Trading the SLA/AMT Intraday

[DbPhoenix 42]

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The SLA/AMT is, again, a primer. Training wheels for the beginner. Rehab for the damaged trader. The beginner will learn discipline, patience, all the good stuff in the Afterword. The damaged trader will, one hopes, find his way back to a disciplined and professional approach, assuming he was ever disciplined and professional in the first place. If he wasn't, then it may provide him with a reset and reboot. The damaged trader will find it vastly more difficult to start over. But it can be done.

 

Once one has worked with the SLA/AMT for a few months, or even a few weeks, he may find that he is able to pick up on behavioral nuances easier and faster than he thought. Why this is, I don't know. But some clearly go with this faster than others. If and when he is able to do this, he may find that the AMT half provides a better fit, and the SLA will become secondary. Or he may find that AMT is a continuing mystery and rely instead on the SLA to keep him out of the weeds and on the straight-and-narrow. But choosing over the other is an error. The SLA and AMT are cojoined, and if one emphasizes one at the expense of the other, he'll be missing out on a considerable number of profitable trades.

 

I used hourly bars in the pdf (see the Stickies) because they are far easier to trade than anything less and easier even than daily bars, though if the trader prefers daily bars, fine, then go with that. Many traders, however, simply cannot hold overnight, much less for days or weeks. They are incapable of doing so without making serious psychological adjustments. They will apply – or try to – this approach to intraday trades, or at least to trading opportunities that occur during one's waking hours (the NQ trades 24/5). But the SLA is a trend-following approach, and the trader who wants to "daytrade" will generally find far fewer trends intraday than he will trading interday. Many days in fact are entirely range-bound and never trend at all. And the trader who doesn't particularly like trading reversals is going to find himself between a rock and a hard place since reversals are the only options in ranges (though one might find all sorts of seemingly-profitable retracements in hindsight, there is simply no time for retracements in ranges; by the time the retracement occurs, one is usually almost to the other side of the range). Which, again, is why I've chosen to illustrate the pdf with hourly bars: the trends last far longer.

 

As I've said more than once, there are two states available to price: trending and ranging. Trends are born of ranges. Price reverses from one side of the range to the other until it eventually and inevitably breaks out of it and begins trending. The trader who wants to make the most of his session, then, will learn both since, as I said above, they are cojoined. There will be times when price launches itself into a trend right out of the gate, but more often it will range for at least a little while – sometimes a great while -- before price exits the range and takes off to greener pastures. So those who focus on the SLA without incorporating AMT into their trading aren't going to have a whole lot to do.

Edited July 19, 2015 by DbPhoenix

[DbPhoenix 42]

If one wants to be a winning trader (and who doesn't), there are certain characteristics that one must either have or acquire. Fortunately, the SLA/AMT addresses all of them.

 

1. Losses. One must accept the fact that he is going to incur losses, no matter what bar interval he chooses. The task is not to avoid loss but rather contain it. The SLA/AMT is designed not to prevent loss but to keep losses minimal.

 

2. Preparation. Doing nothing before the beginning of the session in anticipation of exciting, new experiences pretty much guarantees that those experiences are not going to be pleasant. No, one cannot know for sure what is gong to happen, but he can know where he is with regard to whatever extremes are in his neighborhood, probably ranges. If he hasn't reviewed at least the weekly, daily, and hourly charts before his session, he has no one to blame but himself for what happens. If he has reviewed these charts, he will have a clearer notion of where and how far price may go, which may help him stay in a trade rather than jump out simply because price has gone against him a tick or two.

 

3. Planning. The SLA/AMT is its own plan. But if it isn't followed, if it's "tweaked", it can't be expected to function properly. Yes, there are minor decisions that must be made on the fly, but as one gains familiarity with price behavior, these decisions become matter of course, like slowing down at a Yield sign. Larger changes, however, will most likely require at least minimal testing. Changing something just because "it seems like a good idea" is not likely to yield the desired result. As for ignoring the rules altogether, well . . .

 

4. Discipline. Without discipline, whatever you do will result in failure. The SLA/AMT, however, forces you to be disciplined. If you keep fighting it, like hitting the snooze button over and over again, it will fold its arms and lean against the wall, waiting for you to pull yourself together. If you are a beginner but especially if you're damaged, it is essential that you follow the rules. Yes, you will have to decide what, for example, constitutes a "break" of a line: a tick, two ticks, a point or two. But not five. Not ten. Not half your account. And you must do this every single occurrence. Otherwise the SLA/AMT is no better than that trading plan you got in your mailbox from Winning Traders 'R Us.

