Hey stranger... thanks for stopping by! I do find it incredible that given how long its been since we last talked that I am not much further along. I guess I just thought that I always had something close, but when it came to trading live, not only was I not doing it, but I also was trying to do other things based on what was happening (fear of missing out). You really do hit the nail on the head with regards to the seductive nature of random trading and boosting the ego. There are conflicting things I have in my head from what a few other the expect members on here say. Its not so much that somebody is wrong, but I am taking bits and pieces of each perhaps, or not even understanding the message well enough and trying to apply it. For example, like when we talked, it has to do with how Db teaches trying to figure out what traders want, but at the same time, not "thinking" too much in the live environment. This seemed to be at odd, but of course I now understand that the thinking part has already been done way in advance. When live, all you have time to do is act. The second thing is in regards to not trading bars as Db would say (I do understand the continuous nature of price), but then all examples, like ND's, in relation to price action essentially is based on the bars and trendlines and breaks and tests, and of course then placing an entry above or below a BAR. So I've spent quite a bit of time trying to put all this together because I know that neither person is wrong, and each is clearly making money, but to little old me, it meant that I was being pulled in a few different directions. Of course none of this is the cause of my money loses and my struggle. But this does illustrate so well why a trader has to decide so many things for himself. Given the statistical nature of this en-devour, its funny to think that some things that I might have done could have been right, but because it didn't work out for me at that time, I would assume I did something wrong. As you have pointed out to me though, there is no right or wrong, its just that it worked and it didn't. You know.. I'm gonna stop right here. LOL... Everything we have already discussed and it really has been just my lack of discipline that up to now hasn't made me to the one thing that is necessary. ND has been instrumental with her examples in the past few weeks to really help me understand the "bigger picture" nature of this, in that using trendlines from 5 min bars helps to see trend, and so much of the tiny one minute trends I tried to illustrate was just noise of the algos. Entries from the 1 minute charts and having the 5 minute chart guide you I think will finally be the basis or everything that I will be looking. This was part of my problem. Looking at the 5 minute charts was a bit like tunnel vision. Some off the important stuff would disappear off the left of the chart so I could no longer see it, and then it seemed like it was out of sight, out of mind. But the 5 minute chart allows for the more important stuff to be still visible. Anyway, hopefully this will be the last time that I need a push in the right direction. I think I've tried every road other than the right one! LOL (mind you, just placing a trade at the open and guessing up or down and waiting to see if a 10 point gain or a 5 point loss would be hit might have still had better results than what I have over the past few months given the consistent losses... hahahaha)
Well.. I gotta say, I'm quite surprised by this huge rally. Opening up the computer this morning, there was already a huge 50 point drop (4050-3998), so perhaps in hindsight, it had to go up a somewhat, and days with greater than 50 point moves are rare, so going down another 50 points was highly unlikely. But its still surprising for things to go up so high so fast. I will attach both a 5 minute and 1 minute chart. The 5 minute is just used to show how I got my major 5 min trendlines, and most of the work is on the 1 minute. A - This is a 5 min SL across just the overnight highs. B - This is also a 5 min SL but slightly down angled given that price dropped down so quickly that using only the first SL meant that price was so far away from it. C - There is this fairly significant drop below the open. On the one hand, I think it shows a serious downtrend, although that should be obvious by now, and on the other hand, this might be a move that needs to be retraced since we were left without doing trades at these levels. D - I hadn't intended on taking trades today, but I just figured this down move looks too good to pass up. Most of my loses are from random trades, so if I just keep to very well defined trades that I've been working on (trading in the direciton of the trend, taking the proper trade in a retracement and not just getting in cause I've seen it go so far already), then I thought this would be much safer. I'm out for a small profit very quickly because the profit target was hit. Anyway, let me use this spike down for an initial DL. E - Just before the open, we have a break of the DL and I'm itching to get into a short again. I put it below the RET after the DL break (the break and RET are together), but I'm out of this trade very quickly because I didn't want to get caught up in the frenzy of the open. I didn't actually realize we were so close to the open when I put the trade on. I'm out for a tiny profit as well