Atti2dTrader

Stopped out on this one.

Well, 6E broke through the first possible resistance I marked, but has turned back against me pretty hard. Back down below my entry.

6E is trying to move up a little. I've marked two areas of potential resistance between my entry and my target.

Even though I usually don't acknowledge it to myself, I realize that I'm in a tremendous hurry to become a profitable trader (and I don't think I’m alone in this). I think this is part of the reason why I have a very hard time trading a "big" timeframe like the 15M chart - and even doing "long-term exercises" (wow a whole week) for that matter. However, I also realize that the name of this game is practice, practice, practice, and I know that I need to do it. I can't promise (even to myself) that I will continue all week, but I'm going to make an effort to post 15M charts of 6E, and possibly 6B, as I'm "reading them in real time." I'll write out a specific plan (set of rules) like I did for the exercise I did a couple of weeks ago and post it when I get time. But probably the only thing that I'll need to explain to anyone having read through much of this thread, is that I'm using a fixed stop 1 tick below the HL/LH of the sequence, and a fixed target of 1.5R for each trade. By the way, I feel an enormous amount of anxiety doing this publicly. As I'm writing this 6E isn't going anywhere (and slightly against me), and I find that I'm really afraid of looking stupid and/or "failing," but I'll see how far into the week I can do it. Note: I'm trading this in my live demo account - not with real money.

I'm still going through this thread and I just found some excellent work by Forrestang that precedes the kind of thing I did in my recent exercise. Because they're pretty far back, I thought I'd share links to those posts where he worked with 1-2-3's and Ross Hooks so they can be referenced quickly from this point in the thread if anyone is interested: Forrestang & Ross Hooks 1 Forrestang & Ross Hooks 2 Forrestang & Ross Hooks 3 Forrestang & Ross Hooks 4 Forrestang & Ross Hooks 5 Thank you for sharing Forrestang!