 

5. Patience. The best trades are found at the extremes, either of range limits or channel limits. If you're nowhere near one or the other, you have nothing to do but watch (and don't try to be clever and draw teeny-tiny ranges and teeny-tiny channels in teeny-tiny bar intervals to rationalize and justify your lack of patience).

 

• Learn to use inaction as a weapon against your tendencies toward impulsive action, e.g., "revenge trading", or fear of "missing it".
   
  
• Don't get irritated or angered or feel like a martyr when waiting.
   
  
• Regard patience as a central pillar of your strategy. Don't assign it a secondary or lesser role.
   
  
• Don't be impatient about patience. Your brain is telling you to play patiently while your emotions are saying, "What's taking so long?" These two must be in alignment.
   
  
• Begin by being patient, but don't forget to stay patient. The important thing is not who possesses the control and discipline at the start of the game, but who possesses it at the middle, the end, and all points throughout. (from Zen and the Art of Poker)
  

6. Record-keeping. It is essential to collect and maintain records of your end-of-session reviews (you are of course doing end-of-session chart reviews). If you do not keep track of what you did right and what you did not-right and the results of each, you won't be looking at early retirement any time soon. Avoid, however, the I'm A Useless Sack drama. Focus instead on what you saw correctly, what you missed that you should not have missed, what you missed that the greatest trader on the planet would have missed, which trades were made according to plan and which weren't (along with why, so that you can avoid the same behavior in future). Review Appendix E.

Edited February 15, 2015 by DbPhoenix

[DbPhoenix 42]

The prep begins as all prep does, whether trading the SLA, AMT, or both: the weekly chart. Here I'm posting the weekly from the week of the 6th. It shows that, while we had been in a down-sloping trend channel in the daily, the previous three weeks had failed to make a lower low. This led me to postulate that we might be creating a range, which is what accounts for that tentative demand line at what looked to be a good spot (I mean three weeks is three weeks; seemed to me that something was up, no pun intended).

 

 

In the meantime (meanwhile, back at the ranch), the dailies had been working their way higher. The first is from the day before. The second is of the morning of (pre-trading for the 13th). It this makes no sense, just go with the pictures. They're self-explanatory.

 

 

 

And then the hourly, to see what traders were up to during the night:

 

 

And then we focus on the territory for the upcoming session. A few minutes before the NY session begins, a range has formed between 54 and 59. But there's also a half-assed range from earlier in the night between 46 and 52 that may be important later (doesn't really matter what bar interval is used for this; 30m is too big, 1m is too small):

 

 

And here's where the range-avoidance trader is faced with a lot of do-nothing time. Those who want to trade the SLA intraday are faced with a range from 54 to 59. Unless and until price breaks up past 59 or breaks down below 54, there is no trade unless one focuses on the AMT approach. If one insists on trading the SLA anyway, the losses can most likely be minimized, but the profits aren't going to amount to much, if only because by the time there's been a retracement after bouncing off the top or bottom, price is very nearly to the other side. Therefore, whatever profits might be made will be minimized as well.

And there are all those commissions.

 

In this case, the day that followed the "hard right edge" above was typical with regard to SLA results: a breakeven trade, a 3-point loss, a four-point gain, followed by a 2-point loss on a short and a 2-point loss on a long, which shuts down the SLA enterprise (two losses in a row, one short and one long, signalling chop). But then it was a range. Taking the AMT route meant considerably more and greater profits, including two 14-point moves by 1330.

 

Let's revisit the 60m bar interval, the one used for the pdf. In this particular example, AMT is helpful in locating a range. Once price breaks out of it, the SLA takes over, sort of like a tag team:

 

 

Edited March 30, 2015 by DbPhoenix

[DbPhoenix 42]

For those however who absolutely must daytrade for whatever reason, the following pairs of Befores and Afters may be of help, especially if one pays particular attention to how the SLA and AMT work together (though not necessarily at the same time):

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

 

BEFORE

 

 

AFTER

 

Edited March 30, 2015 by DbPhoenix

[DbPhoenix 42]

plcholder fr nw......

