switching gears to Price Action via SLA

gears said:
One of many flaws, I guess.
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Not really an answer.

"I was on the lookout for a REV, but I didn't take it. It sliced through the area so definitively that it 'felt' like traders were in a frenzy to push price lower."

Unless and until you figure out why you can't follow your own plan, then you won't be able to fix it. It should not be a problem of following somebody else's plan as you have spent more than enough time observing in order to come up with your own criteria for trading opportunities. If more time is required, though, then more time is required. You can't trade something you don't trust, and you won't trust it until you make it yours.
 
I've taken another hiatus from my journal. Posting can be both a great way to track progress and learn from others, but it can also be pressure to keep up or feel obligated to always be right. I struggle with the balance of what I get from posting compared to what it takes from me in defending myself, the method, whatever.

This journal is for ME to go through the ups and downs of my journey through SLA/AMT. If you haven't read the pdf that Db created or have no interest in this approach other than to slam it, focus your attention elsewhere. Correctly or not, this is the path I'm choosing to take and if you disagree, that's awesome - I just don't want to hear about it. I know that this isn't the only way to trade and it isn't the only way to make money. If you're successful at trading using a very different method, I applaud you. I'm asking that this journal stay focused on the topic at hand.
 
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At the suggestion of another trader, I'm taking a backseat to trading and going through yet another observation phase. Could I get stuck in observation again? It's entirely possible. I do find that each time I go through it, I see more. I haven't been successful in following a plan yet - even to just blindly put on a trade with a specified target and stop and just let it rip. Call it personal failure or lack of understanding or fear. No matter the reason, I haven't been able to do it. So - I go back to watching and working on making heads or tails of things.

Here's my 15min chart with prep. I had identified certain areas (PDH, PDL, ONH, ONL and a range). I did have a bit of a bias. The long term SL was still intact. However, overnight price had exceeded the previous swing high and then did make a lower low. I made a judgement on the lower low since it didn't surpass it by much. I figured there was a chance that longs might have more success than shorts - even though the SL had not been compromised.

My take for the day was to watch for longs above the range boundary, wait when price was in the range and look for shorts below the range - because price was so close to the bottom prices that had recently printed. (And to clarify, I wasn't looking to trade. I was looking to watch how price reacted to certain areas.)

20150506 15min prep.png
 
Here's my play-by-play of what I saw today. Oh how I wish every day were a clear as this, but perhaps with greater understanding, I might feel that way down the road.

  1. Classic rejection. Traders moved away from the ONH area like they touched a hot stove. However, due to price just moving out of a range, one might expect a retest of the area.
  2. Price marched slowly and steadily through the range. Sort of an arbitrary SL drawn to keep abreast of the slope of price, but not to hug it like spandex.
  3. No hesitation as price got to the PDL and ONL, but definite pause at ONL - but only ever so slightly.
  4. 4386.50 was the low on the 30th so traders seem to be heading there. Made it.
  5. First mini break in stride. At this point, the PDL (4400) is the 50% area. After virtually 10 minutes of uninterrupted price heading south (and quite a parabolic minute), traders take a breather to establish equilibrium.
  6. 4480 seemed to be an important level and 4380 is acting as a mean of sorts. Traders went below that area 3ish points and above it 3ish points. Then traders try lower, but are met with some initial resistance before again pushing through. However, yet again, price starts to RET rather than just continuing the journey down. Note: price is at the median of the daily/weekly trend channel. The number of traders interested at this level is increased.
  7. Price has moved about 9 points down from 4380. Will traders move 9 points up also? Not right now…
  8. Price made it back to the previously established low, but definitely more sluggishly. Hell - after a 45-point drop in 25 minutes - equilibrium is warranted.
  9. Third visit back to 4372 from 4380 - mini range established here. And then price starts to head down again. A 20-minute pause, but price never went higher than 4384.
  10. Price made more progress down fairly swiftly, but then immediately started heading back up - not in a sideways motion, but in a steady move up. Time differential between down movement and up/sideways movement is no longer favoring down.
  11. SL crossed, RET present, trade triggered and confirmed with HH. (for observation)
  12. Definite hesitation to meet the high or go higher. Price does pop through though and 4380 is acting as a ceiling. Will price pop through like from a springboard or will it resume the previous down trend?
  13. DL broken, but another push up to 4380.
  14. Able to hang out there for a little while and a fanned DL is drawn - but it’s broken very shortly thereafter. 4380 is a repellent.
  15. Price moved down towards the previous low, but couldn’t get all the way back before turning back around.
  16. Definite push of buyers - stride is more pronounced. Will 4380 hold again? Not this time.
  17. As price approaches the 50% area from the down move, the pace slows down.
20150506 1min OBS.png