As with other exercises like the one I did this week, I probably learned as much about myself as I did about "the markets" and price action. I don't want to spend a lot of my time overanalyzing the exercise, or your time reading this post about it, so I've tried to capture my experience in the following brief summary points (if I haven't covered something fully enough and you have questions, just make a post and ask): At the beginning of this exercise I mentioned how long a week of doing this exercise felt to me. But now that it's over, it seems to have flown by in no time. Because I wanted to give myself as much time as possible to "experience" this exercise, I began waking up earlier than I'm used to. I woke up at 4:00am on Monday, and then 3:30am the rest of the week. And with the exception of Friday, I traded until my cutoff time at 2:30pm every afternoon. By late yesterday afternoon, I was feeling it. So much so, that I actually went to bed around 7:30pm last night. However, I discovered that I can in fact do it, and it may very wll be something that I will do in some form going forward. I discovered that trading in the Globex session didn't feel as foreign as I thought it would. Yes, it's slower and the range(s) is/are often smaller, but otherwise it was "just fine." I was once again reminded how my mind tends to make certain things bigger or more important than they might actually be. For instance, as I was going back through to see how many trades the demo account filled at my target without trading through, I thought it was going to be a half-dozen or more. It was actually half that. The 5M chart is a slower pace than I'm used to, and I found it less hectic and stressful than the time frames (1M, 5Range, etc.) I had been using just prior to this exercise. In fact, I firmly believed that the 5M (in the ES) was far too "large" to be able to trade profitably because any opportunities/edges would already have been had by the traders working "inside" the 5M bars. I was quite incorrect in that belief (at least from what I've seen this week). Even as I write this, I'm still struggling with the idea that entering trades based on a 5M "setup" could be practical/profitable because of the conflict I have between what I believed and what I've experienced in this exercise. When using a demo account it is, of course, easier to enter trades based on the rules, but I found that there was a difference between the way I felt when I started, and the way I felt toward the end. The difference came in the form of beginning to actually have confidence in the plan I had created (due to the results I was seeing). I certainly don't know how well it might "work" if I continued to trade it, but I found myself in an unusual state of mind, where I didn't get too concerned about having several losers in a row because I had begun to believe that over time I would likely come back into profitability. Odd for me. I already knew, coming into this exercise, that I tend to do pretty well with following a simple, clear plan, and this time wasn't any different (with the exception being that the plan worked fairly well). I find that it reduces my stress considerably because I'm not trying to figure out if I should "let this one run," or if I should "get out because price isn't looking good here." I know (or maybe I've been told a lot?) that trading "mechanically" like I did in this exercise is not "optimal" (and quite frankly "won't work"), compared to using proper discretion. But I also know that I'm pretty good at executing a plan like this. "Knowing that it works well for me," but at the same time believing that "it's not the right way" might be a contradiction that I need to look into resolving. I was of the strong opinion that "breakout trading doesn't work." I think this is another case of not only being told that a lot (either directly or through reading/watching something), but not doing enough of my own due diligence to actually understand it and prove it, one way or the other, to myself. For you tick counters out there (as Thales might say), here's a quick rundown of the results for this week. I adjusted my results to account for demo fills that were unlikely at targets where price didn't actually trade through (see the previous charts during this exercise and their annotations). I did this by making them 1-tick (BE+1) wins rather than 12-tick wins per the rules I created for this exercise. I also adjusted by completely removing the winning trade I took right before the report on the last day of this exercise, because it was against my rules (see trade chart). With those adjustments made, the numbers are (if all of my accounting is correct!): 49 trades/+98 ticks gross/51% wins/1.42 Avg Win Loss/0.50pt Expectancy. As you can see I've reinforced some of the things I already knew, but I've also come to some very eye-opening realizations (revelations?) about myself, about trading in general, and about price action specifically. I printed out and read the Plato's Republic excerpt that appeared in one of Thales's Weekend Reading posts before going to bed last night. While I may be grossly misinterpreting an aspect of it (and I apologize if someone else has already said this – I'm only on page 274 of this thread at this point), I saw a correlation between it and what I'm seeing (as far as I've read) in this thread. It seems to me that Thales, once living in the dark and observing only shadows, emerged into the light of truth. Upon becoming accustomed to the light, and seeing the truth that was in the light, he resolved to return to the darkness (this thread) so he might help all here to understand the truth that the light offers, and to suggest that we move toward the light so that we might, of our own accord and under our own power, emerge into the light as well. I feel as though I've begun stumbling toward the light, and although I'm squinting because I'm not yet accustomed to it, I believe I am moving toward the truth. And for that, Thales, I thank you.

It's been a long day, and as I mentioned yesterday, I was out of my office most of the day, so this will be short and sweet. I came across this post by RichardTodd, and borrowed his idea of also marking the larger-scale swings (blue line) on my crayon chart. I'll put together a summary of my experience with this exercise and post it in the next day or two. Hope everyone has a great weekend.

Today I came across this post, and while Thales does talk about the "one market, take every H-L-LH and L-H-HL sequence" exercise that I'm doing here, he also talks pretty emphatically about not trading at all and just watching, which is something that I know DbPhoenix strongly suggests as well. Obviously I'm not following that advice. As I've committed to this exercise for the week, I'm not going to stop the demo trading aspect until I've finished what I set out to do. However, in the meantime, I am going to make a point to do more watching of price action while I'm trading it. I created a chart with the exact same settings and proportions as the chart I'm trading from, but I'm simply marking the swings/waves (in pink) as they happen and drawing a "break" line (in blue) as I see it (maybe I'll call it my "crayon chart"). I don't have any specific rules for this. I'm simply doing it as a way to "watch price" as it progresses from swing to swing, wave to wave. The chart is attached, along with my usual trade chart and my S/R practice chart. Tomorrow I'm going to be leaving my office shortly after the ES RTH open to take care of some other business, so I'll only be able to mark/demo-trade in the Globex and early RTH session. I'll post my charts in the evening when I get back to my office.

