It all depends on the price force, no trade is the same
Techniques for Day Trading the ES, NQ, YM, MES, MNQ, and MYM
- Thread starter volpri
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What I don't understand is: If there is strength because it comes out fast. If there is no strength, then I understand.
I am assuming you are talking about the last chart I posted in my post #81? If so, here is my response.
In SPBL trends there are different ways to trade it. All are ok I could choose either methodology to use.
1) I can enter on what looks like weakness (but really isn't as it is just a minor reversal attempt that fails as the larger context is strong) and build a position long as price is going down on a PB. If I average down then I like to exit just above my first entry therefore all buys are "in the money". Such as in the first trade where I averaged down 4 contracts and exited all 4 on a price above my first entry. I basically grab the profits when the market gives them to me. SPBL can go on for hours and I may be in a hurry to do something else and just want to make a few trades lock in some profits and be gone. In this case with this chart I think I was busy drawing the magic up on the chart for you guys. That is hard to do and trade so I just lock in profits and exit. I think all my trades except the last two were done in about 1 hours time TOTAL.
2) SMBL trend work this way. Price grinds up. Slope is usually of the flatter variety. It has small PB's and price resumes. I can wait to see some strength in a previous bar after a PB and enter on a H1 resumption of the trend. As in trades 2 and 3 and 5 (later in the day). Of course, I have "less" risk because I am entering on proven strength "within" the SPBL itself, but I have to pay for the less risk with less profit. See I have waited for a high probability entry which means the movement has already traveled some so I cannot get a big reward. I have to give up reward for probability. Remember SPBL trends are a slow grind up.... fraught with small PB's. These are quick more sure scalps. They add up quickly.
3) I can buy long on a PB and then on every subsequent PB just add more as price grinds up. Then exit near the end of the session or any black buzzard that flies in. LOL this is OK if one doesn't like entering and exiting...etc but less money will be made this way. This is a micro version of buy and hold which is what investors do but here on a daily time frame it is a tiny version of investor modus operandi. But nevertheless, it is a viable way of trading SPBL trends. You personally may prefer this modus operandi. I don't.
4) I can buy at bottom of PB's and then exit at top then wait for another PB and repeat. Look at my last two trades on the chart. I went long on strength shown within the SPBL itself not the larger CONTEXT strength. I thus can't expect a large reward because I have give up some of the movement before my entry point. So, I gotta exit fast. This is akin to #2 explanation above. Now look at my second trade in those last two. That is, my last trade on the chart. I waited for price to drop on a PB BELOW my previous entry in my previous trade. I then go long again then exit as price resumes up. There is basically compounding my profits made from the previous trade (the first one in the last two trades on the chart). See I locked in my profits on the first one of the last two. Then entered again BELOW my previous trades entry then exited on the subsequent push up. Study this and think about this.
What if I entered on my first trade of the last two trades. I did not exit it when I did exit it but held through the subsequent PB then exited where my "second trade" exit was at. Which scenario would have made me more money? The way I actually executed the trades or holding through the PB? See?
I, in essence, used my profits from the first trade of the last two trades to enter a second trade. In reality I just used what was in my account but in essence I compounded. By locking in profits from the first I was able to get back in lower and compound my profits from the first. J.M.Hurst deals with these concepts in his book. Short-term trading can be far more profitable than buy and hold or sell and hold. Most people can't discern it. I simply don't care about commissions which all the guru's bellyache about. I had rather spend another 5.00 and make another 100 than save five bucks and make 100.
Just different ways to trade the SPBL (small pullback bull trend)
Besides I am a scalper and it is ingrained in me. Thus I have a high win rate and reduce stress (as some stress always occurs when a market moves against one's position) by locking in profits. But either methodology mention above can be used.
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Las corto por razón de tiempo, para asegurar el beneficios-las ganancias, y para sacar más ganancias agravandolas.
Guruish
New Metric:
Trader_Efficiency (TE) = Expectancy/Unit_Of_Trader_Time
AKA the "Get_A_Life" Metric
The less time spent managing trades, the more energy a trader maintains as the day progresses.
