switching gears to Price Action via SLA

[dbphoenix]

You can talk all you want about what a stock should be doing or why it isn't doing what it should be doing. You can talk about inflation, interest rates, earnings, and investor expectations. Ultimately, however, it comes down to the picture. Is the stock going up or down? Knowing the reasons behind a stock's movement is interesting, but not critical. If your stock goes up on a given day, they won't take your money away from you if you don't know why it went up. And if you can explain why it went down, they won't give you back your lost money. All that really matters is a picture, a simple line on a chart. The trick to visual investing is learning to tell the difference between what is going up and what is going down.

--John Murphy

 

[artemstreb]

i'd rather 'Knowing the reasons behind a stock's movement', but since i never know i rely on charts is more accurate?

 

[fortydraws]

Just a "pretty charts with lines"

My charts, imo, do not predict. They frame and alert me. The framework tells me where to look to get in, where to look for trouble if I am in, where to look to possibly get out. But it is the market itself that tells me when to get in, when to get out, when to wait. I use market orders at least as often as I do stops and limits to enter. How then does one call a trade ahead of time? 50/60/70 are long targets, and 60/70 profit targets and areas of potential shorts today. But what matters more then the where is the what - what do traders do if/when price gets to these areas? I don't know that until it happens. I decide what I will do based on what they do. So, the way I trade, I can't throw something out there like "Limit offer at 50 with a 30 point stop risking 2% of my house". That's not how I trade (with the exception of expected failures at tests - which, if you haven't done the backtesting, you probably won't have the balls to place those order ahead of time - even having done the backtesting it took me a while to work the nerve lol). And so on a morning like today, when my buy orders are being filled in the 32.75's and 33's, how am I credibly to alert in any way that those bent on disbelief won't find incredible, as 2 or 3 minutes later, when I could finally take my eyes off the market and my finger off the "market sell" button, price was already trading near 39?

FWIW, I am practicing the inferior behaviors of scaling out and using a breakeven stop. For every 4 contracts traded, 1 came off +5, 1 came off +10, and the other 2 are being held with a breakeven stop and with the intention to limit out at 70 by the eod. I am not predicting price to get there - just if it does, I will be out. If price gets to 60, I will likely move my breakeven stop up into the +10 to +15 range. I was going to attach a screenshot of my blotter, but I promised myself I wouldn't do that anymore, and I do not want to break discipline by not sticking to my "posting plan."

 

[dbphoenix]

I decide what I will do based on what they do. So, the way I trade, I can't throw something out there like "Limit offer at 50 with a 30 point stop risking 2% of my house".

 

[k p]

I was going to attach a screenshot of my blotter, but I promised myself I wouldn't do that anymore, and I do not want to break discipline by not sticking to my "posting plan."

Since this last part is cleverly directed at me, I wanted to reply to 40D.

Gears, I hope you don't mind me posting in your journal, and if you do, please just tell me and I will not post here again.

I like that you're sticking to your posting plan as much as sticking to your trading plan 40D! I'd much more prefer to see entries on a chart rather than the blotter if you do ever want to share though. The blotter doesn't help me learn, but seeing the entries and exits on a chart I would find so much more illuminating.

At any rate, each time that there is a little jab in there for me, I don't mind so much because you do offer a little nugget as well. I like how you mention here that you use market orders as much as you do limit orders.

Your entries are just incredible. I did much better yesterday than I did today.... I was a bit early to get into the long. Heck, I even like how you mentioned yesterday that sometimes you are too early too.

On my chart here, you see my long is just a bit early which gets stopped out for a 3 point loss, just before it takes off. I added in the little red rectangle to show the possible areas where you got into your longs. (imagine if my exit for a loss was actually bought up by you! LOL) I was too slow to go long again, which is a shame because my first instinct is to look for a reversal once these important levels are slightly penetrated, but oh well, live and learn.

Even though the post/chart is obviously not intended for me, thanks for posting it! (Wanna follow up with more details about your precise entry there? I take it that you must have gone long more so at the end of the little red rectangle as opposed to the first part.)

 

[dbphoenix]

Since this last part is cleverly directed at me, I wanted to reply to 40D.

Funny, the thought of you never even entered my mind.

 

[k p]

Funny, the thought of you never even entered my mind.

Oh.. I hope I didn't misinterpret this. But since I was the guy who was saying that he wasn't sticking to his trading plan by saying he always scales out at 5 points but not showing this with the trades he shared, I saw a direct connection with this comment so I figured it was a jab at me.

 

[dbphoenix]

Oh.. I hope I didn't misinterpret this. But since I was the guy who was saying that he wasn't sticking to his trading plan by saying he always scales out at 5 points but not showing this with the trades he shared, I saw a direct connection with this comment so I figured it was a jab at me.

News: it isn't all about you.

As gears is doing the work, 40D is attempting to help him out.

 

[fortydraws]

And one last thing: Here is a pattern of behavior I posted in my own journal, and on several occasions around ET. Let me be conservative and say I have sen this hundreds of times (my guess would put the actual number well over 1000 over the last three years if I included stocks and NQ and other futures I have attempted to characterize and various back tests etc. I know exactly what I will do when it shows up. I know exactly where I hit the "Buy Market" button if a particular level prints to the time and sales. It is part f my trading plan. But if you can't see it until three minutes after it occurs, it cannot be part of yours, at least not in the same way it is a part of mine.

FWIW, NQ has traded 60, and I have moved my stop loss to 1/4 +15 (48) and 1/4 +5 (38), with limits at 70 on all of them. It is 11:21 EDT and NQ is 58.75/59

 

[gears]

3) Some trades will stop you for your full loss: And that is ok!

4) You will make mistakes: And that is ok!

This has been my day thus far. The market is moving and while I was "in", I was on the wrong side and now I'm out and sort of fuming at myself.

At 0935 and 0936 when price dipped down to the 4434 level, but stopped just short, I was positive that the level was going to hold so I hit the long button (4437.50) and my 3 point stop was hit. Ok - level won't hold - let's go for a short. Hit the sell button (4432.50) and my 3 point stop was hit. So now I'm down $240 and too shell-shocked to see the LH that printed at 0945. Then price seemed to hesitate at the 4444 level and it was already 10 points away from the low. So I sat and watched and got all pissed off.

I know that I can't be a trader if I'm going to get pissed when trades don't go my way. I think I'm pissed because there must have been something I didn't see. Or I should have waited for confirmation since a V reversal doesn't happen as often as I think it will. I do admit that I initially I had a short bias due to price having been in a down trend since yesterday afternoon. But I wanted to trade according to my plan and at 0400 and 0915, the 4434 level had held. So a long there seemed prime to work. I just got there too early.

I guess I may need to chalk this one up to, "that's life" because this experience will likely not be the last time this happens. I took trades near S/R areas which is according to plan. My plan doesn't necessarily speak to stopping after 'x' number of losses/stop hit, but I knew I wasn't focused to try again. I know it's sim, but I don't want to get into bad habits.