Price Action Journal V1.5

[amitman]

Quote from mccullek:

Max, you had asked about this and today had a great example. Here's a perfect DB, followed by a HH. When that HL set up after the HH, that's when you go long. This was a text book DB play.

Not only that I got wiped at this DB (small lose on short as I expected a break of the S which didn't happen) I didn't have the guts to go long at the higher low since my system didn't signal.
Hindsight, trully sorry not only it was a good DB it was a perfect dragon formation which is very powerful.
Arghh

 

[mccullek]

Quote from vertigo3:

in chart just posted by mc, what are the bars, time? volume? based

That's a 770 tick chart. It looks almost exactly like the 10000 volume chart to me, but I see more wicks on the tick chart, so that's why I use it rather than volume.

I tried to use the volume charts and did not do so well, so went right back to my tick charts.

 

[vertigo3]

please excuse this question. Believe me, I have read the thread from the beginning, but I can't remember.

is 770 tick your anchor chart, is it what you use for timing trades

I guess I'm asking: do you drop to a smaller tick chart to time the entry?

 

[mccullek]

Quote from amitman:

Not only that I got wiped at this DB (small lose on short as I expected a break of the S which didn't happen) I didn't have the guts to go long at the higher low since my system didn't signal.
Hindsight, trully sorry not only it was a good DB it was a perfect dragon formation which is very powerful.
Arghh

Amitman, work on using the 3 bar entry and getting in at the pullback/turn, then be prepared to do something when price reaches the previous S/R area. Had you used a 3 bar entry, you would have had 2 full points of move to work with before prices stalled at that DB, plus you would have been in profit when prices bounced there and you could have covered for a point or more most likely.

You can trade break outs and get it right, but you almost always have to sweat it out and take draw downs. I used to try and trade the break outs and would have many winning days, but on my bad days, I always lost more than I would make on my good days combined due to the large stops needed.

This is just my personal opinion, but if you want to succeed in this business, get in early with smaller stops and then be prepared to jump at previous S/R areas if they hold, particularly on choppy days like today. The real battles are fought at the S/R areas, and you want to be on board with the winners of that battle.

I'll clarify this for honesty. I don't consider myself a proven expert at this stuff in any way, but I've been studying PA for over a year now and the last couple of months, I have really turned a corner.

What changed for me you might ask? I quit trading break outs and started trading pull backs only.... using 3 bar entries only in the beginning. Once I gained confidence, I started taking even earlier entries.

I might also clarify that I always trade two contracts, scalping 6 ticks, then going to BE immediately on the rest. I get it wrong some times, yet many times I still make my 6 ticks. Previously, I would hope and pray that my stop would not get hit when it looked like I was wrong. More often than not, it would. Now, if I think I'm wrong, I just cover, knowing that it's easier to make back a few ticks than it is to make back a full stop. That alone can change your bottom line.

I'm not even close to being a great trader, but the light has gone off for me and I'm getting it now. I only tell you this so you can get it faster than I did, so please don't take it the wrong way. It's meant to help.

 

[mccullek]

Quote from vertigo3:

please excuse this question. Believe me, I have read the thread from the beginning, but I can't remember.

is 770 tick your anchor chart, is it what you use for timing trades

I guess I'm asking: do you drop to a smaller tick chart to time the entry?

I only look at one chart. I use a 2400 tick chart at the start of the day and use it to transfer the major S/R lines to my 770 tick charts. After that, I only look at my 770 tick chart. I tried moving to a smaller tick chart for entries, but that doesn't work for me. I get confused and then I start trying to trade from it as well. One chart is all I use once I start trading.... 770 tick. ST who is probably the best PA trader from what I hear recommends a Volume chart, but it didn't work for me. I'm having success with the 770 tick, so I'm sticking with it for now.

I do understand that there can be big differences in tick charts form what I'm hearing. I trade with AMP and I compared their tick charts to the Zen Fire/NT tick charts which are supposedly true tick charts and I saw very little diference. I honestly have no idea if it makes any difference between tick and volume, I just know tick works for me so that's what I use.

 

[Max22]

Well no lower high and no 3br to get short on so, no trade should have been taken on that. Unless of course you were long and good for you if you were. Now i think trends are up and a pullback should offer a long entry, imho.
Max

 

[vertigo3]

McC,
thanks for your explanation.
I have mixed emotions about volume bars. I still look at 24,000 and 5,000 volume bars on one of my computers, but in a fast market, my Trade Station freezes (quite often in a fast market) and then once the cpu catches up with the datastream, BAM, 6 bars shoot onto the screen in a split second.

 

[mccullek]

Now we are actually bouncing off the major resistance, I didn't take that pull back because I felt we were too close to the major resistance area. There would have been enough room to make a good profit had you taken it though.

I'm not good enough to do it, but I know a trader that has helped me and he takes a trade at all those major S/R areas if prices even hesitate. He almost always scalps 4 ticks and then has multiple runners that he let's run. He would have made 2 points already on this bounce, and if it puts in a top, well, he rides it back down until it fails.

That's my goal to work up to, but I'm not there yet.

 

[infinity08]

Quote from mccullek:

Now we are actually bouncing off the major resistance, I didn't take that pull back because I felt we were too close to the major resistance area. There would have been enough room to make a good profit had you taken it though.

I'm not good enough to do it, but I know a trader that has helped me and he takes a trade at all those major S/R areas if prices even hesitate. He almost always scalps 4 ticks and then has multiple runners that he let's run. He would have made 2 points already on this bounce, and if it puts in a top, well, he rides it back down until it fails.

That's my goal to work up to, but I'm not there yet.

Interesting mccullek, I understand what you mean. Could you put in into a graph because it be easier to visualise than in my head.

 

[mccullek]

Quote from infinity08:

Interesting mccullek, I understand what you mean. Could you put in into a graph because it be easier to visualise than in my head.

I zoomed way out on my 770 tick trading chart so you can see the big picture. Notice the channel we are locked in and how many times we have bounced off these lines. If you took all those bounces and rode them to the other side, you would be deep in the pockets right now.

We appear to be making another top at the res area again, so will it move back to the bottom? I don't know, but that's the pattern right now. If and when it breaks out either way, you want to try and get on board, because it should be a great move.

I placed all these lines on my chart this morning using my 2400 tick chart. There is no magic to them and they are there for all to see. You just have to understand their improtance and know to look for them.