OMG....Where are the price bars???

[llIHeroic]

"I did want to ask a final follow up question if I may. You differentiate between doing this careful and rational analysis and contrast this with just playing probabilities.

Trading is after all just a probabilities game...

...I'm not sure why you relegate the idea of probabilities into the "lazy trader" pile.

For closure's sake: The short answer is that you present the bolded statement as a fact, but I think it is a belief, and one that I don't share. I think that the market follows a rational and scientific system of operation that can be observed and understood at all times. It was hasty of me to use the word "lazy" as it carries certain negative connotations that don't necessarily apply to a fundamental difference in belief between myself and said traders.

Regardless, let's leave that aside. I am aware that it is an absurd belief to most and I have no vested interest in trying to alter anyone's personal persuasion. However, I would like to propose that trading is like cleaning a room in your house, for example. What is clean? How clean do you have to make the room until you've completed its cleaning? I may pick up any mis-placed items and vacuum the floor, then consider the job done. Another may argue that the room isn't clean yet since I haven't dusted it as well.

Everyone has to draw their own line. The further into specifics and differentiating you get with trading, the more successful and less fearful you are, usually. NoDoji carried out this process I am describing. [Thank you for your response, by the way. I appreciate your commendation and admire your approach to trading, especially your efforts to share it with others.] So, she now has increased the success rate of a pattern she recognizes to a higher level.

Do you think that she has done all there is to be done? Perhaps as she compiles data on the smaller sub-group of remaining failures she will be able to further refine her understanding of the pattern once again and increase her success rate. I don't know for certain, but considering her mindset, I'd wager that even in the past few months she has learned something new or made an improvement to her methodology, even if on a very small scale.

The process only ends when you decide it does; when you are unwilling to put forth additional effort to continue to make improvements, you're comfortable enough with your current skill-set that you see no need to develop it further, or you delude yourself into thinking you know all there is to know and the rest is random.

 

[dbphoenix]

I have done this before but I found it to be almost too rigid and I started to focus more on like I said in my first post the pattern versus what buyers and sellers are doing. I have a setup that appears roughly 100 times in a year w just under a 70% win rate and a 4.6:1 profit to loss. I classified the types of entries into V U lll. The more I filtered "things" the more handcuffed I felt during the trading session. What I am after now is more of the flow of it all and thinking more about buyers and sellers versus oh ok this trade is invalidated bc it "looks like" this (lll) instead of this (V). My struggles are now finding static charts of no use because the pace of it all isn't there. You can have an idea of it but you can't see it and feel it. It's like trying to learn how to shoot free throws by looking at pictures of people shooting free throws as opposed to going out in the driveway and shooting 100 times. I'm doing more focused replay now but it takes a decent amount of time to go through. I suppose I shouldn't call it a struggle it just takes more time. Which is fine.

My goal is to truly understanding the flow of it all and what that means in terms of buying and selling. With static charts I feel your missing a 1/3 of the puzzle by not being able to see the pace. You can see duration and extent on a static chart but there is some left to be desired by not seeing the chart move. I also think the more rigid and the more you study static charts the more anxious one can get once the chart starts moving. Think about it. It's easy to see and analyze all of this when the day is done and your chart isn't moving. You train yourself to see this environment as not moving. So when a few ticks come against you you go uh oh and exit. Then at the end of the day you recap and it's all cws. The you in all of this I'm speaking in general terms and a bit of my problems I had in the past.

I suppose now in terms of differentiation I am attempting to see and feel the behaviors of traders and what that could mean for the next probable direction of price. Another issue I have is trying to qualify it all and then once it's qualified quantify it. Maybe I'm just complicating this all more than it has to be and in my mind i understand what I am trying to do but putting the words on paper for all of you to read it's not coming out right lol.

