting price come up 5 points away from an ultimate low if my trade is already well in the money. This comes from seeing areas of congestion/ledges on the way up or down be frequently 5 points or less before the move continues. If its more than this amount, I have seen that the move is usually over. Today, the low of 89 means an exit at 94, where the SL broke, and it sure looks like it was the low of the day for now... so the rule works! Anyway, I'm up $137, only 7 points, far short of the at least 18. Furthermore, being such a good down move, adding to contracts on the way down would have been smart today. But hey, two trades today, both profitable, I'll take it! Its a win on many fronts. The trick is to just keep doing the same thing, the right thing, following the rules, the next day, and the day after that, and etc...
Kp, Sounds like you are closing the gap to being succesfull. I am oposite you. Totaly suicidal trading, forgetting all about SLA and loosing 530 usd in twenty minute, off course no stop to prevent The Big loss. I was parralised like a rabbit i a cars light....
It's "The Zone" you're reaching for, where you know the rules, see the setup, calculate the R:R, then simply act instead of thinking. There's a saying "If it walks like a duck, quacks like a duck, looks like a duck, it must be a duck." As applied to trading, I modify the ending a bit: "If it walks like a duck, quacks like a duck, looks like a duck, the algos are most likely going to respond to it as if it were a duck." A little something from my friend Cornix: "With regard to the psychological training of professional athletes, particularly professional shooters: [...]they set their goal to make a correct shot technically, not to hit the target. They even inspire themselves that outcome is not that important at all, but correct technique is what only matters. And that little trick leads to great results. The shooter stands, focuses on the pleasure of the technically perfect shot and does it literally without stress, being focused on the process, not the outcome. Ironically, the chance of target being perfectly hit increases dramatically in such a case. If the pro shooter's mental focus was to hit the target, he would get overstressed and likely have the opposite result vs. desired."