Bride of If You Can Draw A Straight Line

[timokrates]

After the failure at the top of the trading range and the drive down, I expected (yes, dangerous) a test of the opposite end of the trading range (maybe down to around 59), but obviously we never made it so far down, instead the buyers were taking over again.

In terms of what Wyckoff describes as the halfway points (not that DB did not illustrate the use and the usefullness of the 50% more than once) could the retrace after the downmove which broke the 50% and ended up at the midpoint of the first congestion after the initial downmove be seen as a sign of weakness of the sellers? And for that the trading range or even a reversal could have been expected?

 

[dbphoenix]

Quote from timokrates:

After the failure at the top of the trading range and the drive down, I expected (yes, dangerous) a test of the opposite end of the trading range (maybe down to around 59), but obviously we never made it so far down, instead the buyers were taking over again.

In terms of what Wyckoff describes as the halfway points (not that DB did not illustrate the use and the usefullness of the 50% more than once) could the retrace after the downmove which broke the 50% and ended up at the midpoint of the first congestion after the initial downmove be seen as a sign of weakness of the sellers? And for that the trading range or even a reversal could have been expected?

The simpler, minimalist version that is the subject of this thread doesn't include trading ranges or halfway points in re intraday trading. Just exit the short when the supply line is broken and take the first long thereafter. When this is stopped out, take the subsequent short. When this is stopped out as well, stop trading until price is out of chop. No expectations or guessing about signs. See the first post.

 

[r3algood]

"Therefore, supply and demand -- and the retracements that enable one to enter a trade -- will be the focus of this thread. No breakouts, no reversals, no hinges, no S&R, no trendlines and trend channels: all of that can be discussed in either of the preceding two threads."

In line with the motivations of this thread, here are two trades I took today on NQ.

http://imgur.com/a/ND8fj

First Image: Background of trade setup, range, not going down (dog don't bark, lets move up)

Second Image: Demand Line in place, take with trend breakout after retracement

Third Image: Not getting spooked out of the trade, patiently letting price do its dance

Fourth Image: Exit trade on break of demand line

Fifth Image: Enter long on break of supply line and test of previous range, exit long on break of fanned demand line

What could I have done better? Were my entries valid? Exits valid? I focused on process today instead of results, and lo and behold I ended up with results.

 

[dbphoenix]

Quote from r3algood:

I focused on process today instead of results, and lo and behold I ended up with results.

I'm providing the following chart of yesterday morning's PA to demonstrate that even if one is extremely nervous, trades every twist and turn, and punches and grinds his way through the chop rather than leave it alone, he can still wind up with a win rate of 67% (+/-) and a P:L ratio of 6:1 (+/-). "Positive expectancy" is not an issue.

The two longs which appear to be floating in midair represent two entries that were never triggered.

If on the other hand he allows price at least a little wiggle room and avoids the chop as soon as it becomes evident, his win rate and P:L ratio will of course be even higher.

 

[timokrates]

Quote from dbphoenix:

I'm providing the following chart of yesterday morning's PA to demonstrate that even if one is extremely nervous, trades every twist and turn, and punches and grinds his way through the chop rather than leave it alone, he can still wind up with a win rate of 67% (+/-) and a P:L ratio of 6:1 (+/-). "Positive expectancy" is not an issue.

The two longs which appear to be floating in midair represent two entries that were never triggered.

"Midair" is between 8:40 and 9:00 roughly?

This might be off topic again, but am I wrong with the observation that there are certain times where the best moves occur. In general what I have repeately seen is that within the first 15 minutes there is one move, then around 7:55 to 8:05, 8:15 again (potential countertrend move) and then 8:45. I hope I did not confuse the time settings as we in europe are ahead in terms of DST.

Another question - specially as I still have problems with "realistic" backtest: The P/L ration is calculated with stops triggered at the S/D line break?

 

[dbphoenix]

Quote from timokrates:

"Midair" is between 8:40 and 9:00 roughly?

This might be off topic again, but am I wrong with the observation that there are certain times where the best moves occur. In general what I have repeately seen is that within the first 15 minutes there is one move, then around 7:55 to 8:05, 8:15 again (potential countertrend move) and then 8:45. I hope I did not confuse the time settings as we in europe are ahead in terms of DST.

Another question - specially as I still have problems with "realistic" backtest: The P/L ration is calculated with stops triggered at the S/D line break?

The untriggered longs are the first and third. They are both above swing highs.

I've never found the time thing to be useful, i.e., dependable, though it can seem so in hindsight, particularly if coming from those who want to give the impression that they possess some sort of market "secret". You'll read, for example, that one should avoid trading the first half hour. This is idiotic.

The stop can be triggered wherever you want it to be. In this case, the trade is exited at the break of the line. It can also be exited after the break of the line if price moves counter to the trade. It can also be exited a point past the break, or two. Or a break of the last swing point. What's "realistic" depends on what you can tolerate and how good you are at evaluating the buyer/seller dynamic. There is no downside to exiting a trade just to be safe nor to re-entering in the same direction if it turns out that one exited unnecessarily. It's just a matter of maintaining control.

 

[dbphoenix]

Quote from dbphoenix:

I'm providing the following chart of yesterday morning's PA to demonstrate that even if one is extremely nervous, trades every twist and turn, and punches and grinds his way through the chop rather than leave it alone, he can still wind up with a win rate of 67% (+/-) and a P:L ratio of 6:1 (+/-). "Positive expectancy" is not an issue.

The two longs which appear to be floating in midair represent two entries that were never triggered.

If on the other hand he allows price at least a little wiggle room and avoids the chop as soon as it becomes evident, his win rate and P:L ratio will of course be even higher.

There appears to be an issue with the chart, so we'll try again:

 

[bmwhendrix]

Thanks DB!

 

[timokrates]

Here is a trade I took premarket. This also refers to the "wiggle room" context.

After the entry at the lower high, price tested the supply line (and the 50%) again, but bounced back down. Here the statement you made once that it is important to know "what you don't want to see" is obviously handy. For me it was clear that I did not want to see another break up.

After the trade developed I kept on fanning the lines according to my observations of buying and selling pressing - which was still strong at the minor correction at 96.

I then exited with the break of the next steeper SL near the old highs.

 

[niko]

Once again 92 is my initial level of interest before the open.