Maelstrom

Entry at 12652 Stop loss at 12674 First extension target at 12608 M

John, It's not a problem at all. One of the things I have really enjoyed about starting this thread has been the opportunities I have been given to expand my thinking. Posts by you and other traders like PhilnTexas, Steveh, IamJon, and many others - asking questions, making comments, looking at other markets, timeframes - has challenged me (in a positive way) in my trading. LOL you're point about tweaking a system is absolutely correct though. I have seen and done it a hundred times myself - taken a good, simple method , and "tuned" it so much, it just stops working. I believe it is hard for most people to really embrace someone else's style of trading - maybe trading truly is something that has to be learned, but can't really be taught. But, I encourage the "tweaks"- as I said from day one, the way I trade may not be for everyone, due to a particular market, trading goals, personality, or as in your case, time restraints. I have received many positive messages from traders out there for the thread, and feel I may have achieved my goal some - helping with that "a-ha" moment that could turn things around. So, keep it coming To those of you who have contributed to the thread, once again - thank you. Thanks, M

A fellow trader (names have been changed to protect the innocent ) sent me a message with a "fix" he found to make Tradestation range bars match the type I use. There are two types of range bars in TS.....Type 1 are called Momentum Bars, and these are the one that match mine. Matched a few bars between NT and TS charts, and they are right on or damn close. Phew, I feel better now. And thanks for the info! M

This one is from last week. Saved a loss and turned out to be a decent trade. M

Hopefully a picture is worth a 1000 words..... Important to note.... this is what I would call, for lack of a better term, a little more advanced than the basics I have laid out thus far. The basic rules will still work without these additional nuances I am laying out, just not quite as profitable as there will be more losses in these congested / ranging times. But, several thread readers out there seem interested in this way of trading and seem to have gotten the basics down, so let's call this a refinement. One other "rule" on how/when to trade after a loss that helps prevent additional losses in congestion, but I will hold off on that one for a bit in order to field any questions about this post. M

Attached is a chart with the congestion area last night, with every trade that would have been taken using the basic rules I have laid out. I am posting to make sure anyone following this is truly "following" and understanding why each of these trades would have been taken. Any questions, please put them out there. Otherwise, my next post will be to explain the trade I actually took. M

Good one, but....the reason for me taking the trade at C is not anything I have gone over yet. But having you bring this up is excellent, because I can see now that I was not clear on the point you quoted. A confirmed trend means there was a signal. I will try to explain again. Assume there was a long signal - an upward formation, pullback, breach/ close above the formation, 2nd pullback, and finally a signal bar. THAT means there is a confirmed uptrend. Once that has happened, the long trade is managed appropriately, but I am ONLY looking for a complete short setup at that point. Vice versa going from a short to a long. In the example exercise I posted, B is the correct trade with the rules I have set out. Again, the reason I took C is not something I have posted yet (and a lot of people may think it's a very silly thing when I do, but it works). The reason I haven't disclosed some additional things is some people who have been trying to follow this have struggled with some steps.....probably my fault for not being clearer with my explanations, but, I will continue on and as always leave things open to questions. Onward we go..... M

Wow, that seems like ages ago lol. I think I was going to state that there was no signal down to validate a long or something along those lines. Good chart for what I am going to get into next here shortly though..... M

4 trades so far..... liking my new money management strategy, even though it may leave some on the table at times. 4 contracts per trade, 2 off at +60, 2 at +100, still trailing stops/targets. 1st trade short - +120/+200 2nd trade long - +120/+200 3rd trade short - +120/BE 4th trade long - +120/ +138 (exited the last trade near the close, did not re-enter on market re-open - greed can kill) +1018 for the week, avg 254 pts per trade, about 63 points per contract. Lets see what tonight/tmrw brings. M

This is concerning..... I have seen several charts from traders out there on various other platforms, such as tradestation, and I am seeing some really weird discrepancies. With TS specifically, it seems new bars open exactly where previous bars opened or closed, which is really weird to me as I have never seen that in a charting program before - almost seems more like Renko charts. The issue is it seems to throw everything off at some point....possibly creating a whole new bar after 20 bars that I am not getting. Is it tradeable like that? I don't know, but one TS chart I saw today would have been a loss on a long entry, where I had a great trade. Not sure what this means, but anyone out there looking at this on a different platform than Ninjatrader, please be aware. Thanks, M

Thanks Adam..... as I noted in my previous post above, I really don't think this method is effective on a smaller range. I do believe there is still a lot of value in looking for the markets intention/direction in the formations, but entry triggers, targets, stops, etc would have to be much different due to the increased noise. I am going to look at these smaller ranges closely to determine if I can see a workable method to the madness. As for the night session, I don't know about ONLY trading the overnight session, but I do trade it actively. Often times, overnight entries continue on into RTH, so not sure how effective trading would be to limited hours. M

