Where to set stop loss and Target Price

[jack hershey]

Jack Hershey,

I waited for the first End Effect of the morning and I made a picture of how I understand your system to be executed. I illustrated a short as the 5m Doji Arrow became down after the PP4, and then an early long right afterward when price broke the PP4 BM. Can you confirm that my understanding is correct or point out if I have an error in my thinking?

Thank you,
Magic

Earlier I typed up a comment. I forgot to click on the post reply, apparently.

Attached is a chart and a trading log for the open. I can't get the log to post)

We had a three day week end (See chart of price only for the 42 bars of Labor Day). none of this data is part of the ES RTH data since it is NOT statistically significant as is all non RTH data nor any other non statistically significant data.

As you see from the carry over the RTL you put up is in the wrong place. But on Bar 4 there is a BO T1 as the first turn of the OB on bar 4. The second turn is a PP4 since turn I has a P1 assigned and the #2 value of the OB is T1. The P1/T1 combo is the #2 PP4.

So the open on bar 1 took you short as a carryover entry. The trading rule for optimizing profits (the three tick rule) comes into effect on bar 4 as price rises off the extreme bottom.

The #1 trade on the bar 4 is the BO T1 and the three arrows call it an early entry. It is long. The #2 trade on the bar 4 happens when the OB is set. The arrows tell you to side line on the #2 trade of the OB.

You sit sidelined until on bar 6 your have the three arrows all down for a re entry short. This is very early in the bar since the bar has no leg one AND the DOMINANT leg 2 is SHORT as an arrow for the 5 min arrow. The 30 min arrow has been short for quite a while. An early exit occurs as part of your routine.

I will rescan my trading log and post it. By the first 6 bars, you have taken three complete profit segments. On an 81 bar day the rest of the day (pro rata) means you will not need the whole day to double your capital. We both trade @ 94% of capital to guard against margin calls while keeping leverage maxed.

The open begins with a carryover entry and a profit segment. The turns are signaled by the EE's on volume plus the protective turns of the failsafe regime.

The triad of arrows dictate timely actions. four actions are used: in, hold thru, sideline, or early reversal. You optimize profit legs with early exits or a new timely action signal.

Once on the sidelines you, monitor closely for an IN triad which is a signal named RE ENTRY.

Different methods create different emotions. Some people just position trade cause the intraday grind is too much (See redneck). Nodoji uses bar by bar (Brooks background schooled her) for her setups. Donna does intraday and exits setups as profit segments and WAITS for another entry. Bone does what he does and uses repetition in the form of debriefing for setups in a context of NO market system is possible.

Here in the bar bay bar of SCT the system of operation of the markets is completely defined and bar by bar there is always no probability since the ID of all things is ALWAYS 100% certain.

What are the emotions of averaging 1 point per bar for the first 6 bars of the day? What is the feeling of being sidelined on bar 5 after two profitable trades up to the end of bar 4? What does an early very early on bar 6 feel like? The feeling is one of: "that you know you know that you know".

I'll rescan my log for the first half of the day so you can redo the day bar by bat. That is "Put the Pieces Together" as a drill. you need to know the what, why, how, when and where of each piece.

 

[jack hershey]

Earlier I typed up a comment. I forgot to click on the post reply, apparently.

Attached is a chart and a trading log for the open. I can't get the log to post)

We had a three day week end (See chart of price only for the 42 bars of Labor Day). none of this data is part of the ES RTH data since it is NOT statistically significant as is all non RTH data nor any other non statistically significant data.

As you see from the carry over the RTL you put up is in the wrong place. But on Bar 4 there is a BO T1 as the first turn of the OB on bar 4. The second turn is a PP4 since turn I has a P1 assigned and the #2 value of the OB is T1. The P1/T1 combo is the #2 PP4.

So the open on bar 1 took you short as a carryover entry. The trading rule for optimizing profits (the three tick rule) comes into effect on bar 4 as price rises off the extreme bottom.

The #1 trade on the bar 4 is the BO T1 and the three arrows call it an early entry. It is long. The #2 trade on the bar 4 happens when the OB is set. The arrows tell you to side line on the #2 trade of the OB.

You sit sidelined until on bar 6 your have the three arrows all down for a re entry short. This is very early in the bar since the bar has no leg one AND the DOMINANT leg 2 is SHORT as an arrow for the 5 min arrow. The 30 min arrow has been short for quite a while. An early exit occurs as part of your routine.

I will rescan my trading log and post it. By the first 6 bars, you have taken three complete profit segments. On an 81 bar day the rest of the day (pro rata) means you will not need the whole day to double your capital. We both trade @ 94% of capital to guard against margin calls while keeping leverage maxed.

The open begins with a carryover entry and a profit segment. The turns are signaled by the EE's on volume plus the protective turns of the failsafe regime.

The triad of arrows dictate timely actions. four actions are used: in, hold thru, sideline, or early reversal. You optimize profit legs with early exits or a new timely action signal.

Once on the sidelines you, monitor closely for an IN triad which is a signal named RE ENTRY.

Different methods create different emotions. Some people just position trade cause the intraday grind is too much (See redneck). Nodoji uses bar by bar (Brooks background schooled her) for her setups. Donna does intraday and exits setups as profit segments and WAITS for another entry. Bone does what he does and uses repetition in the form of debriefing for setups in a context of NO market system is possible.

Here in the bar bay bar of SCT the system of operation of the markets is completely defined and bar by bar there is always no probability since the ID of all things is ALWAYS 100% certain.

What are the emotions of averaging 1 point per bar for the first 6 bars of the day? What is the feeling of being sidelined on bar 5 after two profitable trades up to the end of bar 4? What does an early very early on bar 6 feel like? The feeling is one of: "that you know you know that you know".

