If You Can Draw A Straight Line . . .

[Gringo]

Db,

How did you manage your trade from 9:45 - 10:30 am EST? The lack of RET greater than 50% kept you in all the way or was there some jumping in and out required? Even though it was a straight trend up there were interesting locations where it seemed the demand was fading and then it didn't.

After the fact it does appear that the HL were appearing quite consistently tipping the hand.

And I still recall the times I would short a pre-determined R and hope for the best. I was scarred badly by those living on a prayer trading days. This is the kind of day that would have killed me, trying to pick a top. Every book tells you to short R and buy S. BO above R is a buy. BO below S is a short. In reality the books are telling the truth but not in the sense that most understand or use by pre-judging the action.

Gringo

Disclaimer: I don't trade intra-day anymore.

 

[dbphoenix]

Quote from Gringo:

Db,

How did you manage your trade from 9:45 - 10:30 am EST? The lack of RET greater than 50% kept you in all the way or was there some jumping in and out required? Even though it was a straight trend up there were interesting locations where it seemed the demand was fading and then it didn't.

After the fact it does appear that the HL were appearing quite consistently tipping the hand.

Gringo

The rets were pretty feeble. The one at 0942 was only a dinky little point. The next one 2m later couldn't breach it (that's a big shoutout for those who are nervous). By 0950, one can draw a new demand line (that's the line that the BSDs are always snickering about). From there you're good until 1024. It then takes off again at 1031, after which one can draw a new one tracking demand up to 1046. Which is where you get the break and the lower high and the lower low I mentioned earlier. But there's still no compelling reason to exit, which is why I suggested 02. But price decided it would rather go to 09, which is okay by me.

Sometimes demand fades. People do get tired. But demand fuels buying (this is something the snickerers seem not to understand). And sometimes they just have to rest for a while and see what's going on around them. Speaking of snickerers, there's been a strange silence about this morning's trading. Hmm.

Quote from Gringo:

And I still recall the times I would short a pre-determined R and hope for the best. I was scarred badly by those living on a prayer trading days. This is the kind of day that would have killed me, trying to pick a top. Every book tells you to short R and buy S. BO above R is a buy. BO below S is a short. In reality the books are telling the truth but not in the sense that most understand or use by pre-judging the action.

That's where the mechanical approach falls short. It's not enough to see it; one must also understand what he's looking at. Unfortunately, those who put this stuff out there don't understand traders and trading any more than their audiences.

Edit: Incidentally, the ride was even easier on the ES, from 31 to 43/2.5. One would have done slightly better on the NQ.

 

[timokrates]

It has been (another) long day...for me in old europe...

The market and DB taught me another lesson - overall a very good one.

So I was able to take a lot of notes and maybe something is about to click...

So thanks a lot again and have a great day, guys...

Gringo, also thanks for your thoughts on the silver trade. I'm still in and watching how it all pans out with the 50% in mind...

 

[Gringo]

Quote from timokrates:

Gringo, also thanks for your thoughts on the silver trade. I'm still in and watching how it all pans out with the 50% in mind...

Thou, O Timokrates; Thou shalt maketh me proudeth!

Gringo

 

[jack411]

Quote from fortydraws:

....

If price trades up to yesterday's high, I will look for indications of a reversal to short.

....

When price couldn't stay above 86 for 4 or 5 min (8:39-8:44cst), did you consider a short? I didn't short there, but I tried a couple shorts a little while after and took a couple small losses. The strong move up was the reason I didn't try that area.

Price actually made yesterday's high turn to support just a few minutes or so after poking above.

 

[bigmoose]

Jack, I did the bad trade that you are mentioning. I thought that we had broken the DL @ 10:21 and we were bouncing off the new SL @ 10:25. We had entered the bar with a LH, and I took a short expecting a break of 3092. The trade stopped out, as I set it a tick over the 10:23 high in the tic chart...

BIG lesson here for me is that I violated my rule set. I traded counter the daily trend - knowingly. Stupid move that I have to break. I repeated the stupidity, perhaps around where you did in the 12:45 time frame. That second trade violated two of my rules. Counter the daily trend and traded after 11:15 am.

We have to make our trading plan, follow it, and trade what we see. THink I have heard that stated here before.

 

[jack411]

Quote from bigmoose:

Jack, I did the bad trade that you are mentioning. I thought that we had broken the DL @ 10:21 and we were bouncing off the new SL @ 10:25. We had entered the bar with a LH, and I took a short expecting a break of 3092. The trade stopped out, as I set it a tick over the 10:23 high in the tic chart...

BIG lesson here for me is that I violated my rule set. I traded counter the daily trend - knowingly. Stupid move that I have to break. I repeated the stupidity, perhaps around where you did in the 12:45 time frame. That second trade violated two of my rules. Counter the daily trend and traded after 11:15 am.

We have to make our trading plan, follow it, and trade what we see. THink I have heard that stated here before.

