The Foresight Thread
- Thread starter dbphoenix
- Start date
Markets having a tough time recently. To help with understanding the market context of what is happening, accordingly to Bloomberg...we haven't seen this type of price action since 1990'. They say its been the "Tightest Weekly Range Since 1994".
My own personal stats has the S&P 500 Index weekly about 6 weeks of price movement LESS than 1 percent...very similar to Bloomberg's data. I see it as a slow snail like decline. Slow enough to confuse many regardless if day trading or swing trading.
Take a look at most of the traders posting live calls on Stocktwits, Twitter, Othernet/FinancialChat IRC and even here at EliteTrader.com...its been a tough several weeks of trading regardless to the trade method being used. One of my favorite traders that's been posting live calls since the birth of Stocktwits.com and a Wyckoff/AMT trader and a verified/audited trader that has competed at the Duels de Trading (Salonat.com trading competition) in front of a live audience real money competition...
Trading just is not easy right now. It's tough on now even on those that are consistently profitable.
How do you handle this type of trading environment ?
1) You can sit it out until better trading environment returns (essentially you'll be waiting for volatility and range to expand)
2) If you want to trade through it...lower position size and/or lower number of trades
3) Keep learning/studying the markets because this is a very rare type of range price action to gain valuable insights that should be helpful if it continues (eventually you'll need to adapt) or returns again in the future
P.S. I feel sorry for any newbie trader beginning their trading careers in this type of trading environment (poor volatility, problematic range and many global concerns that's spooking many traders)...its going to be a costly learning experience for newbie traders. Hopefully they'll be able to recover when market conditions improve because the professional traders are going to hit it hard when volatility with range begins improving again.
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And we bounce off the trendline, almost to the tick.
Will the bounce hold? Who knows? Who cares? That's what stops are for.
0755: Incidentally, another range from 20-23 has been forming at the halfway level.
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I appreciate your views as you're one of the few who not only actually trades but has been doing so for years. However, a couple of minor quibbles.
1. Volatility and range have been fine IF one trades a longer bar interval. The swings from one channel limit to another are the same as they have always been. They just don't necessarily occur at a time which is convenient to Americans (i.e., those who live in the US -- sorry). If one doesn't thoroughly understand AMT, now is as good a time as any to start (summer doldrums, etc).
2. Only the best trades should be taken, such as 0830 yesterday and 0555 this morning. But then only the best trades should be taken anyway. If one doesn't know what the best trades are, he should stop until he learns how to determine their characteristics. As for how many, there were only two: one entry and one exit, at least for a SLAyer
.3. I don't know how rare it is. It reminds me of '98-'00. But, yes, trading ranges requires a shift to a reversal strategy (as opposed to a retracement strategy; we won't include the Guess&Hope "strategy" here). And the dynamics of reversals are very different from those of retracements, as the dynamics of trending are very different from those of bouncing back and forth. My attempts to illustrate and explain the value of ranges and how to trade them at the beginning of this thread was largely unsuccessful, but perhaps those who are having difficulties would benefit by re-reading those early posts now. There are only one month's worth.
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Trend lines, half way levels. Different ways of looking at the same things I suppose.
Almost all car accidents involve people driving cars with steering wheels in them. Sadly, no one seems willing to offer me information about cars without them.
All cars have rear view mirrors. Those who insist on driving forward by only being focused at looking in the rear view mirror are guaranteed to crash.
You can thank me later for bringing some attention to this circular reasoning thread.
surf
I can only go by the Bloomberg numbers, my own personal historical statistics and many conversations with Wyckoff/AMT traders, Market Profile traders, Traditional Chart Pattern traders and many other types of price action traders.
Statistically, volatility and range have not been fine (not within the norm)...the stats alone confirms such. Further, based upon the above mentioned types of traders...its tough trading out there. As one Wyckoff/AMT trading pal stated...you need to adapt. He's now trading a different market (Forex GbpUsd and EurUsd) while temporarily suspending his trading in the Emini futures until volatility and range conditions are suitable for him to trade.
The goal is to be profitable, not to be married to a particular trading instrument.
Consensus is that its an unusual tough trading environment that most have never traded within this type of environment that has "consistently" persisted the past several weeks...longer than any other duration since the 1990's. My own personal documentation of trading conditions begins the late 1990's even though I traded in the early 90's when the last time this type of range and volatility appeared. Yet, I missed most of 1994 trading conditions (when this type of market conditions appeared) due to caring for a sick family member in another country.
