Making of a method
- Thread starter game
- Start date
5/6/13
3 Trades were placed but none triggered.
8:38 Thinking about the retracement happening right now in this uptrend. Price has bounced twice from R at 2948.75 but is also being supported at 2947. A mini hinge being formed.
8:43 Sell stop at 2944.75
8:44 Cancel sell stop
8:54 Sell stop 2943
8:55 Cancel sell stop
9:20 Sell stop 2946.50
9:22 Cancel sell stop
Summary:
As price shot up from the open I was on the lookout for retracements. Saw an opportunity develop at 8:34 but the pullback and retracement was very quick - happening within the same min bar. Not enough time. Maybe that's a good thing?
T1: No visible S nearby except at open.
T2: Price had broken out of the hinge and took this as confirmation of end of the range that had been forming. But price went back into the range.
T3: Since there was no trend for the day and since the range had been established, looked for a retracement entry on a bounce off Range R.
Looking through the prism of retracements on trend helped avoid a lot of trades today. This same chart last week would have resulted in many more trades and most of them would have been chopped up.
If the nature of price movement after a retracement is what is important, then I have to spend time observing these movements. There will always be a lot of retracement on any given chart. But there will be fewer retracements that present a higher probability trade.
Right now, I speculate that the best retracement trades will be those in which:
1) There is no clear overhead R so the odds of continuation are greater.
2) Price starts to congest in a tight range with a clear Support level.
3) The congestion takes some time - thereby showing double bottoms or perhaps a higher low on the 1 min.
3 Trades were placed but none triggered.
8:38 Thinking about the retracement happening right now in this uptrend. Price has bounced twice from R at 2948.75 but is also being supported at 2947. A mini hinge being formed.
8:43 Sell stop at 2944.75
8:44 Cancel sell stop
8:54 Sell stop 2943
8:55 Cancel sell stop
9:20 Sell stop 2946.50
9:22 Cancel sell stop
Summary:
As price shot up from the open I was on the lookout for retracements. Saw an opportunity develop at 8:34 but the pullback and retracement was very quick - happening within the same min bar. Not enough time. Maybe that's a good thing?
T1: No visible S nearby except at open.
T2: Price had broken out of the hinge and took this as confirmation of end of the range that had been forming. But price went back into the range.
T3: Since there was no trend for the day and since the range had been established, looked for a retracement entry on a bounce off Range R.
Looking through the prism of retracements on trend helped avoid a lot of trades today. This same chart last week would have resulted in many more trades and most of them would have been chopped up.
If the nature of price movement after a retracement is what is important, then I have to spend time observing these movements. There will always be a lot of retracement on any given chart. But there will be fewer retracements that present a higher probability trade.
Right now, I speculate that the best retracement trades will be those in which:
1) There is no clear overhead R so the odds of continuation are greater.
2) Price starts to congest in a tight range with a clear Support level.
3) The congestion takes some time - thereby showing double bottoms or perhaps a higher low on the 1 min.
The question isn't " What information do we need to take a risk?" nor even "What information should we want?" but rather, "Since this is the information available , how do we use this information so as to reduce risk?'
The Nature of Risk - Justin Mamis
5/7/13
Trade 1: 2.00
Trade 2: -1.25
Trade 3: +1.75
Net: 2.50
8:40 Sell Stop at 2953.50
8:40 Cancel sell stop
8:41 Sell stop at 2954
8:42 Stop hit
8:45 Exit at 2952
8:54 Sell stop at 2953.50
8:54 Stop hit
8:56 Exit 2954.75
5 point range since open. Retracements happening in the middle of the range are not worth it.
9:17 Buy stop at 2943.50
9:17 Cancel buy stop
9:22 Buy stop at 2942.75
9:23 Stop hit
9:27 Exit 2944.50
9:31 Sell stop at 2943
9:32 Cancel stop
9:33 Buy stop at 2945.75
9:35 Cancel stop
9:39 Buy stop 2946.75
9:41 Cancel stop
Summary:
A good example of the need to be adaptable and change perspective. I was primed by the 5 point range from today.
Once price broke it, I could not bring myself to enter on a retracement as I was expecting a reversal or drift. There were a number of chances to enter the downtrend. None gave much time to enter though - very little hesitation until the last retracement down below.
The Nature of Risk - Justin Mamis
5/7/13
Trade 1: 2.00
Trade 2: -1.25
Trade 3: +1.75
Net: 2.50
8:40 Sell Stop at 2953.50
8:40 Cancel sell stop
8:41 Sell stop at 2954
8:42 Stop hit
8:45 Exit at 2952
8:54 Sell stop at 2953.50
8:54 Stop hit
8:56 Exit 2954.75
5 point range since open. Retracements happening in the middle of the range are not worth it.
9:17 Buy stop at 2943.50
9:17 Cancel buy stop
9:22 Buy stop at 2942.75
9:23 Stop hit
9:27 Exit 2944.50
9:31 Sell stop at 2943
9:32 Cancel stop
9:33 Buy stop at 2945.75
9:35 Cancel stop
9:39 Buy stop 2946.75
9:41 Cancel stop
Summary:
A good example of the need to be adaptable and change perspective. I was primed by the 5 point range from today.
Once price broke it, I could not bring myself to enter on a retracement as I was expecting a reversal or drift. There were a number of chances to enter the downtrend. None gave much time to enter though - very little hesitation until the last retracement down below.
Db - in trying to think about price movement within the retracement pocket, I drew up some scenarios. I realize that much of this is context dependent, but I was hoping that by breaking up the problem into parts, I might be able to make better progress.
If I assume that:
1) The primary trend is up with no substantial R overhead
2) The DS line has not been broken yet.
Then, which of the attached scenarios would be most suitable for taking a long position within the retracement pocket? And which would be least?
Does the following logic hold?
Scenario 4 would be the best for a long because price is making HH and HL, thus indicating a trend within the pocket.
Scenario 1 would be the least suitable because price has broken into a wide range within the pocket and there is too much risk of getting chopped.
If I assume that:
1) The primary trend is up with no substantial R overhead
2) The DS line has not been broken yet.
Then, which of the attached scenarios would be most suitable for taking a long position within the retracement pocket? And which would be least?
Does the following logic hold?
Scenario 4 would be the best for a long because price is making HH and HL, thus indicating a trend within the pocket.
Scenario 1 would be the least suitable because price has broken into a wide range within the pocket and there is too much risk of getting chopped.
Out of curiosity, would like to know what the OP did to deserve the honor to get coached routinely by a veteran trader.