Son of If You Can Draw a Straight Line . . .

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Quote from niko:

I guess 40 draws got in at 23 :)
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lol... that made me chuckle. I wonder how 40d is doing. I haven't gotten to interact with him that much since he was on his way out by the time I made my account. However, I feel like I know him pretty well since I've read through his posts multiple times, haha.

Another thing to note is that I think our charts are getting more and more similar. You're staying away from those 5 trades / 10 minutes frenzies, and I am a little less squeamish about finding entries at double bottoms and small RETs within an active D/S line.

I've been able to see much better performance by loosening up a little as I become more comfortable with trader behavior as well. Placing entries further away from price has kept me from getting sucked into false RETs as much since I'm not as scared of missing out on being a point closer to the RET and thinking that will somehow make me more likely to avoid losing trades.

I find it usually gives better opportunities to make more liberal exit criteria like giving price room to breach the last swing low if we're close to a reversal area since sometimes price has to hit resistance several times before it changes direction. The 50% marks also give more opportunities to stay in on continuation, but they also give up a lot of points on big movements if you wait until price makes it all the way back there after the D/S line breaks.

I saved a really good post by DB on scaling exits that really takes some of the pressure off as well. I think there is a lot of room for me to grow in having a much more fluid trading session of scaling in on multiple RETs on a big move, and scaling out as the strength of a movement begins to decline. Always something to work on.

My wife isn't doing too well at the moment, but hopefully when things improve I will be able to get back to being around for the NQ opens, participating in the discussion, and sharing some of my charts and observations with everyone.

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Dug up the DB's post that I mentioned:

"The solution to exits is a simple one: trade as if you were trading five contracts or five lots and abandon the idea of being able to exit with all of them at the exact top or bottom. The goal is to make money, not to prove to oneself what a superior trader one is.

Then determine in advance where each of those contracts will be sold. For example, if one is trading support and resistance, sell the first contract at one or the other. Sell the second contract, for example, at the lower high or the break of the trendline, whichever comes first. Sell the third at whatever you didn't sell at for the second. Sell the fourth, for example, at a breach of the last swing low. Leave the fifth, for example, at breakeven."
 
Quote from llIHeroic:

lol... that made me chuckle. I wonder how 40d is doing. I haven't gotten to interact with him that much since he was on his way out by the time I made my account. However, I feel like I know him pretty well since I've read through his posts multiple times, haha.

Another thing to note is that I think our charts are getting more and more similar. You're staying away from those 5 trades / 10 minutes frenzies, and I am a little less squeamish about finding entries at double bottoms and small RETs within an active D/S line.

I've been able to see much better performance by loosening up a little as I become more comfortable with trader behavior as well. Placing entries further away from price has kept me from getting sucked into false RETs as much since I'm not as scared of missing out on being a point closer to the RET and thinking that will somehow make me more likely to avoid losing trades.

I find it usually gives better opportunities to make more liberal exit criteria like giving price room to breach the last swing low if we're close to a reversal area since sometimes price has to hit resistance several times before it changes direction. The 50% marks also give more opportunities to stay in on continuation, but they also give up a lot of points on big movements if you wait until price makes it all the way back there after the D/S line breaks.

I saved a really good post by DB on scaling exits that really takes some of the pressure off as well. I think there is a lot of room for me to grow in having a much more fluid trading session of scaling in on multiple RETs on a big move, and scaling out as the strength of a movement begins to decline. Always something to work on.

My wife isn't doing too well at the moment, but hopefully when things improve I will be able to get back to being around for the NQ opens, participating in the discussion, and sharing some of my charts and observations with everyone.

---

Dug up the DB's post that I mentioned:

"The solution to exits is a simple one: trade as if you were trading five contracts or five lots and abandon the idea of being able to exit with all of them at the exact top or bottom. The goal is to make money, not to prove to oneself what a superior trader one is.

Then determine in advance where each of those contracts will be sold. For example, if one is trading support and resistance, sell the first contract at one or the other. Sell the second contract, for example, at the lower high or the break of the trendline, whichever comes first. Sell the third at whatever you didn't sell at for the second. Sell the fourth, for example, at a breach of the last swing low. Leave the fifth, for example, at breakeven."
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Hey, we were missing you around here. I hope your wife gets better.
 
