I can understand how you would create a special type of chart for yourself, but it seems like the only 3 variables are time, price and number of contracts.
You are focusing on the wrong item -- chart. No matter how much data you gather or how beautiful the chart looks, you are not going to become a profitable trader by following this path in by itself. A chart is just a tool to help you validate and
then learn from your framework. So, a chart should be built
for a framework, not the other way around. A chart without a framework is like a guitar without strings, it is of no use.
those people who have to feel their way around their world could be given those glasses and now they too can benefit from the ability to see both the apple and the snake.
The word "given" concerns me. Seems to me that you do not want to do the work. I could be wrong. Even if one gives you the framework, you will have to do the work to make it your own. Yes, once you make a framework your own, then you have those
corrective lenses.
What is that thing in the market that gives you the power of the glasses?
Answer: The framework. This is the path one need to pursue. What is a framework? The answer will surprise you. TA is the framework! TA, in all its flavors, was intended to be used as
corrective lenses to see the market, not as an adhoc methodology to formulate trade setups. Once you learn to use TA for its intended purpose, then you will understand the
surrounding environment which in turn will help you identify trade setups (which might or might not use TA!). Unfortunately, most new traders use TA as an adhoc trade setup formulation tool and suffer! To compensate for the losses accrued due to poor understanding of TA's purpose, and with only a cursory knowledge of the theory of probability, they seek refuge under risk-reward ratio and expectancy. I know of no trader trading individual issues (not talking about traders trading a portfolio of issues here) that have been successful in using RR/expectancy alone as the cornerstone of their trading plan. It is a myth that retail traders, for whatever reason, are more than eager to follow.
Select a TA -- Wyckoff's Intra-day TA, or multi-day TA (both offered by SMI, I don't know if they are still around), Tom William's VSA, Jessi Livermore's Trend System, Edwards/Magee/Schabacker/Dow/Gann type TA, Joseph Hart's formulation of TA, Douglass Taylor's method, Fisher's ACD, etc -- pick whatever you want. And use it as a
corrective lenses to
see and understand the market. You will eventually understand
context and start seeing trade setups appropriate for each context. There is no other magic formula. Forget about what I am doing - I am a stubborn bastard, and I have a "If not invented here it is no good" syndrome; yet, my framework is nothing but a combination of ideas from other great minds.
What I mean by this would be roughly how many trades might present a day, what your typical stop loss is, what your typical average win is, and of course your win rate. I know its very difficult as different environments present different opportunities.
I am not sure what you mean by different environments, but I will assume 'surrounding environments' (a.k.a context) in my answer. I take may be 3 or 4 trades a day tops. Some days I just sit and watch the market 'cos the market is not generating the contexts that I am prepared to trade - there is no point fighting the markets. Handle123, else where, beautifully said, "If you don't have a plan
before you enter a trade, you are trading lost." Heed that sage advice.
Depending on context, my stops can be anywhere between 4-ticks to 8-ticks. I like to play it tight, and am comfortable doing so.
As an example, I did some backtesting on a setup that NoDoji was sharing. I collected over 100 instances of a price breaking out of 5 min trendlines and then taking the trade on the first retracement based on the 1 minute chart. The entry was I believe 1 point above the bar, the stop was one tick below the setup bar, and the target was simply 1:1. So if the bar height was 6 ticks, I would count it as a win if the profit of 7 ticks could be realized before price dropped to stop me out. I further collected stats on a 1:2 and 1:3 risk:reward ratios. The trouble here was that some of these trades were only 4-6 ticks given that the setup bar was small, others were 4 or 5 points. But I managed to get roughly 66% for a 1:1 trade, perhaps about 40% for 1:2 and less than 30% for 1:3. (I don't recall the exact numbers anymore).
Use the 100 instances to understand the price action around instances. Ask: why do some work and why some doesn't. The answer is the context you are looking for. Using statistical analysis blindly on all the 100 instance is just waste of your time. It makes no sense.
I think I have given you enough to reflect upon. After you have done reflecting, and have tinkered with the ideas provided here, go back are re-read the Wizards book (first and second). You will have a completely new insight into what they are saying.
Knowing that 4 out of 5 trades will produce a profit makes it very easy to just follow the plan and not care about the outcome of any one trade
Ha! When you get there, you will realize it is not as easy as you think it is. Our minds are just fascinating!
All the best.
Regards,
Monoid.
