Trading the SLA/AMT Intraday

[dbphoenix]

Finally, imo, many seem to want to cling to the one minute bar interval hoping it will somehow minimize risk - this is my opinion and it is the impression I get from reading many of these journal entries. The risk can only be minimized by identifying the range and watching what traders do when price reaches an extreme. I do not trade "bar intervals" I trade price ranges. How I trade them depend upon what that little tick on the right of the bar is indicating other traders are going to do. If you are not trading the range, if you are using a bar interval that causes you to lose focus on the range, change the interval. Find the interval, based on your observations, that allows you both to track what traders are doing and maintain your awareness of the context in which they are doing it.

First, if one has his own charting program, he needn't confine himself to 1 or 5m bars. He can create whatever he likes: 2m, 3m 7m, 12m, etc.

Second, those who have trouble determining swing points and distinguishing among them should switch to a larger bar interval as soon as the trade has achieved liftoff. Switching to a smaller interval to detect swing points is nuts. If one switches to a larger interval, the trivial swing points will simply vanish. At the very least, this enables the trader to focus on business instead of each little meaningless twist and turn.

BTW, you'll save a lot of typing by just calling me "Db".

 

[dbphoenix]

What seems to be "swinging in the subtext" of your post is that you think that trading intraday has to be a proper - and maybe the only - job. And if that is not possible trade longer term. That is of course also individual, but in general I would agree that daytrading needs a lot more focus and preparation then most people think it does.

Yes, I do. If one is going to daytrade successfully, the trading must have his complete concentration, even if that's possible for only 90-120m. If he can't make that commitment, he needs to trade a larger bar interval.

What I don't like about (day)trading is the fact that it is a dry business without lots of communication/interaction except of this type. That has made it quite hard for me to really make the final step.

That's the way it is. Once the trade is on autopilot, one can read and post and fuck around for a few minutes, but daytrading requires focus and attention. Which is why performance nearly always suffers when participating in chat rooms.

 

[timokrates]

Wow, thanks a lot for this whole post 40D...

Lately DbPhoenix has been advising us to keep our eye on the right tick marker on the ohlc bar. This is largely what I have been doing for most of the past year using primarily a 5 minute bar interval. There are times, especially during the open, where I prefer a tick chart or a very small bar interval such as 30 seconds or 1 minute (and even then, only if price is either at or near an extreme of a range or price has formed a hinge heading into the open). But after the opening flurry, I usually settle in to my seat with a 5 minute bar interval chart and I just watch that tick whenever price is moving toward one or the other extreme of its most current range.

That is absolutely something that seems to be able to release the handbrake. But as you mentioned later this has to be done in combination with the observation of the range. Doing especially this over the last few weeks brought me to another level. And one can get a feeling for the price that is not "meaningless". How the participants are acting at a certain level gives you an idea. And if you see that it there is no real rejection from a potential resistance level, but price falls back, the next time the contrary party might not have the power to throw it back again...

The risk can only be minimized by identifying the range and watching what traders do when price reaches an extreme. I do not trade "bar intervals" I trade price ranges. How I trade them depend upon what that little tick on the right of the bar is indicating other traders are going to do. If you are not trading the range, if you are using a bar interval that causes you to lose focus on the range, change the interval. Find the interval, based on your observations, that allows you both to track what traders are doing and maintain your awareness of the context in which they are doing it.

Absolutly fantastic, thanks.

 

[VPhantom]

I try to discourage people from daytrading whenever possible, but I'm nobody's mother. At the very least I suggest that those who are serious about this reserve at least some of their capital for hourly and daily intervals.

I like that trends are easier to identify on the daily, but because it requires more capital, it's an "after a year or two of growth" project for me. My money management is very conservative and I'd be lucky to grow my modest account by 50%/year under those conditions.

Down a notch, the hourly is very interesting, but I had a knack for getting slapped around by overnight gaps in stock positions, and Forex moves at inopportune hours for me, so I backed off the hourly for now.

Finally intra-day, being flat at the close, has the benefit of not stressing me about gaps at night, while providing a faster pace of feedback through the learning experience and providing some possibility of faster growth (say 100-200% a year while I'm small, assuming I continue to stay away from prop firms).

That was stocks only while here we talk mostly about the NQ/ES futures, but I thought it was still relevant to share why I'm settling on 5-minute intervals similarly to 40D, despite the steeper learning curve.

 

[dbphoenix]

Lately DbPhoenix has been advising us to keep our eye on the right tick marker on the ohlc bar. This is largely what I have been doing for most of the past year using primarily a 5 minute bar interval. There are times, especially during the open, where I prefer a tick chart or a very small bar interval such as 30 seconds or 1 minute (and even then, only if price is either at or near an extreme of a range or price has formed a hinge heading into the open). But after the opening flurry, I usually settle in to my seat with a 5 minute bar interval chart and I just watch that tick whenever price is moving toward one or the other extreme of its most current range.

A comparison of what one sees on the 5m v the 1m re the right tick:

 

[dbphoenix]

Since I'm doing these for TL, I may as well post them here, too.

 

[fourtiwinks]

Db, can you repost the chart above in TL? It didn't show up..

 

[dbphoenix]

It's there. Post 19.

 

[dbphoenix]

New and Improved SLA/AMT

Well, not exactly new. I've revised the SLA/AMT to include a chart example of a range in the AMT section, added an appendix on fear (Appendix F), and added an Afterword to emphasize a few things that appear to have been overlooked by casual readers.

I've also uploaded a separate pdf of "The Mind Game". This is something I wrote sixteen years ago or so and I've always liked it, which sounds odd, but there it is. It is so very applicable to the new Appendix F in particular but also the SLA/AMT in general that I've posted it along with the SLA/AMT pdf in the stickies at TL. I hope both will be of benefit.

 

[dbphoenix]