Trading the SLA/AMT Intraday

[k p]

THE BAR INTERVAL DOESN'T MATTER. WHAT MATTERS IS THE TEST.

I got a bit distracted this morning, but I'm going over everything now. Since 40D blocked me, I wonder if you don't mind explaining this a bit further Db as I think there is something key here that I didn't pick up on before. (the fact you wrote it in caps makes me think you mean to say something here....)

So 40D showed that series of charts where one combo of H-L-LH-LL didn't mean anything, but it did the next time it happened higher up. So first I mark this chart where it mattered. What he calls the LL to me shows that price still was above the level he outlines in red. Its not until the next LL actually that price actually tests this level from the bottom and doesn't go above. Perhaps he meant that the LL is to the right of the "LL" letters, not the bars above the "LL" since this is what form the LH and doesn't test anything. But since I want to make sure to get this right, do you think that putting together what you say and what he says is a test of that previous swing high? (ie. when you say what matters is the test, is what he is showing the test of that previous swing high?)

I mark up the chart where the first case didn't mean anything since this LL drops only a tick below the previous swing low, but really, is what is more important that there was no previous swing high tested as was the case up above? (ie. price dropping lower and coming back up wasn't testing anything, and it continued higher anyway)

I can certainly understand how you can see this on any time frame as you see the right tick move. So if the idea is that I have that resistance line draw across that swing high, and I see price drop below, and I see that as it comes up on a buying wave and can't break this level, then of course I can understand how this is a test from the bottom and I can see this on any bar interval because what I'm seeing is price unable to penetrate that previous swing high.

In that first example, if price did actually drop below that level of support (dropped below the mini range), and tried to test it from the bottom to re-enter that range but couldn't, could we therefore consider this a successful H-L-LH-LL failure? Just like up above?

 

[samuel11]

Nice try, but he has you on Ignore.

But I do not ignore him and I enjoyed reading his post.

 

[dbphoenix]

But I do not ignore him and I enjoyed reading his post.

And we all must find enjoyment when and where we can. However, he has no idea what's going on with regard to the subject of this thread, and those who are new to the SLA/AMT may have difficulties enough without all the off-topic distractions.

But regardless of the approach,

there is no such thing as "noise"

the "risk:reward ratio" is in the mind of the trader, not in the market, and is therefore self-sabotaging

price is continuous; all charts are tick charts; the bar interval is simply a matter of convenience and preference, like the color of the chart background.

If he wants to open up his own thread, there's no one to stop him.

 

[dbphoenix]

Since we're just about at the 250-post mark, I suppose it's time to post this again, since no one who isn't obsessed is going to read all these posts.

The SLA/AMT is, again, a primer. Training wheels for the beginner. Rehab for the damaged trader. The beginner will learn discipline, patience, how to prepare, how to plan. The damaged trader will, one hopes, find his way back to a disciplined and professional approach, assuming he was ever disciplined and professional in the first place. If he wasn't, then it may provide him with a reset and reboot. The damaged trader will find it vastly more difficult to start over. But it can be done.

Once one has worked with the SLA/AMT for a few months, or even a few weeks, he may find that he is able to pick up on behavioral nuances easier and faster than he thought, depending on how well he understands the Law of Supply and Demand. But some clearly go with this faster than others, again depending on how well they understand the Law of Supply and Demand. If and when he is able to do this, he may find that the AMT half provides a better fit, and the SLA will become secondary. Or he may find that AMT is a continuing mystery and rely instead on the SLA to keep him out of the weeds and on the straight-and-narrow. Perhaps the chief advantage of the SLA is that it will protect the trader from loss, whereas AMT requires a bit more flexibility.

I used hourly bars in the pdf because they are far easier to use than anything less and easier even than daily bars, though if daily bars are fine, then go with that. But bar intervals less than 60m present problems. The most obvious problem is that there are far fewer opportunities for entry, the chief reason being that there are far fewer retracements. A 1m interval will of course present far more twists and turns and moves and countermoves and so on than a 60m interval. This presents far more opportunities for entry and profit. But it also presents far more opportunities for loss. The undisciplined trader who also carries emotional baggage will not likely do well under these circumstances. Add to this the fact that the SLA is a trend-following approach, not a scalping approach. If price spends the day in a range, as it so often does, the trader will have nothing to do if he relies on the SLA since the SLA goes out of its way to prevent him from trading ranges.

