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Niko... can you share what you were specifically thinking at this time? I can recall somewhat well, and the discussion was about how this looked like a down slopping TC, so although we saw the bounce at 35, we were expecting it to turn around when it hit the top line. Then it seems that we both didn't want to take a trade around the mean/apex at 48/49, and then, although I'm not sure what you were thinking, but I had the area in mind where we both tried a long at 54 that turned on us right away as an area to potentially stay away from/clear first. Lastly, for me, it was that the move was missed, it had moved too far, and any RETs can now be deep enough to stop me out even though the direction might still be up. So I have developed a habit of not taking a trade after I miss the initial move for fear the trend might be ending just as I'm getting in. I like how Db said that means and TCs are irrelevant to the trade. I think my problem is that I want to believe what is happening, so its a matter of not seeing what is happening but seeing what I want to see. On top of this, I think I have a somewhat negative bias in life, and hence, I think of reasons why the trade won't work. I don't know how to switch from seeing its going down to believing that it can now go up. Anyway.... I hope you have some recollection you can share.

My apologies.. I didn't see this reply earlier since I don't get an email when you edit a post, just when a new post is added. I knew there had to be a reason for why it didn't look so good, so thank-you for the answer.

Awesome.. thanks! For sure each moment is different so its hard to say, and especially what you will do in the moment with real money on the line is hard to predict as well. Your Monday was incredible.. keep it up!

Gotcha.. thanks for the explanation though. So let me ask you this, what makes you not take a classic SLA trade then? How do you enter a long on an SLA trade, your first one, but then not exit or enter the subsequent short if you are using the rules of SLA? I realize of course that you're just marking the stuff in to follow it, but in real time, will you be taking some SLA trades but skipping others? Db has of course been taking about a bit about context today, so I'm just wondering how you are differentiating.

I found this quote curious emini. I say this because although you point out a bit of trouble at 26, you conclude that there was no reason to exit before 36. The thing though is that your chart shows two possible shorts. So at the time, you were thinking to go short, never mind about just exiting a long, you were thinking to even short! It is true that looking at this chart at the end of the day, getting to 36 wasn't that hard, but in the moment, I'm sure it looked different as evidenced by your chart. Don't worry, I second guess everything myself! Edit: Perhaps those red squares are exits though and not shorts? It sure looks like they are retracements below the crest after a line break though, the classic SLA setup for a short.

We are absolutely working towards something for a lifetime no doubt! I hope it didn't come across as I was making a poke about your performance... mine is certainly nothing to look at. I just meant that I see you holding onto a losing trade for quite a while and wonder if you at least had a blanket rule of getting out at 3 or 4 point loss, it would be better. This of course all comes back to the initial entry and where it was in relation to the move. Perhaps what I am really getting at is that the entry is most crucial. When you get in right at the beginning, at an ideal price, a test of a level never causes you to lose more than a point or two. This way, you don't have to worry if its a range day or a trend day, let that all work itself out below while you are a few points in the clear. This is my thinking. If it ends up being a range, you have time to get out as price comes back to you, and if its a trend, your'e already in. I fully agree about trading size. 10 contracts at 5 points is $1000 a day... and I consider this more than enough. Anything more is gravy, and 5 points is absolutely possible each and every single day. Of course there are those that can do 30-50 contracts and hang on during congestion for the 50 points day, and perhaps this is something to work towards, but my initial goals are the best entries, controlling losses, consistent results, and ability to extract points in both a trending and ranging market.

Ok.. I think my answer kinda sucks... its too long. Here is essentially what I am saying. Do you think you aren't doing better because you don't know enough? You need to learn more technique? You need another approach? You need more statistics? Or is it perhaps that its because you aren't applying what you know in a very methodical manner that you stick to, day in, day out, regardless of the market conditions, because after all, once we know what kind of day it is, its already too late to maximize on that information.

