Making of a method

game · Feb 5, 2014

llIHeroic said:
What exactly is your exit criteria? It consistently seems like you create more trades than there are valid signals for a given time period, even on the fastest fractal I can see using the 1m. This was why I thought an adjacent time-frame might be helpful in order to keep over-activity in perspective.

Your charts look a skittish at times, and the rapid entry/exits incur spread costs and seem to keep you out of solid trends often. Take today's strongest trend, for example.

I do frequently zoom out to get a sense of the larger supply/demand balance. I am making exit decisions based on my judgment of the LOLR intensity.

Regarding the 3rd & 4th short - Since I was not able to position for the downtrend via the Reversal up top or even at the break of the S level at 3436, any entries thereafter would be high price risk - being vulnerable to both short covering and Support buying. The downmove was already worth 26 pts by then.

So in these situations, I try to get in to time the cascade, but I am not going to stick around should there be any hint of a lack of down momentum. Otherwise, I might as well do anticipatory entries. But that's not my style - yet.

macattack · Feb 5, 2014

game said:
Frustrating? I would say challenging at times - but worth it.

Just curious why do you say it's worth it? What have you gained from all of this?
(Not saying it's not worth it; I have no idea; just wondering)

game · Feb 5, 2014

macattack said:
Just curious why do you say it's worth it? What have you gained from all of this?
(Not saying it's not worth it; I have no idea; just wondering)

One gain would be - an inkling of what this is all about - i.e. the behavior of crowds. But I am going to take your question and try to fit it to answer what 'could' be gained.

In the Market Wizards book, Michael Marcus said, "The best trades are the ones which have all three things going for them, fundamental, technical and market tone"

Livermore talked about his big break as the recognition that big money is made from big swings - and that big swings are anticipated by studying 'general conditions'. Initially, he got carried away with this insight and almost blew out his entire account as the market refused to do what he 'anticipated'. No different from many 'analyst' traders. Eventually however, he integrated his formidable tape reading skills with this new insight to create a superior blend of fundamental and technical.

Daytrading allows me many atbats to develop a sensitivity towards recognizing buying and selling pressure. My longer term goal is to use this skill to time the bigger swings.