[DbPhoenix 42]

And another place holder

[DbPhoenix 42]

 

0933: Looks like the ES is going to be a drag again as the NQ nears a penultimate ATH

 

1117: Even though the markets are closed, I thought there might be some futures activity in the NQ given that we are so near a penultimate ATH. And price broke through the upper limit of the range at 1053. While it's unlikely that this will go anywhere, it's good to know.

 

1145: DT and a break of the DL

 

1236: While I don't want to insult anybody, how could one NOT know how to trade this given the range that I posted above? Buy the break up through the upper limit, sell the break back down through the upper limit. If one didn't, he needs to think about WHY he didn't.

 

1253: While this is tons of fun, I see no point in doing it if nobody's watching it.

 

Signing off.

 

End of Market

 

Edited February 16, 2015 by DbPhoenix

[weasel1 10]

I am watching..Its a bit hard to follow you from ET to BM and also TL. But I am on your trail.

[DbPhoenix 42]

I am watching..Its a bit hard to follow you from ET to BM and also TL. But I am on your trail.

 

If you have comments, make them here. BM is only a standby in case TL is down, as it was this morning. ET is for arguing.

[eminiman414 10]

I've been observing this more and more. When one end fails the other end is typically tested. Don't have exact stats but it seems to be very common behavior. I've also noticed that on re-entry into the range price often retests the limit again from "inside" before continuing to the opposite end. This didn't happen today but just something I've observed.

[Gamera 15]

 

0933: Looks like the ES is going to be a drag again as the NQ nears a penultimate ATH

 

1117: Even though the markets are closed, I thought there might be some futures activity in the NQ given that we are so near a penultimate ATH. And price broke through the upper limit of the range at 1053. While it's unlikely that this will go anywhere, it's good to know.

 

1145: DT and a break of the DL

 

1236: While I don't want to insult anybody, how could one NOT know how to trade this given the range that I posted above? Buy the break up through the upper limit, sell the break back down through the upper limit. If one didn't, he needs to think about WHY he didn't.

 

1253: While this is tons of fun, I see no point in doing it if nobody's watching it.

 

Signing off.

 

End of Market

 

 

I shut down after the first hour thinking the holiday would mean a lacklustre day, not the first time I've been wrong and wont be the last.

 

There is still an hour before open so I might be getting ahead of myself here but this is what I am looking at so far.

[DbPhoenix 42]

I shut down after the first hour thinking the holiday would mean a lacklustre day, not the first time I've been wrong and wont be the last.

 

There is still an hour before open so I might be getting ahead of myself here but this is what I am looking at so far.

 

Yep, that's it. I'll post my own, tho, so I can do the EOD comparison in the same post.

[DbPhoenix 42]

 

0927: At this point, 77 takes on added importance. It's the last rejection, and 81 is the median.

 

0933: Make that 77-82.

 

0958: Don't know what the deal was with 71, but it doesn't represent an extreme, so I won't be trading off of it.

 

1001: I should point out that I'm having allergy issues, so I'm being extra careful. Don't trade off me.

 

1006: You'll notice that once price re-enters the range, there's a lot overlap, more extended MAEs, more hesitancy, pace and activity slows. Which is why I posted all that at the beginning of the thread. So do you want the trading to be easy or do you want it difficult?

 

1011: At this point, the lines at 86 and 88 are most important, given that 9 out of 10 of the underlying are showing strength. The ES as usual is being a drag.

 

-------------76 is the median of the uber range.

 

-------------I should point out to those who've never thought about it that there's a lot of hedging and arbitrage and whatnot in the ES and not so much in the NQ, largely because the ES is the proxy for 500 stocks and the NQ is the proxy for only a hundred. Plus the ES has a lot of financials. The NQ has little to none. However, the ES can act like a drag on the NQ just as it's doing now and was doing last Friday. Therefore, one can save himself from pushing too hard by at least keeping an eye on the ES quote, even if he doesn't have a chart up.

 

-------------Disappointing to get all jazzed up and ready for the open and then get stuck in the mud.

 

1046: If the ES can't get past 92, we're not likely to go anywhere.

