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IN THIS THREAD: IronFist learns (the elusive) PRICE ACTION
- Thread starter IronFist
- Start date
Quote from ggoyal:
you should know by now that this is not how the market works. if it were as simple as HH and HL and LL and LH, everybody would be making money.
firgure it out
Ironfist,
First of all, hope your health is fine. That's the most important thing.
Secondly, as you know, I use a version of the HH, HL method, but I was, like you intrigued with the ggoyal post.
We all understand, after study, that there is another layer to understanding the continuation of a trend and a true reversal.
I'd like to get some insight from ggoyal if he'd be willing to chime back in and post.
Hey Ironfist,Quote from IronFist:
Down $280 after commission this morning on two trades.
Both times the same thing happened:
HHs and HLs, uptrend. Buy after an HL and upswing is resuming.
Both times, as soon as I bought, price immediately reversed making a LH and then went down to stop me out with a LL.
What is going on today that the HHs, HL, LH, and LLs are all out of wack????
Is something odd going on or was my analysis wrong?
Enjoying the thread. Not sure if anyone else has mentioned this but something you may want to go back and look at in your charts. after you enter. pay attention to what price does. In your first trade here I believe you enterd and the next bar had no follow through. In these cases you may want to exit without waiting for the market to turn back and stop you out and reenter if you get the chance.
Like I said, you'll have to go back through your charts and see how that would work for you. It could save you a ton on your losses. Usually good trades will go your way right away.
Good Luck
Iron,
Don't use fast charts, they are as good as random. Learn to be patient, not every day hands you low risk high reward trade opportunities in a silver platter, which is exactly what every trade you take should require in principle.
You see eventhough price may appear to move randomly (in the fast fractals) it usually stops at key areas to think things through before the continuation. Identifying these key areas and analyzing how price reacts in these selected key areas is the true meaning of price action. Amazing that many in ET have such a hard time explaining something so trivial, perhaps they don't know what they use.
Use something that is meaningful for the vast majority of the trading world, the market, not ultra fast ultra useless charts.
Trend following works well but only when the chosen fractal is significant and trending or reversing significantly. Anything below 30 min imho is noise only pay attention to support and resistance corresponding to bars incorporating multiple trading days. Intraday S/R holds no weight. Learn to identify key levels on the daily chart.
And last "enter wisely", make sure your stop is out of harm's way, out of noise. If the price action merits a bigger stop, reduce size as risk management is key. You should only get stopped out when mistaken on direction and the stop must not be a loss but should be viewed as trading for information.
When you get it right you should get paid.
When you get it wrong your stop should comeback with most of your capital and a little piece of paper identifying the correct path to a winning trade.
If getting stopped out delivered no information your trade was doomed from the start.
EW
Don't use fast charts, they are as good as random. Learn to be patient, not every day hands you low risk high reward trade opportunities in a silver platter, which is exactly what every trade you take should require in principle.
You see eventhough price may appear to move randomly (in the fast fractals) it usually stops at key areas to think things through before the continuation. Identifying these key areas and analyzing how price reacts in these selected key areas is the true meaning of price action. Amazing that many in ET have such a hard time explaining something so trivial, perhaps they don't know what they use.
Use something that is meaningful for the vast majority of the trading world, the market, not ultra fast ultra useless charts.
Trend following works well but only when the chosen fractal is significant and trending or reversing significantly. Anything below 30 min imho is noise only pay attention to support and resistance corresponding to bars incorporating multiple trading days. Intraday S/R holds no weight. Learn to identify key levels on the daily chart.
And last "enter wisely", make sure your stop is out of harm's way, out of noise. If the price action merits a bigger stop, reduce size as risk management is key. You should only get stopped out when mistaken on direction and the stop must not be a loss but should be viewed as trading for information.
When you get it right you should get paid.
When you get it wrong your stop should comeback with most of your capital and a little piece of paper identifying the correct path to a winning trade.
If getting stopped out delivered no information your trade was doomed from the start.
EW
I took a look at your chart and the HH and HL in the uptrend wasn't that significant IMO. It seemed it was fizzling. Just look at the angle of the trend the angle was going horizontal and the new HH was only a few ticks above the previous HH.
And because it was only a few ticks above the previous HH there is greater possibility of it being a doubletop, thus the end of a trend.
But hats off to you, the 1 min chart is one of the hardest timeframes to trade.
I would suggest you incorporate at least a few support and resistance lines (like S&R, floor pivots or market profile from higher timeframes on the 1 min lower timeframe chart, to decrease your number of trades, but increase the trades that are winning.
Use volume to determine lunchtime chop and to stay out of it. But you need a higher timeframe to visualize it better. You can use volume for entry, but on the plain 1 min chart it would rarely be useful.
And because it was only a few ticks above the previous HH there is greater possibility of it being a doubletop, thus the end of a trend.
But hats off to you, the 1 min chart is one of the hardest timeframes to trade.
I would suggest you incorporate at least a few support and resistance lines (like S&R, floor pivots or market profile from higher timeframes on the 1 min lower timeframe chart, to decrease your number of trades, but increase the trades that are winning.
Use volume to determine lunchtime chop and to stay out of it. But you need a higher timeframe to visualize it better. You can use volume for entry, but on the plain 1 min chart it would rarely be useful.
Quote from nkhoi:
next step is getting rid of candle bar, You want PA you watch OHLC bar and pay particular attention to where it ends.
This makes no sense at all. There is no difference between candlebars and OLHC.
The only reason why you want OHLC is because you can compress your charts more nicely and makes trendlines draw better.
Quote from nkhoi:
next step is getting rid of candle bar, You want PA you watch OHLC bar and pay particular attention to where it ends.
Quote from college_trad3r:
This makes no sense at all. There is no difference between candlebars and OLHC.
The only reason why you want OHLC is because you can compress your charts more nicely and makes trendlines draw better.
I was going to say exactly what college_trad3r said. OHLC bars and candles give you the same exact info. I prefer candles because I was exposed to them first.
nkhoi, please tell me the difference between using candles and using OHLC bars.
Quote from Enter Wisely:
Iron,
Don't use fast charts, they are as good as random. Learn to be patient, not every day hands you low risk high reward trade opportunities in a silver platter, which is exactly what every trade you take should require in principle.
I'm using 500 tick YM charts because it tends to print one candle every 1-4 minutes.
I don't have a giant account, and so if I were to use larger bars, such as 30 minute bars, placing a stop below a previous swing low, for example, would consume too much money if it were hit.
On 500 tick charts, placing a stop below a previous swing low might eat 10-30 ticks.
On a 30 minute chart, it would be much more.
Intraday S/R holds no weight. Learn to identify key levels on the daily chart.
Are key levels on the daily charts identified by a certain formula (the way intraday S/R points are), or are you just looking at daily charts and manually indentifying them?