Ghost of If You Can Draw A Straight Line

[Redneck]

You've made your points. There's no need to make them again and again.

maybe - then again maybe not

straight up - traders in all flavors - I respect

traders who sell stuff - I gotta wonder about - seen too many with ulterior agendas

not saying you have one - but not saying you don't either - I don't know

==============

Folks questioning everything... and everyone... in this business - is good (I should have done more on that myself in the beginning)

It'll either stand the scrutiny..., or fail


RN

 

[trip]

Back testing a filter-less SLA plan produced a positive expectancy.

Sure, Fluke. I guess anyone seriously working with the "SLA" method verifies that within the first few days of interest. It's not what I have questioned here and your elaborate "answer" does not add anything I did not already know. Perhaps it was directed to someone else?

My disconnect was simply with extraneous lines on my charts and I am now perfectly clear on why I have them and why DbPhoenix deems them unnecessary.

Discussions on "SLA" seem to take on surreal qualities where what is written is not read and answers states things that wasn't in question; I don't understand this. I am studying the "SLA" method so I thought this thread be the place for it. I'll stay out from now on and sorry if I've cluttered it with irrelevant posts.

Good luck, guys.

 

[k p]

It is impossible to do the characterization, to do the prep, and to follow the rules scrupulously throughout the session and not be successful. This does not mean that every trade will be successful. I had two losing trades yesterday, one for (1.75) and one for (1.25). But the rest were winners. This may be because I listen to the market instead of trying to bully it into doing what I want. Even so, if I just follow the rules, my day will be successful.

A specific question if I may which has to do with scratching. I ask this question because I discussed this entry in my journal from Friday at the location of "J" in the attached chart that some of the guys took. If this short was taken, price would have moved against you 3 points before ultimately continuing down. Your scratches really are excellent scratches with minimal loss in points, and mostly only ticks!

So I wonder if scratches for negligible losses are possible because you are taking only the best trades and it becomes quickly obvious when the trade isn't working? When taking a trade such as here at J, it is already in a well established reversal from higher up, so if you continue to short the RETs, it seems that you have to be prepared for price to move against you more than just a few ticks, even if it ends up going in your intended direction.

I doubt you scratch just because price moves against you by a set amount of points, you are obviously looking at the behavior of traders. So does price ever move against you more than two points but you hold on because you can see that the trade is still good? Or is it that most of your trades are taken at the very beginning of a move and don't go against you far, and if they do, it shows you right away that the trade isn't working?

In my example, I'm sure you would have shorted higher up, so this decision at J wouldn't be a problem for you. And if you had shorted higher up, when price gets to J but comes up a bit, you are only looking for reasons to stay in the trade, and this action right around J is no reason to get out. But getting into the move at J, holding onto that short would be very difficult in my opinion with the 3 point loss, unless of course you hold on for just another minute. (seems like a terrible rule to hold onto a trade that has gone against you 3 points already though!)

 

[Fluke]

Sure, Fluke.

I apologize; I must have misunderstood your question. I had read your question as you saying you were confused by additional filters and I was attempting to first clarify that additional filters are unnecessary to actually produce a profit, but that the location provided by AMT could potentially increase the chance of success on any given trade.

 

[trip]

I apologize; I must have misunderstood your question. I had read your question as you saying you were confused by additional filters and I was attempting to first clarify that additional filters are unnecessary to actually produce a profit, but that the location provided by AMT could potentially increase the chance of success on any given trade.

No need to apologize. I am a bit cranky today and it was a good answer.

 

[dbphoenix]

A specific question if I may which has to do with scratching. I ask this question because I discussed this entry in my journal from Friday at the location of "J" in the attached chart that some of the guys took. If this short was taken, price would have moved against you 3 points before ultimately continuing down. Your scratches really are excellent scratches with minimal loss in points, and mostly only ticks!

The SLA entry is three bars before yours. Therefore, scratching was never an issue.

