House of If You Can Draw A Straight Line

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This is my attempt:

1. Breakout of the TR. Green dot would be a TR breakout long in this chart and if zoomed in a tick chart a micro pause- retracement after the breakout.
2. Break of the DL
3. SLA short trade
4. Test of the previous TR upper boundary and failure to breach it
5. Break of the SL. Long trade at the test-failure to breach
6. SLA long trade
7. Test of prior SH. DT
8. Break of the DL but after the DB (pink horizontal line)-HL there is an entry at green dot and DL is fanned.
9. Breakout of the DT-prior SH
10. Micro springboard
11. Break of DL
12. SLA short entry (although I would be vigilant to see reaction at level of prior DT (horizontal pink line at 7)
After that level fails to hold (17950) there are two possible entries marked with red dots.

Thanks indeed Db

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Well, damn, Bern. I guess everybody can go home. :)

I'm pleased that there are people out there who understand this so well. That makes the effort worthwhile.

Just one tiny little tweak, though (of course). When price begins to move sideways in a trend to the extent that the SL or DL goes shooting off into what can become useless territory, the ranging can provide a "reset" so that whatever SL or DL one draws at that point actually does what it's supposed to do: track supply or trace demand.

In this case, you can start a new DL at the end of that "micro range." This will turn out to be very brief, but it will allow you to short at 11, not only because of the DT but because of the break in the reset DL.

I know this has the aroma of rationalization in order to justify a hindsight trade, but if one accepts the proposition that trends begin when ranging ends, there is no conflict in starting a new one when price emerges from whatever range it was in. And the "longer-term" DL that you have drawn remains in place anyway and gets you short one way or another, just later.

In any event, you get 12 out of 12. Wanna figure out the win rate and the P:L ratio?

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dbphoenix said:
In this case, you can start a new DL at the end of that "micro range." This will turn out to be very brief, but it will allow you to short at 11, not only because of the DT but because of the break in the reset DL.
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That short at 11 is interesting because of just SLA or paying attention to swing points. The point about a new DL after the small TR is something to pay attention to. I use guidance from potential s/r for cases like 11 but here there is no mention of prior s/r or anything else. Just following price as it gave signals.

Yes, this is hindsight but it shows the logic of following a certain way of thinking. Very refreshing. Keep it up @Bern!

Gringo
 
Gringo said:
That short at 11 is interesting because of just SLA or paying attention to swing points. The point about a new DL after the small TR is something to pay attention to. I use guidance from potential s/r for cases like 11 but here there is no mention of prior s/r or anything else. Just following price as it gave signals.

Yes, this is hindsight but it shows the logic of following a certain way of thinking. Very refreshing. Keep it up @Bern!

Gringo
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Actually I left the lines off on purpose because those who've been learning how to track price can likely tell a change in stride without having plotted any lines. In fact, if one were trading this without lines, he would be far more likely to short that double top rather than wait for some line to be broken.

There are at least a half dozen people working with this now, some still observing, some beginning to test. I'm hoping that after a few months, or even weeks, they won't require lines at all.
 
What you have here is extremely simplistic trend-line analysis.--And that's fine. The simpler the better. However it's being dressed up as being a complicated system that requires many many hours of study. In addition, useless info like volume are being added to the mix. Lines are being drawn incorrectly and without meaning. Swing lows and highs are being misidentified and violated without correct explanation as to why and what that means. The section about finding a trade is extremely convoluted and way too complex. There is no need to start on a weekly chart to find a trade on a 1 minute chart. You would look at the weekly to find a trade on the daily. If trading the 1 minute chart, you would not look at any time frame higher than the hourly and really you would place your biggest emphasis on the 15 minute chart. Your best trades will come when the 1, 5 , 15 and 60 all agree. ---What you do is identify the trend on the 15 (and/or the 60) and then drill down to the 5 and the 1. When trend is up on 15 and 1 is oversold, look at buying. Then trail stops outside the noise until the 1 is overbought and exhibits reversal. ---Exactly the opposite would be true for a downtrend on the 15. Much simpler and one does not need so much study and over analyzing. Always limit losses to less than 2% of TLNW on any one trade/idea. Let winners run. Get right.
 
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bmwhendrix said:
Did you base it on the bo of the range on the 60 min. or on a ret on a smaller time frame?
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I saw the breakout on the hourly and entered the ret using a smaller interval. Of course, if I had awakened an hour earlier, I could have entered 8pts higher.
 
Best bet is to just use RTH charts for trading. The overnight bars really have no relevance to what is actually going on in the market and those bars should be discarded. Once that has occurred, you will see that the market has had a reaction high that has not been breached and you can see where to place stops outside of the noise.--The lines that are drawn on the charts above are unnecessary especially the horizontal lines. Anyone can see that that area is noise and stops would be placed outside of this area.
 
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