Really.
The Trouble With Scribbles
- Thread starter Buy1Sell2
- Start date
Really.
1) One more point remains to be discussed in connection with the practical application of our support and resistance study, and that is the action of prices when they approach such a level.
2) A quick inspection of the various chart examples we have used to help our understanding of these phenomena, indicates that prices may do one of two things
a. Price may either halt and build a pattern of congestion lasting for some time before the level is finally penetrated, or
b. Price may ‘‘bounce’’ back into a reversal movement of more or less importance.
3) There seems to be no dependable guide to forecasting which type of price action will follow the attainment of a critical support or resistance level.
4) In fact, we have seen that occasionally there will be no halt of any consequence in the current movement, but that is the exception rather then the rule.
5) THEREFORE: We must watch to see what sort of pattern develops on the individual chart when price has reached this critical level. adapted from R.W. Schabacker
If Schabacker's account of how one approaches utilizing support and resistance in one's trading does not make sense to one reading it, then, imo, there is nothing any mere scribbler on a trading forum can do to communicate this idea more clearly. If Schabacker's account does not pique one's interest in this particular approach to interpreting price action, then it is probably best that one ignore the scribble method and look elsewhere for trading ideas.
EDIT: On the other hand, if Schabacker's account does pique one's curiosity, then one might find Wyckoff's description of trading levels, tests, and buying/selling climaxes of interest, as these will help one formulate a sense of the sorts of behavior one should be looking for at these levels to determine whether a BO or a reversal is being indicated.
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The two consistent theme I saw in few threads about SLA method is
a. What is defined a break based on the SLA method
b. The corresponding parameters to play it.
If I understand that is what many are trying to find out and I am curious for the same simple answer as well.
It would be helpful if those who are experts in SLA method can provide this answer straight here. Thank you in advance for the same. The following would be the example to consider.
1. Say we have a 15 mins timeframe range in ES. Would 2 ticks above the range considered a break? 5 ticks considered a break? What does SLA method recommend?
2. For the break as defined in #1, would one put a buy stop above 2 ticks? 5 ticks above the range? What would be the Stop SLA method recommend to protect from breakout failure?
3. Or would you define break as say many points (how much??) from the range and buy pb to the breakout area by putting a limit @ the breakout area? What would be the Stop SLA method recommend for such a play?
Thank you in advance for any helpful replies.
a. What is defined a break based on the SLA method
b. The corresponding parameters to play it.
If I understand that is what many are trying to find out and I am curious for the same simple answer as well.
It would be helpful if those who are experts in SLA method can provide this answer straight here. Thank you in advance for the same. The following would be the example to consider.
1. Say we have a 15 mins timeframe range in ES. Would 2 ticks above the range considered a break? 5 ticks considered a break? What does SLA method recommend?
2. For the break as defined in #1, would one put a buy stop above 2 ticks? 5 ticks above the range? What would be the Stop SLA method recommend to protect from breakout failure?
3. Or would you define break as say many points (how much??) from the range and buy pb to the breakout area by putting a limit @ the breakout area? What would be the Stop SLA method recommend for such a play?
Thank you in advance for any helpful replies.
This is, imo, as simple as I can make it:
1) One more point remains to be discussed in connection with the practical application of our support and resistance study, and that is the action of prices when they approach such a level.
2) A quick inspection of the various chart examples we have used to help our understanding of these phenomena, indicates that prices may do one of two things
a. Price may either halt and build a pattern of congestion lasting for some time before the level is finally penetrated, or
b. Price may ‘‘bounce’’ back into a reversal movement of more or less importance.
3) There seems to be no dependable guide to forecasting which type of price action will follow the attainment of a critical support or resistance level.
4) In fact, we have seen that occasionally there will be no halt of any consequence in the current movement, but that is the exception rather then the rule.
5) THEREFORE: We must watch to see what sort of pattern develops on the individual chart when price has reached this critical level. adapted from R.W. Schabacker
If Schabacker's account of how one approaches utilizing support and resistance in one's trading does not make sense to one reading it, then, imo, there is nothing any mere scribbler on a trading forum can do to communicate this idea more clearly. If Schabacker's account does not pique one's interest in this particular approach to interpreting price action, then it is probably best that one ignore the scribble method and look elsewhere for trading ideas.
On the other hand, if Schabacker's account does pique one's curiosity, then one might find Wyckoff's description of trading levels, tests, and buying/selling climaxes of interest, as these will help one formulate a sense of the sorts of behavior one should be looking for at these levels to determine whether a BO or a reversal is being indicated.
A break of a level is a break of a level. Not every break results in a trade in the direction of the break. What tells a scribbler whether a break is a BO or a reversal is not, imo, defined by points or ticks or flasjing red lights. It is based on price behavior at the level.
There is a 40 page FREE pdf that I think explains this stuff very clearly. If one would rather read 400 to 500 page course, there is Wyckoff;s and /or Schabacker's, both of which are likewise FREEon the internet.
This is NOT a system. This is a framework for organizing one's understanding of current price action so that one no longer needs to rely upon systems. The questions as to how one then trades based on this contextual framework is the role of the individual's trading plan. This will differ from scribbler to scribbler, depending upon one's specific goals, tastes, interests, fears, etc.
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The SLA/AMT does not and cannot make recommendations regarding this issue because the answer lies in your risk tolerance and how afraid you are to take the trade at all. Technically, a "break" is a tick. But if you have any experience trading breakouts, you know that a tick is rarely a sufficient measure of intent, and this is after all about behavior. Therefore, the central question becomes whether or not you want to be in the trade. If you do, take it. The specific entry is unimportant. But if you have not determined the criteria for assessing a successful trade and you have no plan for exiting the trade if those criteria are not met, then blindly entering the trade is just as likely to end in disaster as it is success.
I don't know you or your risk tolerance or anything about your fears. But I've suggested to beginners that are particularly afraid of taking breakouts that they collect 100 ranges and determine statistically how far price must "lift" from the range before one can be reasonably certain that the break will continue and lead to a successful trade. Some have done this and can now trade breakouts successfully. Others have not and are just as afraid of trading breakouts as they ever were. If you have not yet learned to be afraid of trading, then take any break through one limit or the other of the range. But know in advance exactly what you're going to do if the entry does not lead to a satisfactory result.
P.S. I see that you were interested in Metal and NoDoji several years ago so this is not new to you. Therefore you are far more likely to understand the SLA/AMT than those who are completely unfamiliar or even unaware of trading price. Since it is only 40pp long, half of which is charts, I suggest you at least give it a looksee.
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DT followed by LH, you entered at the LL
Eddie, I have annotated the SLA chart that you attached here showing 3 other trades--2 longs and a short that were missed on the original analysis.The trade that was already on the chart is a bar late entering. Please let me know your thoughts.
Trader Vic 2B top and we discovered America. 
Is it the double top?
edit: Oh, I see someone else already answered.
Double top and the lower high.