There's nothing inherently wrong with bias as long as the trader confirms his bias with the behavior of price rather than forge ahead without regard for the contradictory signals price may be providing. In the example I was referring to, price went up or sideways without ever breaking a demand line, confirming the "bias" that buying pressure held the upper hand.
Making of a method
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There's nothing inherently wrong with bias as long as the trader confirms his bias with the behavior of price rather than forge ahead without regard for the contradictory signals price may be providing. In the example I was referring to, price went up or sideways without ever breaking a demand line, confirming the "bias" that buying pressure held the upper hand.
Quote from Redneck:
Pullin for ya Game
It takes effort and TIME to train/ retrain the ole noggin, while assimilating this shit�
But it can be done... (and in addition to everything else - you're also learning patience and perseverance)
Keep on truckin Sir
RN
I believe this is very true specially in combination with the contextual part dbphoenix emphasizes over and over. It actually is all about doing it each and every day. This should lead to discipline and the ability to adapt to the changes of the market.
The key here is simplification I guess, i.e. the way dbphoenix mentioned it yesterday, that the macro demand line was not broken so the trend is up - untill there are other signals (lower highs, lower lows etc.)
Tactics, and that's something I'm chewing on atm, is another topic. For me for example it would have been hard to stay in the way dbphoenix described it in terms of the retracement trade yesterday - eventhough the swing low was not broken.
Trading will not likely be as simple today as it has been. Price exited the trend channel but moved sideways thereafter. It must at least hold here if not progress, otherwise buyers (who are currently weak, the strong having bought at the bottom of the channel) will toss their shares back on the market and price will return to the trend channel.
It is particularly important, then, to look for confirmation or contradiction of your "biases" or trade hypotheses at each turn. Those who have fear issues assume that every move counter to their trade is a red flag and a harbinger of doom. As unrealistic as the expectation may be, they want each bar to move in the desired direction, one after the other. Thus a lot of exits, a lot of breakevens, a lot of commissions, a lot of missed trades. Focus instead on the fact that retracements are an opportunity for those who missed the proper entry to take advantage of the second chance (or third, or fourth, some jumping in all the way to the last retracement before the top or bottom). One must ignore the "bar" per se and focus on what traders are doing and how they're doing it. Is price, for example, plunging (after an upmove)? Or is it pausing, the result of light selling (sellers can't be too aggressive or else they won't get the best price)? What matters, then, is not the move itself but the character of it and the extent of it. As with yesterday's upmove, if price doesn't drop below the last swing low (in the market), or if it drops below the demand line (in the trader's head) by a couple of ticks but then rapidly recovers, then the upmove is intact. If, however, the trader is obsessed with his entry and where price is in relation to it, he will in effect go blind and be incapable of assessing the situation properly.
Sufficient observation will make this clear, but the longer the trader has been trading, the more difficult it becomes to observe without focusing on entries and couldawouldashoulda. But then if it were easy, everybody would be doing it. Fortunately, though it may not always be easy, it is usually very simple.
It is particularly important, then, to look for confirmation or contradiction of your "biases" or trade hypotheses at each turn. Those who have fear issues assume that every move counter to their trade is a red flag and a harbinger of doom. As unrealistic as the expectation may be, they want each bar to move in the desired direction, one after the other. Thus a lot of exits, a lot of breakevens, a lot of commissions, a lot of missed trades. Focus instead on the fact that retracements are an opportunity for those who missed the proper entry to take advantage of the second chance (or third, or fourth, some jumping in all the way to the last retracement before the top or bottom). One must ignore the "bar" per se and focus on what traders are doing and how they're doing it. Is price, for example, plunging (after an upmove)? Or is it pausing, the result of light selling (sellers can't be too aggressive or else they won't get the best price)? What matters, then, is not the move itself but the character of it and the extent of it. As with yesterday's upmove, if price doesn't drop below the last swing low (in the market), or if it drops below the demand line (in the trader's head) by a couple of ticks but then rapidly recovers, then the upmove is intact. If, however, the trader is obsessed with his entry and where price is in relation to it, he will in effect go blind and be incapable of assessing the situation properly.
Sufficient observation will make this clear, but the longer the trader has been trading, the more difficult it becomes to observe without focusing on entries and couldawouldashoulda. But then if it were easy, everybody would be doing it. Fortunately, though it may not always be easy, it is usually very simple.
It's also a good example of the point I've been trying to make about the difference between expectation/anticipation and prediction. One can anticipate something interesting at or about 87, but he can't know exactly what it will be. However, he is at least paying attention. Ditto with 97/98; he can anticipate something interesting without knowing exactly what it will be. In the meantime, unless he is particularly adept at trading ranges (which carry extreme information risk but minimal price risk), he can sit back and trim his cuticles.
Quote from Redneck:
Pullin for ya Game
It takes effort and TIME to train/ retrain the ole noggin, while assimilating this shitâ¦
But it can be done... (and in addition to everything else - you're also learning patience and perseverance
Keep on truckin Sir
RN
Agreed, working on this myself!
Day 10 of 20
Prep:
Price in definite uptrend since the lows of the 13th. Key R on the daily is 3005 (Highs from the 4th and the 10th). If price crosses these levels, traders may try to take it to the high of 3051. Price in a narrow 10 point TR since yesterday afternoon. Could break strong in either direction out of this narrow zone.
S1: 2987 (been tested 3 times between yesterday and overnight)
R1: 2998 (from PM & 10th)
R2: 3005 (from 4th & 10th)
http://www.sierrachart.com/image.php?l=13716854675.png
Prep:
Price in definite uptrend since the lows of the 13th. Key R on the daily is 3005 (Highs from the 4th and the 10th). If price crosses these levels, traders may try to take it to the high of 3051. Price in a narrow 10 point TR since yesterday afternoon. Could break strong in either direction out of this narrow zone.
S1: 2987 (been tested 3 times between yesterday and overnight)
R1: 2998 (from PM & 10th)
R2: 3005 (from 4th & 10th)
http://www.sierrachart.com/image.php?l=13716854675.png