Making of a method

[game]

Review:

Trade 1 & 2: Though the Opening thrust did not touch 91, the upthrust looked strong and given the slight up LOLR for day - longed with small size. I wasn't expecting a rocket, and neither was this a very compelling Support. So when price hesitated after some favorable movement, the trade called for an exit for a small loss with a re-entry option. I exited in no man's land just as the swing low was being tested.

This lack of a clear exit and re-entry tactic is a gap in the plan.

Give that this was a 1 lot trade, I did not see any compelling reason to hold through adverse action to ride the uptrend. Neither did I see any compelling reason for a re-entry.

Once the line showed weakness at 37 I started looking for a SAR short up in thin air but none were available. There was no compelling reason to go short via a standard ret entry.

 

[game]

Oct 21st

Trend:

After an ON retracement to the TC mean, price has shot up again continuing the already sharp uptrend which is now 221 pts.
If this trend continues towards the upper limit of the TC, it will first have to contend with the 3930 zone, the break and retest of which led to the cascade on the 10th.

The ON uptrend is worth 59 pts. It is showing signs of stalling, although there has been some ON balance underneath it already, which may provide a base for a further thrust as the market opens.

Value: This uptrend has now clearly broken the 50% level of the initial sharp drop from the 9th. There is not much lateral value close by, except the recent 2 hr congestion from ON.

Potential Trades:

1. Long on new high once some extra confirmation is received from rejection of down move
2. Short on break of DL as price clears PM congestion
3. Long off 50% zone at 3878

Size: No trades will be occurring off major extremes and the trend is extended. Keep size small.

 

[game]

Review:

Trades 1 & 2: Short once there was indication that there wasn't going to be a scramble to join a new swing in the extended uptrend.

Trade 3: Hinge break gets rejected. Overall reasoning same as above.

Trade 4: Compression broke up and shorts would be feeling some heat. But confidence in overall line was low due to the choppiness of the action and dull pace. Exited as the thrust showed signs of failing.

There was no strong reason to take any further longs. Despite the uptrend, the action was poor and that is not what I want to trade.
As price moved to the UL of the TC, it spiked up and there was an opp for an aggressive short in thinness. But once again, the quality of the action discouraged me. I wanted a retest. Price is now retesting, but there is too much flatness to participate against the grind.

Overall decent day.

 

[game]

Oct 22nd

Trend:

The original recoil has turned into a strong trend of its own. The lack of any resistance to this rise indicates that most of the longs had already capitulated on the way down. There will be expectations for a Reversal after this unusual rise. However, since price did grind up here, it could simply move flat for a few days and create a lot of chop. No real downward pressure indicated from ON action.

Value:

While price is back inside the older range, the amount of action since then invalidates most of the prior levels. Price is on the UTL of the 60 min TC.


Potential trades:

1. Long on new highs
2. Short only on strong break through 3962
3. Long off 3940/44

 

[game]

 

[game]

Oct 23rd

Trend:

Price is on the mean of the weekly. It got here via a spectacular rise from the 16th onwards. This rise finally balanced out yesterday, creating a 40 pt Range as ON action saw price climbing strongly off the lows to test the high, where it now sits in a hinge.

While the strength of the ON rise points towards a potential continuation of the uptrend, the sharpness of the larger trend, along with the retests at the high presents an equally good case for the short side. But both moves could be strong off these levels. Yesterday's volume was high enough to give some extra push to either of these directions.

Value:

The mean of the Range is at around 3958, which coincides with the retracement level of the ON uptrend. If price clears the range, the next major level of value is at 3908.

Potential Trades:

1. Long on break of Hinge
2. Reversal Short off Hinge Continuation Failure
3. Short on Hinge break to downside

 

[game]

Review:

Trade 2: The exit from the Opening compression came off the Opening Low with confirmation at the apex. The line had some clarity to it. The exit was fine given that these exits tend to leave this zone rather quickly and there was no point just hanging around. The correct play would have been to realize that the stall had not resulted in a drop back into the congestion. That the stall stopped right at the 50% level of the immediate thrust gave further confirmation of the line. The re-entry on the secondary ret was called for.

given that the larger line was already well extended, there were no low risk continuation trades further up.The trend has flattened out and there are no good shorts amidst this value.

My confidence in seeing the larger line and being patient in taking only the best trades is growing. The need for a precise mental flow chart of decision making to manage risk and re-entries is the weak link. Increasing stop size is not the solution because I will never be able to trade meaningful size with such a tactic. There is a lot of information in the first few minutes after the entry is triggered and I need a robust If/Then structure to act upon it.

 

[game]

Oct 24th

Trend:

While the large up trend off the bottom is still intact, yesterday's late fall reversed 66% of the latest leg, where it then stopped at the Opening low zone. After congesting sideways during ON, it has since picked up steam via a strong spike at 7:40

There is no clear line evident, as the trend slows and lateral levels start forming. The latest leg of the uptrend emerged from short term balance. Shorts off the high may be a better play than shorting the momentum into this balance. Longs off nearby Support do not look too attractive at this stage.

Value:

The PM spike has brought it inside the value zone of yesterdays trading with VAP at 4007. The mp of the ON movement is around 3992.

Potential Trades:

1. Short failure of attempt towards yesterday's high.
2. Short strong movement through 3986

 

[game]

Review:

Recent themes:

The distortion from my incomplete understanding of danger points and criticality produced an orientation towards Reversals, causing a missing out on some powerful trend moves over the last few weeks. However, this week has brought about a much needed clarification. I am starting to see a simplicity in the larger movement and what danger points are about. In seeing how the market is positioned with respect to trend and it's quality, the prep has improved greatly, and I feel confident about the trades that I am putting on.

Seeing the larger line has greatly reduced the number of trades. This in turn has given me insights into the gaps in my adverse trade management. Earlier, the sheer number of low quality trades obscured the quality of trade management, as there was no confidence in the entry to begin with.

The rise in tension as a trade gets triggered need not be something to get rid of, as long as I can harness the automatic increase in tunnel vision type focus to execute precise maneuvers within the entry pocket. Confidence and growing skills in this area will enable me to trade size at these danger points.

There is a beauty to this rhythm of circling down from a larger perspective to executing precisely within the entry pocket, to then once again regaining the large perspective to manage exits. Right now my average time in winning trades is not much greater than time in losing trades. Once this ratio gets to 10 in Trending environments and around 5 in Ranging environments, the points will follow.

 

[game]

Oct 27th

Trend:

We are just a little bit above the mean of the weekly channel. ON action saw price reaching the 4050 level, which has earlier been the Reversal level for the big fall from the 9th. Price has since once again Reversed off this level.

The parabolic rise from the lows has been balancing from the 22nd onwards, although the upward trend is intact.

Value and levels:

Given the extent of recent moves, only the diagonal mean of the weekly TC is being considered. The Daily and 60 min are much too sharp.

Activity from the 22nd onwards has created lateral levels at 4007,3977 and 3941. 4007 is the short term mean.

Potential Trades:

1. Short off retest/LH of attempt towards 4050
2. Long off 3977