Dammit!! Used my own market against me! lol And god, hope I didn't say 5 tick on NQ - 5 full points sounds about right though, but would have to look. Regarding the chart you posted, and sticking to "the rules" I have gone over, the first short would be valid, and prob good for a small profit, then would have been followed by a long where you asked if there was an entry, and that would have been a loss. Then a short coming out of the congestion area, also a loss, and the long at the end you asked about would have also been a trade, and a loss. 3 losses in a row, according to my basic rules. Just too fast of a chart for me and would not be workable with this method. Trends reverse too quickly on a chart like that - maybe a break of two consecutive patterns might be the way to go instead. I will look closer and see if there is something I can find on a shorter chart, since I have had several questions on whether this works on a faster chart - for now, my answer to that is no. M

YMoca, JEH, and IamJon :applaud: BUT.....I did not take that trade at B - I took it at C. And then, a lot of conflicting signals, several possible trades and probable losses, but I did not take another trade until 9:00am CST this morning. This is the point where anyone reading this thread is saying "WTF, you are full of shit!" Maybe so, but....let's extend the exercise. Any ideas why I took that short later? or why no other trades in that choppy mess until this morning? Well, for the amazing price of $97, I will hand you the keys to the kingdom, and ALL the secrets of the holy grail. Act now, only a few packages left! MODERATORS and everyone else - I AM JOKING!! :rofl: Don't ban me, I just couldn't resist. But seriously, I would like any thoughts as to why I took the trades today where I did, and not the others. I will explain the reasons, but this may be helpful to you guys. Last thing, I REALLY hope no one out there is trading this without full understanding of what they are doing and why. I would assume that is a given, but you never know, and I would feel like crap if someone traded this mess this morning, as there are at least 2, maybe 3 losses there just using the methods I have posted (though the long this morning would have more than made up for it). There are some additional things I look for in days like today, and a lot of last week, that I haven't gone over yet. It gets a little more complicated, and I want to make sure anyone looking at this is clear on the "basics" first. M

JEH, Yup, that chart looks like crap :rofl: but, it is a good one to show congestion - looks like a really fast chart though. I am looking for a graphic editing program better than MS Paint to make some notes on your attachment, and will make some comments on it shortly. Going to take a guess on the chart though..... NQ, something around a 10 tick range? Actually, don't answer that lol..... but if you would, double whatever range that is and repost a chart of the same area - I would like to see what that looks like. In a trade at the moment, but will post my comments on your chart soon, as well as award the winner(s) in the "where is the entry" contest M

What I noticed is your winning trade % is pretty good at 60%, put your profit $ versus your losses is way out of sync. If you can increase your winning amount and/or reduce your loss amounts, you will be on your way. JEH is absolutely correct - it has taken me over 10 years to get to the point I am (but I am a slow learner) - but, it can be done. Good luck, M By the way, what markets are you trading?

Thought I would make it interesting, and let anyone out there looking at this thread tell me where my trade today was? Was it point A, B or C? :\ M

