Keeping It Simple II
- Thread starter dbphoenix
- Start date
I know this is a huge complication, but I would suggest using a 33min range on days with 10am reports.
Not a big complication. This is included in the rules:
For the NQ, enter a trade using a stop-limit 2 points outside the opening range (the opening range generally takes 15-20m to form; if there's a report due out at 1000 and price has not broken out of the range by 0950, you may want to wait for the report and use the reaction to it as the opening range).
But it does complicate entering the breakout of the 30m bar. If one wants it mindlessly simple, he may have to pay a price.
--Db
My real time paper trading this last week revealed mindless complications undermining my work, rather than mindful simplicity.
This weekend I went back and re-read the original snosur4 posts that led to all this and I found much inspiration.
I never really tested the simple, un-interpreted 30min break approach because from the outset I agreed with your notion of letting the market establish it's own natural range, rather than use an arbitrary demarcation like 30min.
But after taking another look and doing some review, I'm seeing that the 30 (or 33) min period is not so arbitrary after all and may have advantages. Certainly it removes fretting over whether the opening range has been "established" or not. It also means I have half an hour to get my sh*t together (which often includes taking one).
Here's the complicated part though: I think results can be seriously enhanced by heeding gap size and potential swing reversals on the daily chart (the "Potential Trend Day" condition: good sized gap above/below previous day's high/low, in direction counter to current swing on daily chart).
For example, I will not take a trigger into a large gap (1.8% or more), and I will not take a trigger away from an unclosed regular gap (1%-1.79%) unless it is a PTD.
I also think the previous day's high and low are important to be aware of. If the ORB coincides with a test of the PD high or low, I will not take that trigger. This is a frequent trap zone, and if it's going to continue there is usually a second opportunity to get in after the thrashing about that occurs in the test.
And it looks like no more retracements for me, I do believe I have finally this weekend had the conversion experience to a BO player. Will wonders never cease?
You're correct about the 30m bar. It gives price time to resolve those initial buys and sells, which generally take until around 0950. If that's to be faded, the 30m bar also provides time for the fading to get done.
People who want simple, though, don't want to hear this. They just want rules to follow.
What you're looking for is an "N", or the mirror-image of one. You want price to make a high (or low), then a low (or high), then watch what happens next. But many people have difficulty allowing this to develop.
As for retracements, I've found them to be of greater value in this environment than in the usual since it's so much more difficult to get anywhere unless you enter very near the point of trend reversal. But that's a separate strategy.
--Db
People who want simple, though, don't want to hear this. They just want rules to follow.
What you're looking for is an "N", or the mirror-image of one. You want price to make a high (or low), then a low (or high), then watch what happens next. But many people have difficulty allowing this to develop.
As for retracements, I've found them to be of greater value in this environment than in the usual since it's so much more difficult to get anywhere unless you enter very near the point of trend reversal. But that's a separate strategy.
--Db
My personal preference is definitely for simple rules that are as mechanical, objective and unambiguous as possible. The less the seat of my pants is involved, the better.
But I insist that those rules be based on very solid principles of price action, or at the very least on observed phenomena with statistical verification (such phenomena serve only as entry exclusions, not triggers or foundational principles). And I also must understand the principles or phenomena underlying the rules, not simply accept any rule whether it came from someone else or from my own hypothetical scheming.
But I insist that those rules be based on very solid principles of price action, or at the very least on observed phenomena with statistical verification (such phenomena serve only as entry exclusions, not triggers or foundational principles). And I also must understand the principles or phenomena underlying the rules, not simply accept any rule whether it came from someone else or from my own hypothetical scheming.
It's not strange, it was all arranged for my benefit (educational, not financial).
I was right there on top of that late afternoon ORB and the failure and reversal are specifically defined in my current rules, but I let myself think it was too late in the day and that it wasn't likely to fall very far so I gave up as soon as the potential BO was out of the question and didn't catch the reversal in real time.
I opened the day with a nasty short on the report-spasm spike that I didn't like at all but took for the sake of science since it's a paper trade and it was in the rules I'm testing... That's when I started to realize that I want my opening range to be 33min on report days, and that that's something that has to be established before 10am. But I couldn't evaluate the possible rule change in time to avoid a second losing trade; a specifically defined reversal to be taken after a losing stop out (not a SAR though).
A quick tweak of my OR definition invalidates both of those trades and my rules concur with your assessment: just that one trade for 8pts.