Section 7

[dbphoenix]

Monday recap.

It took me a while to discover that price had begun moving and weren't constrained by the pre-market range anymore (dotted rectangle is where I was wrong). It did keep me out of an initial short that looks like it would have been a scratch, and I missed the correct entry long at 3510 (gray marker). I took it at 3517 instead. Apart from that a pretty uneventful day. Price did go up but the buyers did not follow through so price fell back into what is now a range between 10 and 27 (ish).

Not "wrong". Depends on whether you want to enter inside a range or not. That's trader's choice.

 

[trip]

Not "wrong". Depends on whether you want to enter inside a range or not. That's trader's choice.

I don't want to enter inside a range and it's in my plan not to.

However I think a range has a beginning, a middle and an end and price behaves a bit different depending on where you are. This is something I've noticed when a range is about to come to an end: "something" happens and price movement changes it's "nature" within that range, volatility picks up, there is brisk movement, the tick chart starts scrolling, price breaches a boundary with some conviction before falling back, only to test the level again (or the other side) and then break out. So I feel it's safer to enter within this new more active range in comparison to the older, slower and indecisive part of the range. The "something" that happened for volatility to pick up today was the open.

Another way to see this is when the bars get a little longer in one direction, the closes don't line up from bar to bar anymore, not much overlap, and there is more energy in the movement.

The problem is to quantify this - but this is a discretionary method after all.

Does this make sense?

 

[dbphoenix]

I don't want to enter inside a range and it's in my plan not to.

However I think a range has a beginning, a middle and an end and price behaves a bit different depending on where you are. This is something I've noticed when a range is about to come to an end: "something" happens and price movement changes it's "nature" within that range, volatility picks up, there is brisk movement, the tick chart starts scrolling, price breaches a boundary with some conviction before falling back, only to test the level again (or the other side) and then break out. So I feel it's safer to enter within this new more active range in comparison to the older, slower and indecisive part of the range. The "something" that happened for volatility to pick up today was the open.

Another way to see this is when the bars get a little longer in one direction, the closes don't line up from bar to bar anymore, not much overlap, and there is more energy in the movement.

The problem is to quantify this - but this is a discretionary method after all.

Does this make sense?

Yes, but you're looking at a hinge within a range. The hinge is a different dynamic than a "box" range.

In short, there are primarily four trades off a hinge: long off the breakout, long off the retracement after the breakout (if any), short off the breakdown, short off the retracement after the breakdown (if any).

The task via backtesting is not to determine which entry has the highest probability of success but rather what are the conditions surrounding each type of entry that are most likely to lead to the success or failure of each. This is a little more work, but it means having four options rather than just one.

Edit: I should also point out what may be obvious: the hinge inside the range has more constraints than a hinge without. Therefore, the trade outside is more likely to be "clean".

 

[niko]

The task via backtesting is not to determine which entry has the highest probability of success but rather what are the conditions surrounding each type of entry that are most likely to lead to the success or failure of each. This is a little more work, but it means having four options rather than just one.

A keeper.

 

[trip]

Yes, but you're looking at a hinge within a range. The hinge is a different dynamic than a "box" range.

Thank you. I can see where the dynamics changed but I did not spot that hinge in real time. Actually I had a bit of a problem locating it in hindsight as well. Hinges are currently above my paygrade .

As I see it now, entering at 10 (where I stated I would have if I could) would be more risky than taking the retrace that I did. Entering at 10 is close to entering at the mean of the previous range and the embedded hinge.

I have a list of things to check and this is definitely going on it. It will have to wait though. I am studying "the first retrace after a supply or demand line break" and my primary goal is to trade consistently profitable using only this one "picture" (I don't like to call it a "setup") and prove to myself it is possible. That does not stop me from trying to identify hinges and ranges in real time but I do so not to trade them but to avoid trading them.

 

[dbphoenix]

That does not stop me from trying to identify hinges and ranges in real time but I do so not to trade them but to avoid trading them.

Correct. But if they occupy any space at all in your universe, use a LH and a HL to trigger an alert in your head somewhere so that you become aware of any potential hinges, whether you want to avoid them or trade them.

 

[trip]

Correct. But if they occupy any space at all in your universe, use a LH and a HL to trigger an alert in your head somewhere so that you become aware of any potential hinges, whether you want to avoid them or trade them.

Alert installed . Thanks. Sometimes it seems I miss the obvious.

 

[dbphoenix]

Alert installed . Thanks. Sometimes it seems I miss the obvious.

Sometimes we all miss the obvious. That's the chief advantage of working in a group.

At least one whose members can read maps.

 

[trip]

Tuesday prep and recap. I wasn't able to post this before as ET was unavailable.

Prep.

Recap.

'T was a difficult day.

In hindsight it looks fairly straight forward. First trade was a mistake (I don't do ranges) but I had gotten thrown off a bit earlier from another mistake so when I saw it I just jumped in without thinking of context.

I need to hire me a scratching consultant. I wonder if Niko is available. Or maybe I should go back to observing again. Decisions, decisions .

 

[niko]

Tuesday prep and recap. I wasn't able to post this before as ET was unavailable.

Prep.

Recap.

'T was a difficult day.

In hindsight it looks fairly straight forward. First trade was a mistake (I don't do ranges) but I had gotten thrown off a bit earlier from another mistake so when I saw it I just jumped in without thinking of context.

I need to hire me a scratching consultant. I wonder if Niko is available. Or maybe I should go back to observing again. Decisions, decisions .

You dont need me, the scratching files are posted on my journal. Just give them a look and see what you like and what you dont just ignore it.