the main purpose of this journal is to monitor short term (intraday) trades based on support and resistance levels. i have been trying to develop a code that would emulate the concepts of price action theory effectively. my findings indicate that as of today, the contract future that has been more adequate to this type of trading is the nq. so, for starters, I 'll be posting intraday charts of this contract with entries based on my code. the code itself has been developed to follow just the reversals and not the breakouts. the reason behind this is that the rate of fake breakouts is so high that is nearly impossible to profit from them on the long run, at least from my historical analysis. on the contrary, the reversals are the vast majority of the price action in the nq, which opens the door for profiting from it.
a very important aspect of this code is that it scales in but doesnt scales out. scaling in is important as the support and resistance lines are not set in stone and thus it is sometimes important to average the entries to avoid missing the whole trade. the other side of the coin is that, sometimes, the system enters a trade against the trend and scales in it, hence amplifying the DD. i have to be clear about this. this is done in a controlled way and it is being implemented in this way after carefully measuring all implications in the long term viability of the system.
you'll notice that not always the system reverses on a s&r line. that's because those lines are constantly being evaluated as the price action evolves. confirmation of a line might only be perceptible several bars after the actual reversal has taken place. thus, the code tries to identify the lines in real time, while the lines itself, in some cases, will only be evident after the trade has taken place. this results in a potential mismatch between the code execution instructions and the lines. in other words, the lines represent the perfect entries, while the code shows the best approximation algorithmic projection.
this a sample chart i intend to post in the journal along with commentary and analysis of as the day unfolds.
i welcome everybody interested to participate.
good trading
a very important aspect of this code is that it scales in but doesnt scales out. scaling in is important as the support and resistance lines are not set in stone and thus it is sometimes important to average the entries to avoid missing the whole trade. the other side of the coin is that, sometimes, the system enters a trade against the trend and scales in it, hence amplifying the DD. i have to be clear about this. this is done in a controlled way and it is being implemented in this way after carefully measuring all implications in the long term viability of the system.
you'll notice that not always the system reverses on a s&r line. that's because those lines are constantly being evaluated as the price action evolves. confirmation of a line might only be perceptible several bars after the actual reversal has taken place. thus, the code tries to identify the lines in real time, while the lines itself, in some cases, will only be evident after the trade has taken place. this results in a potential mismatch between the code execution instructions and the lines. in other words, the lines represent the perfect entries, while the code shows the best approximation algorithmic projection.
this a sample chart i intend to post in the journal along with commentary and analysis of as the day unfolds.
i welcome everybody interested to participate.
good trading
, courtesy of asap.
