The Trouble With Scribbles

[stillgrinding]

However, it is highly unlikely given that he is not considering the real time aspects of trading and is curve fitting his backtesting. In order to be successful, you need to lose real money in the real market. The educators of the Scribble Method do not instruct the students in any manner on how to let profits run and cut losers short. Neither do they discuss slippage and emotions and commissions etc. Everyone needs to look closer at what is being proposed.

This is simply not true. How is he curve fitting? And why do you have to lose real money whilst developing a trading plan? He's just starting the process. He's finding logical places to enter and exit. And he's just starting to Demo trade. When he is confident in his trading plan, (by observing,then testing, then SIM trading) He'll go live.
As far as letting profits run and cutting losers short, it's all in the sla/pdf. If you have read it, you'd know. You're just taking little bits out here and there (out of context I might add)to build and argument.
Look, this might not be for you. But don't blast it if you have not read it.

 

[Buy1Sell2]

Looks like another day will pass with no realtime trade calling by the educators and students. No testimonial? No trust plan.

 

[Buy1Sell2]

--05/08/2015 RTH Short here at 4454.25. Initial Stop is 4650.
--05/11/2015 Afterhours PM Price is 4427.50. Staying short with same stop.
--05/19/2015 After hours PM. Reversed long at 4500.75 for 46.5 point loss. Initial stop and reverse is on a close below 4420.00

 

[knutkase]

Thank you for the question Munich. Here is the correct way to trade--

1. Keep losses small. (Never risk more than 2% of Total Liquid Net Worth on any one trade/idea.)

2. Let winners run using stops outside the noise.

3. Keep commissions small

4. Don't scale in or scale out.

--05/08/2015 RTH Short here at 4454.25. Initial Stop is 4650.
--05/11/2015 Afterhours PM Price is 4427.50. Staying short with same stop.
--05/19/2015 After hours PM. Reversed long at 4500.75 for 46.5 point loss. Initial stop and reverse is on a close below 4420.00

Your methods need adjustment.
Allowing a 110+ point gain to turn into a 46.50 loss is not "the correct way to trade". Nor was the original (and unchanged) 200 point stop on that trade "the correct way to trade". Similar result in the ES Journal: 30 point gain turned to 34.50 point loss. Again not "the correct way to trade"

Goes far in explaining the lack-luster 9 year (since 2006, see post 1565 in ES Journal 2015)result of your ES journaling, averaging less than 10K per year.

I also have a suggestion for the integrity of journal posts. Include your expected hold duration. Just an initial expectation, changable like anything else.

 

[Buy1Sell2]

The hourly is clearly long .

 

[Buy1Sell2]

One of the students has shown some ability to grab the main crux of trading

--------"most "daytraders" blowup when a daytrade gone bad becomes a longer-term trade due to inability/unwillingness to accept a loss. The problem is typically amplified by "doubling down" and eventually leads to a blowup."------


The scribble method educators do not pay a lot of attention to imparting this valuable information. Good to see one of the students on board.

 

[Buy1Sell2]

Staying long NQ for now. --Not incorporating the scribble method.

 

[Buy1Sell2]

Here we have a scribble student over-analyzing and trying to figure out the "why" of price movement. The "why" of price movement is unimportant and will cloud thinking. All one needs to know here is that the daily price is rising. Then you begin looking intraday for buying opportunities. Price must necessarily make new highs in order to go higher. It must move through so called "resistance" in order to go higher. One can determine where the "supply line" is by using dynamic indicators coupled with price movement, oscillation, and momentum. There is no need to be drawing scribbles to determine future price moves. They are arbitrary anyway and the educators make no mention of this. Furthermore, the student here does not consider how far above or below the "supply line" one would place a stop. There is no regard for trade.risk management whatsoever and no one steps in to guide him in this regard. Here's a novel idea- Place a trade with and entry and a stop.

-------"Buyers refuse to surrender, but we are at a critical juncture with price making a HH on the 60 min. First the daily chart price has rallied above the mean of the channel and is now bumping against resistance , if buyers can lift price above the SL its possible the highs at 40 will be challenged. Failure to rise above the SL and a drop in price below 3691.75 will confirm weakness and lower prices. "--------

 

[Buy1Sell2]

Here is an example of the confusing and discretionary nature of the scribble method. In this example, the trader has drawn two static scribbles, a gray one and a red one. There is also a more dynamic diagonal line drawn. The trader expects price to retrace to the dynamic diagonal line, but gives short shrift to the static gray and red scribbles----as if they didn't exist at all. Then what is the point of them being drawn at all? It seems that these lines are not needed and are best drawn in hindsight instead of being futuristic. ---not good

 

[Buy1Sell2]

Here is an example of some of what is wrong with the SLA scribble method. We have a student here who is missing quite a bit of activity. Note the obvious oscillation with upside momentum at the RTH open, yet the SLA has him waiting until a "planned" 108.30 to go long and then allowing the exit to come back to breakeven. By "planning" the trades, one misses the dynamic nature of the market ie that new levels are discovered each day. In this instance, he misses half the move by having his trade planned and the days activity does not fit into the picture that he has drawn premarket. Furthermore, he is then shorting on a breakdown of the predetermined range and ignores the obvious long-wards oscillation and gets out at the top of the preconceived range. The trend was obviously long and by ignoring the use of three time frames, we miss out here on effective trades. No--the SLA scribble method remains unremarkable and quite possibly inferior the more we look at it in detail.