Hey game.. great to have you here. Didn't notice this post till now. My thoughts are that even though you have put an incredible amount of work into figuring out the daily range, which I suspect has some value, when you are about to put on a trade, right there and then, I wonder if all the data you have collected will mean anything, other than to take away some fear perhaps by having your data to fall back onto. I am starting to see why Db says that this stuff just can't be coded too well for automation, and setting up too many rules I think almost goes down the automation path. I think you are just trying to characterize the market so perhaps not fully break it down to the numbers, but I can't help but wonder if even this isn't too much. I know for my own trading, I am trying to keep it incredibly simple, as I already have too much stuff going through my head to even add more. And sometimes I too am sitting there thinking why it turned around just 10 points into the move, but perhaps its more important to just focus on the fact that it did. It is frustrating that in the past few weeks, those solid 30-50 point days haven't materialized. But since we never know what we will get, the secret is to prepare for the worst, and get rewarded sometimes. Looking at your charts, what I see is that you hold onto your losers far too long. I think if you just fixed this one minor point, it would make a world of difference. I too am trying to figure out how to play the opening range, how to get into the move sooner so that I can at least get out for BE, and if the trend continues, I'm already in. I don't have the answers, but when I go over in my head what Db constantly says, its always to do with looking for areas beyond which traders can't find a trade. This is especially important during the opening range. Trading around the mean is tricky, but sometimes I feel its the only way to not get caught getting into a move that is about to reverse. Perhaps even then waiting for the range to clear is even better. We are all eager to trade, and Db is always suggesting to trade less, wait for only the best opportunities. Ok.. just realized I'm babbling so I went back to read your original question. What jumped out at me is that I think you're trying to figure out what kind of day we will have based on what has happened. The thing is, we will never know. AMT will say that we are at one extreme or another, but there is no reason why the extreme can't go out any further, and there is no reason to say why we can't leave a channel and go into overbought or oversold conditions. Basically, and this is my problem too, I am unhappy with not knowing what will happen, I am not comfortable with the statistical nature of it. But this is exactly what you have to get comfortable with. We don't know what kind of day we will have, we don't know if it will be a trending day or a ranging day. We don't know if we will have a 30 point range day, even though we might be expecting it because we haven't had one for 2 weeks. Also, which I have seen personally as well, the rules I give myself are not well defined. I am still just sort of trying out stuff. This makes it extremely difficult to know what to do when its happening in real time. So I wonder if all this extra work you want to do, all these layers you want to add in, will in fact help when we first need to get comfortable with not knowing, we need to figure out a set of rules we will abide by (the SLA rules are already back tested), and we need to just stick with it. I personally look for retracements in the 15 second chart now, and during the opening range, I look for areas of price that are rejected, especially at key levels. And that's it. If I was also good at re-entries, I think my trading would be even better, but I am slowly getting there. The biggest eye opener has been putting on trades before I even kind of know. Once the move looks good, its too late, and any further entry has to include a possible deep retracement, since often the original entry is tested again. By getting in right away, this test is usually right at your original entry. But if you enter in a few points later, happy to see its moving in your direction when you enter, the test now means you are already a few points in the red.

Detaching yourself is absolutely key!

It is interesting how on your chart you have a note about re-entering at the same level you exited. I too have struggled with this. It is such a mind game to first worry about the fact that you took a loss by exiting, and then ended up at the exact same place you started, and then you wonder if you should try again, after being wrong the first time. Now of course I can catch myself that what is in fact happening is that I am afraid to be wrong, which is incompatible with proper trading, but I know I think like this, and working hard to change it. Not sure what goes through your mind when you get right back to the level you first entered at after exiting for a loss and then wondering if you should get in again, but it sure is such a mental game!

I too am finding that my trades on a whim are good. Its not so much that its a whim though, its that something makes me think this might work, and before its obvious to everyone else, I could already be in for a better price. So I think there is something to this method. I think there is also something to a 15 second chart. Getting in sooner is good I think, but you also have to worry about being stopped into a trade that will quickly reverse on you. I think looking for a RET in a 15 second chart but still using the one point away entry is something to consider. But like you, I am also very much considering the REV trades, tight stop just beyond the level. This seems to work especially well at double tops or bottoms, but for this watching the tick chart is necessary. Even the 15 second chart would have bars that are too big... so yes, watching price is more important.

Question about your chart with the SLA traders from yesterday. On this attached chart Db, would you consider this last trade legit that you didn't mark in? I would have first started with a steeper SL, but it would have broken a couple of times, and any short placed below each crest would not trigger thankfully, but it sure looks like it was setting up for a short though at least 2 time prior to what I drew in. The short that I did add would trigger, does follow the SL down, and also, this bar just above the possible short opens and closes on the low, hence a rejection of traders wanting to trade higher, which would make the short seem even better. Since you didn't mark this in though, is this a legitimate short? Or can you perhaps see that its too much sideways action by now to risk it? The short would of course have to be scratched for a loss, but no way to know that at the time. Thanks. By that time, you're in a range, so it's not a short that I would take.