Quote from niko:

This are today´s entries. As advised, I am now looking for reasons to stay in, therefore paying more attention to the 50% levels that to the line breaks. The only exception is when I get an entry in the opposite direction as what occurred at 10:14 and 10:29.

In retrospect I guess both were valid, the first (10:14) was at S at 05 and the second (10:29) was at the 50% level of the downswing from 9:41. Perhaps the fact that sellers were not able to co below the 50% level of the upswing from 10:07 could have been a reason to stay in the long, that could have been exited after 11 around R at 21. But at the moment the fact that there was such a strong downmove tilted my bias to the short side.

Maybe the fact that we were still on the TR 05-21 should have prompt me to act in a different way, but that will need more screen time.

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This provides a good example of the difference between those who trade and those who just talk about it. It is highly unlikely that a trade at 24 -- much less 23 -- would be filled. On the other hand, an entry placed six minutes later would have a chance of being filled on the way down, on the way back up, and on the way back down again, assuming that the trader wasn't freaked by the "countermove". The same problem might occur at 1000, though a failure to fill might be a blessing here given how late in the move it is (the fourth wave down).

All in all a potentially 9pt move. Not bad.
 
Given that this is my first day back in the sophomore class, I wanted to share my notes with other students.

Db was very helpful today providing extra information during the trading session, but at that time I was also thinking about line breaks and RETs and I did not have the time to fully incorporate that into my thinking. There was also the fact that DB was trading and I did not wanted to bother him with questions.

That is why I took most of DBs interventions today and placed them on a chart. The times are the times the post got registered on ET, so there will be some delays.

I tried to compress the chart, but did not succeed, so I am posting the
"cinemascope" version :) , sorry.

Now regarding the comments I have some questions (Q) and replies (R) for DB. (I have listed the comments below at the right side of the time of the posting.

09:29 AM Since we're in the Son thread, this is the sort of fast rejection that one could use as a rationalization for a short, if quick to exit.

Q:Given that we were around R at the open, I understand that you were suggesting to take the short after buyers failed to take prices above 22?.


09:34 AM Quick to exit indeed.

09:43 AM Monday morning friskies. Good luck on getting filled.

Q: At the moment I did not get it, but I guess you meant that it was the place to take the short after buyers finally failed. But it was hard to get the fill given price velocity on the fall.

09:50 AM Stay alert. Tons of congestion down here.

Q:Was it because of the range from sunday afternoon-night?


09:58 AM Note how violent these thrusts are.

Q: I noticed again the acceleration of sellers, but I couldnt connect it with something usable, besides the fact that I had to keep my short open.


10:02 AM Watch for climactic low.

Q: I saw the increase in volume, but I had 11 as a S on a TR so I was thinking BO, not SC.


10:04 AM Notice how buyers keep trying to shore it up.

R:Yes interesting to see the overlapping of the bars as you mentioned last week, that with the previous indication of SC and the fact that 05 was important start to make a lot of sense.


10:10 AM Question is whether or not everybody that wanted to be out is out.

R:Interesting way to put it.

10:14 AM If the SL is broken, focus on a long. Like here.

10:15 AM And if you can't make a swing high, then you're looking at chop again.

10:16 AM You have enuf now for a DL

R: As I said, I thought I needed a HH in this case to trace the DL, this is a great tip.

10:17 AM And the DL is fraying.

10:18 AM And you've gt a hinge

10:19 AM Hinge taking too long

10:21 AM If sellers were trying to scare holders out of whatever so that they could pick up more at a lower price, then whatever rally there might be will likely be less dramatic.

Q: I still don't´t understand this.

10:23 AM Motives don't matter, of course. It's the lines. Or the course of supply and demand if you're past lines.

10:25 AM 16 is 50%

10:28 AM Note also how the pace has dropped

10:30 AM Another hinge.

10:32 AM Exit down rejected

10:34 AM If price doesn't exit before the apex, it's more likely to become a trading range. Besides, the break is hindsight.

10:36 AM And here's our trading range.

Thank you Db again for all your patience and help.
 

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Quote from niko:

Given that this is my first day back in the sophomore class, I wanted to share my notes with other students.

Db was very helpful today providing extra information during the trading session, but at that time I was also thinking about line breaks and RETs and I did not have the time to fully incorporate that into my thinking. There was also the fact that DB was trading and I did not wanted to bother him with questions.

