Hooti's Journey

Down/up, Up/down twin setup or any setup you have read and studied in Al's book has to be viewed with market context. Any set up viewed by itself is meaningless.

The up/down twin setup in your chart is in a trading range market environment, - a barb wire type of trading range(quote Al)so to trade the up/down/ twin set up in TR is not going to work. Unless you are buy low and sell high to fade the ranged.

For starters like us to trade Al's methodd, we have to put the following conditions in the trading plan as well.

1. Define market environment, choppy or trending? up trend or down trend? what is the dominant trend in 5 min chart. choppy or trending? according to Al. 3 or more overlappying bars are considered a tight trading range.( the chart you posted above shows the perfect example.), flat moving average can also define the trading range for you but it always lagging.
2. what is the trend and where we are in multimple time frame.
3. where is the major S/R levels(magnetic pull price level)
4. Trendline might act as subjective S/R level
5. entry and exit
6. pattern?-Set ups you are going to take the trade. (this must be included in your trading plan)

I am not sure what kind of strategies you are using,but all these above are very neccessary if you are using his method.

The highest prob trading set ups for us new traders are H2/L2 on EMA set ups in a trending enviroment. Practice this only set ups for a while...

I know its easy for me to say in hindsight. I am working on all these above too.

Just my humble opinion, you will soon find your own methodology.

Its getting so late here in asia, my eyes are blurry, sorry for the typo again.....!:confused:
Good luck!
 
Thank you Matcha, delighted to see you here. Your work is very much an inspiration to me.
I always laugh when you talk about crazy brain. I identify with you and have hope!

I picked the 'twins' because it seemed so simple, a good place to begin. Backtested some months without looking at any context... just did it go up or down as predicted? It came out so good in the months I backtested (69%) that I guessed it was a fluke.

Took a very short time of trading to start seeing the points you are making are very true! I think Twins really have about a 50% success ratio without considering the context of the market. But if you see how it fits in the legs up or down, or around S/R, or as part of another pattern... it has some potential. Tho if it is part of another pattern, the pattern rules most of the time. And if it says it will go up and we are already at the top of a 3rd push up. Pffffft.

Trading it is getting me into decisions about entry and exits, consistancy in placing stop entry braket orders, and keeping stats and all those essentials. Perhaps the twins are like training wheels on my trading bike?

Reading trading journals, now the essentials make more sense. I hope I get good habits!

Hummmmm. You're observation about trading twins in barbed wire is true. I have passed on some barbed wire, but at this point I'm willing to scalp for a 1/2 point if it might be there. Not the best habit, I guess. Was telling myself I would take every twin set up for the month of Dec. and see what happened!
Keep talking to me, I need to hear it!
Thanks
 
Quote from Sam Morgan:

So reminds me of the early days of NoDoji :p
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Please, Sam, it's Christmas season not Hallowe'en, save the scary stuff for next October! :p

Quote from Hooti:

Avg win $56.54/ avg loss $61.68 = .91

Also making far more errors trading for real than I did sim trading. That is cutting my profits alot. With sim trading I had a kind of relaxed focus. Need to find that again.
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Avg win MUST exceed avg loss in technical price action trading. I knew immediately you were cutting your winners when I saw this stat.

Sim trading is very relaxed because nothing of value is at stake.

Quote from Hooti:

long 1238
hard to believe it will go up further! But it's 8:00 and sort of a retracement....

min's later
and I"m sitting here with my finger on the sell bracket order.
it looks like it's forming a triangle continuation pattern....

Hey, it's working? Moving up for the moment
Tgt is 1239
stop1237.5
bracket order entered.

stopped out.

And THEN to 1239.
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Your stop wasn't survivable in the context of this trade. In fact, a 1 point stop is rarely survivable with ES except in rare instances. A 6-8 tick stop is normally survivable if you learn to choose entries wisely. This means your minimum profit target should be 3-4 points. Most of my ES trades are 6-8 tick stop and 3-10 point target. A setup can look fantastic for a 1 point target but I have no interest in a setup unless a 3 point target or better looks very likely. Very often no trade is the best trade.

What research have you done so you know where to place a protective stop that has a good chance of surviving, yet gets you out if the tide has turned?

A protective stop is placed where price proves your setup has been invalidated. An initial profit target is where price proves your setup is valid. If you're moving stops too soon and aren't holding trades until price proves your setup valid, but you're consistently holding trades until price proves your setup is no longer valid, you will lose money no matter how powerful your strategy and skill at choosing great setups.

