Making of a method

I am currently not trading, but this is what I saw in real time as possible entries, no exits are defined, as one can exit at the last swing, or the break of the line or wait for the 50% retracement, not really sure about which one to use, so I am just looking for entries now. Depending on the exit strategy some of these entries will not be allowed as one would be holding the opposite position, or perhaps one could just have two accounts.

I see that you are entering farther away from price than before, am I wrong or have you changed your entry strategy?
 

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Quote from niko:

I see that you are entering farther away from price than before, am I wrong or have you changed your entry strategy?
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It's back to the original tactic of entering 1 point from the crest/trough. A few weeks back I stopped the experiment with entering on smaller bar intervals off S/R. This wasn't working out and I use the 5s now only during the Open and for determining entry test levels.

Your entries look good. Your definition of a ret is a little different than mine, which lets you be a little earlier on certain entries - like the short at the Open and the long after that.

Regarding your second short: I would have taken this a few months back, but my plan now requires a retest of S/R before taking a Reversal trade off a main wave - a guideline to discourage me from going counter trend too early.
 
S/D review for Oct 15th

1. The Rev attempt fails at the 50% level. Supply still dominant. Short in anticipation of test of S.

2. DB confirms S and sets up the long Rev entry.

3. Long is stopped. Balance here. Do nothing until imbalance.

4. Break below S signals imbalance. Waiting to see if price will find S at this level again.

5. The ret does not enter back into value zone. Short.

6. Strong bring back of breakdown attempt shifts balance to demand even though price is still in the middle of former chop zone. Long is taken because of the strength of the surge. If price had instead crept up instead of surging, there would be no strong reason to assume imbalance.

7. Decision to be made. Exit on breach of SL or hold? There has been a 13 point swing without any significant ret. OTOH the long term trend is up.

8 and 9. Although price retraced a majority of the former up wave, HL's were formed along with HH's, indicating demand.

10. The previous back and forth at 8 and 9, along with the current fall below the 50% mark signals balance, long is exited.

11. Continuation attempt makes DT. Neutral.

12. Important zone. Will neutral turn to LOLR up or down? Be ready with Sell stop if price finds R again. Short.

13. Price cannot go past 50%. Supply still in charge.

14. Price finding S at previous congestion zone. Exit on cross of SH.

15. Rev attempt falters. Continuation short.

16. Strong 8 point surge. Do not just jump in at this level of extension. Wait for a full ret to form.

17. Full ret forms. Long.

18. Exit on SL breach.

19. Short as R confirmed through LH retest.

http://www.sierrachart.com/image.php?l=1382154766163.png
 
Quote from Gringo:

Today was a bit of a punch in the gut for you.

Gringo
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It was in the liver. Went through many months of past sessions this weekend and realized the staggering difference between taking profits like I had been versus letting the trade run. The probability of V Reversals after a 8 point trend run was 17%. Granted this will not apply during a ranging environment. Also realized the value of giving trend continuation trades room instead of getting out at the first instance of trouble.

I took my new found enthusiasm for holding on a little too far. Letting winners run is different from letting BE trades run after they have come back all the way to entry. And giving trend continuation trades room applies when it is a low price risk entry taken at a deep retracement rather than up top near R. It takes me a while to re-calibrate whenever I have these moments of insight. There is a bit of dissonance and hesitation as the tanker turns. Perhaps in the future, when I do have these 'weekend insights', I should just simply observe till I am ready to incorporate the new view.
 
FT Day 42 Oct 22

Review:

Today's review will be against the new strategy which is as follows:

New strategy

1. Take a position during the first trend move of the open
2. Keep on taking sequential swing moves until either

a.Dominant trend is established

OR

b. Range is established
There will be a max of 4 major trades before the existence of Range is confirmed. Two longs and two shorts.

If a dominant trend is established

a) Hold on to it through first Reversal because most likely there will be a retest of some sort

b) Add to position at deep retracements

c) Don't take any counter trend trades till dominant trend is confirmed to be over either through a deep Reversal or very clear S/R

The goals of this strategy are to:

1. Greatly improve winning trade management by holding till the dominant trend is over

2. Greatly reduce counter trend trading by only taking trades in the direction of dominant trend.

The main problems that need to be resolved are:

1. Judging the pace, extent and duration of a swing to determine if a dominant side exists.

2. Exiting trades quickly if the dominant side has not been confirmed, so that I am ready to position for the opposite move.

Mistakes from today:

1. Today's longs from the open should have been exited upon some MAE because there was no overwhelming pressure. Normally, these moves bust out off the open.

2. Scaling should occur during retracements ONLY once the dominant side is established. I have been scaling in too quickly without waiting for either deep retracements or confirmation of dominant trend.

3. The slow start and lack of follow through during the move out of the Range meant that no dominant side had been established. Thus, I was free to take shorts. There was no trend to warrant counter trend caution. I should have gone back to sequential swing trading mode.

http://www.sierrachart.com/image.php?l=1382455240433.png
 
The surprising success of equal weighting schemes has an important practical implication: it is possible to develop useful algorithms without any prior statistical research. Simple equally weighted formulas based on existing statistics or on common sense are often very good predictors of significant outcomes. In a memorable example, Dawes showed that marital stability is well predicted by a formula:

frequency of lovemaking minus frequency of quarrels

You don't want your result to be a negative number.

- Thinking, Fast and Slow
 
FT Day 43 Oct 23

Review:

The plan was to be fluid with small risk and hold steady for large gains. The plan was well executed.

My current guidelines call for being aggressive with ret's only during the first few moves and thereafter giving them room to form a full crest or trough on the 1 min. This let's me take advantage of the faster movement during the open and safeguards me from chop as the action slows down.

However, the arbitrary rule of stopping aggressive ret's after the first two moves led to missing the short at 0844. The action was fast and demanded a faster position. If the action after the first two moves remains fast, I can continue with fast rets.

http://www.sierrachart.com/image.php?l=1382541581463.png
 
FT Day 44 Oct 24

Review:

For the plan to work I need to do the following things well:

1. Not hesitate to participate in the first few trend moves off the open
2. Keep losses small on these moves
3. Stop if price stops trending
4. Let winners run till dominant trend is over

All these things were done today. There are times when I sense a lack of power in pressure during the first few moves of the Open. Perhaps this is just hindsight illusion. But I will keep observing to see if there are any clues in the pressure that will allow me to adjust and match the aggressiveness of entry with the speed of the action.

Once price dropped quickly after the BO failure from R at 46, price failed to drop below 41. The trend, although slow and choppy, was up. The retracement of this trend, despite being deep, sharp and below the established R level was being repeatedly supported at 41. While there was no clear opp to take the immediate Reversal of this counter wave, there was a continuation opp at 0942.

http://www.sierrachart.com/image.php?l=1382630124752.png
 
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