If opportunity presents later in the day, the trader may be more capable of managing a win, compared to approaching the new trade exhausted from having managed trades all day long.
This may be subjective: for some, it's the number of trades that exhausts more so than their duration, or the waiting might be more exhausting than the managing; to me this implies that while waiting, leave the room and do something else -- set an alarm at relevant price levels and/or times, and return when it goes off.
For me, the implication: AUTOMATE !!!
// R Expectancy Per Trade
// = (Probability_of_Win)(Targeted_R) - (Probability_of_Loss)(1R)
// for a Targeted_R that is positive ...
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Distinctive here, and what may confuse some/many, is that while consistently taking trades w/ high Expectancy, you repeatedly vary the relative importance of the factors that go into the Expectancy calculation.
eg, in the 2nd to last trade, very high probability for a small R win drives high Expectancy, whereas the high Expectancy of the last trade is comparatively dependent on much higher R win, while having relatively lower probability of win. In both cases, the Expectancy is high enough to make the trades with confidence.
This highly adaptive approach to implementing a consistent Expectancy is really masterful and serves Trader_Efficiency, which seems to be an overriding goal, appropriately.
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I can agree with some of your points here. The problem is it is nigh impossible to automate Price Action. See successful price action depends not only on reading context (larger and immediate), interpreting the contexts, seeing setups, executing those setups, setting initial SL’s and PT’s BUT it also depending on reading and interpreting the dynamics as the trade unfolds. That can’t be coded. It has to be observed and reacted to “live” after all the others have been done and one is in a trade. Someone can’t really just walk away. I mean, a person could, but it will affect their win rate. It is not only interpreting price moves and executing trades based upon those moves but it is also reacting to “how” the move was made. That can only be discretional.
Two identical H1-setups with almost the same larger and immediate contexts can render two different profit targets. This is dependent much of the time on the dynamics of the move after the trade has been entered. This is discretionary. Can’t really be programmed that I can see. Too many variables.
If energy is an issue for me I can trade larger size make two or three trades and quit. Maybe will do this next week. That is, make a larger trade size to show what I am talking about. Up to now I have just made very small trades. Most won’t believe with small trades how will they then believe with larger trades? But the PROCESS is the same.
I know a really smart guy that is trying to automate it. Haven’t talked to him in a few months so I don’t know how it is coming along.
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I have a background in data analysis and database analysis/design, and most facets of software development. The analysis work includes experience interviewing subject matter experts, towards representing their knowledge objectively. I'm immersed in the kind of approach that both you and Brooks share, and in offshoots that I'm in the process of specifying.
You may regularly intuit decisions you consider subjective, or too complex/subtle to explicate, but I wager that if you were to put yourself through a rigorous, ongoing self-interrogation of "why did I think/do that?" (which is what your journal is doing!, esp when others ask questions that you may not have thought of initially) you'd find your decisions increasingly representable via objective logic. It's even possible that you'd ultimately find the small remaining truly subjective part to be a detriment
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My sense of price dynamics and context won't be exactly the same as yours, but it does capture essential things that are non-obvious (not to be confused w/ "subjective") and representable objectively in a normalized data model ready for software implementation. A lot is possible when thorough and precise analysis is represented accurately in a normalized data model. So long as the underlying data model captures what one considers the key aspects of price dynamics, I don't think there's necessarily a difference between pre-trade and intra-trade analysis via software.
You may regularly intuit decisions you consider subjective, or too complex/subtle to explicate, but I wager that if you were to put yourself through a rigorous, ongoing self-interrogation of "why did I think/do that?" (which is what your journal is doing!, esp when others ask questions that you may not have thought of initially) you'd find your decisions increasingly representable via objective logic. It's even possible that you'd ultimately find the small remaining truly subjective part to be a detriment
.My sense of price dynamics and context won't be exactly the same as yours, but it does capture essential things that are non-obvious (not to be confused w/ "subjective") and representable objectively in a normalized data model ready for software implementation. A lot is possible when thorough and precise analysis is represented accurately in a normalized data model. So long as the underlying data model captures what one considers the key aspects of price dynamics, I don't think there's necessarily a difference between pre-trade and intra-trade analysis via software.
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