How Do You Trade Channels for Price Action Traders ?

[llIHeroic]

@Gotcha

The 1220 bar closes outside the Left Trendline on increasing volume [referred to as "In The Zone"]; so the whole trend steepens and ends at the conclusion of that particular spike. There are three equal medium-weight trends which constitute a completed thick-weight trend; we no longer need a RTL cross to confirm uptrend because of the ITZ close; so I know that we are now going to build a thick-weight trend in the opposite direction. Again, the method is quite intricate and there are thousands of posts written on meandering discussions around the mechanics of it. Don't want to derail the thread or feel the need to defend my analysis; that was never the point of my post.

I'm okay with the fact that most people who try view charts annotated by this method just come to the conclusion that it's hindsight; hence the comment concluding my last post. They have since the method was introduced on the forum over a decade ago. I don't take any offense to your post or intend to be abrupt. But this method and common objections to it have already been discussed to death 50x over. Wish you the best.

 

[Gotcha]

@Gotcha

The 1220 bar closes outside the Left Trendline on increasing volume [referred to as "In The Zone"]; so the whole trend steepens and ends at the conclusion of that particular spike. There are three equal medium-weight trends which constitute a completed thick-weight trend; we no longer need a RTL cross to confirm uptrend because of the ITZ close; so I know that we are now going to build a thick-weight trend in the opposite direction. Again, the method is quite intricate and there are thousands of posts written on meandering discussions around the mechanics of it. Don't want to derail the thread or feel the need to defend my analysis; that was never the point of my post.

I'm okay with the fact that most people who try view charts annotated by this method just come to the conclusion that it's hindsight; hence the comment concluding my last post. They have since the method was introduced on the forum over a decade ago. I don't take any offense to your post or intend to be abrupt. But this method and common objections to it have already been discussed to death 50x over. Wish you the best.

If you have a specific reason for doing it the way you do, then I respect this. A poke below that trendline doesn't to me signify that the downtrend is broken, but it of course doesn't much matter what I think.

In cases like this though, I always like to ask if the person can provide a chart from their platform with the trades marked. As you can imagine, its far too convenient to draw all of this on the chart after the fact. Also, since you entered short twice, where would the exits be? I find that whenever someone wants to share something on ET, they do so by cherry picking the best examples, but if asked for full trades stats, what we end up learning is that only half of the time does it work. If the R:R is good enough, then 50% wins can be quite profitable, but given the emphasis you put on your micro channels within channels, I do wonder how often you get it right and how often you get it wrong. It seems as if you are trying to explain every single move in the market and unless your stats back this up, I'm not sure if you can explain the market movements in such a structured fashion.

 

[llIHeroic]

I understand where you're coming from. It's good in some cases to try to verify a source of information before you sink time and effort into deciphering what they've presented. I have developed exits and risk metrics as well but a presentation of my system and personal trading methodology isn't what I was going for here.

I merely wanted to give some input on how a beginner could start to look into channels and talk about the underlying methodology of study and improvement that breeds progress. I'll be the first to tell you that my trading is still a work in progress; I haven't made a significant amount of money and I have actually been away from the markets for quite a while; at least day-trading wise. Definitely not trying to come across as an expert but rather speak from what I know and give some advice to someone who seems to be just starting down the same path I've been working on for several years now.

 

[Gotcha]

I understand where you're coming from. It's good in some cases to try to verify a source of information before you sink time and effort into deciphering what they've presented. I have developed exits and risk metrics as well but a presentation of my system and personal trading methodology isn't what I was going for here.

I merely wanted to give some input on how a beginner could start to look into channels and talk about the underlying methodology of study and improvement that breeds progress. I'll be the first to tell you that my trading is still a work in progress; I haven't made a significant amount of money and I have actually been away from the markets for quite a while; at least day-trading wise. Definitely not trying to come across as an expert but rather speak from what I know and give some advice to someone who seems to be just starting down the same path I've been working on for several years now.

