switching gears to Price Action via SLA
- Thread starter gears
- Start date
Definitely appreciated. I've kind of felt like all I've heard is crickets in here lately!
I do appreciate the language you attached to those areas. I'm trying to train my brain to think in terms like that (equilibrium, seeking new value, fair value) rather than focusing so much on price to the tick/stops. Understanding the flow is my goal. Check back if you'd like...
Everyone has his own way of working through the process. Which is difficult in a forum like this because so many people think that they have the answer to the problem, even though they have no idea what the problem is, and want to be "helpful". My experience has been that it's best to just leave the individual the hell alone and let them work through it, though not to the point where they sink without a trace, if for no other reason than that the insights which the individual gains through his own efforts and his own epiphanies make a much deeper impression that the second- and third- and fourth-hand epiphanies that were arrived at by somebody else (if the latter were true, all one would have to do in order to trade successfully is read a book).
If I see you going off the rails again, I'll intervene. But the fact that you already went off the rails once and worked your way back means (a) that you are highly unlikely to do so again and (b) that you will likely go through what you should have gone through before much faster. The big challenge is the rewiring, the what are traders doing and where are they doing it and why are they doing it there rather than where do I enter and what should my stop be (hint: if you're worrying about stops, you're not ready).
Thanks for your post!
I've definitely seen more based on my own work. To be honest, though, the framing of thoughts in context has been exceptionally helpful - as I mentioned to MadeMan above. When you characterized things as 'equilibrium' or 'seeking new value', etc., that helped to frame in my head more of what I should be seeing. Joining that with the notion that price is either trending or consolidating was a big help. I'm not sure that I would have gotten there on my own because I didn't know how to simplify what I thought I was seeing.
Going off the rails sucked, but the time away was priceless. I do feel like I'm seeing things more, but still trying to wrap my arms around what to DO with it. I'm considering starting to use SLs and DLs again just as another vantage point for price reactions and taking SLA out for a test drive this week to see how I do with my clearer knowledge of seeing price. I think I need to just follow the rules for a bit...
I wouldn't worry about it too much. The more you concern yourself with that, the longer it will take. You'll reach a point where what to do about it seems obvious.
So this morning, I took SLA in conjunction with S/R out for a test drive and I'm pretty pleased with the results. "I" still have a lot of work to do on just holding, but it went well - mostly because the market dropped like a beast and I just hung on.
Likely too many lines on my chart, but I use them as a guide to pay special attention to the behavior around then.
Key to the lines:
Solid blue = Overnight range
Dashed black = midpoint of overnight range
Dashed blue = previous low from 2/1
Dashed light blue = previous swing low from 1/29
Solid light blue = previous low from 1/29
During the overnight hours, price had been ranging between 34 and 54. Movement up and down and the midpoint was fairly popular. The hour or so prior to the NY open, price had been hanging out more in the upper range of the range and at the open, price popped up, but fell quickly. I likely should have seen it as a REJ, but with the volatile swings at the open, I wasn't sure if it was just usual movement. So, I was going for a long, but it didn't trigger.
So I saw my DL broken, and tried for a short and it went. It went quite nicely, but I exited prematurely a I thought I was reading PA correctly. So I waited and price made a new LL. So I looked for another entry to continue the short. It triggered and again moved nicely. I drew a tighter SL at this point since price moved without any resistance down. Slight pullback followed by another drop, but then price headed up. Though there were attempts to move higher, it was a struggle. The movement down was even more herky jerky. So I exited when a previous high was breached after another attempt was made to go lower. It was inside the longer term SL, but it's what I did.
Though just two trades and I was successful, I was pretty tired from watching price like a hawk, so I didn't get involved in the major up move that has since transpired.
Constructive comments welcome.
Likely too many lines on my chart, but I use them as a guide to pay special attention to the behavior around then.
Key to the lines:
Solid blue = Overnight range
Dashed black = midpoint of overnight range
Dashed blue = previous low from 2/1
Dashed light blue = previous swing low from 1/29
Solid light blue = previous low from 1/29
During the overnight hours, price had been ranging between 34 and 54. Movement up and down and the midpoint was fairly popular. The hour or so prior to the NY open, price had been hanging out more in the upper range of the range and at the open, price popped up, but fell quickly. I likely should have seen it as a REJ, but with the volatile swings at the open, I wasn't sure if it was just usual movement. So, I was going for a long, but it didn't trigger.
So I saw my DL broken, and tried for a short and it went. It went quite nicely, but I exited prematurely a I thought I was reading PA correctly. So I waited and price made a new LL. So I looked for another entry to continue the short. It triggered and again moved nicely. I drew a tighter SL at this point since price moved without any resistance down. Slight pullback followed by another drop, but then price headed up. Though there were attempts to move higher, it was a struggle. The movement down was even more herky jerky. So I exited when a previous high was breached after another attempt was made to go lower. It was inside the longer term SL, but it's what I did.
Though just two trades and I was successful, I was pretty tired from watching price like a hawk, so I didn't get involved in the major up move that has since transpired.
Constructive comments welcome.
I did a cursory review last week of your ebook that you posted to TL. To my surprise, you did somewhat of a decent job. Well Done!
Picking up on rejections at S/R will take awhile, less if you start with a bias, more if you do. And if you can avoid thinking of it as a trick, which so many traders do. Even so, you didn't let it throw you and entered well anyway.
As for the premature exit, this is where AMT comes in, and it can require a lot of faith if one hasn't done substantial testing. When trading a range, one pretty much has to initiate the LITHA tactic (Leave It The Hell Alone). If an exit seems appropriate as one nears the lower limit of the range, then do so. But you had another 16pts to go.
There is also the matter of realistic expectations and greed. When price drops 60pts in a half hour, it is simply unrealistic to expect much more, particularly since by that time you've had five waves down (and price begins moving sideways immediately after the last one). Therefore, if one is tempted to hold on, he should consider the advantages of exiting before anyone yells Fire! and looking for opportunities to re-enter if the exit turns out to have been premature.
The fact that you weren't trying to pick bottoms in itself is something commendable.
Gringo