so I'm at $53 or so and should be done for the day. O - At the open, we have lots of chop. I expected price to drop right away (stupid to have this expectation perhaps), and all it does is go sideways so just as many people want to buy as sell. F - This low just after the open ends up being used to draw an initial DL that I will make my 5 min one since it uses major swing points. G - I note here that price bounces off, and this level acted as resistance before the open. Its interesting, perhaps maybe good confirmation for going long, but these are just too random and in the middle of nowhere to actually provide a reason to take a trade. Maybe it helps give you confidence in a trade, but certainly shouldn't be the reason for a trade. I also use this swing point to draw a tighter DL. (But no way am I going to connect two bars beside each other as per ND!) H - So here we reach the first 5 min SL, the tighter one. We penetrate, but drop down below. Lets track if a short would be filled. Sure enough, price does drop, going right through that DL. Now I'm really hunting for a trade. I think this will be my easy trade for the day since I've worked so hard to wait for something to happen at a 5 min trend line. Price drops so quickly though that there is no good place to take a short. I - We have a bit of consolidation here, and I finally enter a short. Well, you can see how it turns out. Whats funny is that I sat through price going up and down a couple of times, and I already had my profit target set at one tick below entry just to cover commissions after the trade wasn't working right away, but it never got hit. Then I slid it up to get out BE at my exact entry, but I still couldn't get a fill. In the back of my head I wondered if I should just hit close and exit at the market because am I really going to risk price going all the way back up just to save 5 bucks?? Well, that is exactly what happened. The stop loss was hit for 4 points and I'm kinda mad that I didn't get out when I should have. Of course since price came back down to my entry I thought if I exit now I will miss the big drop down so getting out for tick profits I shouldn't do. At any rate, I'm now at -$27. Was the trade a bad trade? It really was the first entry after the big drop down based on the 5 min trendline poke, so this is good. But perhaps by this point, we have 5 minutes of congestion so I should have waited. After this was all over I went through the chart and marked areas where trades could have been taken. There is a down arrow below H, just before the drop. Given that we hit the 5 min SL, trying for a short below any of these bars is I think a more statistically probable trade than shorting below any other random bar. Will have to do testing of course. J - Here we bounce of the same SL again, and even possibly in the previous RET as well that almost touches the line. Neither of these two shorts go anywhere, but maybe exits at BE could be made. It seems like when this type of trade works, it works right away, so if price doesn't move in your favor in a 1 minute or two, take an exit for minimal loss if possible. I might miss some good moves that eventually go, but if the losses are kept really small, this might be better while I climb up the ladder slowly. K - So playing this trendline again, would going long above the trend line work? Here too we would fill, and have to perhaps sit through almost a 3 point loss before it takes off. L - So now we end up going higher and reach the original 5 min SL. There is a possible short below that might fill if entry was only a couple of ticks away from the low of the bar, but I think I would not be filled if it was a point away. The long is tricky because at no time is price really above the trend line until a few minutes later when it really takes off, so a long might never be placed to begin with, and when it takes off there is no good place to enter. By this point now, I guess I have to forget thinking about a short. All downsloping trendlines have been broken, and we are 20 points above the open now. Up to this point, I kept thinking if price goes up, it will just allow a short for a much better price higher up. I really hadn't considered the rally up too much, only up in so far as retracing that big and quick move down 30 mins prior to the open. But lets face it, this is a strong bull rally by now. M - Just for fun, I can draw this SL above here. Although we don't have a break of the DL yet (unless I drew a really tight one), we do still have a higher low, and what looks to be a break below a previous swing low, so in essence, this looks like it could be a reversal already under way. So I might be inclined to go short here at M. But this would in fact be the worst place. Price would quickly break the SL and keep going. So when there is a strong trend, only trade in the direction of the trend. What's a strong trend? No idea really, but 30 points up probably qualifies. Now at what point is a reversal safe? No idea as well, but perhaps a break of a 5 min trendline should be at least one rule. N - The break of this trendline here looks much more solid and when it breaks, it breaks quick. But once again, it goes nowhere. Any shorts would have to be scalps for ticks, and they are all losses more than likely. SUMMARY Well, I'm kind of mad to be down -$27 when I was up earlier. But you know, I was taking legitimate