Someone remarked recently that with respect to the NQ, "most seem to be making in the order of 5 to 10 points on a trade here and there, hardly pulling in 50 point trades."
I would say, as a generalization, 5 to 20 points is the range of 98% of available NQ Opportunities based on how I understand and use SLA/AMT and what I call Wyckoff Trading Areas ("Wyckoff" because he's the writer who use the term "Trading Area" to = "Range". So let me call the basis for my trading SLA/AMT/WTA. I've posted some larger trades. I know some of you have hit for much larger than 20 point targets because you've called them out to me in private threads. This should be "stating the obvious" to those who have gone back and properly identified past ranges and observed price behavior in and around the extremes of these ranges, but for those who haven't (most of ET): The big trades
almost always occur when the hourly trend is configured in one particular direction, and when the entry is being made in the direction of the hourly trend, and price has recently traded at or near a particular limit of its daily trend channel and has not yet reached its mean, let alone the opposite limit. The entry is also usually a breakout of a premarket/globex, prior day WTA.
DbPhoenix said yesterday that "Beginning Trader has to define a range. Only after he has done so can he even begin to test various entries, with or without stops, much less
begin to test tactics for trading a trend since trends are born of ranges." There are basic definitions & concepts, e.g. trend, range, retrace, reversal, breakout, trend channel, context, etc. that serve as the common framework by which we in SLAworld understand one another. If you do not understand these as we understand them, if you decide to try to decipher a trade opportunity without placing that opportunity in the market context as described by our conceptual framework, then you will almost certainly feel that something is missing or that your understanding is incomplete. That is because it is incomplete. But you must recognize that that "incompleteness" is because you have not understood and adopted the conceptual framework that makes these opportunities visible to the naked eye - the incompleteness is not the one showing, but the one viewing. To steal an analogy from a recent
@monoid post - you are not wearing the proper corrective lenses to see as SLA/AMT and/or WTA would have you see.
Like learning a language, however, most of us are not going to be able simply to read and know. We will need to read the material, and study the material, and then observe the market (listen to native speakers) and then through back testing and replay (immersion) we come to be able to speak with some degree of fluency. Further practice and experience will help us gain in fluency, and perhaps even improve in accent and pronunciation to the point where we may be mistaken for native speakers. But browsing through the material and expecting to understand the market well enough to immediately profit is as misguided as the person who skims through a conversational Spanish book and heads of the Spain expecting to be able to communicate fluently and free of misunderstandings upon arrival.
I use the language analogy here in gears journal because when I started studying his journal posts, I thought here is a guy who knows the letters of the alphabet and he knows how to put them into words and for the most part he knows what those words mean but his grammar is wanting - his syntax - the rules that by which these words are strung together to make intelligible and communicable phrases and sentences - was off. His understanding of the material was
incomplete. His incompleteness, imo, was primarily 1) underestimating the importance of range/support/resistance and 2) an under appreciation of price action as continuous flow. These are the areas he's been focused for about three weeks or so (he can say better than I) and I think he would agree that doing so has led to a marked improvement in not only his ability to understand the market, but his ability to understand DbPhoenix
