Darnit... I hate it when people use sound logic against me... it makes it hard to fight back!
Trading NQ via Price Action
- Thread starter k p
- Start date
Darnit... I hate it when people use sound logic against me... it makes it hard to fight back!
I'm hoping I have already given up the fight.
I am sick of that feeling when I go into a trade being apprehensive even before it fills. So often I catch myself thinking that I wish I knew what my chances are here, wanting to have some sort of statistical analysis to fall back onto. More importantly, I also wish I knew where to get out, not being at the mercy of first just hoping that price goes instantly in my direction, and then when it doesn't, not being sure of when to cut my losses and wait for the next trade.
There is still that element of thinking that I should be able to read what the market tells me, but this reading ability really can only come from a statistical analysis of what has happened in the past. It touches a bit on that dichotomy between trading behavior and trading patterns, so in a sense I would equate trading patters with backtesting. I didn't want to be building a system that was accurate to the tick, knowing that given this setup, my chances of price moving in my favor 20 ticks is 67% and if it goes 12 ticks against me it would hardly ever go back in my direction so place the sell stop at 13 ticks away. I just cannot fine tune it down to this my precision. And I this if this could be done, then computers already doing it... so what chance do I have when they will have all their stats loaded and ready to go. (If you're ND of course... you are that computer!
)But saying all this, I do realize that the only way to solve the problem of entering a trade based on what I "think" will happen is to see what has happened in the past and build a system based on this.
So yes, I have been fighting for a while here, trying to do it, trying to remain somehow faithful to trading behavior, but it is clear that this isn't working for me. Perhaps watching this live for 5 more years, forward testing my ideas based on whatever my brain can remember would get me there one day. But I certainly cannot last this long, nor do I really want to take the long road. I see no reason why in just a few weeks I cannot have something that works, and my goal now really is to do whatever needs to be done so that I get something that is profitable within the shortest amount of time.
This journal is strictly for the enjoyment of others... if I actually make any money, that will just be a minor bonus!
Ok.. now you gotta tell what's so funny because I'm far too dense to see it tonight.
It really doesn't get better than this.
Working on my hinge backtesting last night, I was a bit frustrated with not finding enough hinges that looked good enough. And then today, after quickly reviewing the chart after coming home, this one stood right out. Its not perfect in that it happens in an area with some consolidation to the left, but at least the hinge formed after a rise up, not forming within a current range.
Not only does it take off beautifully when it exits, but the apex provides support twice, and launches a much higher move up close to the end of the day. Ah... if only most hinges were this perfect. There is even a RET in there right after the exit to allow for a clean long entry.
Working on my hinge backtesting last night, I was a bit frustrated with not finding enough hinges that looked good enough. And then today, after quickly reviewing the chart after coming home, this one stood right out. Its not perfect in that it happens in an area with some consolidation to the left, but at least the hinge formed after a rise up, not forming within a current range.
Not only does it take off beautifully when it exits, but the apex provides support twice, and launches a much higher move up close to the end of the day. Ah... if only most hinges were this perfect. There is even a RET in there right after the exit to allow for a clean long entry.
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I'm hoping I have already given up the fight.
I am sick of that feeling when I go into a trade being apprehensive even before it fills. So often I catch myself thinking that I wish I knew what my chances are here, wanting to have some sort of statistical analysis to fall back onto. More importantly, I also wish I knew where to get out, not being at the mercy of first just hoping that price goes instantly in my direction, and then when it doesn't, not being sure of when to cut my losses and wait for the next trade.
There is still that element of thinking that I should be able to read what the market tells me, but this reading ability really can only come from a statistical analysis of what has happened in the past. It touches a bit on that dichotomy between trading behavior and trading patterns, so in a sense I would equate trading patters with backtesting. I didn't want to be building a system that was accurate to the tick, knowing that given this setup, my chances of price moving in my favor 20 ticks is 67% and if it goes 12 ticks against me it would hardly ever go back in my direction so place the sell stop at 13 ticks away. I just cannot fine tune it down to this my precision. And I this if this could be done, then computers already doing it... so what chance do I have when they will have all their stats loaded and ready to go. (If you're ND of course... you are that computer!
But saying all this, I do realize that the only way to solve the problem of entering a trade based on what I "think" will happen is to see what has happened in the past and build a system based on this.
So yes, I have been fighting for a while here, trying to do it, trying to remain somehow faithful to trading behavior, but it is clear that this isn't working for me. Perhaps watching this live for 5 more years, forward testing my ideas based on whatever my brain can remember would get me there one day. But I certainly cannot last this long, nor do I really want to take the long road. I see no reason why in just a few weeks I cannot have something that works, and my goal now really is to do whatever needs to be done so that I get something that is profitable within the shortest amount of time.
only trade it.
there is no sense of statistics analysis.
Facts here:
when market trends,follow it whether up/down.
when market sideways, go against it.
when you follow a trend, go againts the smaller timeframe,but follow the big timeframe
if you indersatnd those facts, then youhave an edge. statistically, in a long-term trend, if you trade that direction, always the probaility is higher than another direction.
most people pay too much attention to the small directions, that is why they lost.