trades based on what will be in the trading plan. Of course I guess I should have packed away the trading idea until the trading plan is well formed, but ah, the excitement of it all, the idea that I can make a few quick points in what looks like a solid down move. I'm perhaps most mad at the fact that I didn't see this up move at all, and yet its gone up 50 points!!! Once my 5 minute supply lines started breaking that should have been a solid clue, and although it was 20 points above the open, it still means that there was 30 points left to grab. Well... good lesson today and it only cost me $27 to learn! At the same time, I should also be proud that I didn't enter a trade based purely on emotion. I'm also mad that price went up to be honest. It seems so stupid for everyone to be buying given all the problems going into this week. But trust me, I know I cannot be mad at this. Its just a bunch of traders with lots of money in their accounts working to extract all the money from mine. So I just have to work a little harder so that I can put some of their money into mine for a change!
hmm. Did you have 00/04 as an area to watch? Remember where can't traders find trades? Where might they look to find them? This is hindsight of course but just what I was looking at going into today.
The 4000 level was quite prominent but you know, I was just stuck in a short frame of mind the whole time. Given the huge drop down, my 5 minute SL was quite high up so I wanted to see if it would break or hold. Now of course since it was so high up, once price rejected going down, points could have been made on the way back up and then I could have seen what would happen here, but I was too scared to trade in the opposite direction of the trend. I am a huge fan of outlining these horizontal levels actually, but to be honest, I haven't looked at in in the past few days while I've been focusing on these 5 minute trendlines, but of course, even on the 5 minute chart is a nice bounce a retracement to go long. I honestly just didn't believe it... silly me. I do love your chart, exactly how Db started to teach us and it is very powerful. But these things seem to work better for a slightly larger time frame. For some reason, I'm just trying hard to stay in a trade for a minutes and cannot give it more time to work itself out. Also, these areas of congestion can be always drawn a few different ways, so although I visually do see them, then when I get down to how do I enter, I'm left with micro managing again and not knowing when or were, so in a sense, I will have to incorporate the type of chart you show once I'm at least getting into moves properly. Keep pointing this out to me though!
I hope that when I post I don't confuse you or deter you from your own methods. I feel like I've been where you are however I myself still am not where I can/should be by this point in time. I've been studying diligently AMT/SLA. For me it makes the most sense and realistically you have to pick some type of method, test it, and if you achieve the results you desire trust it and stick with it. Does SLA lose trades absolutely, so does any method, however I have come to realize that it is really difficult to blow up if you are trading it correctly. Being stricter with SLA has improved my read on the market tremendously and out performs any "I need to get in this move entry" or ok this price is "good enough" to exit it at even though nothing is really telling me to exit, or "i'm happy with x points." That was essentially what was happening when I really had no plan whatsoever. As far as the drawing of boxes and lines etc etc you say there is a few different ways to draw them. I don't think they need to be drawn with the utmost pin point accuracy they are just depicting supply vs demand and then areas where we consolidate or range etc. If you miss a line by a tick or two it won't matter too much it you're really focused on the movement of price. Also where I have the boxes drawn you saw price move those days in real time so those congestion areas should already be noted before the open today. DB says you must keep meticulous notes. So when I opened my charts today, glanced quickly at the one min before grabbing some coffee, seeing price at 4001 I knew we were at the low of the sideways movement from the afternoon of the 25th and the morning of the 26th. I'm not saying you didn't see this because you do have it drawn on your chart but I guess what I'm saying is the drawing of a box or a line isn't important it's where the trades are being made vs. not. Also in my head as I plan I say ok if 00 holds where are we going to go? If we explode to that next level what do I do? If we chug and struggle all the way to the next level what do I do? If we never get there and price starts overlapping back and forth what do I do? What is all of this telling me? If I anticipate x but get y I dont say ok I was wrong now what? I say ok we didn't explode thru like I anticipated instead we are still stalling what do I do? This is all part of the plan and again like DB says should be made in advance so you can essentially be on autopilot which is what I am striving for. Thru the testing I've done so far AMT/SLA makes more money than anything I have ever come up with in the past and most of the work has already been done for us, it's just a matter of creating the finer details of the plan.