That is why I took most of DBs interventions today and placed them on a chart. The times are the times the post got registered on ET, so there will be some delays.

I tried to compress the chart, but did not succeed, so I am posting the
"cinemascope" version :) , sorry.

Now regarding the comments I have some questions (Q) and replies (R) for DB. (I have listed the comments below at the right side of the time of the posting.

09:29 AM Since we're in the Son thread, this is the sort of fast rejection that one could use as a rationalization for a short, if quick to exit.

Q:Given that we were around R at the open, I understand that you were suggesting to take the short after buyers failed to take prices above 22?.

Aggressive, but yes. Why not?

09:34 AM Quick to exit indeed.

09:43 AM Monday morning friskies. Good luck on getting filled.

Q: At the moment I did not get it, but I guess you meant that it was the place to take the short after buyers finally failed. But it was hard to get the fill given price velocity on the fall.

No. They'd already failed but refused to die making a higher high instead. I'd rather see how this shakes out before making a commitment. If they don't know what they want, how can I be expected to know? A lower high would be a better entry, e.g., where you entered. As to the fills, in situations like these, you pretty much have to anticipate what traders are going to do.If you can't, then just wait until they've shown their hands, as with the lower high.

09:50 AM Stay alert. Tons of congestion down here.

Q:Was it because of the range from sunday afternoon-night?

And previous days.

09:58 AM Note how violent these thrusts are.

Q: I noticed again the acceleration of sellers, but I couldnt connect it with something usable, besides the fact that I had to keep my short open.

Nothing usable at the time, but it seemed clear that they were trying to shake holders out of whatever (possibly stocks, and all that carried over to futures; you'd have to look at the stocks*). Given the climactic action, it was reasonable to wait for a climactic low.

*A brief glance at the stocks, but don't see anything huge except for Apple and Microsoft, but maybe that was enough.

10:02 AM Watch for climactic low.

Q: I saw the increase in volume, but I had 11 as a S on a TR so I was thinking BO, not SC.

Forget about S. Focus on the behavior.

10:04 AM Notice how buyers keep trying to shore it up.

R:Yes interesting to see the overlapping of the bars as you mentioned last week, that with the previous indication of SC and the fact that 05 was important start to make a lot of sense.


10:10 AM Question is whether or not everybody that wanted to be out is out.

R:Interesting way to put it.

10:14 AM If the SL is broken, focus on a long. Like here.

10:15 AM And if you can't make a swing high, then you're looking at chop again.

10:16 AM You have enuf now for a DL

R: As I said, I thought I needed a HH in this case to trace the DL, this is a great tip.

10:17 AM And the DL is fraying.

10:18 AM And you've gt a hinge

10:19 AM Hinge taking too long

10:21 AM If sellers were trying to scare holders out of whatever so that they could pick up more at a lower price, then whatever rally there might be will likely be less dramatic.

Q: I still don't´t understand this.

Everybody who wants to sell has sold, and if the only participants who are interested in buying are those who drove price down in the first place, they're unlikely to feel the need to be in a hurry. Doesn't make sense for them to bid it up themselves. Let somebody else do it, then they can sell again at a higher profit.

10:23 AM Motives don't matter, of course. It's the lines. Or the course of supply and demand if you're past lines.

10:25 AM 16 is 50%

10:28 AM Note also how the pace has dropped

10:30 AM Another hinge.

10:32 AM Exit down rejected

10:34 AM If price doesn't exit before the apex, it's more likely to become a trading range. Besides, the break is hindsight.

10:36 AM And here's our trading range.

Thank you Db again for all your patience and help.
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Very nice work both. Db for saying something intelligent and Niko for having the sense to record it in an orderly fashion. The chart illustration with comments was a commendable effort.

Gringo
 
Quote from Gringo:

Very nice work both. Db for saying something intelligent and Niko for having the sense to record it in an orderly fashion. The chart illustration with comments was a commendable effort.

Gringo
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Thank you, not every day wannabe traders get the opportunity of having a master trader show them the right path, I just wanted to make sure I was getting all the information that DB so kindly shared.
 
Quote from niko:

Thank you, not every day wannabe traders get the opportunity of having a master trader show them the right path.
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Master? Hardly. And it's only one path.
 
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