I'm not sure I understand this retracement. To go long after a SL break (although here its more of a REV because SL wouldn't be broken yet), we are looking for the top of a bar to be at least a tick below the top of a previous bar, hence our retracement, and then we put our Buy Stop at one point above the top of this lower bar. In this example, you highlight the bottoms of the bars. Now I can see how in the bar with the first arrow, price finished on the low of this bar, and hence was higher where it opened, and the next bar, second arrow, price opens at this same level and then travels up, so our RET is there. But are you suggesting we go long one point above the lows of both of these bars, and hence our stop is filled within this second bar? I will attach a 15 second chart which shows this RET off beautifully, highlighted by the pink square. Our entry could therefore be at 48, since the lows are at 47, but this then is a slightly different way to look at retracements than what we are doing with SLA when we use the one minute bars. (I am of course a fan of looking for the RET in a 15 second chart when you have good reason to believe you have a change in trend such as at a reversal and want to see that RET sooner. And of course since price is continuous and its only arbitrary that we use one minute bars to illustrate where price has been, its normal that the RET is sometimes burried within the one minute bar). I drew in a green dot to show where the entry would be, if we are in fact using one point above the lows of this bar for our entry, and not waiting for the top of the bars to be one tick lower, as in our traditional RET which is highlighted by the second green dot.

Looking at your chart and the annotations, a few things come to mind. I was also thinking this when I made the post to Emini's journal about buyers and sellers and transactions. I notice on your chart you have phrases like "sellers don't want to mess with the previous day high" and "anyone there?". I know that Db is teaching us to look at the behavior, and I would never want to disagree with him, but I wonder if too much emphasis is being placed on what they want, as if we know. We essentially only know what those people who are buying and selling in that one minute want, but not the whole group. We don't know why some traders are buying and why some are selling (there are after all just as many buyers as sellers). I find that we may be going too deep into the meaning, and missing the important fact that price is either going up or down. I know when I see a spike up in price that quickly comes down, I think buyers are rejecting this price level, only to have it breached a few minutes later. Because I am speaking on behalf of buyers and sellers, I am almost setting up too much of a bias that prevents me from seeing what is happening, what price is doing. I feel as if right now I am trying to simplify, to take stuff away that I don't need because I am even having trouble following the damn SLA and making it work for me with just some simple rules. So although I think like you too, and price moving is a result of the behavior of traders, if I take away phrases such as what buyers and sellers want or don't want and just focus on seeing that "price spiked up a bit, came down, couldn't go lower, now went sideways, but stayed closer to the top of the range versus the bottom of the range", I am in a much better position to just see price and give my brain less to do. Db will of course read this and be able to comment further or correct me, but I wonder if the small change of going from saying what buyers and sellers want, which is kind of trying to predict or explain, but rather just focus on saying what price did, which is focusing on being in the current moment, perhaps this will put us in a better frame of mind to see the bigger picture, to leave our brain more open to seeing price better, and to not be locked into a bias.

I have to laugh here because I know this feeling all too well. When price reaches the level you are waiting for, you still don't know what to do! Ha! Not laughing at you of course, but at myself because this is clearly something I am working on.

Hey emini.. let me see what I can come up with. I think if there was interest by buyers, price would go up. We only went up about 5 points at the open and then it was downhill. So I wouldn't say buying pressure at all. This is all about tracking the balance between supply and demand. Yes for every transaction there has to be a buyer and seller, so its not like we can say there were more of one or the other, but if demand is really there, prices go up, and if there was too much supply, prices would go down. We have prices go down, but as you say, lots of overlapping bars, so there was still some buying pressure, or else price would just plummet/cascade down until it got low enough for someone to be interested in buying. What creates the pressure is that the two sides don't agree on what is a fair price. If a buyer and seller agree on a price, a transaction happens. When you see price go from 3600 to 3600.25, its because someone wanted to buy, and nobody was willing to sell at 3600, so we had to go one tick higher. If the buyer didn't want to pay more, this transaction wouldn't happen at this higher price. Yes, if a seller can't find a buyer at a higher price, he either lowers or doesn't sell. I had trouble with this as well, especially the short selling aspect which I understood for stocks, since you borrow the stock from your broker, but with futures, I didn't understand. But the way it works for short selling is that you create the contract that you don't have. You pretend you have it, you sell it to someone, and if they think its a good price, they buy it. You of course think the price is too high so know you can buy it back at a lower price to close the contract. It does get difficult to talk about buyers and sellers, as if one was more important than the other, because in reality, you have to have one of each for a transaction. So its more accurate to just say a transaction happened at this price, and then this price, and so on. But what we have to track is does the transaction happen at a higher price or lower price. We say buyers are in charge when price is going up, but there are just as many sellers as buyers, and we don't know if they are selling something they have, or short selling something they don't even own. So in a way, we can talk about buyers or selling being in charge, but for fundamentals, all we can really say is that each transaction happened at a level where the buyer and seller both agree, and then we just track the subsequent transactions to see if buyers and sellers are agreeing at a higher price or a lower price. Anyway, hopefully I"m not wrong about all of this, but its the way I see it now.