Mine were an hour or so later after your first trade. The second time was a revenge trade for the 1st, so I called it quits for the day and did something else. I was waiting for that big retrace back down that we finally got this afternoon

Buyers weren't done yet though, and with the trend being up like you said, there was no reason to short unless being overly aggressive.

 

[dbphoenix]

Quote from bigmoose:

We have to make our trading plan, follow it, and trade what we see. THink I have heard that stated here before.

You've been at this for at least eight years. Jack has been at it for at least seven. Since neither of you have opened journals, I'm not going to use this venue to pry, but I admire both of you for setting your egos aside and being willing to try something new.

The chief problem is that you are both going to have to learn a new way of seeing. You are also going to have to do something about your relationship with the market, or price, or both, which is another way of saying your fear of it. This isn't therapy, but if you come out the other end, you may feel as though that is exactly what you've undergone.

Traders who, shall we say, haven't done as well as they expected will often get so excited about stumbling upon a proper entry that they will look for any excuse to cut their profits short (whether or not they let their losses run is another matter but frequently tags alongside). In fact, as the profit in the trade increases, so does their tension. It can even get so bad that they will exit just because they can't stand it any longer.

The proper thing to do, of course, is to stop trading and put in the observation time. This may seem ludicrous to someone who's been futzing with this for years, but trading off charts can be and usually is an entirely separate activity from observing what price is doing (those who've used a lot of indicators may not even have been able to see it).

It may even be fun to observe price for a couple of weeks free of the obligation or responsibility to do anything about it. And if just one door opens, the exercise will have been worth it.

One other suggestion: try to avoid an aspect ratio on your charts of more than 1.25:1. I've seen charts so strung out that the price track looks nearly flat, and there is no way the average trader is going to be able to judge swing highs and lows and tests thereof when the price track appears to be a noodle. Granted the charts I post tend to be more on the square side, but the swings are crystal clear.

 

[fortydraws]

Quote from jack411:

When price couldn't stay above 86 for 4 or 5 min (8:39-8:44cst), did you consider a short? I didn't short there, but I tried a couple shorts a little while after and took a couple small losses. The strong move up was the reason I didn't try that area.

Price actually made yesterday's high turn to support just a few minutes or so after poking above.

I guess you are referencing my notes from earlier where I mentioned that price could not hold below last week's low for more than four or fie minutes. Today, on the other, hand, price broke yesterday's high and had no trouble staying above. You yourself noted that sellers tested 84.75 and it was bought. I saw then and see now no significance to 86. You should write this down: What matters is what price is doing and where it is doing it. A random HL or LH out in some random point within a larger range is noise. There is no trade there. Somewhere near the beginning of this thread, I did the same thing as some others did here today - I kept shorting a runaway rally for all the wrong reasons.

Here is my trading plan as it has developed, at least that part of the plan that most would be interested in, and in a nutshell to boot:

1) identify during premkt trading those levels of S/R that are likely to come into play duing the upcoming session.

2) Wait for price to reach one of those levels.

a: If price indicates buying is present at S or selling is present at R, then enter long on a HL or short on a LH..

b: If price breaks through an S or R, then wait for a retrace back to test the former R as S, or S as R. Trade accordingly.

3) If at anytime I find myself with two stop outs in the same direction, stop trading and observe price until I am seeing price again, and not what I want to see.

What I can't tell you is how to apply it for yourself. I think this is where so many miss what DbPhoenix has been saying to everyone of us, and it is what makes the criticisms of him laughable: This is a personal journey. No one can lead you to its end. Someone can point the way to the path, but once on the path, it is your own responsibility to navigate its hazards and unravel the secrets of its rewards.


Today, I bought during the 9:31 bar interval, filled at 73.75 (too slow getting a 73 stop order), and I added with a buy during the 9:36 bar interval filled at 79.75. At no time did my finger ever come close to manually exiting the trade. Once price was above the day before's 84.75 high, it looked like buyers were intent on gunning for 3100. Don't get me wrong, had price ever behaved in a manner that indicated a reversal or prolonged consolidation was comencing, I'd have been out. I was looking for trade to reach 3100, but I am always open to other possibilities I exited all 10 contracts at 3100 on a limit order filled during the 10:39 bar interval.

 

[bigmoose]

db first thanks for the sage advice. I can tell you've been around the horn as they say, as your observations are right on. In a nutshell, my best over the past 30 years was in buy and hold, but with the world situation, I am uncomfortable with that amount of exposure these days.

I believe I am inconsistent on the futures instrument (NQ) with only a 56% winning percentage (67% long winners, 44% short winners) this year. Average gain is 2.2 X average loss. The bad trades I made today are typical of my short loosers. The good ones break fast in the right direction, the bad ones I get a tick or two in the right direction, then a reversal and a meander to the stop. I don't move stops away from entry, I will move them in tighter.

Thanks again (db & 40d) for the advice. It is appreciated. I am in my early 60's and I learned a long time ago, there is no place for ego when you are searching for excellence.