Making of a method

Quote from game:

It's been very encouraging to see the theory work in practice even though I am far away from good execution.

I was reading an academic journal article where it was shown that 99% of daytraders lose over the long run. So if 1% are consistently profitable, it is likely that only about 0.1% are consistent with size.
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99% fail because they're not willing to do the work, though there is a considerable percentage who don't even know what the work is (clue: it's not making as many trades as possible, hoping that enough of them work out so that one can at least break even).

It is important to log your successes, to reward yourself for having traded well even though you may not be in profit for that session. For some it takes longer than it takes for others. That's life. But if you want it bad enough, and if you continue to find pleasure in it, you very likely, eventually, will get it.
 
Quote from game:

FT Day 7 Aug 30

R: 3109 (high from 29th) - 5
R: 3100/3103 (mp of range from the Daily and Multiple SH) - 4

S: 3089 (thrice tested SL from 29th and slight HL from PM) Is also mp of yesterday's upwave from 3067 to 3109. - 6
S: 3084 (previous R now S) - 4
S: 3067 (yesterday's low and prior established S) - 5

Review:

1: Error. No Reason to take this. Price had not tested planned S level of 88.
2: Error. The downtrend since the open did not justify getting in this early off S. The right approach would have been to let S establish itself given that price was down since the open. PA did not justify the aggressiveness.
3: OK.Trend since open is down and 88 does not hold. The reaction is not high and the sell stop is hit in anticipation of testing next level of 84.
4: Error. No reason to take this right above anticipated S level of 84. This should have been a preparation to go long instead.
5: OK. Price breaks S level of 84 and the reaction is not very strong.
6: OK. S is formed at 76 and long is entered on the ret of the Rev wave.
7: Error: High Price risk. Did not wait for ret.
8:OK. SAR short off mp zone in anticipation of downtrend continuation
9: OK. Odds favor down because of trend since open and the recent rejection of rally attempts. Trade in anticipation of testing S at 76.
10: OK. Price breaks S and the ret never goes back to value zone.


Negatives:

4 Trades that should not have been taken, of which 2 were blatantly wrong.

Positives:

Focused on having clear expectations of what price should do after entry and exited when it did not happen.
Regained perspective despite the poor performance earlier in the day

http://www.sierrachart.com/image.php?l=1377909716362.png
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Are you using a tick chart to trade. It seems that you are getting more entries that the ones triggered by te 1 min chart you are posting.
 
Quote from niko:

Are you using a tick chart to trade. It seems that you are getting more entries that the ones triggered by te 1 min chart you are posting.
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Yes I switch back and forth between the 1 min and 5s during the session.

It's been challenging maintaining equanimity within the fast action of the 5s. However, since this approach is based on acting on pressure changes at critical points, I think there is a lot of upside in becoming skillful with the faster bar intervals.

My main goal at this point is to maintain perspective despite using a faster interval. I am thinking of it as learning to ride a bucking stallion - the one that is worth taming.
 
Good luck with that my main "personal" problem was to keep focus while looking at the smaller interval and trading live. As I moved from the 30 tick to the 1 min and the 5 min I got not only perspective, but also was able to control my emotions more easily, I made some personal tests and the most I could handle such a small interval with real money on the line was 20 minutes.

I went from over 20 trades a day to about 5, although sim results are better the more you trade, is emotion what screw you up when trading with real money, but that is just my personal fearful oppinion.

I suggest you take a look at 40draws work he seem to be understanding this PA trading very well, me, not so much.

Gotta train a lot more on this side to be able to keep taking objective decisions in such a small interval.
 
Quote from niko:

Good luck with that my main "personal" problem was to keep focus while looking at the smaller interval and trading live. As I moved from the 30 tick to the 1 min and the 5 min I got not only perspective, but also was able to control my emotions more easily, I made some personal tests and the most I could handle such a small interval with real money on the line was 20 minutes.

I went from over 20 trades a day to about 5, although sim results are better the more you trade, is emotion what screw you up when trading with real money, but that is just my personal fearful oppinion.

I suggest you take a look at 40draws work he seem to be understanding this PA trading very well, me, not so much.

Gotta train a lot more on this side to be able to keep taking objective decisions in such a small interval.
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You don't have to be satisfied with the defaults, you know. There's a wide world beyond 1, 5, 15, 60. You can use a 3m bar. Or a 7m. or a 32m. How you construct your summaries is entirely up to you.
 
Quote from dbphoenix:

You don't have to be satisfied with the defaults, you know. There's a wide world beyond 1, 5, 15, 60. You can use a 3m bar. Or a 7m. or a 32m. How you construct your summaries is entirely up to you.
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Thanks, event though i understand the fact that the price is continuous (my journey through tick land helped me with that) i seem to be stuck in pattern land, and fail to see in real time what seems like ovious PA in hindsigth.

My main concern is that if i even look at the tick in RT I will start seeing all kind of signals to get out of what seems like a legit trade in the 1 min. I know at this stage is something in my mind that is not helping with the process, and i am working on dealing with that, not really sure how, i think i will have to go back all the way to screen time in order to find out where did I screw up.
 
