Ok lets look at trade 8. As you can see trade 8 was averaging down short on 4 one contract entries. On the chart which is a 5 min chart you can see that I am averaging down on a two legged PB. So, why would I keep averaging down as opposed to dumping the losing position, reversing and going back in long doubling up. Let me explain. From 8:15 a.m. down to the bottom of that red highlighted area we had 5 PB’s they were all very minor and within 2 or 3 bars price resumed. Notice the steepness of the highlight tight channel down. So, at the bottom we begin a 6th PB. What are the odds that this is gonna be a real deep PB or maybe even a reversal. Pretty low, being as the previous 5 PB’s were all minor reversal attempts and in a tight steep bear channel composed of 11 bear bars, of which 5, were very large (relative to the bars at the very top of the chart). We had 6 bull bars. Some bear bars in sequence. Gaps between the high of a PB bar and the low of a prev PB. Gaps between the close of a bear bar and the close of the first bear bar after a PB is done and then trend resumes. These gaps speak “urgency” “inertia” “momentum”.
So, considering these things are the odds high it will be a minor PB even if deeper than the previous 5 PB’s and that price will simply resume south enough for a scalp or at worst go into a range? And even if it went into a range I would still likely be able to get out with a good scalp as ranges go up and down, back and forth. Therefore, I had no problem to just keep adding to my short as price went against me, but I did it on small size, just in case. Remember..40/60. I could be wrong and have to exit, double up and go long. An astute trader prepares himself for all sorts of scenarios.
Ok, now consider this; From my last entry (blue line) what are the odds (taking into consideration that tight steep bear channel) that price will go and hit my first SL (first red X) BEFORE it would go down thru my first entry And allow me to exit 1 tick below my first entry like I did? Odds heavily favor PA making my PT before making my SL. Odds would even be higher had I used the wider SL (second red x).
Always think logically about the total context and be prepared for anything. Get a premise, then structure your trade, and watch it like a hawk. Never be satisfied with losing. Be a winner. Learn how. You make your own reality in the markets. Blame no one. Be responsible for each and every trading decision. It is YOUR TRADE and yours only.
As it turned out price did go into a range giving me more than one opportunity to exit my 4 lot averaged down position.
You may ask why are you divulging your trading secrets on a public forum. Well there are no secrets. It is just trading the probabilities of price action graphically. If every one on ET did it then it would just be more precise and accurate. Please do join me but do it on your SIM ROFLMAO.
The beauty of it is that the tactics will likely be working 50 years from now. They won’t get old and outdated as long as we humans look at charts for trading decisions. We may have to adapt some things ..like...for HFT’s..algo’s and modify our stops losses and profit targets but basically it will probably work for the rest of our lives, at minimum.
So, I have NO SECRETS TO HIDE.
PS It is discretionary and would be hard to automate because you have to monitor visually bar dynamics as each bar is forming. I am not a programmer but that seems as if that would be difficult to pull off with a computer. It cannot compare to the power of the human brain to make judgment decisions. It can only do what it is programmed to do, but a brain adapts on the fly to all scenarios. It would be IMO extremely difficult to program all the variables.
I just hope the concepts help some small traders get really good on a SIM! What they do afterwards is totally their business. I ain’t telling anyone to trade these concepts with their money.
Most traders ain’t gonna listen anyway cause I break too many of the guru’s rules. That gets depressing to me as it is alot of work typing this malarkey up and taking snapshots of charts and annotating them. But I press on. I’m 65. And don’t know how much longer I will explain these things. But I do still enjoy doing it even though it is alot of work. I sincerely hope folks are finding it useful.
So, considering these things are the odds high it will be a minor PB even if deeper than the previous 5 PB’s and that price will simply resume south enough for a scalp or at worst go into a range? And even if it went into a range I would still likely be able to get out with a good scalp as ranges go up and down, back and forth. Therefore, I had no problem to just keep adding to my short as price went against me, but I did it on small size, just in case. Remember..40/60. I could be wrong and have to exit, double up and go long. An astute trader prepares himself for all sorts of scenarios.
Ok, now consider this; From my last entry (blue line) what are the odds (taking into consideration that tight steep bear channel) that price will go and hit my first SL (first red X) BEFORE it would go down thru my first entry And allow me to exit 1 tick below my first entry like I did? Odds heavily favor PA making my PT before making my SL. Odds would even be higher had I used the wider SL (second red x).
Always think logically about the total context and be prepared for anything. Get a premise, then structure your trade, and watch it like a hawk. Never be satisfied with losing. Be a winner. Learn how. You make your own reality in the markets. Blame no one. Be responsible for each and every trading decision. It is YOUR TRADE and yours only.
As it turned out price did go into a range giving me more than one opportunity to exit my 4 lot averaged down position.
You may ask why are you divulging your trading secrets on a public forum. Well there are no secrets. It is just trading the probabilities of price action graphically. If every one on ET did it then it would just be more precise and accurate. Please do join me but do it on your SIM ROFLMAO.
The beauty of it is that the tactics will likely be working 50 years from now. They won’t get old and outdated as long as we humans look at charts for trading decisions. We may have to adapt some things ..like...for HFT’s..algo’s and modify our stops losses and profit targets but basically it will probably work for the rest of our lives, at minimum.
So, I have NO SECRETS TO HIDE.
PS It is discretionary and would be hard to automate because you have to monitor visually bar dynamics as each bar is forming. I am not a programmer but that seems as if that would be difficult to pull off with a computer. It cannot compare to the power of the human brain to make judgment decisions. It can only do what it is programmed to do, but a brain adapts on the fly to all scenarios. It would be IMO extremely difficult to program all the variables.
I just hope the concepts help some small traders get really good on a SIM! What they do afterwards is totally their business. I ain’t telling anyone to trade these concepts with their money.
Most traders ain’t gonna listen anyway cause I break too many of the guru’s rules. That gets depressing to me as it is alot of work typing this malarkey up and taking snapshots of charts and annotating them. But I press on. I’m 65. And don’t know how much longer I will explain these things. But I do still enjoy doing it even though it is alot of work. I sincerely hope folks are finding it useful.
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