Trading the SLA/AMT Intraday
- Thread starter dbphoenix
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Dbp, thank you most kindly for this detailed reply. I am most grateful!
The fourth push to breach, and break out of the opening range has, yet failed again. It would be interesting to watch the price reaction around the demand line.
Schaefer
If you're in a range, there shouldn't be any demand lines. Or supply lines. Or, for that matter, channel lines. All that matters is the range (see the thread at TL).
From TL:
The distinction between trending and ranging requires the trader to make important decisions regarding what he wants and how he plans to go about getting it. This is made even more difficult by the fact that most traders don't even know that there is a distinction between trending and ranging and that a decision must be made.
The Law of Supply and Demand is, of course, a law. Auction Market Theory is a theory. However, the longer one works with it, the more easily he begins to see that the most profitable means of trading a range is to just leave it alone and let it do what it does. Yes, one can get literal and insist that any movement up or down is a trend, and that the movements from one side of a range to the other are trends. And for an intellectual discussion, that might be good fodder. But the practical matter is that trends are limitless and ranges are not. This does not mean that trends do not pause, end, and reverse. But they do not have predetermined limits. If they did, the market would be several thousand points lower.
For those who love to trade and can't stop doing it, the SLA at least provides some structure for making intrarange trades. But, at the end of the session, it is rare to find that all these in-and-outs amount to more than what one would have gained by doing nothing more than entering at one end and exiting at the other, if one has any gains at all.
As for yesterday, it is important to note that if one had bought the DB at 0330 and ridden it to the test of the previous evening's 1130 high, he would have done quite well, even though at the time it was not yet a range. But then DBs and DTs send powerful messages, and if one zooms out on the hourly to a view that includes the10th, he can see just how important this DB was in the context of the past week's movement. Unfortunately, for the daytrader, this is largely irrelevant in terms of the account balance since few people in the States are trading at 0330. The point regarding trends and ranges, however, must be made, as well as the point regarding daytrading vs taking at least a somewhat longer view: one who had entered on the 11th wouldn't have had to concern himself with any of this.
The distinction between trending and ranging requires the trader to make important decisions regarding what he wants and how he plans to go about getting it. This is made even more difficult by the fact that most traders don't even know that there is a distinction between trending and ranging and that a decision must be made.
The Law of Supply and Demand is, of course, a law. Auction Market Theory is a theory. However, the longer one works with it, the more easily he begins to see that the most profitable means of trading a range is to just leave it alone and let it do what it does. Yes, one can get literal and insist that any movement up or down is a trend, and that the movements from one side of a range to the other are trends. And for an intellectual discussion, that might be good fodder. But the practical matter is that trends are limitless and ranges are not. This does not mean that trends do not pause, end, and reverse. But they do not have predetermined limits. If they did, the market would be several thousand points lower.
For those who love to trade and can't stop doing it, the SLA at least provides some structure for making intrarange trades. But, at the end of the session, it is rare to find that all these in-and-outs amount to more than what one would have gained by doing nothing more than entering at one end and exiting at the other, if one has any gains at all.
As for yesterday, it is important to note that if one had bought the DB at 0330 and ridden it to the test of the previous evening's 1130 high, he would have done quite well, even though at the time it was not yet a range. But then DBs and DTs send powerful messages, and if one zooms out on the hourly to a view that includes the10th, he can see just how important this DB was in the context of the past week's movement. Unfortunately, for the daytrader, this is largely irrelevant in terms of the account balance since few people in the States are trading at 0330. The point regarding trends and ranges, however, must be made, as well as the point regarding daytrading vs taking at least a somewhat longer view: one who had entered on the 11th wouldn't have had to concern himself with any of this.
If someone - and there are obviously a few - is searching for "the secret/missing ingredient" to "complete" this approach they should look at the ranges mentioned by DB so frequently.
I'm guilty for wandering around in the dark to nowhere land as well, but if you look at them then it becomes very obvious. And you get the compass to maybe find the way.
I'm still backtesting this. But today for example 87.75 where price took of around the open was the midpoint of the premarket range (or the top of the overnight/asian session range).
I think I'm getting better in defining these ranges, but every kind of further elaboration on this is highly welcome...
I'm guilty for wandering around in the dark to nowhere land as well, but if you look at them then it becomes very obvious. And you get the compass to maybe find the way.
I'm still backtesting this. But today for example 87.75 where price took of around the open was the midpoint of the premarket range (or the top of the overnight/asian session range).
I think I'm getting better in defining these ranges, but every kind of further elaboration on this is highly welcome...
See the postings at TL.
Yes, thanks.
Actually I know them already...
Might make more sense now...
Sometimes it takes a decade or so...
Actually I know them already...
Might make more sense now...
Sometimes it takes a decade or so...
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