The SLA, therefore, on the whole, presents far fewer opportunities using a smaller interval than the AMT approach does. Sometimes price launches itself into a trend right out of the gate. Sometimes it does nothing until late morning. Sometimes it sits there until the NY session is nearly over. So those who focus on the SLA without incorporating AMT into their trading aren't going to have a whole lot to do. Eventually, however, if one works with the approach seriously, he will find that he need do nothing more than look at a chart without any annotations of any kind and know what to do.

The origins of and inspiration for the above may be found in the pdfs below:

 

[Buy1Sell2]

But I do not ignore him and I enjoyed reading his post.

Thank you Samuel. I have enjoyed reading yours as well.

 

[Buy1Sell2]

So 40D showed that series of charts where one combo of H-L-LH-LL didn't mean anything, but it did the next time it happened higher up. So first I mark this chart where it mattered. What he calls the LL to me shows that price still was above the level he outlines in red. Its not until the next LL actually that price actually tests this level from the bottom and doesn't go above. Perhaps he meant that the LL is to the right of the "LL" letters, not the bars above the "LL" since this is what form the LH and doesn't test anything. But since I want to make sure to get this right, do you think that putting together what you say and what he says is a test of that previous swing high? (ie. when you say what matters is the test, is what he is showing the test of that previous swing high?)

The reason that the first one was not the correct short is that the market was not overbought at that one. We were in a serious downtrend on the 15 minute chart and well overbought on the 1 minute chart when the right one presented itself. You should necessarily be looking for short trades when those conditions present. Has nothing to do with H-L-LH-LL etc. --But more importantly, if wrong, you must keep risk at a bare minimum. That is actually more important than the correct entry. That is not being discussed at all.

 

[dbphoenix]

The reason that the first one was not the correct short is that the market was not overbought at that one. We were in a serious downtrend on the 15 minute chart and well overbought on the 1 minute chart when the right one presented itself. You should necessarily be looking for short trades when those conditions present. Has nothing to do with H-L-LH-LL etc. --But more importantly, if wrong, you must keep risk at a bare minimum. That is actually more important than the correct entry. That is not being discussed at all.

http://www.elitetrader.com/et/index...-sla-amt-intraday.289624/page-25#post-4097162

 

[damnpenguins]

25 bid 50 offer 50 trades 25 bid 50 offer 50 trades 25 bid 50 offer 25 trades 25 bid 50 offer 50 trades...

I just spent a few minutes transposing that since I've spent a bit of time with T&S lately, so I was intrigued.

I think I've officially become a trading nerd

Either that or I'm just exceptionally gullible if it turns out that was a red herring and troll bait!

 

[dbphoenix]

I just spent a few minutes transposing that since I've spent a bit of time with T&S lately, so I was intrigued.

I think I've officially become a trading nerd

Either that or I'm just exceptionally gullible if it turns out that was a red herring and troll bait!

This in very large part is the chief reason for and advantage of going through the observation phase, which gears and boru are learning even as we speak. Yes, one can define a swing point and a HL and a LH and a DT and so on, and one has to if he is going to automate this. Or try to. But nobody is going to go through a checklist of criteria to determine whether or not he's looking at a LH in real time, even if it were possible to do so before the trade evaporated. If he can't see it instantly, then he's looking forward to a hell of a lot of observation time.

 

[dbphoenix]

I gotcha beat: 0650EDT 89.25--87--88.50

For those who care, which is very likely no one, 24.5 may be as close as we come to the median of the weekly trend channel. But, hell, 2.5 pts after a decline of 140 is pretty trivial.

But, as long as we don't hit 50, I'm still in. Sitting here. Watching. No matter what, it'll still amount to a 36pt trade.