The first two, the reversal and breakout occur without a defined retracement in the one minute chart. So is the rationale, for a reversal trade, simply that a price level is strongly rejected and then a buy stop is placed one point above the rejection bar, sufficient enough? Similarly, with the BO here, because the context of a tight trading range is so strong, is it sufficient to place a buy stop one point above the top of the range? Or are you also looking for a tiny retracement in the right tick once the BO occurs? Reversals, breakouts and retracements are separate strategies.

This stands out for me as very wise words indeed. When you learn something for yourself, when you prove it to yourself, what is gained from this is just that much more valuable.

This is the million dollar question. You never know if you will get the week where 4 ticks works, or the week where you need at least 6 ticks, so a more universal number is I think necessary, and then of course evaluating the context at the moment to tell you if you should hold on a bit more or get out right away. With loads of screen time, I think seeing how much the right tick moves up and down, the pace, the jittery action, the extent of the quick move up or down, that is all you need to develop a feel for either patience or a quick exit. This is of course lost on the one minute chart when you look at it post. But for me, what is most important, is that first best entry which makes all of this unnecessary. I know we can't predict when price is just about to take off, but I see it all over the chart, where an entry is just right, barely moves against you by a tick, and within 30 seconds you are already in the clear. Then you have the option of scratching at BE because if price does ever come back to your entry you know the move is weak, and that is your only worry. I tend to think Db is this good after so many years of practice. Because his scratches are in the order of ticks and not points, he can fish out these amazing entries within the one minute bars so thinking about universal 6 tick stop loss or 8 ticks is never his concern.

Yes.. for sure progress as opposed to perfection is a great frame of mind. But it should be simple enough to go over last week at least to see how often price goes against me by more than 2 or 3 points and yet continues in the intended direction, and how often scratching early is in fact best, and then of course re-entering. It will just come down to good old backtesting. Great that you had such a good weekend, I was busy as well so couldn't get my homework done, but I'm sure that if I knew by way of enough statistics where the sweet spot of either getting out early and re-entering vs. holding on longer is, then I would feel more comfortable going forward. As it is now, getting in early it just best from many perspectives, so I am focusing on that, even if it means I have to enter in a range perhaps, before a break out of that range. (Sorry if this clutters up the Ghost thread Db... feel free to move it to the off-topic thread if necessary)

This is exactly what jumped out at me when I saw Niko's chart. Technically, after the break of the DL, the RET is there for the short at the arrow that you draw, and then it instantly goes against you for what looks like 3 points easily, so this would have to be a scratch for a loss. Then as you say, a quick re-entry is unlikely, and then of course, the bad feeling once price has moved too far away from where the initial entry is. There is another entry that could have been made, two bars after the second short drawn, which would have been filled just below 58, but price went against you right away again to above 61 before it continued coming back down. This is partly what worries me about getting in on retracements as price continues in what appears to be still be a good move. These RETs can very easily go against you by more than 2 points, and holding on is either just hoping, or breaking a rule if you have a 2 point stop loss in your plan. When I look at where the entry under the crest is, and where the SL currently is, if they are too far away, it means you would have to give price way more room. I'm not sure what to do about this of course, just saying that I fully understand the implications of what you say. I know that getting in on the first entry is absolutely critical, because then dealing with all of these RETs doesn't have to concern you. And for this reason, once missing the first entry, I'm hesitant to enter on subsequent RETs because each one is now more likely to be the bottom of the move down, and it feels just like chasing the market. But then I think of the chart you posted a few days ago where you showed all the possible entries or even places to add to a position, and there were quite a few, so perhaps, statistically, you are still better off if you take each one, but be prepared for a few of them hitting your stop loss.