As is often the case, the pre-FOMC price action was a bit choppy, and as such, wasn't very conducive to the plan today. Regardless, I stayed true to it and let things play out. I have to make note here that although I'm not trading for P/L, from a psychological standpoint I was not enjoying the losing trades I took today (most of which were in a string from ~06:50-09:00 – four in a row). I found myself contemplating taking profits early on some trades just to "book it," as well as having my mind wander to alternative approaches and markets – the typical (for me) fear-based reactions. That being said, it's interesting (to me anyway) to note that despite how "poorly" my plan did, one would still have ended the day with a net profit (albeit small) – even paying $5/RT. That's better than a lot of days I've had using my brain and being "smart." I also want to make note that I've already discovered something about myself in this process: Watching price dance up and down on my DOM creates a lot of anxiety within me. I realized this early on Monday and since then I've been placing my orders and then minimizing the DOM. From there I can keep track of my open orders in one of the platform windows. Using HiLo bars (with one color for both up and down) has also reduced the anxiety I've felt previously because price isn't displayed, in each bar, in a way that shows "going up" or "going down" the way that OHLC, candles, and similar bars do. That's not to say that OHLC or candles are "bad," just that right now it's a relief to not try to make judgement calls based on them. Charts are attached. I intentionally cut the last 30 minutes or so, of the RTH session, off of the marked chart. I did this because the generous post-FOMC move skewed the scale of the chart making it even more difficult to see the annotations in the 08:00-09:00 area. The full RTH session is visible on my S/R practice chart. And speaking of my S/R chart – it may look a little busy, but there are really only three things going on: My idea of S/R in the form of the shaded rectangles. The prior session(s) H/L/C displayed as green/red/gold lines respectively. A Fib measurement of the 5M Opening Range. All of the rectangles and lines are drawn before the RTH session, with the exception of the OR measurement which is drawn at the end of the first 5 minutes of the session. So I find it more than just interesting to see price often reacting at/around those levels for the rest of the day (and even during the pre-market/Globex session). I don't have a way to really use that yet, but I thought I'd point it out. Please note: Because I'm new here my posts are still being moderated and are taking upwards of 12 hours to be reviewed and then released for posting - I apologize for the delays.

I've done exercises similar to this before, and I will usually (not always!) get a little spark of new understanding. I'll definitely let you know. Can I borrow one? Thanks for that. As Thales might say "Just use your eyes, not your brain." A friend and I have recently been joking about "dumbing down" in order to be more successful traders - and I mean that in the most respectful way. In other words, getting away from all the things we tend to do to complicate this, and just doing the simple, straightforward things like you (and of course Thales) suggest. Thanks for replying, and I'll look forward to any other input/suggestions you may have. -AT

I've been getting up earlier than usual for me (03:30CT this morning) in order to give this exercise as much effort and screen time as I can – I was in my first trade this morning at 04:40 in the Globex session. As with yesterday, there were areas today where price "formation" wasn't clear, and therefore I just didn't mark it or act on it. Some of those areas "looked like" H-L-LH or L-H-HL type situations, and they likely were, on smaller time frames, but I'm only looking for clear patterns on the 5M right now - no smaller/other time frames. And like yesterday, ES was very accommodating to my trading/training plan. I did make a couple of errors today: For this exercise I plan to cancel any existing entry orders 10 minutes prior to a major report and I hesitated to do that this morning (see chart annotation). Toward the end of my day I missed an entry (short marked on the chart) that I should have taken – I missed it because I was preparing this post and it happened fairly quickly. Once again, every trade marked here was taken in my live DEMO account. And to repeat, this exercise is about marking H's, L's, and their variations, in an attempt to learn to read price action in real time – it is not about P/L. However, as I said before, I'm recording every trade into my log/spreadsheet and will have a final tally at the end of this exercise. I've attached today's marked chart as well as my "S/R practice" chart.

This is the ES RTH S/R chart I mentioned above, for today.

Because of the boxy way ES tends to move, there were a couple of areas where I was uncertain what to "call it." When I was unsure, I didn't label it, and I didn't take action, even though it looked like a possible "setup." I'm not going to overanalyze today's work but rather just consider it a day of experience. I do however think my first trade today may not have been really appropriate as price was making LH's and HL's and not really creating a real H/L/LH or L/H/HL situation. Also, the rule I made about not taking trades after 14:30CT kept me out of a winner. I'll just have to see how it works over time. I took 1 trade last night (Sunday night) just after the markets opened and I've attached a chart of it too.

