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Yellen backed up the truck and made some money last night ;-)

Wow, someone took out those 5000 contracts in one swoop .... that was nuts.

Ok thx. Well, that's gonna be fun tomorrow. 5000 on the offer and 13 bid .... lol. Yikes.

Or maybe that's in honor of Prince :-)

Did circuit breakers kick in on the ES ? Stuck at 1999.

Ok I'm glad you guys reassured me ... I almost thought spoofing was a real thing. :-)

No, I mean "IS", and forever will be.

It's just a simple schematic chart. It's not meant to capture every possible pullback manifestation, of which there are many. My point was, when price makes a higher high, BAM !, it's a pullback !

Well, I didn't forget. I'm not claiming it's going to trend higher or go sideways. Just a narrow definition of a pullback as answer to the OP question at a certain point in time (at the higher high). If you define a pullback as having to go substantially higher than the previous high, I can...

Building on Stewie's work earlier in this thread, I think the answer to OP's question is fairly straightforward. Is it a reversal or a pullback ? If we define a pullback as a retracement in an up trend followed by a higher high, we simply have to wait for the higher high to determine the answer...

Video game makers know that random interval reinforcement makes the most addictive games. Like WoW. This same dynamic is at play in day trading. Random rewards. So yes, at it's core day trading is very addictive.

DJ, on reading the DOM, can you recommend any material/videos that give a good intro into that type of tape reading ?

Ok got it. I trade similar to you and currently just use pattern recognition to enter. Which at times is tricky, since a pullback is a pause in the action / counter trend move and by nature highly random/noisy. So maybe observing the DOM will add some edge.

Did you ever back test your trading setup when you developed it ? I am asking since you are using the DOM to time your entry and that might be difficult to back test.

As a thought experiment .... if chop is defined as pure random price action, then money cannot be made trading it. No strategy or risk management exists to extract money from pure random action.

DJ, one way to predict chop is using time of day. Around 11:30am EST I expect the ES to slow down on most days and start chopping. Do you use time of day in your trading ?

Not sure I understand. Do you mean that after a loss your total account size drops and therefore the next 1 contract trade is a bigger bet relative to the account size ?

Maybe, but that still wouldn't match what you are doing imo. Betting strategy always has to do with exploiting winning/losing streaks using position sizing. And you just trade 1 contract straight up every time. So you don't use any betting strategy.

I don't see how your strategy has anything to do with roulette. The numbers don't match at all. Betting black or red in roulette would give you a 47.4% win percentage with a 1:1 payout. Obviously a losing proposition. Your strategy has a 41.4% win percentage with a huge payout (Avg win/Avg...

Thanks Romik. That's a great risk return ratio. It's been very enlightening. Maybe I should get away from 610 Tick charts :).