Ain't that the truth!
switching gears to Price Action via SLA
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Depends in part on what one is looking at.
The following is a sample tick chart that is part of my Developing a Plan pdf. The segments A-F are 1m each, and the OHLC bar and candle under the first one show what all these ticks would look like if they were consolidated into one or the other. Clearly there is a great deal of information here that is lost when one looks only at the bar or the candle, not the least of which are the gaps from one tick to another, some of which are quite wide. If one looks at this, if only occasionally, he will at least remind himself of how and why these lightspeed moves are created. This should squelch the "chasing price" impulse.
As I've said before, price may be continuous, but it's not necessarily contiguous.
You don't say how and why you identified 4331 and 4272 as the extremes, but I'll assume that you didn't look at the charts I posted pre-market. If you had, you would have seen that the extremes were less than this, in the case of the lower extreme considerably less.
The simplest and not particularly difficult solution to overtrading is preparation, including planning. Once you are able to locate the range, your choices are automatically limited: sell a break below the range, buy a break above the range, do nothing if price remains within the range (unless the range is wide enough to trade reversals). And that's it.
In this case, you had an opening range of 4308 to 4312/13 that was within a wider range of 4298 to 4328. If price were to drop below 4308, short. If price were to rise above 4312-13, buy. As it turned out, price fell. That's a short, even though it took place before the open. If not taken, then there is NOTHING to do until price reaches the opposite extreme of 4328, at which point one trades the reversal. That is a half hour of doing nothing. One then follows price to the other extreme. This takes 12 minutes. The trip back to the upper extreme takes an hour. But there are no trades from one end to the other after one has traded the reversal.
That is a total of three trades if one did not take the pre-market short and reversal.
The point of locating these ranges is to plan one's trades in advance. If instead one trades by "feelings", he's going to be making a lot of trades, most of them losers. If you can't write down, in advance, what you're going to do and where, then you should observe that day and postpone your trading until you can prepare properly.
This prices were the PDH and PDL area from the 26th. The 50% area was at 4301.50. Those are the main areas I identify for basic context.
I did actually look at the charts you posted, but I wasn't following them so I figured I wouldn't use someone else's levels if I didn't understand them myself. You had almost a hinge marked with a tighter range identified coming out of that.
I definitely need to work on my context review and planning - no doubt. As is the case for many, my hindsight skills are great. When price is moving, my skills diminish.
Very good advice. I would suggest, gears, that you take a look at lajax's most recent journal, and see how he "plans the trades" once he identifies the range. I would suggest that you do the same exercise before the market opens - print out your chart, identify the range free hand, and plan the trades free hand, and keep that chart between you and your keyboard. Before you hit the buy/sell button, make sure what you are seeing on the screen matches in principle what you have drawn on your chart, or cancel the order and keep watching.
The PDH and PDL aren't necessarily relevant, at least anymore so than the ONH and ONL. They represent potential "levels of interest", but they have little to do with decision-making.
The first task is to find the range, the level or zone where traders have found equilibrium. If you can't do that, you have no place to begin. If you're going to consider the PDH/L to be your range, then you have nothing to do unless and until price reaches one or the other. In this case, you'd have had no trades at all.
Your first task, then, is to learn how to locate the range that will be in play during the upcoming session. Once you have that, you can begin planning your trades. Whether or not price is moving is irrelevant. Your decisions have been made. The only skill required is to wait for one of your planned trades to trigger.
Exercise. And anyone who wants to do it is welcome to do so. Just not necessarily here.
Right now this very minute, the range on the NQ is 4300 to 4328. Up until the market closed, it was forming a hinge with an apex of 4324.
Assuming that this is the situation prior to Monday's open, where are the trades?
Right now this very minute, the range on the NQ is 4300 to 4328. Up until the market closed, it was forming a hinge with an apex of 4324.
Assuming that this is the situation prior to Monday's open, where are the trades?
I frame my plan in terms of what I call the primary range (Hi/Lo prior 24 hours) and a secondary range (ONH/ONL or a premkt hinge or rectangle range). Also, I do tend to put "00" on watch whenever that level looks to be in play near the open. I rarely trade before 9:30 AM EDT, but I often find myself entering within the first minute of the open, sometimes right at the open. My first long fills yesterday were time stamped by my broker @ 9:30:01 at prices between 5.75 and 5.875 (and I do not care what your time and sales says or what your 5 second chart says - that is the time stamp my broker reported to me). I exited a little over half an hour later after the failure at the ONH. While that would normally have been a good short opportunity for me, I was done for the day as I had some family obligations scheduled for the afternoon that were weighing upon me a bit adversely.
If I were one to trade regularly before the open, I agree with DbPhoenix that the drop below 4308 was a short, and thought to myself at the time that he would likely be short that drop. At the same time, the bounce off "00" and the higer lows at 2 and then 2.5 then 3 had me ready to hit the buy market button at the sound of the bell. FWIW, I have a stock brokerage platform open in the morning whether I will be trading in that account or not solely for the purpose of hearing the "opening bell" feature lol. I sometimes wonder if I am not becoming a bit like Pavlov's dogs
Here is pretty chart with lines showing I had framed the day prior to the open, and then the little insert to the right shows the what I saw to trade long at the sound of the bell.
This is correct. You've nailed the crux of the matter. This is where most fail--trade management. Most traders excel in hindsight reviewing.
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This is essentially what I had, though the charts I post to the Foresight thread include a 15m that takes us up at least to 0830. In this case, that resulted in a hinge and a narrow range that was only an hour long at the time the chart was posted. But a range is a range, and the narrower it is, the more likely it represents equilibrium, which in turn provides a trigger (with a wider range, there's no choice but to wait for an extreme). And within 5m after I posted the chart, price fell out of it on its way to 4300. It took 40m to get there, but I'm patient.
It's worth noting that the trolls have no idea what all of this is about. They have no idea how to use ranges -- much less AMT -- to plot the day's trades. Which says a great deal about just how "experienced" they are. Just about any day's trading can be plotted in advance, but to them the Foresight charts are a complete mystery, nothing but "pretty pictures".
Ah, well . . .