1. judge what kind of market is: I classify them into two categories: a random and b trending
2. then apply the strategyaccordingly
buy low and sell high, always follow this rule. you find trading isvery enjoyable thing
Yes I'm doing my backtesting, but I can't help but watch price every morning. Not going to waste time today with a detailed analysis, but as I watched price drop, I had the inclination to keep watching my higher time frame. I did feel fairly confident in a short somewhere. Each day we seem to go higher by only a couple of points and then drop right back down again. As an aside, there was a tiny 5 min DL I could draw in just before the open, about the only DL going into today from the overnight, but when it broke, going down was the obvious direction.
Anyway, the whole point of this post just now is that after we broke my important level of 4142, I wondered where we would find support. The horizontal levels are the easiest to see, but I have been paying special attention to how Db draw his trendlines on higher time frame charts. The low that we hit a few weeks ago below 3700 stopped very close to a DL that would have been drawn under swing lows on a weekly chart from over a year ago.
So today, I saw two prominent lows on the hourly chart and after I saw price shoot up, I drew this line in as pictured. At "A", we could have already been aware of this trend line, and by the time we get to "B", we can be on the lookout for it breaking or not. As it so happens, we got a bounce. By the time this change in trend was evident on the 5 minute chart, price had already gone up quite a bit, so taking a REV entry is tricky. You should of course always be careful about trading against the trend, and even though a tight SL on the 1 minute chart would have broken at around 42, this same SL has to be fanned a few times on the way down anyway, so going long is still risky as this may be another case of just fanning the SL yet again. Seeing this bounce from the hourly DL might give you just a bit more confidence though, especially since we are getting close to the bottom of this range we have been in for a few days.
I also mark in the 50% of this down move. The down more from the high at the open to the bottom has been breached, but if we consider the down move as drawn on this chart from the high of 4179 to the low at 4136, then price just ever so slightly poked above this 50% level but couldn't hold it.
Our macro view is that we are still below the upper limit of the channel. Price is barely able to make new highs on the daily chart. But at the same time, we now have a series of higher lows on the hourly. Back in September, we were stuck in this kind of a range for almost 2 weeks, and we ended up breaking below it, then breaking above it, and then it was a series of lower highs and lower lows before the plunge. So as it is right now, we just have to wait and see what ultimately happens.
Anyway, the whole point of this post just now is that after we broke my important level of 4142, I wondered where we would find support. The horizontal levels are the easiest to see, but I have been paying special attention to how Db draw his trendlines on higher time frame charts. The low that we hit a few weeks ago below 3700 stopped very close to a DL that would have been drawn under swing lows on a weekly chart from over a year ago.
So today, I saw two prominent lows on the hourly chart and after I saw price shoot up, I drew this line in as pictured. At "A", we could have already been aware of this trend line, and by the time we get to "B", we can be on the lookout for it breaking or not. As it so happens, we got a bounce. By the time this change in trend was evident on the 5 minute chart, price had already gone up quite a bit, so taking a REV entry is tricky. You should of course always be careful about trading against the trend, and even though a tight SL on the 1 minute chart would have broken at around 42, this same SL has to be fanned a few times on the way down anyway, so going long is still risky as this may be another case of just fanning the SL yet again. Seeing this bounce from the hourly DL might give you just a bit more confidence though, especially since we are getting close to the bottom of this range we have been in for a few days.
I also mark in the 50% of this down move. The down more from the high at the open to the bottom has been breached, but if we consider the down move as drawn on this chart from the high of 4179 to the low at 4136, then price just ever so slightly poked above this 50% level but couldn't hold it.
Our macro view is that we are still below the upper limit of the channel. Price is barely able to make new highs on the daily chart. But at the same time, we now have a series of higher lows on the hourly. Back in September, we were stuck in this kind of a range for almost 2 weeks, and we ended up breaking below it, then breaking above it, and then it was a series of lower highs and lower lows before the plunge. So as it is right now, we just have to wait and see what ultimately happens.
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Although I don't think there is anything wrong with buying low and selling high, and of course making sure you're trading in a trending environment, being able to follow trend is fairly hollow advise. If you get in at the wrong place, how long will you keep holding a loser before it turns back around?
I think that the statistical analysis is the biggest problem with your reply. You see, knowing to follow trend is almost a statistical analysis in and of itself. Trends tend to continue, and by saying they "tend" to continue, this is based on someone at some time doing a statistical analysis of this. When you say to go against a smaller time frame but follow the big time frame, perhaps what you're saying is that in a down trend, you should short after every retracement that goes back up. For all of this to be successful, I think you would have to have built a statistical model.
I used to think that my brain could do all this for me, that I could just watch price in real time enough and make notes on my chart and that then I would magically know what to do. The brain is I think unfortunately terrible at collecting stats, so although the idea isn't wrong, the brain just cannot do this. If anything, its prone to failing you because it will just remember the winners and not the losers. So it won't give you the important statistical edge that you need to know how to put the trade on.