Quest for Growth

Market has been showing the same patterns over and over again; a simple setup could have worked several times in the past 24 hours. But why is mastering the trading one of the most challenging job in the world? I feel it is resulted mainly from that consistency being very challenging to achieve and subconscious mind issues or blocks.

Using the simple setup illustrated in the above posts as an example to describe my thoughts. For this simple setup, there are quite a few key aspects which are both an art and a science, listed in the below, which makes trading consistently very difficult. On the other hand, subconscious mind can make traders not to execute the trading plan flawlessly if having a strategy consistently making money.

One solution for the mental issues is to meditate to reach theta brain state so that those subconscious issues or blocks which are very difficult to overcome are observed by traders and avoided or resolved. One solution for reaching technical consistency is to make those key aspects which are both an art and a science as precise and simple as possible so that no thinking is needed during execution.

This setup is called as RangeUp-ABCDE/ RangeDN-ABCDE where ABCDE comes from the chart at post 1 on page 2. Key aspects are both an art and a science for this simple setup:

1. Analyze accurately the context: identify market type (TR or TD), direction, and strength of buyers and sellers.
2. Find out a possible sensible reversal point, to reach the target at least at the third time.
3. Draw a sensible horizontal line as support at the reversal point candidate.
4. Find out a sensible PB after the entry and BO to draw ABC target and a sensible target band.
5. Decide whether to exit partial position at PB and the exit quantity.
6. Figure out whether to use moving stop and how to move stops if moving stops.

Markets' price action is different, therefore to choose wisely the market to trade. 5m ES on left and 5m NQ on right; NQ price action is cleaner. Thanks maxinger's suggestion on this aspect.
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4000 Volume ES on left and 2000 Volume NQ on right; NQ price action is also cleaner.
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Update on the last post of page 2: it reached the ABC target E3 20+ hours after the entry .

What can be learned from this experiment? The gold box shown after the blue box PB can cause a lot of stress if not fully accepting the risk of the stop. It also shows to move the stop to under the blue box after breaking out above the blue box can yield a pre-mature exit. But it would have worked if we moved the stop to the gold box low after breaking out the blue box and then testing the blue box , which shows that it is rewarding to expect a not strong up move to have an expanding triangle PB after the initial range PB. For a not strong move we have to be prepared for large PB.

Chart: 5000 Volume

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Chart: 5000 volume

When the right blue box BO (break out) above the left gold box, there are three possibilities: BO above the right blue box, BO below or inside it. The market chose to BO above it first following by BO below it, combined to one big box so that four boxes together becomes a big expanding triangle. It happened twice in 25.5 hours for a weak up market. What is learned here? For a weak up or down market, it is rewarding to be prepared for getting expanding triangle PB in deciding sensible moving stops and how to take profits if trading weak trending market. This observation should also be helpful in how to identify the type of the market: trending (TD) or trading range (TR). From now to the open, very likely it will be a TR wrt the right gold box [3655, 3682]. By the way, the last post on page 1 showed a box [ 3612, 3655]. For this range of 23 points box, it can have strong trending legs in smaller time frame.

Deciding which time frame to trade is both an art and a science. How to trade consistently by keeping things as precise and simple as possible? As far as time frame choice, one solution i feel is to stick to one time frame for trading (precise and simple) and do not trade weak market. Of course it is helpful to analyze price action in multiple time frames.

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Now put all five boxes together. The left red box is the one in the last post on page 1. The market first BO below it but re-entered inside it , that is, a FBO ----failed break out, followed by BO above it but failed again , together forming another expanding triangle. Now the third time it BO above the red box and PB to test the top of the box without re-entering inside the box so far ---- calling it a successful BO, buyers getting stronger. Will it continue to stay above 3655? let's wait and see.

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Chart: 60m

Now to take a look at the plan " to wait to long HL" at the last post of page 1 written around the open of Dec 1. Since that post, 4 HLs ---{3642, 3642, 3661, 3655} have appeared, all of which are above 1/3 line 3641 of the box. I was not able to trade these 4 HLs consistently. It is time for me to think how to trade HLs in general consistently.

An interesting observation is that there may be a close connection between the plan on this higher time frame chart and the setup RangeUP--ABCDE talked about at post 1 of this page. Here the range bottom line is the top 1/3 line 3641, where at post 1 the magenta range bottom line is drawn based on swing low or/and range PB. Note: the red arrow points to the time of the post at the open of Dec1

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Chart: 5000 volume and 60m
For plan 1 and plan 2, both context and setup.1 are not precise. But setup.2 and setup.3 is quite precise. It seems to have many words, but in fact two plans do not differ much in terms of setup.2 and setup.3. (setup.1: first item under steup)

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Chart: 5000 Volume

Updating the above chart 5000V:

1. On 12/5, i thought with a higher probability the market would PB to LH and then move down,, but it did not happen.
2. The event with a smaller probability happened: a strong up starting from the top half of the box, forming a HH, and reversing down to the top of the box.
3. 2 bars PB to 3070 followed by a down move.
4. 3 swing highs marked by ovals formed a HST (head shoulder Top).

Context, setup.2, and setup3 of the plan2 can still applied to the chart when the right oval was drawn. Plan1 is still valid except the current down move is weaker than the down leg of last Friday.


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Chart 1000 Volume

Updating the above chart 5000V using 1000V following plan1. Red arrow gave the time of the last bar in the 5000V chart.

1. At the bull bar 's close with the gold arrow pointing . set the bar as A1, the A part of RangeUP---ABCDE.
  • Drew the support line at 3686, higher low above previous small swing low 3685.75.
  • Took long when the price was at 1 tick above A1's high 3689 if treat small gold box as PB D. then E would be at 3693.75. using target zone [E-1pt, E]. exited at 3693. If using a target zone not including the price 3693 or waiting for a deeper PB to be D, then this trade would have been stopped out at 3685.5.
2. If stopped out for long at A1, then at the bull bar's close with right red arrow pointing still inside the support zone [ 3682, 3585] of plan1, set A2, the A part of RangeUP--- ABCDE.
  • Submitted the order to long at 1 tick above A2's high 3685.
  • it will not be triggered.
  • If wanted to try long again at the small bull bar after A2, it will not be triggered either.
  • Then it bo below support zone without one bar PB.
  • The Plan1 is not valid anymore, no need to try the third time in the plan1.
3. For the future: the goal is to be as precise and simple as possible.
  • for the support zone [ 3682, 3685], 3685 include all the prices in [3685, 3685.75], 3682 includes all the prices in [3681.75, 3682].
  • it makes sense now to draw support line at 3685 .5 the exact low of blue box wrt A1.
  • It makes sense to pay attention to TL/TCL. exit at least partial position if reaching a TL.


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