So lets go over the 5 minute chart. Lines A and B are as discussed in the journal. C - The long here, even visible on the 5 minute chart was clearly the trade of the day. The REJ of 3998 is obvious, but man oh man, I couldn't loose my short bias. Right around where this entry is shown on this chart, the 1 minute chart had a breakout above the 4 or 5 chop bars. Gosh, how unfortunate to miss this. D - So we get here, the first SL, and we had a solid REJ and a trade to go short would have netted some profits as discussed earlier. It might have really been a solid 10 points. Next time we come back up, the shorts should still be taken, given that price bounces off the line and would fill below the trigger bars. If the exit is just above the trigger bar, both of these might be 4 point losses. Hopefully I wouldn't be so quick as to short again if I just took one 4 point loss. E - Coming up further to the unfanned SL might provide an entry for a short. It is there on the 1 minute, but if the entry is a point away, it would never trigger. The long entry I suppose is there, but you'd have to be quick. First you would see the short going nowhere, and before you know it, price shoots up. Anyway, movning along. Hitting a high of 48 is still below the OH of 51, so this isn't really marked in, and you know what, I didn't even mark it in today. Since we opened so low, I figured maring the overnight high would never come into play. Perhaps if I had my blue level in there at 51 things would have looked different to me. F - So given the lower high, I can now start to draw in a SL, but there really is no trade yet, and I'm not going to be shorting after such a stong move up. G - Hitting the low here is almost dead on 50% of the up move (3998 to 4048). But is there really a trade here to go long? I don't want to make my lines super tight. All I have from this I guess is the idea that a long might still be strong since we can't go below 50% of the up move. H - After the line break here and price shooting through, on the 1 minute it comes back down and I do have a solid reason to go long, but it wouldn't lead to a huge move. Still, a safe trade with some points to show for it. I - Getting to I here is a bit messy, and this SL can only really be drawn once we make the low at J, so taking a short around I to catch the move down isn't something that really setups up for me. J - This is interesting here though. My very first DL from way at the bottom, if extended up, comes to here, and price every so slightly pokes below. On the 1 minute, the rejections are very obvious. But what is more interesting, is that this is the level at which the breakout from the overnight SL happened as shown by the yellow line. ND has shown these before, and although I'm not sure yet how much faith I can put into this, there are at least several reasons to go long. There are some entries on the 1 minute chart, and on some price would move against me a bit, and, hardest for me, I would have to be patient since it takes price a little while to really take off, but it does go up to test the previous high again, so this was a good 20 points.
Flip a coin! 5 days of coin flipping and being all in long or short is bound to have more winning days that what I currently have! LOL... (my losing days are -200 and winning day are usually +30 or +40, so you can see how coin flipping and going for a 5 point gain or loss is bound to have better results!) In all seriousness, the best answer is to not trade but forward test. I think I really have something with my plan of watching the 5 min charts for trend and entering only when something juicy is happening there. It was such a shame to miss the double bottom of 3998 today, but I just couldn't see anything other than the short I was looking for. I have also come to realize that I know where my stops for trades will be, just using the high or low of the previous 1 minute bar, so having this somewhat defined is also a major step forward. But none of this is well researched enough to be written down, so I should stay away from live trading, although I know that if something incredibly juicy should present itself, like another test of 3998, then I don't think I will stay away from that.