Nothing like hindsight
And if the SLA had been followed mechanically, the trader would have earned 29pts, not 9.
The Trouble With Scribbles
- Thread starter Buy1Sell2
- Start date
Nothing like hindsight
And if the SLA had been followed mechanically, the trader would have earned 29pts, not 9.
There are no stop outs listed on this chart. .... the first thing that should be done is to establish stop loss areas and this chart still needs that done. The focus here is on being right instead of trade management. It's ok to be right, but I would make a recommendation to look at potential loss first.
The trading plan establish clearly where are located the SL areas, you can see the document.
Yes, maybe this could be a day of 29 point, but I´m testing what I wrote in my trading plan and Im following it in order to have objective conclusions and later determine if it is useful or not.
But so far the results in the overall have been good and they will be posted when I finish the 100 trades.
Finally this is my last time posting and reading this thread because I have better things to do.
BTW: thank you for describe me as "the scribble student"
Thank you for your posting!--Very much appreciated. The point here is to help you and other readers see that there are simpler methods to reap equal to or greater benefits than the SLA. Do you concur that simple diagonal line crosses would achieve an equal or better reward?
lol DbPhoenix, I was just about to zoom in on that same line when I was alerted to your post. Funny thing is, he is getting closer and closer to advocating the SLA! lol
He could save himself so much time by just reading it.
All he needs to do is start recommending lajax waits to enter the "simple diagonal" breaks on a retrace and he'll become a prolific advocate of SLA without even realizing it. An amazing transformation lol
Here is a recent chart posting by a scribble student. Note that the forecast is for price to go one of two ways, either up or down. In addition, analysis of the upper trendline and lower trendline show that they are drawn in an arbitrary fashion. This is because they could have easily been drawn at different angles with the upper line going on top of the 105.61 bar and then across the top of the 109.17 bar. This would greatly change the angle. In addition, the lower line cuts through the noise at the bottom instead of being on the outside of the 89.70 bar. This would greatly change the size of the range and could show a much greater potential for price to fall. Furthermore, why isn't the lower line touching the 99.52 bar or the 99.13 bar? Conclusion to be found here is that the trendlines can be drawn however one feels they need to make the noise fit the way that they want it to. It's all in hindsight so it doesn't matter anyway. What is of import though is what is happening now and that can be determined by better methods using indicators along with price action and then adhering to strict and prudent money management principles.
I can answer this one for you B1S2!
If you back up far enough (which isn't shown), those channel lines actually start with very well defined swing lows for the lower channel line, and the highest high between those two lows for the upper channel line. This channel just happens to begin to the left of the chart. This therefore helps you identify the overbought and oversold conditions, as in the lows that hit 90 when they drop below the channel, and some of the slight penetrations above the upper channel line.
Its true that from here, price can either go up or down, but that is essentially what happens when you are at the mean of a channel. Being in the middle makes it much harder to favor up or down as opposed to when you are at the top, where the chances of going down are greater, or at the bottom, where the chances of going higher is the better bet.
EDIT: Here is a daily chart of the NQ which shows how that channel is drawn.
If you back up far enough (which isn't shown), those channel lines actually start with very well defined swing lows for the lower channel line, and the highest high between those two lows for the upper channel line. This channel just happens to begin to the left of the chart. This therefore helps you identify the overbought and oversold conditions, as in the lows that hit 90 when they drop below the channel, and some of the slight penetrations above the upper channel line.
Its true that from here, price can either go up or down, but that is essentially what happens when you are at the mean of a channel. Being in the middle makes it much harder to favor up or down as opposed to when you are at the top, where the chances of going down are greater, or at the bottom, where the chances of going higher is the better bet.
EDIT: Here is a daily chart of the NQ which shows how that channel is drawn.
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