It was definitely interesting to watch the 50% area hold. Granted, it coincided with the ONL, but it did hold. Also interesting to see was that price moved 19 points down from 4380 and almost as much up before it turned. I'm seeing more and more how powerful AMT is. The concept of ranges and medians has sort of alluded me, but I'm seeing their power more as I really see price.
 
I'm working with people on three sites at the moment (plus email) and the "struggling" traders continue to have the most difficulty (beginners, the least). One of their bigger problems has to do with fear, of course, which has a particular influence on their ability to track price and follow the rules, especially when making the transition from observation back to trading. Even simtrading. Once they return to trading, their attention is dragged back to their trades rather than price behavior. This commonly results in plenty of overtrading, cutting profits short, revenge trading, i.e., the same old turmoil, and they're back where they started.

One suggestion that has been found useful is to turn off anything and everything that has to do with the trade: markers, P&L displays, W/L displays, percentages of whatever. There should be nothing on the chart that indicates where the entry was or how the trade is going. The information display can be minimized. In this way, whoever is trying to implement this can focus on where the focus should be: price.

Not looking to trade is a start, but don't even think about where you might trade. Or might have traded. Forget about trading entirely. In this way, the underlying structure of the auction market will become more apparent and the movements up and down will become far less mysterious.
 
Forget about trading entirely. In this way, the underlying structure of the auction market will become more apparent and the movements up and down will become far less mysterious.
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I've spent a bit of time watching the DOM and T&S in order to get a better idea of the flow of price - rejections, where price resides for longer periods of time, speed of movement, hesitations, etc. At the suggestion of another trader, I took charts away for a while so that I would see the movement of price on it's own rather in the form of a price bar - no matter the time period. The time away has been good. I've found that the T&S has opened my eyes a lot when it comes to retraces. The last few days, I've read yet again about highlighting the behavior of traders; where price has and has NOT gone. So often where it hasn't gone is a clue to where it WILL go. So coupling logic with more sensitivity to price movement, I decided to get back into the sim game to see if my "feel" has improved.

I still mark areas on a chart just as an overall guide about where price has been and where it might turn or plow through. Using a 60min chart, I saw that price was making some good traction, but that each time it came back up, it was not able to exceed a previously high price. It also looked like 4520 was a popular area - a mean almost.

20150601 pre-mkt 60min.png

Prior to the open, price had printed the ONH, but in the hour just prior price had been trending downward. Just after the open, price headed up, but it couldn't exceed the swing high from 0830 much less make it to the ONH. The momentum seemed to swing and price was heading down. So I jumped on board. I used 2 contracts to take +5 and then hold on until it seemed like price was done.

Price pretty definitively sailed through the 4520 area. Due to the PDL area being at around 4498 and it coinciding with a '00 area, I figured that price would likely stall around there so I put in a target and just waited. There was some minor sideways movement, but nothing to worry about.

20150601 1min.png

As per usual, AMT showed its hand again and price bounced off the PDL, but it was only able to travel to just below the previous sideways area. The 50% wasn't reached. Price then again got back to the PDL area and even further.

I'll keep working to uncover the story that price is telling.
 
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