As far as I can tell in chat, all of you except for Niko are still afraid to trade. But then no one other than Niko -- again, as far as I can tell -- is trading the SLA. So there's not much more I have to offer. If you want to decrease your information risk, you're going to increase your price risk, which is what happened with your trade. The attempts on the part of participants -- chat and otherwise -- to make the SLA safer actually make it riskier.

 

[k p]

The SLA entry is three bars before yours. Therefore, scratching was never an issue.

As far as I can tell in chat, all of you except for Niko are still afraid to trade. But then no one other than Niko -- again, as far as I can tell -- is trading the SLA. So there's not much more I have to offer. If you want to decrease your information risk, you're going to increase your price risk, which is what happened with your trade. The attempts on the part of participants -- chat and otherwise -- to make the SLA safer actually make it riskier.

Yes, you're absolutely right. None of these trades were mine actually, I just marked them onto the chart as they were called out in chat so I could follow them and reflect later. (I was stuck in the "too afraid to trade" camp)

The price risk vs. information risk I have been keenly aware of ever since I finished Nature of Risk by Mamis about a week or two ago. I think going forward I want to increase by information risk and decrease my price risk. Since this is about making money and not being right, I do believe that getting the better price is more important in the long run.

And on the last point in regards to SLA, this realization has also been on my mind very much this past week as I do feel I've ventured into the weeds again. The discussions about scratching and re-entry mean adding in so much more to think about, which is sometimes a case of the trader getting in his own way, something I knows happens to me often. Luckily there is still lots of time to prepare for tomorrow!

 

[dbphoenix]

The discussions about scratching and re-entry mean adding in so much more to think about, which is sometimes a case of the trader getting in his own way, something I knows happens to me often. Luckily there is still lots of time to prepare for tomorrow!

Actually, it doesn't mean adding anything at all. All it means is that you have to decide ahead of time just how far against your position you'll allow price to go, then exiting if and when does that. This is all part of prep.

 

[k p]

Actually, it doesn't mean adding anything at all. All it means is that you have to decide ahead of time just how far against your position you'll allow price to go, then exiting if and when does that. This is all part of prep.

Ah.. thanks for the clarification. I thought it might mean something like having to back test each different version of how you might go about scratching (ie. getting out right away on line break, picking a fixed value of 2 stops past line break, or waiting to clear a previous swing low or high for example)

Add to this, the idea of getting out for the purpose of scratching at a loss, and getting out for the purpose of taking your profit when you think the behavior is changing, and then wondering if your exit rules for scratching would be the same as exit rules for ending a profitable trade.

My gut feeling on this is scratching right away when trade doesn't go in your favor, and at most taking a 2 point loss. Ideally there are also rules for re-entry if the trades does in fact work right after exiting. But for exiting a profitable trade, I see far too often areas of consolidation where traders take a break, and then price goes in your favor some more. I am familiar with your posts about exiting rules for multiple contracts, but I don't think I have ever seen what to do when it goes against you right away. My feeling is sell all 5 contracts at once!

 

[dbphoenix]

Ah.. thanks for the clarification. I thought it might mean something like having to back test each different version of how you might go about scratching (ie. getting out right away on line break, picking a fixed value of 2 stops past line break, or waiting to clear a previous swing low or high for example)

Add to this, the idea of getting out for the purpose of scratching at a loss, and getting out for the purpose of taking your profit when you think the behavior is changing, and then wondering if your exit rules for scratching would be the same as exit rules for ending a profitable trade.

My gut feeling on this is scratching right away when trade doesn't go in your favor, and at most taking a 2 point loss. Ideally there are also rules for re-entry if the trades does in fact work right after exiting. But for exiting a profitable trade, I see far too often areas of consolidation where traders take a break, and then price goes in your favor some more. I am familiar with your posts about exiting rules for multiple contracts, but I don't think I have ever seen what to do when it goes against you right away. My feeling is sell all 5 contracts at once!

I suggest you trade it as written for two weeks, then review your results. Charting your course according to what other people are doing, particularly if they are not all doing the same thing, will most likely leave you high and dry.