Chart attached with notes. M

Arndude, Your charts and annotations are excellent - I should refer people to you to explain this method I will try to answer all your questions, but looks like you have a pretty good grasp of this. First off, it appears that we have a data discrepancy. The beginning of the downtrend Sunday night, then your first formation of the uptrend - bars on my charts are different. Was trying to figure out why, and I noticed that your bars seem to open at exactly the same price the precious one closes. For example, on my charts, it a downbar closes at 12400, the open of the next bar is always one tick from the close, 12399 in this example. Not sure if I am seeing the opening bar prices on your charts correctly or not, but do verify that for me. Even if that is the case, your charts seem like they will work just fine. Your recognition of the formations, breaks and entries are dead on. Now, for the short trade, and I will base everything on your charts since mine are different (will post mine shortly) and will go step by step as you did. 1. Formation A forms (down) 2. Formation B forms (up) 3. Formation C forms (down) and there has been no close below A - the upward Formation B is ignored since we are only looking for shorts. 4. There is a close below Formation C a few bars later, a two bar pullback, then the entry bar would be the first down bar of what becomes Formation D. Something to note....a setup formation does not have to be below a previous formation in a downtrend, or above in an uptrend. But, for me, I take only the first signal in a new direction, so your entry off of Formation F would not be something I would take. It IS absolutely correct in the setup, formations, etc, and worked well in this instance, it is just not something I do because I have had too many trades mid-trend flail around and take out my stops. Also, with the extension - the first extension in a trade should be from the most recent formation prior to the entry bar - in this case, the extension should be based on Formation G, and the extension should begin from the bottom of the formation (the green bar terminating the formation). Overall though, great trade! Now, for the long.... Looks great - entry is dead on. Again, the first extension should be of Formation K, however, not J. Also, in regard to extensions, keep making those extensions off of each new formation that occurs in the trend. Overall, looks pretty damn close to what I do - great job! Now let me see if I can answer your other questions.... If that is correct, I wonder how you enter the trade… stop market, limit order, manually entered market order… etc? Usually during RTH, stop market orders - on overnight, since it is usually so slow, I will use a limit order to try and eliminate slippage. Do you have suggestions or guidance as to choice of exit? Timely question. Just this week, I have decided simplicity is the way to go. I have wrestled with fixed vs fluid exits, and have sort of merged the two now. In brief, I still adhere to the trailing formation stops and extensions, but now exit half my position at 60 pts, the 2nd half at 100 if no other exits have been hit. Today, I left a lot of money on the table, BUT....300+ pt straight moves are fairly rare, where as 100 pt moves are much more common, and I saw myself losing too much on retraces, even with trailing stops. But this is where each person's market experience comes into play - if you could clearly see there is a lot more upside, hang on to that thing and ride it out You also offered a warning of sorts regarding the overnight lack of liquidity. How do you handle the overnight alternative? At this point, I have to be ready to trade overnight to catch those first signals of a new trend. AH trading demands A LOT of patience, and watch the spreads.... you can slip a couple of points easily with a market order. Trading with significant size could also be a problem, but I have not seen an issue on anything up to 10 contracts. If one chooses to trade overnight, setting price level/bar formation alarms is a must, otherwise you will never sleep. But, several people have contacted me and changed up this method to make it their own..... smaller bar sizes, only trading RTH, etc, and had good success. Take what works and discard what doesn't, and make it your own. Thank you for taking the time to understand my method and for the outstanding post - keep the posts, questions and comments coming! M

J, It is a legitimate question. I will try to post an example of what I think you may be asking about here shortly. But briefly, I simply don't pay attention to consolidation periods, either between trades or during, as long as an exit point isn't breached, or a reversal occurs. Often times, I get into a trade, and it immediately goes into consolidation - alternating up/down bars with no real direction. As long as it doesn't retrace enough to hit an exit point, this is fine an a normal part of a trend. For me a trend consists of bursts (or intention moves) in a given direction, then stalling/consolidation/minor pullbacks, then a move in the trend direction again, over and over in a good trend. As for consolidation periods between trades, I will wait as long as needed for a signal opposite of the last to occur. You had asked earlier about a consolidation period, and whether to take the first trade right after that (a short I believe), and possibly take a long after that would have been a good trade. I would absolutely take that short IF the previous trade had been a long. Look at it this way - losing trades are good with this method. Picture a up trend and a long entry, and lets say you took the trade, and got out with +100. Then, you have a short that doesn't work, so it a -21 or -22. Then, the market takes off north again, you get another long signal, and lets say you make another +100. You are now +178 for that day. The point is, if I hadn't taken that short trade for the loss, I wouldn't have been able to take that second long and would have been sitting on only 100 pts for the day (of course, not a bad day at all) because I only take alternating trades. Sometimes, this methodology doesn't let you get everything a day has to offer - today is an excellent example of that for me - but I got +160 today per 2 contracts with a new money management strategy I am using. Left a lot on the table, but no complaints here. Back on point, there are several nuances I use that help keep me out of chop or whipsawing trades. If anyone out there is looking to actively trade this method, or something similar, I will be happy to post details - it would have certainly helped last week. I didn't trade at all last week, but did go back and look through the trades available, and this is what I saw: 4 longs - 3 wins, 1 loss 4 shorts - 3 wins, 1 loss So, 6 out 8 for about 295 pts/car. Tough week, not a lot of range at all, but would have held up just fine. So far this week, 1 short and 1 long, +160 per contract. M

Jon, I believe I know what you are asking about, but if you can post a chart or two with examples of these areas, I will try to offer an explanation. Thanks M

JEH, You hit my intentions for this thread right on the head. Entry triggers, targets, stops, etc - these can, and do, all depend on the trader. But the universal key to success imho is asking and answering "what is the market trying to do right now". Lots of ways to determine that, this way is just one - but, if it has helped at least one person out there in some way, then I am very glad I started this thread. M

Hello all, My apologies to anyone who have been following the thread for my lack of posts. Unfortunately, had some personal issues that I had to deal with last week, so there was no trading for me. Glad to see that there have still been some great contributions to the thread.... if any out there are still interested in the continuation of the thread, let me know and we can pick up where we left off. Thanks M

Chart with notes of what I am seeing (or what I think I am seeing) M

.....for a short imho. Would be a perfect setup, IF it gets there and behaves the way it should. Of course, this is the market, and when does it ever do that? M

Stopped out at 12386. Lost that battle at 12400 level, but looking at a short setup coming up. M