Determine rules for stop placement and trade management based on the setups you trade. The way to determine the best rules is to analyze every one of your setups that occurred each day and look at a small time frame chart to note how many ticks against you each trade went. Some trades will go against you straight to your stop or go your way a little bit, then retrace to a max stop out (losing trades), but the winners will go your way and never look back, or will go your way, retrace against you, then continue your way. Analyze every potential setup day after day until you can set hard fast rules to follow that keep you in winners to target (or better) and get you out of losers for losses that are smaller than your minimum profit.

ONLY cut winners short if a reversal signal sets up. If that happens you take a small profit and reverse positions. Learn to know the difference between normal retraces and reversals. This is very difficult to master with ES. ES has a lot of back and forth price action and you'll be chopped up and cut most of your winners short if you don't learn the difference between normal retraces and reversals.

Quote from Hooti:

You know,
I can't believe how much difference there is for me in trading live vs. sim trading. I compair my records and I'm just to 'tight' now.

I'm thinking to try two approaches.
Set a budget for losses, don't worry about it and see if can trade as freely as I did sim trading... for a few days as a test, or maybe once a week?
Geez said he could sleep well if he had 5 losses straight in a row... which would be about $1000 for him. With one point stop loss... that would be about 20 trades for me.
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I was unable to bring myself to trade CL live until I allowed myself to potentially lose more than $500 a day (my max daily loss trading ES or stocks). Because at that time I hadn't done the detailed research I did later, I was allowing max stops in CL of 20-25 ticks and until I could allow myself to lose $1000 a day without giving up, I would not be able to comfortably trade this volatile instrument.

However, with ES a max daily loss of $500 was OK as long as I was trading just 1 lot.

So, pick a max daily loss and as long as you're following all your rules, 5 losses in a row can happen to the best and would tell you that perhaps the market is simply not in sync with your trading style that day.

Quote from Matcha:

Down/up, Up/down twin setup or any setup you have read and studied in Al's book has to be viewed with market context. Any set up viewed by itself is meaningless.
More...

I find learning to read price action in market context to be the very advanced side of trading. It comes gradually over time, and if you have a good R:R and let winners run to target, you can easily pay for contextual screwups. I still have plenty of those "Oh sh*t!' trades, but learned to bail quickly. I had one Friday in fact, buying a high tick, but I cut the loss immediately and switched sides, taking a profit 4 times the size of the loss.

Hooti, the more homework you do, the shorter the road to profitability. I wish I'd listened to Bighog from day one, but I really hadn't yet the foundation necessary to understand what he was telling me. It was only after many failures that I finally decided to practice doing what I found most difficult. The market rewards what is difficult, more than you can imagine.
 
Quote from NoDoji:

Avg win MUST exceed avg loss in technical price action trading. I knew immediately you were cutting your winners when I saw this stat .....

Your stop wasn't survivable in the context of this trade.........
This means your minimum profit target should be 3-4 points. Most of my ES trades are 6-8 tick stop and 3-10 point target. A setup can look fantastic for a 1 point target but I have no interest in a setup unless a 3 point target or better looks very likely. Very often no trade is the best trade.

What research have you done so you know where to place a protective stop that has a good chance of surviving, yet gets you out if the tide has turned?
More...

Hi NoDoji, and thanks for stopping by.
I've been becoming more and more aware of the above as you've said it in more than one thread. And watching the movement of the ES it makes obvious sense. At the same time, I've been looking at starting small, like get 1 pt a day, consistently, and then go for 2, etc. And I am trading one contract. But I see that bigger might be actually easier.

The research I've done is just with the twin set-ups, reguarding protective stops. I'm concluding I didn't do it long enough, but what I did look at... a one point protective stop had a good success rate, but mostly for a one point gain. Moving the stop to BE or trailng it would occassionally allow for it to run. And the up/down twins seem to come before some good runs. So I was looking to improve my win/loss rate there. At least as a concept!

.....but you're consistently holding trades until price proves your setup is no longer valid, you will lose money no matter how powerful your strategy and skill at choosing great setups.

Determine rules for stop placement and trade management based on the setups you trade. The way to determine the best rules is to analyze every one of your setups that occurred each day and look at a small time frame chart to note how many ticks against you each trade went. Some trades will go against you straight to your stop or go your way a little bit, then retrace to a max stop out (losing trades), but the winners will go your way and never look back, or will go your way, retrace against you, then continue your way. Analyze every potential setup day after day until you can set hard fast rules to follow that keep you in winners to target (or better) and get you out of losers for losses that are smaller than your minimum profit.

ONLY cut winners short if a reversal signal sets up. If that happens you take a small profit and reverse positions. Learn to know the difference between normal retraces and reversals. This is very difficult to master with ES. ES has a lot of back and forth price action and you'll be chopped up and cut most of your winners short if you don't learn the difference between normal retraces and reversals.
More...

