House of If You Can Draw A Straight Line

[dbphoenix]

Thank you for your posting! Noise is the market activity created by market participants. Placement of a stop within the noise will lead to a higher percentage chance of that stop being taken out. Placement of a stop outside the noise will lead to a lower percentage chance of that stop being taken out. When a stop placement is determined, one can then calculate the size of the position for that particular trade. One should always have full position on when entering---The amount of that full position is determined by calculating that you would not lose more than 2% of Total Liquid Net Worth if the stop is taken out. This is the most important part of trading. Prudent money management.

Which is easy when one trades only in hindsight.

 

[dbphoenix]

Incidentally, those who've actually read the material will note that we are now back below the 60m SL.

 

[dbphoenix]

And we test 00 again. A hush falls over the crowd.

 

[dbphoenix]

This is a good opportunity to point out to those who become dispirited when they are forced to stop themselves out that one can often re-enter at a better price and make more than he would have by sticking with the original trade, not to mention avoiding the cramps and the loose bowels and the flopsweat.

 

[Buy1Sell2]

With the verbiage that was shown one posting prior, we now have the beginnings of some good information. Capital and prudent money management are the main considerations in successful trading and take precedence above all else.

 

[dbphoenix]

With the verbiage one post prior, we now have the beginnings of some good information. Capital and prudent money management are the main considerations in successful trading and take precedence above all else.

Of course, actually taking the trade also helps. But BS apparently trades only in hindsight.

 

[fortydraws]

Referring back to Brian's question:

1st a reminder that "bars" or "candles" do not come into existence suddenly and all at once at the end of a particular time or data set. These form over time as trades are completed.

2nd I think that you might have attached yourself to the HL/HH thing (which is good as most seem to miss even this); but you still need to find your context. I think in terms of trends and ranges and SLA. One thing I do (I DbPhoenix may or may not consider it orthodox SLA - but it works for me) is that I do not "hug" price as closely with my lines unless I'm coming close to an S/R level. Also, for a demand line, I need a Low to start from, then I need a High, a Higher low, and then at least a Double top or Higher High to draw the demand line. Doing it this way usually (not always) still gives me a chance to enter/exit near the turn, and it is more likel to signal a turn, rather than a simple change in stride or range. If it does turn out to be the start of a new range, I'll be shown that quickly and I can scratch. Or I can wait to see which way price breaks from the range.

3rd You asked about a similar LL the other day. I see what you are seeing, but I am not interpreting these little pauses the same way. I'm not sure how to explain how to see it like I do.

 

[dbphoenix]

The median is of course higher by now, and will be even higher by Monday.

 

[Buy1Sell2]

When you look at this chart with bollinger bands and rsi overlain, the top of the channel is characterized by overbought conditions and tags of the bands.--And the lower part of the channel is replete with similarly inverse conditions. So, the system does not offer anything new under the sun. What would be interesting here is to further the discussion of how to limit losses and catch big winners. What would be the entry, exit and stop out points on this chart? This type of information would be helpful.

 

[dbphoenix]

And completely irrelevant to the subject of the journal.