 

1105: I should point out here in reference to the posts opening this thread that if the range is wide, such as this one is, one may have the luxury of waiting for a ret if price rejects the upper limit. However, the better trade continues to be a reversal trade, as with all ranges. If it succeeds, then one is above all the retracement scrabbling.

 

1110: Note: when a lower limit is as soft as this one is, you'll have to come up with some alternate criterion for exiting, such as the last swing high. You may give up a few points by not exiting at the bottom tick, but you don't want to give it all back, either.

 

1123: 75 is the median of today's range, not much different from the level I mentioned earlier.

 

1125: A higher swing low, but one is either going to trade the range or he isn't.

 

1142: Zoom out to see a hinge forming.

 

1147: ES may be moving out.

 

1157: This hinge is taking too long. Be careful.

 

1209: ES testing its upper limit but NQ not.

 

1220: No go on the ES. Yet.

 

1250: Time to redraw the hinge, if one hasn't already done so.

 

1353: Regarding Gamera's notes, this is an excellent opportunity to revisit the decision to scalp or not scalp. Of course, if one is no good at it, that's that. But a day like this is a strong temptation to reconsider. Even so, it should be noted that whether one shorted at the double top at 87.5 or at what had been the "upper limit" at 86, either trade would have worked. And if neither had, how much is there to lose? But this is how a range is traded. Waiting for retracements is rarely satisfactory, not is it necessary, largely because all those who bought up to the limit are now going to exit, which is why price falls. I should also point out that this situation provides a good example of why using the SLA to trade ranges is not the best choice. By the time the DL is broken and a retracement made, the reversal entry is long gone. And if there is no retracement at all, there is no trade.

 

1410: Currently back at the apex of that hinge.

 

1635: While this seemingly interminable day has yet to resolve itself, it is a welcome change, if for no other reason than that it is an excellent opportunity for those who are experimenting with this and that to revisit their approaches to scalping vs trend-trading. The intraday trend-trader would have wound up today with bupkus. The scalper, on the other hand, might have done much better (I suggest you not consult journals to determine the possible profit pictures). But then scalpers miss out entirely on those 40 and 30 and even 10pt days. So, you pays your money and you takes your choice. What do you want? What kind of trader are you? What kind of trader do you want to be? A reminder, though, that if one had been trading an hourly interval as suggested above, he'd still be about 100pts ahead and today would not have mattered in the least.

 

I don't "love" trading. What I like about it is the hours. And no boss. If it weren't this week's demos here, I probably would not have traded at all. If I have to trade more than the first 90-120m, I get real bored. And since I will most likely miss good trades when bored, there's no upside to sticking around. All that aside, there was really only one good trade in my book, and that was the reversal at the late double top. Ordinarily, if I weren't providing commentary (and it seems no one was here to read it other than Gamera and gears), I would have initiated what I call a SIFI trade, i.e., Set It and Forget It: enter the trade, wait for it to clear your entry, and if and when the trade begins to stall, just set a stop at your entry level and go do something else as sitting there and watching it is akin to watching paint dry, and you may just exit the trade unnecessarily simply because you don't want to look at it anymore. Sometimes price will plummet. Sometimes it will stop you out. But price really doesn't give a damn whether you're watching it or not; it's gonna do what it's gonna do and you don't necessarily have to participate, either actively or passively.

 

Edited February 17, 2015 by DbPhoenix

[youngin 10]

 

Are you using the dashed pink line at 75 as the mean of the bigger range or the lower limit of the tighter range?

 

Swing highs.

Edited February 17, 2015 by DbPhoenix

[Gamera 15]

I'll edit post as we go along as not to stretch the thread too much. I might wonder into the weeds a little.

 

09:39 Price broke lower, halted at 72, this low to the mean is equidistant from previous days high, possible second reaction at 72 underway.

 

09:55 price chokes on pm range low at 77. ret underway.

 

09:56 ret confirmed, looking up towards range mean, high and previous days high.

 

09:59 Another ret a little deeper this time dropping out of the range, caution.

 

10:00 Confirmed, I might be a little too focused on the smaller picture but price to the upside is slowing.

 

10:05 After price drops to 75 (pre market s/r) it took off to 83 level highlighted in an earlier post.

 

10:11 Price took a second shot at 83 failed, the low has not been broken so the rev is not confirmed either.

 

10:16 Third shot at 83 failed.