Thanks for your honesty. I do appreciate it.

I have tried using channels and trendlines and find them highly subjective. This is why I was surprised that you would say the downtrend was broken simply because of a poke lower.

These days, stats is what I find most juicy. Most traders don't talk about this, which is a shame since this game is all about stats, and never about just one trade here or there. Its the stats that tell you how viable something really is. By pressing someone to also reveal stats, it sometimes becomes clear that what they are doing is as exceptional as first presented.

One perfect case in point was watching tons of stuff from FuturesTrader71 and what some of the guys that he taught are doing. He would put in so much effort into so much analysis, and in the end, the win rate was hardly better than flipping a coin on many setups. Sure some guys were still profitable, but I didn't see the sense of confidence that I would want to see if I went through so much analysis and had everything line up so well in order to take a trade. The end result is still 50/50 on that next trade. I think that the simplest approach that produces satisfactory results is best, because over-complication can often not improve the profits much, but certainly add to the amount of stress induced. So I always like to ask what type of results people have with whatever it is that they are doing.

 

[Sprout]

Train your mind on how to See. The results come naturally.

Like learning a foreign language with vocabulary, grammar and learning nuances that only immersed in the culture can provide. Once you can See, than you can Read what the Market is saying at any point in time with a complete dataset that you've built with your mind with certainty by testing it all along the way.


No, I did not do those trades.
Yes it starts with hindsight.
Another word would be debriefing.

What makes this similar to this?
What makes this different from this?

As you debrief, you mind builds to see differences where you didn't perceive them before.
As you perform MADA, you see these trades develop in real time.

I wish I would have started training in MADA sooner. I would have saved a ton of anxiety, pain, fear, anger and financial loss.

Now I experience confidence, comfort, support and financial growth just like the wiser folks said.

Yes, I see those trades develop in real time now.
Yes, I can bank coin.
No, I'm not gonna show you any proof. That's crass with no class.
Yes, as a skeptic and critical thinker you should verify claims.
It's all bullshit otherwise, and cannot be anything other in the light of structured inquiry in the pursuit of truth. In a topsy-turvy world, discerning what is bullshit and what is not requires a great concentration of effort. The effort will be ridiculed - doubt, uncertainty and ambiguity will be at the party as well as frustration, sleeplessness and teetering on the edge of the abyss.

Yet everyone at any moment can make the choice to "learn how to learn."

Yes, I still have sticking points. Yes, I still make mistakes. Yes, I can still grow.
Just let Jack Hershey and Spydertrader 's writing wash over you. At first hardly any of it will make sense at least that's how it was for me. That changes for those that actually do the exercises and drills.

The things llIHeroic speaks is solid. There are priceless teachings in these archives, very generous individuals that contributed to the great succession of thinking minds.

Any shortcuts for doing the work is a waste of time, energy and resources.

Now get to it. ;-)

 

[wrbtrader]

...One perfect case in point was watching tons of stuff from FuturesTrader71 and what some of the guys that he taught are doing. He would put in so much effort into so much analysis, and in the end, the win rate was hardly better than flipping a coin on many setups. Sure some guys were still profitable, but I didn't see the sense of confidence that I would want to see if I went through so much analysis and had everything line up so well in order to take a trade. The end result is still 50/50 on that next trade. I think that the simplest approach that produces satisfactory results is best, because over-complication can often not improve the profits much, but certainly add to the amount of stress induced. So I always like to ask what type of results people have with whatever it is that they are doing.

I'm still out with the jury on this because I remember many threads here at ET and other forums where someone titles the thread with the word "simple" in the name or calls it KISS.

I quickly notice that some viewed it as a "simple method" while others still consider it complex or too much analysis for them. I guess simplicity is in the eye of the beholder.

Also, we can be very profitable with a 50/50 method with good position size management, stop/loss management and old fashion discipline with some experience.