Quote from niko:

____________________________________________

My main concern is that if i even look at the tick in RT I will start seeing all kind of signals to get out of what seems like a legit trade in the 1 min.

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I don't usually watch the tic chart when trading. I use it mainly to go back at the end of the day when I write up my daily review so I can recall what I was seeing on the one minute bar interval at the time. And if you are focused on the one minute as you need to be, you will see everything there that you would see on a tic chart anyway, with the addition of all the context visible on the one minute that would necessarily "fall off" the tic chart.

If you are "seeing all kinds of signals" on a real time tic chart, then maybe you are not keeping the "where price is" part in mind, I suppose. For example, on Thursday, during the rally from 64 to 3109, a tic chart would have "signaled" no end of short sales due to "LH"s. These are not really reversals, as we now know, but really just "rests" along the way. DbPhoenix described them much better terms in a post on Thursday:

Quote from dbphoenix:

Sometimes demand fades. People do get tired. But demand fuels buying (this is something the snickerers seem not to understand). And sometimes they just have to rest for a while and see what's going on around them.

____________________________________________________


That's where the mechanical approach falls short. It's not enough to see it; one must also understand what he's looking at.
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You have mentioned "pattern land" several times in your posts, Niko. By pattern land, if you mean using lower highs as signals to short or exit a long or higher lows as signals to long or exit a short, might it be the case that you are applying these patterns in the absence of any nearby anticipated S or R? No where near a midpoint or 50% retrace? No real demand or supply line break? These are the clues that help you understand what we are looking at.

If so, maybe it would help you to go back to the first one minute chart DbPhoenix posted in the "Drawing straight lines thread." I use that chart as my wallpaper or background or whatever it is called on my laptop. It is the first thing I see when I turn my computer on in the morning before I load my IB and Multicharts, and it is the last thing I see when I shut down after I finish my daily review of my trades. It is always a helpful reminder to me of what I am supposed to do that day, and how I'm supposed to do it.
 
Quote from fortydraws:

I don't usually watch the tic chart when trading. I use it mainly to go back at the end of the day when I write up my daily review so I can recall what I was seeing on the one minute bar interval at the time. And if you are focused on the one minute as you need to be, you will see everything there that you would see on a tic chart anyway, with the addition of all the context visible on the one minute that would necessarily "fall off" the tic chart.

If you are "seeing all kinds of signals" on a real time tic chart, then maybe you are not keeping the "where price is" part in mind, I suppose. For example, on Thursday, during the rally from 64 to 3109, a tic chart would have "signaled" no end of short sales due to "LH"s. These are not really reversals, as we now know, but really just "rests" along the way. DbPhoenix described them much better terms in a post on Thursday:



You have mentioned "pattern land" several times in your posts, Niko. By pattern land, if you mean using lower highs as signals to short or exit a long or higher lows as signals to long or exit a short, might it be the case that you are applying these patterns in the absence of any nearby anticipated S or R? No where near a midpoint or 50% retrace? No real demand or supply line break? These are the clues that help you understand what we are looking at.

If so, maybe it would help you to go back to the first one minute chart DbPhoenix posted in the "Drawing straight lines thread." I use that chart as my wallpaper or background or whatever it is called on my laptop. It is the first thing I see when I turn my computer on in the morning before I load my IB and Multicharts, and it is the last thing I see when I shut down after I finish my daily review of my trades. It is always a helpful reminder to me of what I am supposed to do that day, and how I'm supposed to do it.
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Thank you for your reply. By pattern land I mean the inability to read what traders are doing in real time, instead of just spotting patterns, that even though can end up having a high probability are still far away from being able to know what is happening with traders when one is risking money.

I think i must have skipped a step or two, there is a thin line but with brutal distance that separates where I am from where i want to be. So i guess i just have to keep on working on my tape reader skills, and see if I can ever get to the other shore.

I have not been very good at spoting S and R, as I said some days ago, i guess it could be something related with the instrument of preference that is CL, I have restarted following NQ to see if i can get a new aha moment that can take me to the next step of the ladder.
 
Quote from niko:

I have not been very good at spoting S and R, as I said some days ago, i guess it could be something related with the instrument of preference that is CL, I have restarted following NQ to see if i can get a new aha moment that can take me to the next step of the ladder.
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As far as S & R on CL, from what I have observed from watching for about two or three weeks, the only consistently reliable areas worth watching for a trade are found around the prior day's high and low. If price breaks one of those levels, then it seems like it wants to keep going. There was one day where there was a dog didn't bark situation where I think I remember CL made a new low by just a few pennies, if even that much, and then reversed. I can't get my charts open from where I am right now, but that may have been the day before it broke from that hinge you had noted. And now that I think about it, the break of the high & low leading to continuation might have be because price was in the hinge, "filling it with price." So it would take many more days of watching for me to say for sure.

The NQ has been easier for me than CL looks to me because most of the stocks I traded were Nasdaq stocks, and I imagine that their behavior was influenced by the general behavior of the trade of stocks in that index.
 
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