 

10:22 price seems stuck for the last 6 or so minutes trading in a 3 point range?

 

10:23 PM range low at 77 tagged, now moving slowly towards upper extreme at 83, as Dbpheonix has already pointed out 86 and 88 are beyond this level.

 

Just so I am clear, I have not taken any trades yet, the 6 point PM range is a little tight for me to play, whilst the action at 72-71 was interesting and might have gotten me involved to the long side, I would have been more interested if it was nearer the previous days low/ON double bottom.

 

10:34 Price has again tagged 83, but it seems to be hanging around this time.

 

10:42 If one was inclined a DL could be drawn from the lows.

 

10:43 BO hesitates, is this how a BO should behave? I think not, but it is close to ON highs.

 

10:46 We have a drop off from 85.25 which is a tick shy of a predefined area (wider PM range my charts) 2 bar drop with a 1 bar ret.

 

10:52 I was going to say in my last update that I would like to have seen a deeper ret before considering an open. (a weakness of mine)

 

10:53 Dump off and so far we have had slight choke where we might have expected one, where will the drop end?

 

10:55 We get to 72, an area from earlier, will we get a secondary reaction.

 

10:59 Looking interesting.

 

11:03 We had a push higher beyond the previous swing high, price has so far failed to follow through BUT the 4374.5 lows are still intact.... barely.

 

11:06 We break lower, still the low at 10:55 is intact, this behaviour is happening around an area identified PM at 75. If we move to the downside we have 71 as the most immediate area and to a larger extent 65 (double bottom)

 

11:13 A little hindsighty, this looks like a DB, BUT the drop and then price waffling for 20 minutes is putting me off, the drop, I would have thought would have resulted in a quick and decisive action, from the looks of it I am not seeing that.

 

11:21 Then again I might be opening my mouth too soon, I guess these are old thinking habits affecting my thought process.

 

11:24 Possible range at low 70's on the lower end and 85 to the upside?

 

11:29 Price appears to be struggling at the mean of the PM range. wait and see if this is a ret.

 

11:31 Ret confirmed, but as I look, price is dropping off, more overlap and rets in this immediate area.

 

11:37 Price broke a tick lower and rejected it, price seems to be churning the PM range mean.

 

11:45 Price is breaking lower and fell out of the range but it has returned as a type.

 

Hinge? previous days high, 07:55 and 10:42 highs and last nights DB 03:30 to 09:50 lows??

 

11:56 If this is a hinge price is dithering at the mean.

 

There was/is a smaller hinge from the last test at 85 and the last low at 72 if that is the case price has broken to the upside and is currently in a ret towards the apex.

 

12:16 Price has dropped through the apex of the smaller hinge, the test to the downside is roughly the same as the move out to the upside. (as I write this)

 

12:28 Price appears to be dropping and is close to 75 again, but it is slow, below that there is the previous swing lows at 72-73 and this will coincide with the larger hinge low.

 

12:32 Where did this rally come from? four bar DB at 75.25?

 

12:40 Spike is halted, ret failed to confirm, price breaks lower. I might add this move is happening around the apex of a smaller hinge.

 

12:55 Price failing to do much, as I write price is testing the lower line of altered hinge.

 

12:58 Price is hugging the DL of the hinge.

 

13:02 We have moved off the DL of the hinge, the SL is at around 81 but this is descending all the time just a question of how long it takes to get there, if it gets there.

 

13;04 So much for that line of thinking, hinge possibly blown, 85-86 on the cards, also an HTF hinge SL from previous days high coming in at just under 85.

 

13:09 Ret either we continue or reverse back to mid-low 70's.

 

13:12 If price were to break higher it has a couple of hurdles close by that might limit or hinder an upwards move.

 

13:14 Possible DT into resistance.

 

13:20 Price breaks higher to 86.75 but rejects just as quick, no BO yet.

 

13:22 Price has not really dropped off that much yet, and is as I type making another run at it.

 

13:24 88 tagged 2 ticks short of ATH.

 

Considering an action if price pushes higher here.

 

13:33 Price is dithering at highs.

 

13:36 The inability of price to push higher at a known value at 88 was a possible entry (hindsight) price has dropped off and is currently putting in a ret, the possible range is in the mid to low 70's from an intraday perspective.

 

13:41 Ret confirmed.

