BuyStopLimit
The Trouble With Scribbles
- Thread starter Buy1Sell2
- Start date
Yes.
If I expect no more than 4 ticks of heat, my stop would be 5 ticks away
If I expect no more than 4 ticks of heat, my stop would be 5 ticks away
Sorry, no. If you have to have a stop, it must go behind the "danger point", in this case, 10.50. That's five points. This doesn't mean that you have to sit there immobilized if price comes back at you. It does mean that you have to have determined in advance exactly what you're going to look for to tell you that the trade is in trouble and how much leeway you're going to give it before scratching it. Unless you become paralyzed, you should not be vulnerable to more than a few ticks. Can you do this?
I can try, but then if one was so very skilled and sensitive to the imbalances of supply/demand, would they even need identify ranges in the first place?
If I stop myself out for a few ticks loss (rather than letting it hit my 5 point stop) because price doesn't seem to be going my way, and it then starts to move in the 'intended' direction again, I can get back in? How many times can I keep trying after stopping myself out? Is there not a risk of getting chopped to pieces?
If I stop myself out for a few ticks loss (rather than letting it hit my 5 point stop) because price doesn't seem to be going my way, and it then starts to move in the 'intended' direction again, I can get back in? How many times can I keep trying after stopping myself out? Is there not a risk of getting chopped to pieces?
1. Without ranges, there's no place to start unless you're entering a reversal off the upper or lower limits of a trend channel, which is itself a range; a diagonal range.
2. You will NEVER allow price to hit your stop. The purpose of such a stop beyond the problem of losing connectivity is to force you to focus on what price is doing without regard for your trade. Once you've entered the trade, you cannot think about it any more. Turn off every little button and flashing light that tells you how much money you've made or lost. Focus ONLY on what price is doing. If you don't like what price is doing, get out. Whether you're still in the plus column or the minus column doesn't matter. Focus on price, not on your trade.
3. When you're just beginning to gather data, then of course you will misread the tells and exit when you shouldn't have. However, if you're not thinking about the money, you will be in a far better position to evaluate this new situation, and if price doesn't for example drop the way you thought it would, then, yes, a re-entry is certainly possible.
In any case, you have something to start with. Ideally, you would go through an observation period of at least a couple of weeks in order to learn to see differently. But there's nothing I can do to force you to do so. If you must cut right to the chase, then begin testing your thesis on actual hindsight charts. There are plenty to get you started in the Foresight thread. There are more in my journals. Your thesis may blow up after one trial. Or it may hold for thirty. But eventually you're going to have to make adjustments. This does NOT mean that you have to start over. But you will at least have something that is yours, that belongs to you, that you can have confidence in, not something that somebody told you to do, something that will evaporate as soon as the going gets rough.
The very worst-case scenario? 5 points is a hundred bucks. So what?
2. You will NEVER allow price to hit your stop. The purpose of such a stop beyond the problem of losing connectivity is to force you to focus on what price is doing without regard for your trade. Once you've entered the trade, you cannot think about it any more. Turn off every little button and flashing light that tells you how much money you've made or lost. Focus ONLY on what price is doing. If you don't like what price is doing, get out. Whether you're still in the plus column or the minus column doesn't matter. Focus on price, not on your trade.
3. When you're just beginning to gather data, then of course you will misread the tells and exit when you shouldn't have. However, if you're not thinking about the money, you will be in a far better position to evaluate this new situation, and if price doesn't for example drop the way you thought it would, then, yes, a re-entry is certainly possible.
In any case, you have something to start with. Ideally, you would go through an observation period of at least a couple of weeks in order to learn to see differently. But there's nothing I can do to force you to do so. If you must cut right to the chase, then begin testing your thesis on actual hindsight charts. There are plenty to get you started in the Foresight thread. There are more in my journals. Your thesis may blow up after one trial. Or it may hold for thirty. But eventually you're going to have to make adjustments. This does NOT mean that you have to start over. But you will at least have something that is yours, that belongs to you, that you can have confidence in, not something that somebody told you to do, something that will evaporate as soon as the going gets rough.
The very worst-case scenario? 5 points is a hundred bucks. So what?
Here is the 15 min chart of NQ today showing only one long trade today and the entry was prior to the NY open. If just trading RTH there would have no long trades to take today on the 15. For one, the 15 was seriously overbought so you would have had to drill down to the 5 and then to the 1 to perhaps find an oversold condition with fresh upside momentum to go long. The stop would have remained at 4409 on the 15 until stopped out and the trade would have basically been a 3-4 point loss. In the next posting you'll see that by keeping an eye on more than one time frame will help you see turns.
Here is the 5 min chart of NQ today. You can see that a buy signal is created hours before NY open and the RSI grail is more of continuation here rather than as a buy as it was on the 15. The 5 minute chart shows the reversal unmistakably and could have been exploited as a short with trailing stops.
Very good posting. You are beginning to ask the questions that will get you to the answer that you seek. Some of my best day trades have been when I was stopped and and in the mext couple of minutes got right back in. Need to be able to be nimble. ---Identifying ranges is not necessary to successful trading. Trade management IS though.