Day-Trading 2.0 for small traders

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To add to Amitman's post, trading every color change of the HMA is doomed to fail no matter what the lookback period...IMO. You trading rules are simple enough to code into something like TS and see for yourself without having to kill yourself everyday manually forward testing.
Support and resistance levels must be considered when making entry and exit decisions.
Buy support, sell resistance.
Your big losing trade got you in at ~12297 which was 1 tick higher than the previous high pivot (resistance). You bought resistance. This previous high pivot (12296) appears to have been a lower high as well, so the sellers were in control, at least as shown in the chart you posted. The LH you have marked is incorrect, it should be a HL, so some PA to support a long...mixed signals.
Most indicators will always lag the price action.
So how to fix? Maybe only enter the position in the same direction as the last X number of pivots, don't enter unless you are X number of tics away from the next level of resistance (for longs), move to a lower time frame chart (4-5x difference) when approaching a previous level of support and look for a low failure (HL) in it to trigger your entry, or maybe a combination of all the above.
Again, these types of things are fairly easy to code into somthing like TS if you want to get an idea of profitability. If it looks good then trade it realtime which a simulator like NinjaTrader using a good feed like TT or Zenfire.
Having a plan based on price action and support/resistance will lead to profitability faster than trying to perfect the use of an indicator...IMO.
Keep at it.
 
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Quote from Bbox_trader:

To add to Amitman's post, trading every color change of the HMA is doomed to fail no matter what the lookback period...IMO.
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I don't trade every color change of the HMA. I try to do it just based on PBP rules but I guess I don't have it down quite yet...

Your big losing trade got you in at ~12297 which was 1 tick higher than the previous high pivot (resistance).
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Doesn't that kind of thing happen by definition when trading waves? The new upward momentum of the wave always passes the old "resistance."

edit - omg I see what you mean :eek:

like this right?

goodentry.gif
 
Iron fist, just my 2 cents. Im still learning too but here goes.....

In theory if the trend is up then it should go past the previous waves high. BUT there is always a chance that it will reverse as well. The high of the previous wave or just below it should be a good point to consider your first exit. This is after all only scalping. If you want to learn to ride the waves you should read the AHG thread. I am thinking of the best entries and exits for myself. I dont enter a new trade if the stop loss is above my risk level (I only like to risk a very small % of my account per trade).
So If I saw that there was the chance I could lose 34 ticks on that one trade I would probably let it go, regardless of the entry signal. Also consider what kind of return you might expect. Like I said I use the previous high as my first target. I only take the entry signal if there is at least enough ticks between the entry and the previous High. If it is already near the previous high then let it go. Dont enter just because the trigger says so.
If you do that then you can even get out with some profit even if the trend turns against you.
And as you now know that entry you took a big loss on didnt respect the PA anyway.
Long winded but I think I got my point across
 
And your ' good long entry ' is a better example of a good trigger because there wasa good retrace ment first. BUT Its still not a entry that respects price action. The previous High is lower than the one before it. Therefore if you trade strictly by the rules you wouldnt take it.
 
Quote from maninjapan:

Iron fist, just my 2 cents. Im still learning too but here goes.....

In theory if the trend is up then it should go past the previous waves high. BUT there is always a chance that it will reverse as well. The high of the previous wave or just below it should be a good point to consider your first exit. This is after all only scalping. If you want to learn to ride the waves you should read the AHG thread. I am thinking of the best entries and exits for myself. I dont enter a new trade if the stop loss is above my risk level (I only like to risk a very small % of my account per trade).
So If I saw that there was the chance I could lose 34 ticks on that one trade I would probably let it go, regardless of the entry signal. Also consider what kind of return you might expect. Like I said I use the previous high as my first target. I only take the entry signal if there is at least enough ticks between the entry and the previous High. If it is already near the previous high then let it go. Dont enter just because the trigger says so.
If you do that then you can even get out with some profit even if the trend turns against you.
And as you now know that entry you took a big loss on didnt respect the PA anyway.
Long winded but I think I got my point across
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Great point--we are scalping--technically looking for small movements and ramping up the lots with greater predictability. In a trending market odds are high that retrace will come back to last h/l. Try trading multiples with 2 exit points. 1 under/above last h/l, 2nd move sl to b/e and set under/above next support/resistance by amount of ticks applicable to your instrument. On moving sl to b/e, though, note atr so you don't get stopped out too often--may need to give more room (has to be based on distance from entry to just under/over last h/l.) Perfect entries for me are slow pull back, rounding on retrace and far enough back to allow my sl to be less than 10 ticks from previous h/l with enough distance to previous h/l to make good profit...just my 2 cents...pkchilly
 
not trading multiple lots yet, but thats what Ill do too when I do.
And I completely agree with you on your R:R. Its gotta be worth gettin in for. Not gonna risk 30 ticks to get 5. Others may not agree but this is all about making this system your own right??
 
Quote from maninjapan:

And your ' good long entry ' is a better example of a good trigger because there wasa good retrace ment first. BUT Its still not a entry that respects price action. The previous High is lower than the one before it. Therefore if you trade strictly by the rules you wouldnt take it.
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wait, how many concurrent hh,hl,hh etc. do you need for it to be good PBP?

i'm on my phone, otherwise i'd draw and post pics, but i though it took only 3:

(for a long)
a low, a high, and a higher low (and then long entry after confirmation)

i thought it didnt matter what the previous highs and lows were as long as you had that as the most recent formation.

the next possible setup would require 4:

(for a long)
a high, a low, a higher high, a higher low (and then long entry after confirmation)

or 5:

(for a long)
a low, high, higher low, higher high, higher low (and then long entry after confirmation)
 
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