Off-topic Posts

[logit 10]

Hi everyone, I just thought I'd say a quick hello. I found my way over here after following Db's posts on another forum and the increasing feeling that following pure "price action" is the direction I would like to take my trading.

 

I've been away a few days, but before I went I was looking at an very useful thread on this sub-forum about wycoff's laws of supply/demand and auction markets. There was also a pdf that I intended to download, but the link to that thread is now invalid. Has this information now been placed in a different location?

 

Many thanks

 

There was unnecessary duplication in the stickies; essentially the same pdfs on "supply/demand and auction markets" and "developing a plan" were posted in three separate stickies. What you're looking for is posted in "Trading By Price" as attachments.

 

Wyckoff's original course is still linked in the "Introduction" stickie, but few people want to read it, which is why I wrote the SLA in the first place. Took me five years to give it up, but there you are.

Edited August 18, 2015 by DbPhoenix

[rlim 10]

I need help clarifying why a "test of supply" is a markdown of prices below the support. I would have imagined it would be a test of supply above the resistance. Below is my understanding of the "test of supply"

 

What is a "test of supply"?

A "test of supply" is more specifically a test of supply below the support level. It is not intented to tell us about the supply above the current price or at resistance. It also does not indicate if price will move higher, which is why we still watch the next bar after a successfully test of the supply. When we test for supply, we are finding the market's opinion if the underlying has reached a bottom.

 

How does SM marked down the prices?

SM simply sells a small volume of the underlying at a price below support and the bids. SM would then watch the effort to recover above the support, which is measured by volume.

 

Reactions to the markdown

A. Price continues to move downward.

"Test of supply" obviously failed and found large supply below the support.

 

B. Prices recover above the support with low volume.

"Test of supply" is successful. Few owners of the underlying are willing to sell below support, expecting higher prices in the near future. Few shorts want to enter new short positions. Shorts don't see the underlying moving further below support, concluding the reward is not worth the risk. Buyers are snatching up the few shares available below support. Shares are transitioning from weak to stronger hands. Market is indicating, at this point of time, that prices have reached the bottom.

 

C. Prices recover above the support, but with high volume.

Although price was able to hold above support, "Test of supply" is not considered successful. The markdown has triggered a large amount of selling activity. Many stop losses are triggered. Owners are getting worried and exiting their positions to limit their losses or perseve their capital. More shorts feel confident the underlying will move lower and enter new short positions. The high volume indicates a large supply.

 

Questions about the "test of supply"

However, why is a high volume test of supply not successful?

Although supply was large, demand overcame supply by closing above the support. So why is the underlying considered not be ready to be marked up?

 

Checking the smaller timeframe for success?

I am imagining a 5 minute bar, markdown is at beginning of the bar. The bar recovers above support in the 1st minute with low volume. The next 4 minutes, underlying is trading above the support with high volue. At a 5 minute timeframe, the test of supply would be a failure, but the 1 minute time frame would indicate a success. I am guessing the 1 minute timeframe trumps the 5 minute time frame and the "test of supply" successful.

 

Where did you read about or hear about "test of supply"?

Edited August 30, 2015 by DbPhoenix

[MightyMouse 12]

Everything you are looking for is ex post facto.

 

If you want info you can use to enter a trade, then you'll need to focus on where supply is or might be, and not where you think it might of been.

[rlim 10]

@Db,

I read a couple of places that referred to springs and shake outs as a test of supply. E.g.,

"A spring is a price move below the support level of a trading range that quickly reverses and moves back into the range." link

 

A spring is a price move below the support level of a trading range that quickly reverses and moves back into the range

 

@MightMouse,

I am not sure what you mean by "ex post facto", but a successful spring with low volume would indicate that supply "is or might be" available below support.

 

The article to which you refer is based not on Wyckoff but on Robert Evans' interpretation of Wyckoff. There are no "springs" nor creeks nor ice. There is no "law of cause and effect" nor is there a "law of effort vs result". This is not to say that the Evans version is not useable. But it isn't Wyckoff. If you want to learn Wyckoff's approach, study Wyckoff's course. You will likely find that doing so at this point will be exceptionally difficult due to your having so much to unlearn.

