At that time I was looking for a short, not long... And it never came back down
Do you use Pivot Points and High and Low of Day S and R areas?
- Thread starter oraclewizard77
- Start date
I prefer trading when price crosses up/down thru highs/lows
Interesting. Can you comment on why you were looking for a short the second time it came down, but you took a long when it came down to this line the first time? Does it have something to do with how it came down? Or simply that you thought if the direction was still up, it shouldn't come down again?
thats a 150 tick chart and that is all that i use to determine what i think is the current trend. i only trade what i see on this chart. in this example, i was looking for a pullback in a current trend. The first trade was a pullback down in the current up trend. i entered on the second up/green bar. that uptrend then peaked and reversed down about 7:16. so i was thinking this is now in a downtrend. when price hit the black line and reversed up, i was looking for price to pullback up and then continue with the downtrend. price continued up and never moved back down for my potential short entry. however, price then peaked about 7:26 and formed a new downtrend. my second trade was what i was looking for. a pullback up in a downtrend... so i shorted after 2 down/red bars. too bad it didn't move down more.
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Thanks for the detailed explanation. About the chart... I took quite a bit of time to figure out how to get mine to look exactly like yours. I noticed your bars had no wicks, and finally figured out its a bar chart, not a candle chart, but bars which only show high and low. Not every single bars matches yours, sometimes the red and greens don't match, but its mostly close. Here is how mine looks. Is there any reason why you choose these settings? It certainly looks less distracting without wicks. Since I've only ever used time based charts, I don't have a sense of how these move.
![NQH24-CME[M] 150 Trades #28 2024-03-02 14_33_42.467.png](https://test.elitetrader.com/et/data/attachments/317/317255-d242c2e9b87966cb23bb9ef2e68da7f2.jpg?hash=0kLC6bh5Zs "NQH24-CME[M] 150 Trades #28 2024-03-02 14_33_42.467.png"){kind=small}
Excellent and simple. For this first long, when you entered, price was still below the previous high, so you got in early.
But for the short, since you said you waited for 2 red bars, you got in just as it was already at the previous low.
Would it be fair to say that perhaps your trigger is to wait for 2 bars to now be moving in the direction of the trend once you think the pullback is over and then you jump on? For the long, it just worked out that you were still well below the swing high, but for the short, you were already at the swing lows, so it dropped a bit more already. How do you decide if you think the pullback is over? 2 bars in the direction of the trend seems like it would trigger way too often and fail quite a bit.
And lastly, if you don't mind, do you have any idea about how many trades are winners, losers and break-evens?
sorry about that... those are heikin-ashi bars. if the average price of the h/l/o/c of the bar is higher than the prior bar the color is green and if the average is lower than the prior bar, the color is red. i don't need to see wicks like others that use longer timeframe charts. no need for me to see inside the bars where the open/close of the bar might be or swing lows/highs, etc. my charts are tick charts and i think i can see trends better with ticks than with time-based charts. tick charts also allow me to see trade speed. some people like to see volume but i like to see the number of trades executing at any point in time.
i'm a fuzzy logic kind of trader and tend to say things like close, near, about, etc. i do this because traders are constantly placing/pulling orders and even though i can use the exact high of yesterday as a line like on this chart...with the constant placing/pulling of orders, price very seldom stops or turns on the exact line. so i think of this line as a range where price can sometimes pullback above the line or below the line or right on the line... sort of like a zone that others talk about. as long as its "close" i see this as a setup that can be traded. my experience is that when price gets close to the high of yesterday, the odds get better that the trade will move more in my favor. it may not hit my profit target, but it might be profitable. i may have a loss, but the loss may be smaller.
so the first long, price pulled back down "near" the high of yesterday and yes, i typically enter the pullback setup when there are 2 green candles in the direction of the trend. i actually have that part automated and would have turned on the automation sometime during the initial pullback and my software would place the order on the second green bar. if i didn't turn on my automation, then i would have manually placed a market order when price turned back in the direction of the trend for a few bars.
