That doesn't mean much, 5 bars, So? 5 bars later we can be 20 points down. and when it does retrace "up into it" the down slope of the channel means you are still underwater. Its like buying so price can hit the moving average above, sure it will hit it at somepoint, maybe 5 bars later, but when it does you're down big. I can clearly see where you're getting all your price action lingo from and the problem is its all super subjective, its not even backtestable because the definition for the patterns are far to loose. When does a tight channel (bo, spike) become a regular channel? Nobody really knows. You can't even properly define a leg. There are 100 different ways to define a leg in a move for example. But nevertheless, I give you credit for talking past the entry!
Some folks can’t deal with the uncertainty of the markets. They want clearly defined setups with clear entries...exits..risk...based upon what they call backtesting. However the market doesn’t give a hoot about backtesting. That is only for the comfort of a trader that needs the reassurance that props up their hopes and dreams. Lol. I have a defined system. I use an initial structure. Then I convert to a dynamic structure once a position is taken. That IS my structure. See, I am smart enough to know that the dynamics doesn’t have to match my initial structure. However, it often does. I do not attempt to presume to tell the market it has to match my initial structure. It depends on what happens in the dynamic if I will average down or not. If I average down there is a reason for it. A dynamic mathematical reason. Sorry if that is disconcerting to you but it is how I trade since I believe we trade in a fog and can never see clearly until things happen live. You on the other hand are probably a systematic trader Come hell or high water your system rules the market. Only it doesn’t. You can’t tell the market what to do..ANYTIME. It doesn’t care about your system. The way I see it is I need adaptable strategies to employ to meet whatever the market is throwing at me. That is why I will switch and turn on a dime while other traders are keeping their fingers crossed and hoping that their well defined system pans out and they can chalk up another profit. How many well defined entries...exits...SL’s backtested malarkey..positive expectancy systems were flushed down the toilet and into the septic tank since ...well lets say feb of 2020? See, my willing to be flexible is why I have a high win rate which is necessary to have when scalping. Most traders cannot flex with the market and cannot deal with the inherent uncertainty so they want a well defined system that for them makes them feel secure. The problem is, if the statistics thrown around are true, then 90% or more of traders lose, regardless of the system they employ. So they go from system to system searching for certainty. And I might add from blown account to blown account.
Volpri lets be clear here I am not picking on you or trying to discredit your ideas or your experience and observations in with the mkts but I am someone who believes that lots of times out of a challenge or a confrontation comes understanding. Volpri you said when you do average down you have a mathematical reason so you are admitting there is a system. now how do you exit? do exit them all at once with a small profit quickly almost like a large scalp or are you deploying this mathematical exit strat? i ask because ive studied over the years lots of average down strategies and typically they have a max loss amount and you never allude to ever being wrong. you can be wrong on a trade within a trade but your overall trade can be a winner. it sounds like as much as you say you have a dynamic system you are really saying you use gut ability and your observational experience to make your adds and exits. wouldnt this be the case? also with systems for trading they are dynamic always. its rare any of the systems signals wouldnt involve a form of dynamics in the numbers used to calculate
Aren't you basically saying that a big chunk of your trades you are exiting early? So clearly on the bad trades you are moving your stop loss also and taking a smaller loss than initially planned for.. Otherwise you don't make money, (always take big loss and small wins) So initial profit target and stop loss is completely irrelevant, thats my understanding of "actual risk" which means whats the point of the setup, whats the point of having an initial stop loss and target plan if you exit because the trade goes in your favor right away?
There you go via volpri @ https://www.elitetrader.com/et/thre...-trading-the-es-nq-ym-mes-mnq-and-mym.336259/ Yet, you're already aware of that thread. Here's others you may not be aware via the Hall of Fame section @ https://www.elitetrader.com/et/pages/hall-of-fame/ A lot better for having those types of discussions than within this thread about why educators do not discuss the entire trading plan as it unfolds instead of only talking about their entry signals. wrbtrader
Read my journal. It has charts in it. With detailed explanations. Flexible targets has to do with the dynamics. “How” is PA being made as opposed to it just being made. For instance, price in say the ES goes from 2955 to 2960 and I am in long at 2955. Do I exit at 2960 or do I hold for more profit. Well, that depends on “how” it got to 2960. Did it reach it quickly pop up there on the 5 min chart then meander around back and forth or did it grind up there making it to 2960 during the close of the bar? And did I get any adverse movement BEFORE it made it to 2960? If it pops up there on no adverse movement then I am out at 2960 faster than you can spit. It will be a very good ACTUAL R:R trade. I am grabbing my 5 points because the dynamic says this was a high probability trade and high probability usually won’t go too far. That is, it will have less expected reward. It had good reward but to continue to think it will have even MORE reward is risky because the move from 2955 to 2960 was made on little to no adverse movement. I know this seems wrong but it isn’t. Except in certain scenarios will I hold onto this trade (for instance in a strong BO) after my 2955 entry. Of course, the problem is determining if it is a pop or a strong BO. To do so I need to be aware of the phase or cycle the market is in when such price action takes place. If we are in a bull trend and this scenario 2955 to 2960 happens after a PB ends and means trend continuation then I am holding. Or if market is in a bit of sideways move (doesn’t have to be TR of 20 bars) I enter on a setup at 2955 it trades against me a few points to 2953 or even 2950 then goes back up and closes at 2960 then I am holding for more gain. I’ll take my chances we may get a second leg up. This is what I mean my adjusting my initial PT. I cannot define these before I see dynamic price action after my entry so I can’t just point them out and say I am getting out here at this point...etc. Yes, I set an initial PT (As a structural component) but even that is contingent on dynamic PA after the entry.
interesting but I still don't really get what the point of the initial stop / target is? Why even have an initial stop/target if what you're doing is totally dependent on your interpretation of follow up price action.
Good point. Averaging down without some kind of risk limit is not trading, it's gambling. Also, you better understand martingale if this is your go to method.
Sure; I've posted many screencap PnL proof examples showing wins and stops, entries and exits, but not every single day since time consuming, I'm a one man company. Open to ideas. I will post more in my journal. Here's a dilemma, question.... I often do 20+ trades daily, most are scaling into or out of swingtrades, others straight daytrades. No time to track and post every entry and exit, eg it would read like " bought 30 shares PENN at $xxx to add to existing swing" x dozensof trades. I often do so many trades I cant screencap the daily blotter, entries and exits in less than 3 screenshots which is a pita to post regularly. Lmk ideas, thx!