 

FWIW, I decided a couple of years ago to stop arguing about this and pursue another path: the SLA. In fact, I posted the following to another site just yesterday:

The SLA/AMT

is a reset. After years of arguing about what's Wyckoff and what's VSA and what's Evans and what's SMI and trying to sort it all out, I finally two years ago started from scratch. If traders want to break through ice and jump creeks, they are welcome to do so, but that no longer has anything to do with me. Rather than spend/waste seemingly endless amounts of time arguing about what is or is not Wyckoff, I can ask that those who are interested in all this focus on the SLA and implementing the SLA. As the SLA is about as simple as it gets with regard to trading price and as the entire thing is one-fifth the length of Wyckoff's course (100p vs 500p) and the condensed version posted to the first post is one-fifth of that (20p), and as one can approach it without testing and with minimal journaling, the primary task for the intended becomes extinguishing bad habits and learning new ones, rather than slogging through hundreds of pages and thousands of posts. The SLA is based on and stems from Wyckoff, but one can study it and practice it and trade it without ever having heard of Wyckoff or having read a single word of his course.

You are of course welcome to study Wyckoff in the original and ask whatever questions occur to you. But if you choose not to do so, you won't be alone. The SLA is far simpler and far easier to understand.

 

You may also be interested in this post.

Edited August 31, 2015 by DbPhoenix

[zdo 20]

At the risk of sounding ignorant of what is happening on the higher time frames I would say that my answer is about the same as the last one regarding the higher time frames, I can tell you that 85-90% of my larger trades (>20 points) are sourced from Hourly/Daily/Weekly levels in the form of a stride breaks, reversals or breakouts.

 

These levels are not exact, I focus on behaviour as price approaches, reaches or surpasses major swing points or medians of prolonged ranges. More often than not (cant give accurate number as exit notes have multiple reasons) the behaviour would change by enough of a margin to exit or flip, this does not mean that price stopped at a level just that the behaviour changed.

 

As for lower time frames, when I was collecting stats for the metrics I use I weigh them up at what point a certain scenario becomes more probable rather than measuring win or success %.

 

I'm bad at explaining things but I'll try my best. I don't know what is going to happen after a trade is triggered so I don't set targets I only define risk, I'm not so sure on how to project outcomes without targets, a profitable trade is not necessarily a good trade and a losing trade is not necessarily a bad trade. I cant say that a stride break trade has a 67% chance of being profitable by say 10 points, I know that the average entry leg on a stride break ret is 7.5 points, a ret that holds beyond a range limit following a BO will have an entry leg of 11.5 points but just because price moves this distance is, in my mind, not a reason to exit. On the other hand, a stride break of a certain value will have an outcome that means price is unlikely to progress further in the direction it has been travelling, this could be a reversal or a range but an exit is the safest option.

 

Clear as mud.

 

Most of my rules are in the first few posts to the thread, I'm considering re-evaluating these metrics as they are often getting caught, doesn't help that I'm executing the plan as poorly as I am.

 

 

Gamera, this is not very well organized ... banged it out in just a few minutes so feel free to ask for clarifications.

 

Assumption: you really do “know what [your] metrics are through back testing and studying swing point breaks, stride breaks, breakouts, continuations and retracements.”

 

Assumption: you are capitalized sufficiently to size your trades in units and multiples of units

 

Re: "Most of my rules are in the first few posts to the thread, I'm considering re-evaluating these metrics as they are often getting caught, doesn't help that I'm executing the plan as poorly as I am"

And

"I often find myself avoiding trades because I think something is likely to happen"

And

“if PA does not move quickly doubts set in and I tighten up, or I don't take the trade or the stop out rule is just tagged.”

These recent things you’ve mentioned indicate limbic system / mid-brain (and even hind brain) issues and the only sure way to 'fix' that is exposure, exposure, exposure to the very things feared. There’s not much you can do cognitively to address it except to 1) learn to monitor when cns is susceptible to being sympathetically momentarily overwhelmed (which will lead to uncon start altered perceiving and breaking script to even more cautious or the opposite and truncating/changing the rules, etc, etc ) and 2) to work on coming to more conscious acceptance of the ‘uncertainty’ of every trade.