the short trade was just the opposite. price trend down, pullback up "near" the high of yesterday and entry on the second red bar. the pullback was too quick to turn on my automation, so i entered the short trade manually with a market order during the second red bar. if you look to the left, there was 2 other quicker pullbacks that i could have shorted before the one i took. sometimes price moves so fast i miss earlier entries while im thinking whether i should take the trade or not. i prefer to just "get in the trade" and don't wait for price to hit a swing low/high or anything else. 2 bars in the direction of trend works most of the time and if it doesn't my trade management takes over. this 2 bar rule is just for the "pullback setup". other setups i typically use market orders regardless of the color of the bars.
are you asking about winners/losers/break-evens for this setup or overall. i don't track by setup and don't get many break-evens given that i use market orders that are affected by the spread. what i use as a baseline measure to compare to actuals is: win/loss ratio greater than 50% and profit/loss ratio greater than 1.5. if i can consistently meet this baseline minimum, then i will be consistently profitable. when i have calculated actual stats, on good trend days my win/loss ratio can run as high as 60-70% and on choppy days, 40-50%. my profit/loss ratio averages about 2.6 for trend and choppy days.
i'm a fuzzy logic kind of trader and tend to say things like close, near, about, etc. i do this because traders are constantly placing/pulling orders and even though i can use the exact high of yesterday as a line like on this chart...with the constant placing/pulling of orders, price very seldom stops or turns on the exact line. so i think of this line as a range where price can sometimes pullback above the line or below the line or right on the line... sort of like a zone that others talk about. as long as its "close" i see this as a setup that can be traded. my experience is that when price gets close to the high of yesterday, the odds get better that the trade will move more in my favor. it may not hit my profit target, but it might be profitable. i may have a loss, but the loss may be smaller.
so the first long, price pulled back down "near" the high of yesterday and yes, i typically enter the pullback setup when there are 2 green candles in the direction of the trend. i actually have that part automated and would have turned on the automation sometime during the initial pullback and my software would place the order on the second green bar. if i didn't turn on my automation, then i would have manually placed a market order when price turned back in the direction of the trend for a few bars.
the short trade was just the opposite. price trend down, pullback up "near" the high of yesterday and entry on the second red bar. the pullback was too quick to turn on my automation, so i entered the short trade manually with a market order during the second red bar. if you look to the left, there was 2 other quicker pullbacks that i could have shorted before the one i took. sometimes price moves so fast i miss earlier entries while im thinking whether i should take the trade or not. i prefer to just "get in the trade" and don't wait for price to hit a swing low/high or anything else. 2 bars in the direction of trend works most of the time and if it doesn't my trade management takes over. this 2 bar rule is just for the "pullback setup". other setups i typically use market orders regardless of the color of the bars.
are you asking about winners/losers/break-evens for this setup or overall. i don't track by setup and don't get many break-evens given that i use market orders that are affected by the spread. what i use as a baseline measure to compare to actuals is: win/loss ratio greater than 50% and profit/loss ratio greater than 1.5. if i can consistently meet this baseline minimum, then i will be consistently profitable. when i have calculated actual stats, on good trend days my win/loss ratio can run as high as 60-70% and on choppy days, 40-50%. my profit/loss ratio averages about 2.6 for trend and choppy days.
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I'm shocked! I know nothing about this type of bar, but its interesting how closely it matched up with what I finally plotted. Thanks for the explanation.
Yes, I do see that. And had you entered on either of the earlier opportunities, price would have gone against your entry both times. Of course you can never know this, but on this third try it gave you an entry without any heat, until it of course failed and came back up to stop you out.
On the one hand, the fact that its now dropping after trying hard to rally twice might mean the drop will have more momentum behind it, but on the flip side, perhaps the fact that it tried to rally several times could mean that this drop won't lead to much. Do you ever get caught up with too much thinking like this?
I just meant overall, so thank-you for providing those stats. Those are excellent stats. Is most of your trading trying to capture roughly 10-15 NQ points like shown and being in the trade for just a few minutes? How many trades might you take in an average day?