You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Making of a method
- Thread starter game
- Start date
Quote from niko:
Today was particularly choppy, how are you mixing that into your plan?.
If I see a trend move I have to take it unless the move is occurring within an established chop zone. Reviewing today's entries I do not see any that were taken in the thick of chop. ON downtrend turned to uptrend. The action was sticky but it was directional. There is room for improvement in judging how sticky it is and thereby waiting a bit. But given my tendency to overthink with too many variables, I rather err on the side of just taking the trade.
My previous plan would have hesitated to go long due to the PM R at 3346. But backtesting has shown that it's better to position for a trend regardless of potential S/R rather than wait for a BO. Too many potentials lead to too much hesitation.
I have undergone a change in outlook these last few days. The plan is a lot simpler now.
Review:
Pressure was building for the long at 0842 but the entry was not taken because there was no fully formed trough. Waiting for the full crest/trough to form helps with preventing early entries. However, why should a tactical rule override the more important Demand/Supply information? The 30s would have provided a clean trough for entry, but picking hindsight entries off bar intervals is not the solution. The entry tactic has to serve the strategy - which is to enter a trend. Bar intervals have got nothing to do with it other than frame price. So my next task is to take the existing ret tactic and make it more robust. If I see a trend, I need multiple options to be able to join it.
The Failed Thrust entry did not meet the plan's conditions, being too far from S. I don't see too many of these so it may take a while till I get used to them. Until then I should pay extra attention to make sure that all entry conditions are met on these entries.
I have to also think about how to dynamically position size based on P&L as well as the speed of the market.
Lastly, I have to brainstorm on what information needs to be recorded from the day's session so that I can keep an ongoing database on the NQ that will warn me of shifts in the character of the market.
http://www.sierrachart.com/image.php?l=1382714521288.png
Pressure was building for the long at 0842 but the entry was not taken because there was no fully formed trough. Waiting for the full crest/trough to form helps with preventing early entries. However, why should a tactical rule override the more important Demand/Supply information? The 30s would have provided a clean trough for entry, but picking hindsight entries off bar intervals is not the solution. The entry tactic has to serve the strategy - which is to enter a trend. Bar intervals have got nothing to do with it other than frame price. So my next task is to take the existing ret tactic and make it more robust. If I see a trend, I need multiple options to be able to join it.
The Failed Thrust entry did not meet the plan's conditions, being too far from S. I don't see too many of these so it may take a while till I get used to them. Until then I should pay extra attention to make sure that all entry conditions are met on these entries.
I have to also think about how to dynamically position size based on P&L as well as the speed of the market.
Lastly, I have to brainstorm on what information needs to be recorded from the day's session so that I can keep an ongoing database on the NQ that will warn me of shifts in the character of the market.
http://www.sierrachart.com/image.php?l=1382714521288.png
Successful traders must understand the implications of the zero sum game. To trade profitably, traders must trade with people who will lose. Profit motivated traders therefore must understand why losers trade to know when they should trade.
- Market Microstructure for Practioners by Larry Harris
Some thoughts on broad markers to identify compelling opportunities.
Markers are:
Retest - Lowest aggregate risk produced by the interaction of price and information risk.
Opening Swings - High uncertainty offers the best Risk/Reward to position for dominant trend of the day.
Counter Counter Trend - Best opportunity to scale in to the dominant trend.
Extremes - State where trader bias is highest.
So the absolute best trade may be:
A counter counter trend trade at a retested extreme occurring during the Opening zone.
- Market Microstructure for Practioners by Larry Harris
Some thoughts on broad markers to identify compelling opportunities.
Markers are:
Retest - Lowest aggregate risk produced by the interaction of price and information risk.
Opening Swings - High uncertainty offers the best Risk/Reward to position for dominant trend of the day.
Counter Counter Trend - Best opportunity to scale in to the dominant trend.
Extremes - State where trader bias is highest.
So the absolute best trade may be:
A counter counter trend trade at a retested extreme occurring during the Opening zone.
FT Day 47 Oct 29
Review:
Today's best opportunity was the short at 0837. However, my tactics did not present any opportunity for entry. There was a clear failure to break through major R. That this happened during the Opening move meant that the likely counter move would be substantial as trades were unwound. A SAR short was worth the small risk. If I am seeing a clear imbalance, I need to be able to position myself. If my tactics are limiting me from doing so then I need to make them more flexible. With greater flexibility comes more opportunity to over trade. So I need to clearly define the conditions that will permit me to enter SAR Reversals.
The exits on the first two shorts were late. Price did not creep up to entry, it surged. Immediate pressure is clearly against the trade so a faster exit is called for. There is always an option to re-enter if the bigger imbalance persists.
http://www.sierrachart.com/image.php?l=1383059551651.png
Review:
Today's best opportunity was the short at 0837. However, my tactics did not present any opportunity for entry. There was a clear failure to break through major R. That this happened during the Opening move meant that the likely counter move would be substantial as trades were unwound. A SAR short was worth the small risk. If I am seeing a clear imbalance, I need to be able to position myself. If my tactics are limiting me from doing so then I need to make them more flexible. With greater flexibility comes more opportunity to over trade. So I need to clearly define the conditions that will permit me to enter SAR Reversals.
The exits on the first two shorts were late. Price did not creep up to entry, it surged. Immediate pressure is clearly against the trade so a faster exit is called for. There is always an option to re-enter if the bigger imbalance persists.
http://www.sierrachart.com/image.php?l=1383059551651.png
Quote from game:
FT Day 47 Oct 29
Review:
Today's best opportunity was the short at 0837. However, my tactics did not present any opportunity for entry. There was a clear failure to break through major R. That this happened during the Opening move meant that the likely counter move would be substantial as trades were unwound. A SAR short was worth the small risk. If I am seeing a clear imbalance, I need to be able to position myself. If my tactics are limiting me from doing so then I need to make them more flexible. With greater flexibility comes more opportunity to over trade. So I need to clearly define the conditions that will permit me to enter SAR Reversals.
The exits on the first two shorts were late. Price did not creep up to entry, it surged. Immediate pressure is clearly against the trade so a faster exit is called for. There is always an option to re-enter if the bigger imbalance persists.
http://www.sierrachart.com/image.php?l=1383059551651.png
Have you tested entries on failures, that was what happened at 8:37 buyers failed to break above the LSH after the DL was broken, so they were telling you that pressure had shifted from the demand side to the supply side.
Even though the market presented a couple of short entries again around 9:4x those were harder to trade depending on initial exit rules.
If your blue dots are the exits, I suggest you review why are you placing your initial exits so close from entry, it has not worked for me so far.
Quote from niko:
Have you tested entries on failures, that was what happened at 8:37 buyers failed to break above the LSH after the DL was broken, so they were telling you that pressure had shifted from the demand side to the supply side.
Even though the market presented a couple of short entries again around 9:4x those were harder to trade depending on initial exit rules.
If your blue dots are the exits, I suggest you review why are you placing your initial exits so close from entry, it has not worked for me so far.
Taking SAR trades without a ret at every failure to break a SH upon break of DS line is going to lead to a lot of scratch/losing trades in chop. I believe that is where the value of the ret comes in, as one gets a mini re-test for confirmation.
In feel that in this case, more important than the SH was the major R of 3392. Failure to break through R at the open justified the greater information risk of a SAR entry. That is what I have to test and define so I can take it without hesitation in the future.
Regarding the exits: do you use a certain logic for entry test level management or is it simply a matter of trial and error? I am wary of curve fitting. It's definitely something that needs to be refined, but I feel that it will come with time as I start getting used to the speed of the market.