As concepts the stop placement and TM make sense, tho I obviously have to apply it, not just think about it! And I think I have a small sense of when something is going to normally retrace or reverse.

I was unable to bring myself to trade CL live until I allowed myself to potentially lose more than $500 a day (my max daily loss trading ES or stocks). Because at that time I hadn't done the detailed research I did later, I was allowing max stops in CL of 20-25 ticks and until I could allow myself to lose $1000 a day without giving up, I would not be able to comfortably trade this volatile instrument.

However, with ES a max daily loss of $500 was OK as long as I was trading just 1 lot.
More...

I'll have to adjust my thoughts to that. It makes sense.

So, pick a max daily loss and as long as you're following all your rules, 5 losses in a row can happen to the best and would tell you that perhaps the market is simply not in sync with your trading style that day.

I find learning to read price action in market context to be the very advanced side of trading. It comes gradually over time, and if you have a good R:R and let winners run to target, you can easily pay for contextual screwups.
More...

'easily' ?! I'll hold you to that! ...ohhhh, the big 'if' at the start!

I still have plenty of those "Oh sh*t!' trades, but learned to bail quickly. I had one Friday in fact, buying a high tick, but I cut the loss immediately and switched sides, taking a profit 4 times the size of the loss.

Hooti, the more homework you do, the shorter the road to profitability. I wish I'd listened to Bighog from day one, but I really hadn't yet the foundation necessary to understand what he was telling me. It was only after many failures that I finally decided to practice doing what I found most difficult. The market rewards what is difficult, more than you can imagine. [/B]
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I'm imagining a lot, tho perhaps in a different vein than most. And that means doing things that make steam come out of my ears with effort as exactly where I aim to go. Of course I'm human and go sideways rather than reaching my goals ...now and then like anyone else.

From what you are saying, I'm aiming to low with my trades and strategy. I'm thinking of Dec. here as a chance to ...just learn how to post charts! And get less errors in my mechanical trade placement. And experience some loss and gain. And get a routine of focusing on trading as a daily habit.
And those things are beginning to work.
But I'd like to get my 'aim' better at the start...

and *scratching head* I'm not exactly sure what my most difficult things are yet! Other then, maybe everything :eek: !
Please feel free to point out the likely ones you see!
Grateful.

I'll start today backtesting and looking for trades with R:R 'range' you are describing. May take a few days to show up in my trading, but... oh yes!
 
Hooti

I also would like to see to succeed, your story has touched my heart....


Listen to, and follow KDASFTG & NOD’s posts – they are golden


RN
 
Quote from Hooti:

I'm very serious.
I just 'have' to do it a bit different.



Yes. Oh yes, I get the picture.



. What works is at least attempting work beyond your capascity.

I'm here because I need something new to further work with visual things and math. With mental and physcial coordinatiion

I


I .
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Hooti, i drew a picture of something i saw on pbs ten years ago,on either side of the board u have a piece of paper with colored dots,you connect the dots on both sides at the same time, left side with your left hand,right side with your right hand,nose on the board so that right eye can't see left hand and vice versa ..the right brain controls the left hand and vice versa, ...the excercise causes your right and left brain to communicate rapidly,sort of like dumbells for the brain, try it for 5 minutes each morning place your forehead on the spot marked "a"
 

Attachments

Not trading so far today, family in for the holidays.

And I'm thinking I need to do a lot of work to get to NoD's POV, even as just understanding it.

It's like I'm taking my toe and stirring the leaves laying around the roots of the 'trading tree of knowledge and profits'... while there is fruit hanging from the branches over my head, out of reach... or that I am still unaware of!

Well! That doesn't have to continue. I'm reworking my up/down twin's study and including the columns NoDoji listed for hers (The work she does after trading each day). So far twin's are holding their own, but I need to include a much larger testing sample. And then do more studies.

One thing I heard somewhere was:
as a beginner
Trade one contract for one point
When you can do that consistently, trade for 2 points.
When you can do that consistently...
Trade two contracts for one point.
When you can do that consistently,
trade two contracts for two points,
and so on.
 
the classes you are taking sound introductory where they give you a sample of everything on the menu,great to have the rounded out base on everything but you need to take one tool and master it,then another and so on,trying to use a little bit of knowledge is a dangerous thing,i use trendlines,support and resistance, market profile s/r and then watch how the different markets interact,presently the with fed's involvement and the euro crisis,the dollar and eur/usd are keys that all the players are watching, and then see how your instument,tf/es/ym/nq react...having support and resistance in front of you sort of makes the picture smaller and easier to read...i would make charting your first tool to master as it's the basis for all entries and exits
 
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