I'll rescan my log for the first half of the day so you can redo the day bar by bat. That is "Put the Pieces Together" as a drill. you need to know the what, why, how, when and where of each piece.

Here is the log for the trading shown on the chart.

 

[jack hershey]

Here is the log for the trading shown on the chart.View attachment 144042

the afternoon's trading is attached. You can tab the day's trades using entries, early exits and re entries at values that are "when" the signals appear @ observable points.

 

[Magic]

Jack Hershey,

Thank you for taking the time to help me. Many things are a lot clearer and I will continue drilling through the trades and attached log that you posted.

I believe the primary barrier for me at this point is an incorrect understanding of the three-tick rule which causes all of my trades to exit prematurely before a majority of the profit segment is captured. I made more images, can you tell what the error in my thinking is?

Thanks again,
Magic

 

[jack hershey]

Jack Hershey,

Thank you for taking the time to help me. Many things are a lot clearer and I will continue drilling through the trades and attached log that you posted.

I believe the primary barrier for me at this point is an incorrect understanding of the three-tick rule which causes all of my trades to exit prematurely before a majority of the profit segment is captured. I made more images, can you tell what the error in my thinking is?

Thanks again,
Magic

Thanks for your illustrations of application of the three tick rule.

The best thing to do is to continue to be precise. You will find that exiting where you do really separates you from the FI skill and knowledge hierarchy.

This means the only thing left for you to do is bring to bear additional powers that come from using additional degrees of freedom to expand your sensitivity and, then, using these degrees to assemble filters that allow you to "carve" as scientifically as possible.

As you see this thread is stuck in the mire of targets and stops as a way to deal with how the mind creates emotions when a person "does NOT know" two classes of information:

1. Not knowing how the system of operation of the market works, and

2. NOT knowing what the person does not know.

I will give your several tools to ad to your quiver for carving turns most effectively. I can see that you are using all the pieces of the system of operation of the markets. All that remains is going back into the pre PC era and examining how "tape readers" were so cool in "olden" times.

I never allowed anyone at the brokerage to ever "see" me in person. It was said that I looked about 14 1/2 yo when I sat in decision making meetings at IBM. There, I was excused from discussions and only came into meetings to define the solution to be implemented. EOP was the same as well as board meetings of large corp executive board meetings. The money, power, information hierarchy is a tough one to buck.

To refine your work, consider that the 1 min chart is not as powerful as other degrees of freedom available. We do use the YM 2 min as a leading indicator of the 5 min ES. The reason is that the # of elements is in high contrast and thus the YM is more agile.

To carve on the ES it is best to use the DOM and T&S. Were you to check the times where the lines you drew occurred on these, then you would see no reversal was possible on that micro scale.

Also there is the time available for glancing around to look at the market. I am slow these days since I am on morphine 24/7 via a patch and my metabolism delta affects the flow it turns out. Ordinarily, I have mostly free time while I log and annotate. So I mostly watch the DOM and T&S as verniers on "carving" price ONLY IF AND WHEN a turn is anticipated on any given 5 minute bar.

Our difference in performance is mostly one thing. I only carve when a turn is at hand. You are tending to carve when a turn is not possible.

Notice I draw messy lines from a significant symbol to an empty cell in the future. I also fill in the cell before hand since only one answer is possible (100% probability).

Our rate of money velocity was seen yesterday as 6 points/ 6 bars. This pitch is Great Gatsby-like in life style terms. In my earliest 30's I gathered @ 32A BELL mid sound to begin and end weekend long class A and B races. The money velocity was a rate whereby a racing sailboat could be financed in less than two years trading with zero margin.

All early exits come from the CW type emotions that come from the two items above cited.

All you need do now to polish your performance is glance around at the DOM and T&S to see that the 1 min bars are in a part of the 5 min legs where an exit is NOT THERE.

Please add highlights to your 1 min charts as well as volume.

 

[Magic]

Jack,

Thank you for the detailed explanation. I will seek to familiarize myself with the DOM and T&S conditions during turns as opposed to profit segments so I can better recognize them and not use the three-tick rule prematurely. I will also make the changes you specified. Mostly everything was very clear from the material you have posted to this site, and now I believe I have all the tool required to succeed. I am grateful that you have taken the time to teach me.

-Magic

 

[Hate2Lose]

Some argue that one shouldn't ever use a stop loss or target price.

Some set it at say 150 points every time both ways

Some use Bollinger Bands etc. to set them just above ( TP ) or just below ( SL ).

What do you do ?

Depends on what I'm trading. No point doing a standard 150 points each side if the most it ever moves is 50.


Needs to adjust dependent on the instrument

 

[oraclewizard77]

This is a very important point. You are looking at the instrument you trade and the time frame that you trade it. A person who holds a trade over a week will obviously have a wider stop than one that holds a position during the day.

Let's look at an example of a day trade. I look at a chart, I see the market moving down towards a location where I would be willing to go long with say 1 contract with a limit order. (Note some rather watch what happens when the market reaches their location and either go long with a market order or even a buy stop order) I then have a stop in place that will let me get out where I believe the market is telling me that my reason for going long is wrong but still big enough to give trade room to breath. My target would be then where I believe the swing long could reach before either reversing or for example no longer going higher. In this example, the stop and target for the limit was preset to a standard stop and limit that I normally use since over time I have found that these values usually work.

Depends on what I'm trading. No point doing a standard 150 points each side if the most it ever moves is 50.


Needs to adjust dependent on the instrument

 

[Humpy]

Depends on what I'm trading. No point doing a standard 150 points each side if the most it ever moves is 50.


Needs to adjust dependent on the instrument

Just so and that is why I use Bollinger Bands. They take volatility into account.