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Technical Strategy
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Quote from Neoxx:
Reversal long.
873.75 @ 14:19:57
Dude... call me the B-team or whatever, but every day I see you going long right into major resistance.
874 offers major resistance. 844-48 was a major resistance zone from the past few days. Thirty seconds of "doing crayola" on a 15min or 60min chart would have led you to expect price to reverse at these areas - and also would have let you anticipate the short later on. Move around the gaussians, tapes, and channels all you want, it's no substitute for a few horizontal lines.
If you think there is value in what JH has told you then great, but that's no reason to disregard sound trading principles.
Quote from Specterx:
Dude... call me the B-team or whatever, but every day I see you going long right into major resistance.
874 offers major resistance. 844-48 was a major resistance zone from the past few days. Thirty seconds of "doing crayola" on a 15min or 60min chart would have led you to expect price to reverse at these areas - and also would have let you anticipate the short later on. Move around the gaussians, tapes, and channels all you want, it's no substitute for a few horizontal lines.
If you think there is value in what JH has told you then great, but that's no reason to disregard sound trading principles.
I appreciate your comments, Specterx.
Going long at 874 was a bad trade, pure and simple. No fault of the system, because all the signs were there. I just didn't heed them well enough.
If I had been mindful of the signals, I would have reversed long at 14:05, then short at 874.
The Day
Today I remembered the reason I initially steered away from the 5-minute Traverse level resolution, and moved to the next finer one.
WMCN.
I hadn't been able to determine What Must Come Next with appreciable consistency, and therein lay the barrier to building the Trust which Jack so often spoke about.
Keeping to the faster fractal resolution had been a way of safe-guarding against omissions in analysis.
On several occasions today, things didn't turn out as expected.
In some cases, preconceptions about what should happen masked the not-so-subtle evidence to the contary.
Two of the biggest discrepancies between W-Must-CN and W-Did-CN occured during the last bars of the day. After 15:30, I was convinced there would be another dominant short move, giving an accelerated Traverse, and I thought I clearly recognized three distinct SOCs during the rally into the close.
I don't think the process of MADA was the issue, with the obvious exception of the pre and post FOMC bars.
Life gives some people lemons and they make lemonade. Others get gourmet recipes and Michelin starred restaurants and all they can make is tripe.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2280230>
Today I remembered the reason I initially steered away from the 5-minute Traverse level resolution, and moved to the next finer one.
WMCN.
I hadn't been able to determine What Must Come Next with appreciable consistency, and therein lay the barrier to building the Trust which Jack so often spoke about.
Keeping to the faster fractal resolution had been a way of safe-guarding against omissions in analysis.
On several occasions today, things didn't turn out as expected.
In some cases, preconceptions about what should happen masked the not-so-subtle evidence to the contary.
Two of the biggest discrepancies between W-Must-CN and W-Did-CN occured during the last bars of the day. After 15:30, I was convinced there would be another dominant short move, giving an accelerated Traverse, and I thought I clearly recognized three distinct SOCs during the rally into the close.
I don't think the process of MADA was the issue, with the obvious exception of the pre and post FOMC bars.
Life gives some people lemons and they make lemonade. Others get gourmet recipes and Michelin starred restaurants and all they can make is tripe.
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2280230>
Attachments
Quote from Neoxx:
I appreciate your comments, Specterx.
Thanks... Having dabbled in SCT myself I can tell you that IMO one of its greatest flaws (relative to other PA trading strategies) is that it does not allow you to anticipate, with accuracy or with any obvious consistency, where and when price events such as FTT, FBO etc. might occur. Assuming that the basic structure of diagonal channels, etc. is valid in the first place, there are certainly a handful of recognizable price levels where, as you guys say, "change" is demonstrably more likely to occur. These levels are almost always clear in advance. Maybe it's humanly possible to always stay in the right timeframe, and disaggregate the tangle of channels, tapes, traverses, and gaussians at a fast enough pace to provide tradeable signals, using no other information for guidance - like trying to navigate a highway when the exit signs are posted half a mile past the offramp. But maybe not.
I (and I bet many others on ET) find this thread to be very interesting since it's the first time that somebody has really documented SCT, straight from the horse's mouth as it were, and posted live charts and trade calls. Personally, considering the work and dedication you've shown in this thread (and no doubt the yield in screentime), I think you'll be successful if you think outside the box a bit, discard the elements of SCT that you do not find useful (the YM for example) and introduce new innovations or ideas from elsewhere that might be helpful.
Anyway, I'll leave you to it, good luck.
Quote from Specterx:
Thanks... Having dabbled in SCT myself I can tell you that IMO one of its greatest flaws (relative to other PA trading strategies) is that it does not allow you to anticipate, with accuracy or with any obvious consistency, where and when price events such as FTT, FBO etc. might occur. Assuming that the basic structure of diagonal channels, etc. is valid in the first place, there are certainly a handful of recognizable price levels where, as you guys say, "change" is demonstrably more likely to occur. These levels are almost always clear in advance. Maybe it's humanly possible to always stay in the right timeframe, and disaggregate the tangle of channels, tapes, traverses, and gaussians at a fast enough pace to provide tradeable signals, using no other information for guidance - like trying to navigate a highway when the exit signs are posted half a mile past the offramp. But maybe not.
I (and I bet many others on ET) find this thread to be very interesting since it's the first time that somebody has really documented SCT, straight from the horse's mouth as it were, and posted live charts and trade calls. Personally, considering the work and dedication you've shown in this thread (and no doubt the yield in screentime), I think you'll be successful if you think outside the box a bit, discard the elements of SCT that you do not find useful (the YM for example) and introduce new innovations or ideas from elsewhere that might be helpful.
Anyway, I'll leave you to it, good luck.
Hi Neoxx
I'd like to ditto Specterx comments re: your efforts here.
For me, I don't see it the same way however re: SCT not allowing you to anticipate.
If we take it that Spyder has put forward a set of principles, rather than red light green light rules, and in similar fashion principles also have context.
For example, in principle I would...however...etc..
My point is that it's the context that's so hard to both see and maintain.
Rather than fit things into rules I think we have learnt the rules in order to see where they fit.
I hope that doesn't seem a contradiction.
For example, you were expecting a P3 of a down channel during the last up move. As I see it, you were trying to fit the rules into a context, rather than allowing the context to show itself so that we may then apply the appropriate rule.
We know to expect black volume in a retrace, idealy DBV but anything but red. Which we got.
It didn't matter that it was IBV and took us all the way to and through the RTL. Price kept moving in favour of a long position and we knew what to expect at the RTL and what action was appropriate if need be.
Knowing the rules does allow us to anticipate.
Knowing the context does allow us to anticipate correctly.
However the expectation, by fitting a rule into a context that either does not exist or we don't see, will lead us to undermine the rules and ourselves.
You know the rules. I'm sure if you follow each bar you will see the correct action to take and at the correct time. To say it's not the same in real time is to say that in real time our mind is elsewhere.
How else can it be ?
We know what to do, aren't we just waitng for the market to get there so that we can do it..
Hope this helps.
Great stuff and many thx.