Like how can I qualify and then quantify a change in pace as part of an entry process? Or going "parabolic" into R and then the pace just "drops off" or as parabolic as we go into R price gets shot off it like a slingshot w "more force" than the parabolic move into R to begin with. I believe there is so much more info in these "behaviors" than the info I'd get from a bar closing a certain way. I "saw" moves/behavior like this on a 1min but at times would lose it because at times these pushes/probes/rejections were almost "hidden" within the bar. I suppose I wasn't skilled enough yet to do anything with these behaviors. Seeing price as a line is helping with that. There have been times I see the pace change on a move up and then down even within that same 1min bar but it was more difficult for me to see it as a wave where now looking at a line I can see the waves of these movements. I have many examples already of some interesting things even within the scope of the traditional SLA approach w opening all this up.

I'm attempting this so we'll see what happens however the traditional SLA and the other strategy will never go away if I can't "get this"

It appears that you have experienced a few epiphanies, and even though what you've said here is pretty much what I've said in the past, experiences and insights are not easily transplanted, which is why I encourage/insist that beginners conduct their own observations and formulate their own hypotheses (what-ifs) rather than try to emulate me.

Those who stick with this eventually come to understand that it is the flow that matters, not the pattern or the bar (or candle) or whatever lines one may draw or might have drawn. They also understand that studying static charts in order to come up with things to look for in replay is a stage that shouldn't take more than a couple of weeks, not a couple of years, and the sooner one gets into replay and actual movement, the sooner he'll begin to become sensitive not only to this flow but also to changes in it. For example, the behavior of price in a retracement: does it plunge? hesitate? flutter? stall? What happens after each of these behaviors? Is there useful information here, information that can be used when this occurs again (which it will, sometimes within a few minutes)?

The behavior after a parabolic move up or down is almost guaranteed. A pause. A breather. A what now? Traders want to see what other traders are going to do. Are they going to throw it all back onto the market? Or is there a continuation in store? Being mechanical about it isn't going to result in much if any progress. Rather one must account for various outcomes and take his risks where they seem to be most favorable (which is the basis for TDTDB).

Resorting to statistics and the mechanical does not deliver one from the sort of New Age Fluff that this can become. However, one must remember that the touchy-feely thing alone isn't going to put him in the profit column. For example, even though he may become exceptionally adept at predicting whether or not the behavior in a retracement is or is not characteristic of a successful outcome, he must still determine how far price must go out of the retracement before he can be comfortable about adding contracts, and how far price can come back at him before he must decide that the trade isn't working and he needs to consider bailing out of it (this in part are what the swing points and 50% levels are for).

All of this you know or are learning. The challenge with regard to posting an online journal will be to keep your eye on the ball.

 

[eminiman414]

Honestly DB you've said so much and while I thought I knew and I thought I had aha moments before still there were things left to be desired. The ahas helped but still I knew there was more. I can trade a pattern that's not difficult but thinking about the dynamic btw buyers and sellers honestly I struggle with and I know that's why I haven't been able to "trust" any of the statistical results/patterns I've traded. I even made some money but still it's not good enough. The knowledge is what I seek and with that the money will follow. At least in my mind that's what I expect. Thanks for your post.

 

[dbphoenix]

the dynamic btw buyers and sellers honestly I struggle with

What is the character of this struggle?

 

[eminiman414]

What is the character of this struggle?

Maybe I'll wait until tomorrow and make notes and get back to you on that? I think it's more of a what does it all mean sort of thing. Like a hesitation or a sudden drop off in pace. Are we resting before continuing or are we done and it's time to move in the other direction? I know there are other things to help you come to a conclusion like the points and 50% levels that you mentioned. But I dunno. I will think deeper about this.

 

[eminiman414]

I guess I just don't know how to turn the movements of price into people and what they want, don't want etc

 

[dbphoenix]

Maybe I'll wait until tomorrow and make notes and get back to you on that? I think it's more of a what does it all mean sort of thing. Like a hesitation or a sudden drop off in pace. Are we resting before continuing or are we done and it's time to move in the other direction? I know there are other things to help you come to a conclusion like the points and 50% levels that you mentioned. But I dunno. I will think deeper about this.