In other words, I too am taking it easy in this market condition. It's new to me too (I didn't trade much in 1994) and if I need to change markets (adapt)...not a problem but I do have my own personal restraints about what markets I can trade and when doing such is possible due to family restraints.
Statistically, volatility and range have not been fine (not within the norm)...the stats alone confirms such. Further, based upon the above mentioned types of traders...its tough trading out there. As one Wyckoff/AMT trading pal stated...you need to adapt. He's now trading a different market (Forex GbpUsd and EurUsd) while temporarily suspending his trading in the Emini futures until volatility and range conditions are suitable for him to trade.
The goal is to be profitable, not to be married to a particular trading instrument.
Consensus is that its an unusual tough trading environment that most have never traded within this type of environment that has "consistently" persisted the past several weeks...longer than any other duration since the 1990's. My own personal documentation of trading conditions begins the late 1990's even though I traded in the early 90's when the last time this type of range and volatility appeared. Yet, I missed most of 1994 trading conditions (when this type of market conditions appeared) due to caring for a sick family member in another country.
In other words, I too am taking it easy in this market condition. It's new to me too (I didn't trade much in 1994) and if I need to change markets (adapt)...not a problem but I do have my own personal restraints about what markets I can trade and when doing such is possible due to family restraints.
I appreciate your views as you're one of the few who not only actually trades but has been doing so for years. However, a couple of minor quibbles.
1. Volatility and range have been fine IF one trades a longer bar interval. The swings from one channel limit to another are the same as they have always been. They just don't necessarily occur at a time which is convenient to Americans (i.e., those who live in the US -- sorry). If one doesn't thoroughly understand AMT, now is as good a time as any to start (summer doldrums, etc).
2. Only the best trades should be taken, such as 0830 yesterday and 0555 this morning. But then only the best trades should be taken anyway. If one doesn't know what the best trades are, he should stop until he learns how to determine their characteristics. As for how many, there were only two: one entry and one exit, at least for a SLAyer
3. I don't know how rare it is. It reminds me of '98-'00. But, yes, trading ranges requires a shift to a reversal strategy (as opposed to a retracement strategy; we won't include the Guess&Hope "strategy" here). And the dynamics of reversals are very different from those of retracements, as the dynamics of trending are very different from those of bouncing back and forth. My attempts to illustrate and explain the value of ranges and how to trade them at the beginning of this thread was largely unsuccessful, but perhaps those who are having difficulties would benefit by re-reading those early posts now. There are only one month's worth.
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Statistically you may be right. But statistics don't help me when I have to make a trading decision, such as yesterday morning or this morning. As for other PATs, it all depends on the individual tactical sets though the strategies remain the same (reversals, breakouts, retracements). The chief advantage of PAT is that it's adaptable. It can't help but be adaptable due to its nature. Personally I see no need to change markets. I just wait for the best entries and trade less often. I don't want to be spending a lot of time trading this time of year anyway.
And, yes, I can believe that this is a tough market for those who've never traded one like it. That's one of the primary advantages of experience (I don't think anyone has 20-year-old replay files). I've seen all this before. It doesn't throw me. And there is always the issue of preparedness. Your current exchanges with whozis are a perfect example of those who are eager to trade but are in no way prepared to do so, either financially or psychologically or experientially or any other way. But people will either listen or they won't.
When people complain about the market, I have to remind myself that many were in preschool when you and I were trading the internet bubble, so, yes, it all seems so new and so different. But then that's where the "old" have the drop on the young.
And, yes, I can believe that this is a tough market for those who've never traded one like it. That's one of the primary advantages of experience (I don't think anyone has 20-year-old replay files). I've seen all this before. It doesn't throw me. And there is always the issue of preparedness. Your current exchanges with whozis are a perfect example of those who are eager to trade but are in no way prepared to do so, either financially or psychologically or experientially or any other way. But people will either listen or they won't.
When people complain about the market, I have to remind myself that many were in preschool when you and I were trading the internet bubble, so, yes, it all seems so new and so different. But then that's where the "old" have the drop on the young.
AGREED. Amazing how in one sentence, it is told that stops are not required and then later it is mentioned that stops are needed. Let's see some live trades.All cars have rear view mirrors. Those who insist on driving forward by only being focused at looking in the rear view mirror are guaranteed to crash.
You can thank me later for bringing some attention to this circular reasoning thread.
surf