switching gears to Price Action via SLA
- Thread starter gears
- Start date
Thank you again for taking the time to check in on my journal, see what I'm up to, how I'm faring and for offering such tremendous insight. Your time and attention is most certainly appreciated.
--I notice when price rises or falls quickly that if there haven't been any pauses along the way that the other side tends to react as quickly and forcefully in the opposite direction.
--I notice the wave effect - that when price movement starts to be less extreme with almost equal opposition that there's a bit of a power struggle and the current movement direction is not often sustained.
I wouldn't be comfortable because I haven't tested enough yet - even in just replay. I know enough about the market and how it can bite you in the a$$ that I want to achieve a level of confidence, or second nature reactions to seeing certain things occur. Also, the idea of reading what price is doing and riding each wave is new to me. I'm more accustomed to the notion of what price 'should' do based on what occurred previously.
Thanks for delineating the steps. To be quite honest, I wasn't exactly sure what the difference between backtesting and forwardtesting was. I'm sure that I need to spend more time on the first step, but I find myself in a bit of a quandary. By doing the 'bride' level of the SLA, my understanding was that it's really about drawing demand and support lines, an expectation that the market will go in a certain direction and if it doesn't do what you thought it would, get out. Like kp, I'm finding myself in information overload with trying to put so many concepts into play. Granted, with watching price, it's not about concepts, but just about observation.
I know I haven't been reading the nuances of price enough (step 1) to have a feel for things in this manner. It seems like I don't know what I'm looking for. If I make comments, it seems more like predictions of what's to come rather than just simply stating what I've seen.
--I notice when price rises or falls quickly that if there haven't been any pauses along the way that the other side tends to react as quickly and forcefully in the opposite direction.
--I notice the wave effect - that when price movement starts to be less extreme with almost equal opposition that there's a bit of a power struggle and the current movement direction is not often sustained.
I wouldn't be comfortable because I haven't tested enough yet - even in just replay. I know enough about the market and how it can bite you in the a$$ that I want to achieve a level of confidence, or second nature reactions to seeing certain things occur. Also, the idea of reading what price is doing and riding each wave is new to me. I'm more accustomed to the notion of what price 'should' do based on what occurred previously.
No choking yet, but I'm wise enough to realize that I'm not yet ready to bark at the sim, much less live, door.
If you find that there's too much information, then focus on your objectives, on what you want to get out of this. Then determine what you need to know in order to reach those objectives. If a mechanical approach appeals to you, then skip all the observation and testing and get right to it with the rules I provided. But if you find that you just can't do that, then you're going to have to become more intimate with price, and that begins with observation. A kind of stalking, if you like. The SLA is set up so that one can be successful with it even if he has no interest whatsoever in nuance or subtlety. But few traders can be as mechanical as they'd like to believe they are. Ego intrudes. Or fear. Or doubt. Or inattention. And so even drawing a straight line becomes an insurmountable task.
I said a few days ago that everyone in chat is in a different place. Like a one-room schoolhouse. Some are actively trading, some have only begun developing plans, some are still testing, some are still observing behavior, some are only thinking about it while they cling to their indicators. And being in the same room with all these people may be unendurable, particularly for those who have focus issues anyway. I don't know that a room devoted solely to those who are just observing would fly. And the in-breeding might lead to undesirable results. On the whole, I like the one-room schoolhouse model, but it's important that the individual trader be able to filter out whatever is of no interest or whatever he's not ready for yet.
If the simple task of drawing lines is what appealed to you in the first place, then go with that and see how far it takes you. Even if you're also interested in the "why", you may not be ready to tackle that yet. When you are, you'll know.
Twice..., Iâve read this from you
=============
Traderâs prime directive; Make money
Traderâs prime concern; Protecting money firstâ¦, Making money second
What a trader is looking for; A price condition in which the trader thinks/ believes he/she can exploit to do above
This price condition; Should (must) include a low risk entry â and clear point where that trade fails
A trader can make it as complicated - or easy - as they choose
==============
No matter what;
We never know
The mkt is uncertain
Every moment in the mkt / outcome - is unique
Mkt is based on probabilities - that are not the math kind
Accordingly is how we must conduct our trading - always (and I do mean without the least smidgen of lax / neglect / inattention )
================
Now go forth an conquer..., never speaking of this not knowing BS again
RN
You're right. Seems like a bit of a cop out. No excuses - just not feeling sure of the output that is expected when I watch price. I thought I should make assumptions based on the movement that happened, but it seems that just documenting that price was here, is now here, shot up here, etc. was more the desired outcome. And that latter bit of information is the kind that I don't know what to DO with it. But, that's ok. I guess the a-ha moments will come.
Ain't that the damned truth!
Thanks for the encouragement/kick in the ass all rolled in to one!
Continuation of 12/4/13 in replay. Had a harder time getting a feel for where things were, but likely due to it being after the first few hours of the open and the market having settled down a bit.
Another great learning experience. As has been discussed at length, finding what works for yourself is quite a process.
- Not sure if making my DL and SL so tight after a new HH or LL is the best option. Leaving the original line allows for some pullback and for the market to resume the original direction. But on the other hand, leaving so much room might mean that one is quickly burned. I would likely use stops to control the amount of room being granted (though I know db isn't a fan of using stops as it takes control away from the trader).
- SL was crossed, but the exit was more about the notion that the market didn't do what I expected/wanted to be "in." Trade would have been triggered and then price shot in the opposite direction.
- Wondering if stepping up or down the trigger spot is a good idea or possibly playing with fire. The idea of the market coming to me is appealing. Only reason the down trade wouldn't have been triggered would have been if the area for the up RET and trade had been. A HH wasn't achieved and the market went down again.
- Gave it a little more room before the exit was noted. Not sure if I'm creating a squiggly line by doing that. Due to the pretty serious down move, I knew it would need to pullback. I wasn't comfortable that the bar was closing in the up direction.
- Kept the up trade triggered due to the red line not being compromised in the down direction. Market couldn't breach the LSL and kept trying to make a HH.
- Tighter DL caused the exit as the move almost seemed parabolic.
- Again I'm not sure if the immediately tighter DLs and SLs are causing me to feel too trapped and not giving enough room for the market to do it's thing. I wonder if I've taken the fanning due to a HH, LL to a level that is doing some choking? That's something for me to consider.
Another great learning experience. As has been discussed at length, finding what works for yourself is quite a process.
More replay. Getting used to the idea of more entries/exits and proper DL and SL drawing. This particular morning was more volatile (less of a trending situation) and I wouldn't have done well with the strict SLA rules as I was applying them. BUT - it's about having a plan and sticking to it. The wins and losses are just part of it.
Just before 1030 was an excellent example of a hinge and the initial exit out of it being the incorrect sentiment for when the stronger move occurred.
Just before 1030 was an excellent example of a hinge and the initial exit out of it being the incorrect sentiment for when the stronger move occurred.
I marked a potential short on your chart.
Was it not a valid entry after the thicker aqua line was broken and there was a retracement?
Gabe
I can see how you could view it that way. For me, I wanted to view the bar with the green dot on it as a retracement for an up move. It didn't make a LH, but it did make a LL. Then price failed to meet that low, make a HH or another LL. It felt like a hinge might be forming so I wanted to be above the highest high thus far or below the lowest low. The high entry hit first.
But it's nice to see that others are actually looking at what I'm posting. I really appreciate the feedback.