 

re: 'changes' 'adjustments'

Whatever you do change, if anything, make sure it facilitates taking signal - ideally, to the point where you take EVERY “triggered”. Assign real-time confidence levels to what you’re seeing.

Clearly delineate the PA’s (or price levels) that would immediately nullify that current situation. Then - Take EVERY “triggered”. Base the size of the trade on your real-time confidence levels.

 

We can’t not project. We can’t not “think something is likely to happen”(... and guess what something does happen - quite often :helloooo::rofl: ) Consciously calling up and acknowledging ‘bias’ beats the sht out of avoiding, denying, suppressing projections. Its influence is much greater when it operates from the background than when it is constantly held up to the light and PA’s (or price levels) that would immediately nullify that bias are clearly delineated. Assign real-time confidence levels to what you’re projecting, too. You can actually learn to use this ‘soft information’ instead of trying to throw it away (like all the 'rational at any cost teachers' advise)

 

Whatever you change, if anything, make sure to structure it to enable your entry (and exit) decisions to slide towards ‘automatic’ ie twd an ‘unconscious competence’. You see it. You take it as it forms! Period! Your new decisions become sizing and then once in the trade, assigning real time ‘stay’ to the trade.

‘Stay’ is how commited you are to staying with the trade - ie in loss or in profit, either take all the mults off quickly, take them off incrementally, or hold them all until (near) when swing exhausts, or trail stops, or etc etc ...

 

Making such a transition is quite simple, but it is not necessarily easy. (It’s an act of creating a resolving structure, not removing or solving a problem, btw.)

 

Even though I appreciated the wisdom of taking EVERY “triggered” long ago, it was not until I had automated many systems that it sunk in to where I could do it without dissonance. Once I really committed to it, I simply practiced it until I couldn’t fail at it.

I don’t know how many transactions you’ve done this month in NQ, but it doesn’t seem like many . In contrast, I’ve already done hundreds in the NQ and I typically only manually trade ndx’s actively 1.5 - 2.5 hours a day. A signal forms and when it’s triggered I’m in at 2 - 4 mults if trigger is aligned with my bias and 1 mults if trigger is against my bias - period. Size is all I have to consider at entry. The statistical ‘quality’ etc ( not the‘prettiness’) of setups or triggers forms the basis for the sizing consideration.

 

re: stays, I commit to a stay decision as early after entry as possible. Long ago when I first started this, my “stay” decisions were subject to the ‘risk averse in profits’ bias, etc. but over the years have become more and more realistically attuned to PA instead of my internal stuff... Everyone has different difficult challenges... Again, ultimately the key is practice it until you can’t fail at it. So re: “if PA does not move quickly doubts set in and I tighten up, or I don't take the trade or the stop out rule is just tagged.” Yes I too have also pulled out early more than once and also been just barely stopped out a few times, but I have also taken EVERY trade. ie I have also participated in every good, medium, and great swing - which vastly offsets the occurrences of the other two outcomes you mentioned (and also other possible outcomes you didn’t mention.)

 

Sugg: some traders find improvement re: those “avoiding trades because I think something is likely to happen” and “if PA does not move quickly” issues by placing stop order first before placing entry order.

 

Sugg: Btw if you have an unusually high incidence of “stop out rule is just tagged” then consider waiting to put on your size where you would have previously placed your stops.

 

Sugg: If you are not actively utilizing all 5 time frames you have been posting, something to consider would be to drop all frames you do not actively utilize. “utilize” is the key word here. How much real utility to YOU do each of your ‘duration shots’ ( time frames ) have?

 

Other than that, notice that I have not advised or even suggested you change your representations of the markets/ data forms, your perception modes, or your trading methods at all.

 

Wishing you all the best

[jpennybags 11]

Gamera...

 

The jpeg that I've posted here is not given with the prospect of changing what you are doing, but more in the prospect of seeing the markets (price action) in "another light" (through another person's eyes). Make of "it" what you will...