I think that's the problem, we don't all have the same discipline level, not the same experience level, money management is different, position size is different of course because everybody doesn't have the same capital or risks tolerance...

A 50/50 method can produce different profits or different losses for different people.

In fact, I've seen 50/50 methods results as losses for someone while the same 50/50 method resulted as big profits for someone else just because of difference in discipline/experience.

I know its cheezy to say its than the trader that's the key variable but what if it really is that way with "some" methods ?

Reality, we can't just look at the method being used all by itself...we must also view the method within the context of the trader that's using it. This is extremely difficult to do via the fact we really don't know the person personally nor how they're going to react in certain market situations.

 

[fordewind]

It is best to try to automate the channels and trade ftt of the channel.FTT - stands for 'Failure To Traverse', and is the point on a chart where the price is supposedly not going any further.

 

[fordewind]

You`d next want to mark those ftt`s somehow and then you place on that place a 'bookmark' - a horizontal line - a reference point at which you are watching the price behaviour.

 

[Gotcha]

I'm still out with the jury on this because I remember many threads here at ET and other forums where someone titles the thread with the word "simple" in the name or calls it KISS.

I quickly notice that some viewed it as a "simple method" while others still consider it complex or too much analysis for them. I guess simplicity is in the eye of the beholder.

Also, we can be very profitable with a 50/50 method with good position size management, stop/loss management and old fashion discipline with some experience.

I think that's the problem, we don't all have the same discipline level, not the same experience level, money management is different, position size is different of course because everybody doesn't have the same capital or risks tolerance...

A 50/50 method can produce different profits or different losses for different people.

In fact, I've seen 50/50 methods results as losses for someone while the same 50/50 method resulted as big profits for someone else just because of difference in discipline/experience.

I know its cheezy to say its than the trader that's the key variable but what if it really is that way with "some" methods ?

Reality, we can't just look at the method being used all by itself...we must also view the method within the context of the trader that's using it. This is extremely difficult to do via the fact we really don't know the person personally nor how they're going to react in certain market situations.

I guess this is how I view simple. It should have only a few variables, and then you take a trade, and if you keep consistent stop and target, the trade hits one or the other. Trade management would be a huge part of this, and I think is a huge edge overall. Some might say its not an edge on its own, which is true, but without a sound and consistent approach with trade management, you might be the best trader and still lose money.

Once you introduce too many variables, I'm just not sure how you end up taking any trades because the setups would be so rare. To combat this, you may have many setups, and although quite rare, perhaps at least one presents every hour, even if it might not show up for the rest of the week. Now of course you have to keep track of them all in your head.

But the thing for me is that once you see stats on these trades, if they aren't so good, you almost have to wonder how profitable are these setups. If you first have to consider the general market sentiment, then the price in relation to the overnight action, then the price in relation to the previous day action, then you throw in some rules about how close to have to be to a previous swing point before you enter, and then you have to factor in time of day, etc., and then after all this you place your trade and hit 2 points profit before your 2 point stop is hit, how much of this winning trade can we contribute to all this analysis? There are literally tons of areas on the chart where you can take a 2 point trade that set up with so much analysis.

I figure that all this extra analysis should provide a hugely juicy win rate. If on a 1:1 trade you're only getting 60% win rate, and on a 1:2 barely cracking 40%, then is this the result of superior trade selection via countless variables, or perhaps a bit of luck, good timing, and trading in the direction of the trend?

I guess the point that I'm trying to make is that often times, trades are over complicated in order bring about the appearance of good trading. What results from this is the need to be right, given all the analysis, and perhaps even less opportunities to trade, since you're constrained by all the rules. Contrast this with a more simple system, which may produce more trades, but as long as the trade management is top notch, it might actually result in more profits, even if it seems worse because many trades end up being losers.

Its of course difficult to know any of this since so little trade stats are shared, but from all the sources I have been able to reference over the years, I am very much leaning to this conclusion.

 

[themickey]

Mathematically define them

Linear Regression channel