I want to reiterate that although I will be keeping records/stats as I take trades, this plan is NOT about profitability. It is about taking the time, and doing the work, to learn to "read charts in real time." This is the "training plan" I have outlined for this exercise using a live DEMO account – NOT real money: Execution I will follow this training plan starting Sunday night, 1/25/2015, through Friday afternoon, 1/30/2015. I'm using my live demo account to take and manage the trades in real time. I will watch one product: ES. I'm not going to worry about the dollar value of the ticks for now. I'm only interested in the marking of my charts as price moves, and the execution of my plan. I'll keep track by simply counting ticks made/lost. I will mark each H, L, HL, LH, etc. as described in Thales's post. I will trade 1 contract using a fixed 12-tick target, and a fixed 8-tick stop loss. I won't move the initial stop unless: A new "natural" stop (swing point) is created prior to the target being reached. There is a new setup in the opposite direction (stop & reverse). Price touches my target but doesn't fill - stop moves to BE+1. [*]If I am not currently in a position, I will take a new position at successive breaks in the direction of the current trend. If I am currently in a position, I will not take new successive breaks. [*]I will mark S/R, as I see it, on a separate chart, but I will not use it for entry/exit decisions – only as practice marking S/R. [*]I don't plan to take any trades after 14:30CT. [*]I will normally cancel any open orders 10 minutes before important reports. ES Chart I take entries only from a 5M ETH HiLo chart. I can use larger time frames to see the bigger picture, but all entries will be based on the 5M chart according to my plan. Edit: I also have a 5M RTH HiLo chart where I will be marking S/R levels/areas for practice. It includes the previous day H/L/C and a measurement of the 5M OR. I'll post it over the course of this week as well. Marking Charts I will use an approach that will hopefully be consistent with this thread for marking entries, stops, targets, and S/R on my charts: Trade entry levels are marked with blue lines. Trade stop-loss levels are marked with red lines. Trade profit-target levels are marked with green lines. Yellow "up" triangles indicate long entries. Yellow "down" triangles indicate short entries. Yellow circles indicate trade exits. S/R levels are marked with grey lines. General S/R areas are marked with grey boxes. I'm probably leaving something out but that will do for now. If I, or someone else, discover(s) something, I'll try to edit it before time expires to do that. Edit: I did leave out that I intend to use only the two charts described above, without modification of any kind for this exercise/week - no other markets, no other indicators, no other bar-types - no modifications. I'll post a brief summary with a chart at the end of the session for each day of this exercise.

There are a lot of things I could say here before getting to the point of this post, but I won't. The one thing I would like to do before starting here is to simply say thank you to Thalestrader and the other traders who have contributed to this thread over the years – for their willingness to share and their patience in helping others. Now to the point: By the time I had gotten to the "Please, folks, do not make this more difficult than it is" post in this thread, I knew that I needed to go back to the "Try it for one week" post, follow Thales's suggestion, and start building a foundation. So I've committed to follow the exercise for this entire week (doesn't sound like a long time until you actually begin). Over the weekend I devised a plan for implementing it. Within 30 minutes of trading it this morning I realized that I had taken on more markets than I should have. In other words, "Trade one market until you get it. After you get it, most should probably still just stick with one instrument." I quickly revised my plan for one market. I'm using fixed stops/targets because this week-long exercise is not about profitability, but about taking the time to learn how to "read charts in real time." In the next post I'll outline my simplistic "training plan." I'm sure I'll make mistakes, look stupid, and probably unintentionally violate the rules I've outlined for myself, but hopefully they will be few. I know that this thread is over 5 years old, but I'm hoping that I'll be able to get some feedback from others here who still follow this thread and have more experience looking at price this way than I do. Regardless, I'll post here each day for the duration of this exercise. To be clear: I AM TRADING THIS IN A LIVE DEMO ACCOUNT. THESE ARE NOT "REAL-MONEY" TRADES. I'm new to posting to this forum, so if I haven't explained myself fully, my charts/images aren't clear, or if anyone has suggestions for improvement, just let me know. "Training Plan" forthcoming...