 

The chart on the left is a 40T chart... the chart on the right is a 1min chart. Both are from the TF contract. I've placed the crosshairs at the open on both charts.

[zdo 20]

Gamera, On a scale of 0 (not) to 10 (very) - how congruently would you say your method and trading mirror the intended essence of the SLA method?

[Gamera 15]

Gamera, On a scale of 0 (not) to 10 (very) - how congruently would you say your method and trading mirror the intended essence of the SLA method?

 

Probably a 7, I am doing a pretty poor job of executing consistently and give my thoughts/fears too much sway when it comes to the decision making process.

 

Thanks for sharing your thoughts in the earlier post, there are a few things I am still thinking over on that, there is a reasoning behind the multiple time frames and I'll try to explain them in another post.

[jpennybags 11]

Shutdown after trade 3 as I had low expectations given the time of day.

 

Gamera... Just another example of seeing things differently. Considering the lines that I've added to your chart, how may you have traded differently through the session? No need to answer the question here... it's just offered for your consideration.

[jpennybags 11]

After trade 1 price spent the session in a range that was a little on the choppy side for my liking.

 

Once again, another perspective...

 

My last interruption to the conversation... hth.

[fxpaulm 10]

JP,

 

Are you using action/reaction lines or something else?

[jpennybags 11]

JP,

 

Are you using action/reaction lines or something else?

 

I knew "this" was going to lead to trouble...

 

I have no idea what you are speaking of (action/reaction). I was raised a "feral child"... I have no "names" for anything, and I see things as I see them. As I've said to Gamera: "make of it what you will". My advice would be the same to you. Last word...

 

Edit: My words were a bit abrupt, and for that I apologize. The channel lines that I've exhibited over these few posts are just a reflection of my way of seeing. What I've shown should be self explanatory, in a visual sense, such that one would be able to experiment and draw their own assessments... retain it, shelve it for later, or dismiss it as you will. Hands on learning is the best way... words are a hinder.

Edited April 29, 2017 by jpennybags

[zdo 20]

Making more trouble down the line ... with lines...

 

Not equidistant or pretty like jp’s... but 2nd attached is LONGsNOSTRAIGHTLINES.gif picture is of that same morning with the buystop entries shown. These are program generated lines (NOT straight lines!) from one of my automated systems. New dots / line extensions to the right form at the close of a bar. (Sellstop entries, and two trailing stop ‘lines’ not shown on this illustration. )

 

Believe it or not these points / lines are formed from intra- and inter-bar ‘price action’ plus a couple of volume tricks/tells ( but btw it’s not price action that finds SETUPs ie starts and stops the ‘line drawing’ and it’s also not price action that triggers take profit exits on this system... fwiw the ‘strength’ of this system is not these ‘lines’. the ‘strength’ of this system is how it goes dormant (and / or also sizes way down ) in congestions )

 

With a little bit of cherry picking, I could find better illustrations of this ‘indicator’ than that morning ... just glancing at results, it seems long SETUPs were activated a few too many times = a couple extra stopout losses, a couple of reverses at a loss, a couple of reverses at a small profit (like short at 10:41 back long at 10:53... stopped out a 11:01), etc etc. Happens all the time...typical of automation probabilistic fuzziness... Still - other than these few ‘synchness difficulties’, most winners only took a few ticks of heat...

 

So while the buy triggers look a little ‘warped ’ to me for that morning, the sellstop entries for that day ‘computed’ a whole lot ‘tighter’ to price... more ‘resonance’, fewer stopouts, etc. See 1st attached SHORTsNOSTRAIGHTLINES.gif of last half of the same day’s shorts for this system. In addition to running tighter to price, these ‘lines’ were generally angled more parallel than the buystop entries in the morning,... more parallel (and maybe even more equidistant from each other ) like the straight lines jpbabsonbags posted.

 

Fwiw, I still manually use ‘parallelogram grids’ on daily charts ... been using them since the mid 90’s... years ago posted a few ‘parallelogram grid’ YM charts in here maybe...

Anyways - when your up angle and down angle ‘settings’ of ‘parallelogram grids’ needs to be changed - That means something ! just sayin (oh sht 'just sayin' is spreading...)