AMT can help with regard to what does it all mean. The limits and the means are targets of a sort, but price can take its own sweet time in reaching them. But if for example you are near a limit, like Thursday, the probabilities are higher that a pause is just a pause before a continuation, not a pause before a plunge.

Some people are particularly good at this, like 40D. But not everyone is. And it really doesn't matter in terms of turning a profit on the trade. But in order to set this aside, one must be very specific. For instance, given a particular bar interval, "I" will enter a trade n ticks below the low of the highest low in the retracement crest, place a stop n ticks above "my" entry, move the stop to my entry if and when price moves n ticks away from my entry, move the stop to BE if and when price moves n ticks away from my entry and on and on and on. But few are going to be this specific. And even if they do get this specific, they will find it nearly impossible to trade any sort of size this way unless they want to trade in a perpetual state of anxiety. And if one can't trade size, then this becomes at best a hobby.

Thinking in terms of all the millions of traders out there won't be of much help. But thinking instead of the Composite Man isn't going to be of much help either (no blaspheme intended). Rather it becomes a simple matter of whether or not buyers are willing to pay the ask. If they aren't, then one's "feelings" and/or one's management scheme is/are irrelevant: price is going to go down. If one has rid himself of his fear, he will be able to adjust and modify his management in seconds. If he has only "controlled" it, he will more likely be thrown and will be unable to regain his seat before the trade has run away from him.

**"I" and "me" do not refer to me in particular. And stops are optional.

 

[eminiman414]

See this all makes a bit more sense when I only look at one side of the coin and let's say buyers and going long. Simplistically when buyers become interested or enough buyers become interested price rises and when buyers don't want to continue to buy at higher and higher prices price stalls or turns around until it again attracts enough of a following. But then I think about sellers and the short side of things it gets a bit more confusing bc of short sellers adding to the decline in prices so it's not just disinterested buyers causing sellers to drop their asking price. And can short sellers overcome buyers? So at "R" are sellers stronger than buyers or are buyers no longer interested? Is there even a difference? Like price movement because of disinterest versus one side overcoming the other?

I may be completely off in all of this but this is the "stuff" I think about and how to associate the sometimes herky jerky, sometimes smooth and flowing, and the sometimes mess price movement can "look like" and what the dynamic is btw the buyers and sellers when these movement are happening.

 

[dbphoenix]

See this all makes a bit more sense when I only look at one side of the coin and let's say buyers and going long. Simplistically when buyers become interested or enough buyers become interested price rises and when buyers don't want to continue to buy at higher and higher prices price stalls or turns around until it again attracts enough of a following. But then I think about sellers and the short side of things it gets a bit more confusing bc of short sellers adding to the decline in prices so it's not just disinterested buyers causing sellers to drop their asking price. And can short sellers overcome buyers? So at "R" are sellers stronger than buyers or are buyers no longer interested? Is there even a difference? Like price movement because of disinterest versus one side overcoming the other?

And this is where the lines in the sand -- or on the chart -- can be helpful because none of the questions you've posted really matter to the trade. All that matters are the footprints, the traders' trades. If those indicate a continued desire to buy, then one stays with it. If they don't, then one exits and perhaps prepares for a trade on the opposite side.

For example, again using Thursday, if buyers pause and the prints move sideways, is this sufficient reason for exiting the trade? After a parabolic move, surely they are entitled to a breather. If nothing else, those who are in the trade have to decide if they want to add to their positions. Those who got left behind have to decide if they want to risk an entry at this level. If the former don't and the latter don't, then price will fall below the last swing low. If the former instead do and the latter do, then price will not fall below the LSL but rather rise. But motives are no more than a matter of casual interest. What is more important is the price movement and where the prints are going (how they're getting there can also be important, tip-toeing or racing). One can exit the trade if price drops below the LSL, not solely because of the price movement per se but because of what that movement signifies with regard to traders' motives and desires.

 

[eminiman414]

Very nice. That makes sense and that's sort of what I've been attempting to get a handle on.

Thanks again for your posts. These discussions will probably be more helpful once I post some examples/commentary.

Enjoy the rest of your weekend.