If You Can Draw A Straight Line . . .

[dbphoenix]

Quote from niko:

I guess this is where fear come into play, I am afraid that because that RET is not significant enough, my rules I will not work so I avoid it instead.

Perhaps you need to rethink what you mean by "significant". Price falls out of that range, then barely re-penetrates it before failing, the most important factor being failure. If you had placed a sellstop at 50, you would not have been stopped in if price were serious about re-entering that trading range.

There is also the issue of "trusting" a lower high or higher low or whatever. Trust is not a factor. If your rules or guidelines call for shorting a lower high after a demand line is broken, then you have to take it. You'll learn something whether the trade is profitable or not.

 

[niko]

Quote from dbphoenix:

the most important factor being failure.

Interesting, never thought about it in that way, regarding BOs from TRs. I still struggle between reading price action in RT and seeing patterns in the bars, so I end up failing to make that kind of analysis.

 

[stevegee58]

This reminds me of a thread I read somewhere called Trendline Break The Only System You Need or something like that. Basically entries were based on technical failures of trendlines and I think sup/res lines.

 

[dbphoenix]

Quote from niko:

Interesting, never thought about it in that way, regarding BOs from TRs. I still struggle between reading price action in RT and seeing patterns in the bars, so I end up failing to make that kind of analysis.

It's not about patterns nor is it about bars. Perhaps by looking for and waiting for what you view as a "pattern", you're ignoring traders' behavior. And by the time the "pattern" gels, it's already too late to take the trade.

 

[dbphoenix]

Quote from stevegee58:

This reminds me of a thread I read somewhere called Trendline Break The Only System You Need or something like that. Basically entries were based on technical failures of trendlines and I think sup/res lines.

Actually it has nothing to do with trendline breaks per se. Trading price is about trading behavior, in this case the failure of traders to maintain momentum. Any "break" of a line, which after all is in the trader's head, is merely a signal to look at what traders are doing or not doing and act accordingly.

 

[niko]

Quote from dbphoenix:

It's not about patterns nor is it about bars. Perhaps by looking for and waiting for what you view as a "pattern", you're ignoring traders' behavior. And by the time the "pattern" gels, it's already too late to take the trade.

Yes I know

 

[dbphoenix]

Quote from niko:

Yes I know

Look at it this way: price is in a tight range before the "open". A couple of minutes before the open, price falls out of it. What are buyers thinking? What are sellers thinking?

 

[Redneck]

Quote from niko:

Thanks RN, I am all eyes! (I would say ears, but it would be out of context)

Take a sheet, or several sheets, of paper

Draw a line down the middle

Left side – label “Issue”

Right side label – “Because”

example

Issue;

I am afraid to enter/ take trades

Because;

I don’t know the outcome
I don’t like losing
I am afraid
I am nervous
I don’t know if this is the right trade
I don’t trust what I’m seeing
I don’t read a chart well enough
I don’t know where I will get out
Etc… etc…


After you've written down every “because” you can think of

Take each of those because(s) and do the same exercise – (list it under issue / then list its becauses)

Do this till you can drill down no further on each of the initial becauses

The last thing you write is the root issue..., and what you’ll need to resolve first..., in order to fix the rest

take your time - think through it - be honest - write down each because until you get to the root cause - fix the root cause

Doing anything less than this entire exercise thoroughly - is a temporary band aid – and it won’t last for shit (I know this)

RN

 

[niko]

Quote from Redneck:


Doing anything less than this entire exercise thoroughly - is a temporary band aid – and it won’t last for shit (I know this)

RN

Thanks RN.

 

[dbphoenix]

To those who follow this thread:

We all face the upcoming trading session with at least some eagerness, I hope. But after trying to eke out a profit from choppy day after choppy day after choppy day, we tend to have trouble generating the old excitement for what's likely to turn out to be yet another BE or small win/loss trade.

Then a series of days like these come along, in which the intraday swings can yield the kinds of profits that one won't find in months' worth of chop. But we don't take the trades because we expect -- perhaps subconsciously -- the kind of chop we've been subjected to day after day. And the opportunity the market provides is squandered. And eventually we get tired of letting all these potential profits evaporate and we decide to go for it and trade the way we should have been trading throughout this gold rush.

Which is when the market returns to chop, and the losses we take are greater than they would be otherwise because the market has encouraged us to be not quite so rigorous on stops and exits.

This is really no different to the burned longer-term investor who swears he'll never become involved in the market again, only to see the markets trade higher and higher. When he can't stand it any more and decides to jump in so that he can participate in at least some of these seemingly never-ending higher prices, that's when the market begins to put in a top.

Every trade that meets your criteria has to be taken, no matter what. If you start second-guessing your approach, much less yourself, then you may as well stop entirely and start over.

There are untold numbers of posts regarding profit targets and risk:reward and expectancy and so forth. Ignore all of that. It's irrelevant. Just take the trade. Don't be concerned about how far you think it's going to go. Don't be concerned about ratios. Just take the trade and follow it, wherever it leads you. You can't predict a trend and you can't predict chop, though you can determine ways of recognizing when you are in one or the other. So just take the trade and see what happens. The seeing what happens part may be the only "fun" aspect of trading for those who've been at this for long enough to get bored with it.

So just follow your plan -- you do have a plan -- and take the trade.