 

PS, jp I liked your post just fine before the edit

[fxpaulm 10]

JP,

 

No worries, just asking. I'm not looking for a "way" or trade advise or anything like that.

 

Just being a casual observer I think Gamera is often late and uses SLA poorly, perhaps depending too much on lines rather than price behavior. Good example is trying to use lines when price is in a range -- one should not use demand/supply lines when price is in a range, instead use AMT. That is just one misuse of many, but everyone learns differently and must find their own way of understanding.

 

Trading is a job to me and I sometimes like to talk theory, hence my question about action/reaction lines. Personally that is way too many lines for me, but to each his own. I think Wyckoff said to look for the motive behind the action and interpret the behavior of the market, not getting caught up in lines which are in the individual traders mind.

 

God luck.

[jpennybags 11]

Just being a casual observer I think Gamera is often late and uses SLA poorly, perhaps depending too much on lines rather than price behavior. Good example is trying to use lines when price is in a range -- one should not use demand/supply lines when price is in a range, instead use AMT. That is just one misuse of many, but everyone learns differently and must find their own way of understanding.

 

Trading is a job to me and I sometimes like to talk theory, hence my question about action/reaction lines. Personally that is way too many lines for me, but to each his own. I think Wyckoff said to look for the motive behind the action and interpret the behavior of the market, not getting caught up in lines which are in the individual traders mind.

 

God luck.

 

Other than a read through of the DbPhoenix publication, I have not studied SLA/AMT, and I can't comment on that aspect... though from what I recall of the method, it may be that it's being poorly applied. I think zdo was hinting at that previously.

 

Regardless of what method is used, any experienced trader would surmise that Gamera has some issues... missing trades that should be taken, and taking trades that shouldn't be (or trades that have a very short shelf life).

 

It's either method or madness, or a combination of the two, but it's something that Gamera may want to explore "living in his own skin" (so to speak).

 

Edit: btw, not that it matters, but I agree... the lines aren't the story, just the outline for the narrative.

Edited May 1, 2017 by jpennybags

[DbPhoenix 42]

....................

[jpennybags 11]

Ha! I think this the first time I've seen this happen...I am amused...

 

Your time... your money... your life. I'm cool with that... "get on with your bad self"...

 

At the end of the day: It's the best option...

[zdo 20]

When and how did this go from a conversation with Gamera and his trading to a conversation about Gamera and his trading ?

[jpennybags 11]

When and how did this go from a conversation with Gamera and his trading to a conversation about Gamera and his trading ?

 

I don't believe (if one is honest about human interaction) that "with" or "about" can be separated, but only by a very thin line. For a conversation to be helpful it must drift (swing) across that line at times. My point was that Gamera may want to (prefer to) explore these issues "living in his own skin". Which is where the best answers come from.

 

Edit: Definition for "living in your own skin".... "working it out for yourself"

Edited May 2, 2017 by jpennybags

[zdo 20]

I don't believe (if one is honest about human interaction) that "with" or "about" can be separated ...

 

jp,

 

I get that...

Still - to me - ( even in the cruel internet world of traders ) it seems like a bit of undeserved disrespect...

[jpennybags 11]

jp,

 

I get that...

Still - to me - ( even in the cruel internet world of traders ) it seems like a bit of undeserved disrespect...

 

Cruel... nah; disrespect... hhmmm... nah...

 

I've stated in another thread these words: "I've not learned a damn thing about trading from anyone on this website, save but just a couple of people (you know who you are, because I've thanked you personally)". What I received from those two interactions was not instruction (in the formal sense), but it was just a "bump" that opened up a door to a different way of seeing. Often, that's all it takes is a bump.

 

I've been doing this for 7 years now, yet I'm not so far removed from the struggles that I experienced when beginning (finding my way). A couple of years ago, I took the time to read back through my journal entries from that first 2 years. There were some entries that were brutally honest, and others where I was just shuffling my feet to find a more comfortable space, and still others where I had discovered something new. As I read through some of the posts here, I see much of what I found in my own journal... and I want to help (because I do feel your pain). The truth is though: From my own experience, the process requires a lot of winding, then unwinding and then winding again (the unwinding is the most difficult), and this something that must be done from the inside.