I have been thinking about this post you made and wanted to add in my thoughts if I was in this situation, coming of course from my inexperienced perspective! I have read a bit about these guys who build automated systems and they have all these ratios and values that the computer spits out to evaluate how well their system would perform. Perhaps the most important, besides profit and loss, were numbers related to their max drawdown and also how many times they might be wrong in a row. Now we aren't trading mechanically of course, but a few bad trades in a row has to be assumed. Given this, this is how they arrive at how much money to be putting on the line for every trade. The problem of not doing this mechanically is that you know you aren't taking every setup that you see, either because of fear going forward, or fear based on your last few trades. So in essence, your stats that you have thus far with live trading are I think incomplete. I think its too early to say if you are picking enough good winners to have an edge over all or not. Trading 3 contracts though can very quickly put a dent in your account. Assume you had $10,000, each point is $60 for the 3 contracts, and lets say you have a stop loss of a max 3 points. Well that is $180 plus commission, so lets call is $200 you can lose on each trade. 5 bad trades and you are down $1000, which is 10% of your account. I think you know this as well, and this figure is what messes with your ability to take each trade as you should. Furthermore, by not taking every trade, you miss on getting that one home run. I think every week there have been at least 2 opportunities where the market moved 40 points or more lets say in an easy cascade fashion, and perhaps even twice like this in even one session. Just one of these moves at 3 contracts would easily make up for all those scratches. But since we haven't hit that move yet, things haven't been able to balance out. You haven't done 100 coin tosses yet to see that 50/50 is what toss a coin gives you. After 10 coin tosses, I'm sure there is a very real chance of getting only heads twice. Take 50 coin tosses, and getting only 10 heads (one fifth just like before) is way more unlikely. So what I'm saying is given your setups and the way you trade, after only a week, you might have a win ratio of only 30 percent, but over the long run, this ratio might actually be 60%, but you are just starting with the string of losses as opposed to the string of winners before it all balances out. So I think that the 3 contracts is causing too much of a money loss before you can truly evaluate. Of course if you only go down to one and hit that big 40 point move you will be mad, but I think you need to figure out a way to go through way more trades with your account before you can truly evaluate. Hopefully someone who knows more about this than me can amend anything I am getting wrong, but its how I see it. I'm sure you know its not about the money, its about trading well. Trading with money really shows us how we will in fact perform, so I think forward testing with real money is pertinent, but there is no need to do this with 3 contracts, survival is key first. After you have enough stats for yourself to know how you trade, then you can figure out if scaling out of 3 contracts is good for you, or perhaps scaling into 3 contracts based on how you trade is better. Since Db shares the scaling out approach, I'm sure this is better in the long run, but for us new guys, we are just looking for good entries, to test our skills, and hoping not to get crushed. We aren't into maximizing just yet. I think dropping down to one contract, not caring if you lose $100 a day and just putting on each trade that might work should keep you from second guessing more, and hence will show you if you are trading well that much more clearly.

Its interesting that the first 3 trades, especially the second and third are practically right at the mean of 12 from the overnight range. Continuing from Niko's journal, I wonder if you can comment on the difference between trading away from the mean, such as the first long or the second short which has to just go through it but the idea being that the short will take us well below the mean, and trading toward the mean, such as if we took the long from the REJ at 3604 which was a prominent level. It seems to me that trading around the mean offers good trades given the right context. We can either trade in the direction of the mean if we are at an extreme and reject it, or we can trade away from the mean if we are at the mean and if we have some idea of where the extreme might be. These seem to work even better during the opening range where rejections of going up or down seem more prominent to put us in the proper direction for where price might go throughout the day. Would love to hear your thoughts.

"It's not so much a question of trading around the mean as trading through it. Once price bounced off 4, it headed pretty much straight for 20, then right back down again. The TR may just be background and not necessarily influential. This is not to suggest that one try to trade these wild swings, but the focus may need to be more on the SLA and less on AMT, given where we are." I am stalking you here too Db! ) Niko and I were discussing just this very thing, the difference about trading around a mean versus through it. Thanks for clearing up the important distinction as today, trading through it certainly was profitable and I see this often as well.

Thank god you made the volume bars smaller.. I could barely see the price and entries on your recent charts and thought how the heck are you trading that! LOL