Keeping It Simple II

Sounds good.
I got the reversal short, so refreshments are on me.

Re: an example of my not taking a secondary BO if support/resistance hasn't been demonstrated outside the OR, I thought I had a couple of good examples, but looking back over them there's other factors going on.

Today has an example, though maybe not the best as again there are other factors. At 1:30, price broke the morning high by 2pts. Now, there were probably various reasons not to take this "secondary BO", but the one that was most clearly defined in my rules is that before the BO there was no demonstration of support above the original OR top at 1073.00. I suppose my intent here is to offer some measure of protection against a fake-out poke. It's a potential trap situation, so I want to see price build a stong case for continuation.

But, I did take the next "BO" at 1079.00. It felt pretty crazy, and price had been acting weakly. Nevertheless it had pulled back cleanly above the OR and was developing a trend. There were plenty reasons that this was probably a foolish entry, but it just wouldn't die and I'm testing the extremes of my plan anyway and I gave it a shot. I moved my stop to BE when it failed to go above 1082.00 on the second try. I knew that it was 2pts from target, but more importantly it was at resistance on the daily and at the top of the gap from the 24th.

I don't SAR, so I didn't get the aggressive entry on the reversal, but I put a sell stop under the ledge that developed.
 
Quote from dbphoenix:

In the meantime, I'm providing an example of what I look for in retracements.

--Db
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How do you enter? Stop-limit above the retracement bar that finds support? Do you trail the retracement bars with an entry stop, or do you wait for evidence of thrust and enter at market/limit?
 
Quote from spedblavio:

Today has an example, though maybe not the best as again there are other factors. At 1:30, price broke the morning high by 2pts. Now, there were probably various reasons not to take this "secondary BO", but the one that was most clearly defined in my rules is that before the BO there was no demonstration of support above the original OR top at 1073.00. I suppose my intent here is to offer some measure of protection against a fake-out poke. It's a potential trap situation, so I want to see price build a stong case for continuation.
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I agree with you here. I don't enter 100% retracements for the same reason. They rarely go right through. In fact, they much more often make a new low, then stage a recovery. I'd rather see price "absorb" that retracement by moving sideways for at least a few bars. A resumption of the trend is then more likely to be genuine.

Today, of course, price was crawling up to the HOD on its hands and knees rather than ramping, but in that case there's even more reason to suspect the breakout might fail.

--Db
 
Quote from spedblavio:



How do you enter? Stop-limit above the retracement bar that finds support? Do you trail the retracement bars with an entry stop, or do you wait for evidence of thrust and enter at market/limit?
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Stop-limit, two pts above the high of the lowest high. In the first case, the lowest high was 69.5, so the entry would be 71.5 (going back to the earlier post about thrust). In the second case, the lowest high was 74.5. In the third case, the highest low was 1079.

What's nice about this environment as opposed to two years ago is that stop-limits ALWAYS get filled. I had abandoned them during the momo days because they so often got left behind in the dust.

Now let me try and think of something else that's nice about this environment . . .

--Db
 
Quote from dbphoenix:



Stop-limit, two pts above the high of the lowest high.
--Db
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Interesting to hear. I think one of the reasons I've soured on retracements so much is that I'm used to T's method of trailing the bars tightly, usually by just one tick. From her perspective, she wants to get in early with very tight stop-loss and then look for thrust after the fact, bailing out if it doesn't happen.

This can get quite messy if one is not clear about their expectations, and quick on the button. I got sick to death of trying to pick the most clever, stealthy spot, and getting stopped out of retracements that become more complex before they resume the trend, or turned out not to be retracements at all.

I will have to balance myself out now, as it is clear that each entry method has it's place. But it was very refreshing for the time being to step back and ignore those for a while, focusing on the BO approach. Also, right now for me it's a slippery slope to start taking trades inside the OR (other than reversals near the edges). Certainly there are higher finesse trades that I'm going to miss, but snosur4's original idea is an effective way of keeping one out of chop. Trying to pick the sneaky move out of the range was often a downfall for me. I can see that smaller ranges can be defined within the original OR; it's not a question of legitimacy just an area that is not specifically defined in my rules yet.

I need to go for a walk now.
 
I got sick to death of trying to pick the most clever, stealthy spot, and getting stopped out of retracements that become more complex before they resume the trend, or turned out not to be retracements at all.

Ditto. It's real easy to trip over your own feet by trying to be too clever. One can do amazingly well by following basic principles. It really isn't necessary to be clever as well.

Also, right now for me it's a slippery slope to start taking trades inside the OR (other than reversals near the edges). Certainly there are higher finesse trades that I'm going to miss, but snosur4's original idea is an effective way of keeping one out of chop. Trying to pick the sneaky move out of the range was often a downfall for me. I can see that smaller ranges can be defined within the original OR; it's not a question of legitimacy just an area that is not specifically defined in my rules yet.

I'm hoping that having more than one pair of eyes watching this stuff will help. I'm having a real problem with boredom these days. What used to take an hour now takes all day. And I get inattentive. I don't think the TL/Ret setups I've posted are all that difficult, but they're easier to explain by example than with words and rules and blahblah. Unfortunately, they are also easier to see in hindsight than in realtime, especially when one is nodding off. Ordinarily, I detest chatrooms because I couldn't care less about who entered where or how much money they made. But this one has a nice Ignore feature, so I don't have to be distracted by all that. We'll see how it goes.

--Db
 
Quote from spedblavio:

Trying to pick the sneaky move out of the range was often a downfall for me. I can see that smaller ranges can be defined within the original OR; it's not a question of legitimacy just an area that is not specifically defined in my rules yet.
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One other point. Your comments are why I insist on both TL resistance or support and R/S from the last reaction point, or stairstep. If price seems to find R or S in midair, I tend to skip it and wait.

I also don't like unusually long bars or overlapping bars. The best moves come out of consolidation. Therefore, I want to see things tighten up. This also helps keep stops tight.

--Db
 
Quote from dbphoenix:

[BDitto. It's real easy to trip over your own feet by trying to be too clever. One can do amazingly well by following basic principles. It really isn't necessary to be clever as well.



On attached chart circles 1 and 2 looked like good breakouts as I understand this kis setup. Was it a basic principle that made you pass them up or just your feel for the market not being a breakout type of day.

I somehow had the impression you were mostly a breakout trader, tossing in an occasional reversal or pullback entry.
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