 

For anyone who has read my posts... I'm getting a bit long winded here (running out of words) so I'll close:

 

I rarely get involved in the all too futile task of giving advice; it often does more harm than good, and leads to another misunderstanding that then must be unwound. Occasionally you run across someone who has an axe to grind, or who thinks you're an idiot and will go out of their way to tell you why, but for the most part... people just want to help.

 

Edit: "Bump"... something you already know, but is yet to be realized.

Edit 2: As we have been cast into "Off Topic" land, I intend to thoroughly amuse myself (ROFLMAO)... was that chart with all the dots a "bump" or "something else"? Ha! It was probably the last fucking straw. Salute to Mr. Gamera...

Edited May 3, 2017 by jpennybags

[zdo 20]

was that chart with all the dots a "bump"

You bumped lines over corrections / retracements. It reminded me of automated system that ostensibly does same... The real point - anytime lines are being used for triggers (whether they are straight or crooked, drawn manually or via programing ), they will attract more money if they ‘cover’ corrections / retracements. I should have just bumped that explicitly instead of rambling on about features...

 

 

Speaking of features...

re:

As we have been cast into "Off Topic" land

ANY outside assistance is frowned upon by cult leadership ... seems to always have something to do with purity of ‘lines’

 

but for the most part... people just want to help.

For months I have wondered why no slaampt peers, etc were showing up...ain't ironic at all...

[jpennybags 11]

The lines on the charts that I posted weren't intended to demonstrate anything particular. That's why I said: "I knew this was going to lead to trouble"...

 

I was trying to provide that gentle "bump" that I spoke of. Gamera was (is) missing the broader argument between the buy side / sell side that is occurring in the time frame that he was placing his trades.

 

And here again, the question of "with" and "about". I was trying to avoid the "about", and it may be that I shouldn't have been... it's a fine line.

[zdo 20]

Gam

 

Tried to hold a trade to a reasonable conclusion rather than just exiting cause I had me some points, the result of this stung a little and reinforced that need to bail out on trades at the first sign of trouble, which is frustratingly limiting

Do you use volume spikes to lighten up or get out of trades?

 

 

After trade 2 I sat out as the PA seemed to be whipsawing more than my tolerance.

 

I may not have posted it directly in your thread but I did post stuff recently about

keep on taking every signal and trigger... that's the only way to beat back the results of trades like your first one yesterday.

“He who recovers fastest wins.”

 

Example I’ve made 14 reverses (now 15) in the YM in the last 8 minutes ... 7 of them were near washes (started writing this post at ~ 11:34 )...

 

 

hth

[Gamera 15]

Gam

 

 

Do you use volume spikes to lighten up or get out of trades?

z,

 

I use the volume spikes as possible selling/buying climaxes and if the test follows on lighter volume and looks likely to fail I track for an entry (possible higher low/lower high).

 

 

I may not have posted it directly in your thread but I did post stuff recently about

keep on taking every signal and trigger... that's the only way to beat back the results of trades like your first one yesterday.

“He who recovers fastest wins.”

I saw the post (I thank you for it) and have tried to follow suit, but, I start to think that I might be tilted if I fire off too many trades in quick succession even though there are times when it is justifiable. I also have a tendency to mentally shut down when I'm doing poorly (most of the time) because I doubt what I see, I'm trying to push through these issues but its tough.

 

 

Example I’ve made 14 reverses (now 15) in the YM in the last 8 minutes ... 7 of them were near washes (started writing this post at ~ 11:34 )...

 

hth

 

That's pretty fast and reading the mentioned post it sounds like you got out of your comfort zone, pushed through the pain barrier and came out better for it :thumbs up:.

 

As an example of where I'm at, today had a buying climax at 09:33, a test (DOG) at 09:37 (lighter volume) a drop and test that topped out at 09:41 which I tracked for a short at around 6350/49 but, I was spooked by the oscillations and expected trouble so held off then sat out.

 

What is up with these 20-30 point swings in minutes over the last few days?

 

Take care and have a good weekend.