 

As a side not, I considered a short, this short would have been triggered as price confirmed the ret with a stop just above the previous swing high, as it stands price would have tested me but the trade would be holding.

 

13:51 Price seems to be going in a 3 point sideways range, the inability of price to push lower would have had me alert if I was short at the time.

 

14:03 Price has dropped and gotten a bump at the apex of the hinge, previous swing high at 82.

 

14:09 Price broke the previous swing high at 82 by 2 ticks and it was rejected immediately, up to this point price is reacting to the apex of the hinge.

 

LOLR is still down a the present time.

 

14:22 Would like to see this area get cleared, price seems to be hanging around the apex.

 

14:24 Possible hinge formation, extending the earlier hinge DL puts this most recent low into play, a descending line from the highs at 88 gives an upper line. It has not been filled in too much so it might mean nothing.

 

14:36 TBH if I had taken a short in the correct place the behaviour over the last 10 minutes would have seen me bail.

 

14:54 After a couple of HL's and HH's price has again dropped off to the apex of the earlier hinge at 78.

 

15:11 Price is unable to push past the apex at 48, not sure if the apex is relevant now, or if the focus should just be on the inability of price to make its way lower after multiple attempts at this level.

 

15:12 Just noticed price is roughly trading inside the PM range, 77-83 over the last few highs and lows.

 

15:34 After tagging the highs from the PM top 85, price dropped off to 77, will we get a breakdown in the last half hour or could price rally back to highs?

 

15:49 Price breaking lower, will it follow through?

 

15:56 No follow through. yet.

 

16:00 After failing to break lower price rallies into the close.

 

An interesting day with a few good opportunities but a lot of twists and turns away from the extremes.

 

16:10 DT with secondary reaction.

 

Tomorrow is another day.

 

Gamera

 

 

Six people were here, two of whom were late and have left (we weren't exciting enough, I guess), and another has left. But that's trading intraday.

Edited February 17, 2015 by Gamera

[gears 10]

So far today is definitely one requiring lots of patience.

[gears 10]

Six people were here, two of whom were late and have left (we weren't exciting enough, I guess), and another has left. But that's trading intraday.

How do you know who's "HERE"? ((Just saw the Currently Active Users Viewing This Thread bit))

 

I'm a moderator. I see everything.

 

Plus one can smell the flop sweat.

Edited February 17, 2015 by gears

[gears 10]

Back to 75/76. This range bit really is quite fascinating to me. Feels like blinders have been lifted.

[eminiman414 10]

Just wanted to let you know I am following along but it's too difficult to type and focus at the same time. Some questions I have might be more related to AMT and just buying/selling a level outright if it "appears" to hold as opposed to waiting for some type of price "pattern" to trigger my entry, let's say a 123 or double top/bottom or even the first RET thereafter on a smaller interval. I find that when I think of myself as a buyer or seller I focus on price movement and less on the trigger required to get me in. In a way the trigger becomes almost irrelevant to what was actually happening with price. To make a short story longer if one was to focus moreso on AMT is that how it should go? Just buying/selling the limits that appear to be holding? Of course one would have to define "holding" but it's seems easier/less stressful to buy/sell the level then waiting for some "setup" around the level bc every time I start getting into that I go back to pattern land and it screws me up. In AMT isn't playing with the limits called responsive (reversal) trades and initiative ( breakout) trades? Is the nature of those types of plays just getting in nearest to the limit? I do use the SLA to track but not the entry trigger. I'm watching a smaller interval for entry around the levels.

 

I'm asking this because every instance is so independent of the last in terms of how price behaves around these limits so essentially I've just been trying to simplify everything. If an upper limit is holding just short it. Don't wait. It doesn't matter if it's only spent a few minutes there. If the level is going to hold it's going to hold and price won't trade much higher than the level if it's good. You may have to sit thru another test but again if the level is good for the reversal it will hold. If not take the loss and re-evaluate.

 

Is this wrong thinking?

 

Also do you have any recommendations on further reading material regarding amt?

 

You're over-thinking it. If you're going to trade a range, you have to trade the reversal. Where you enter will depend on how far away from the limit you have to enter to give a reasonably high probability that traders are showing intent. A point or two away from the limit ought to be enough, and this puts you close to the danger point. You may have to endure a lot of twisting at the limit if you enter too close to it. The SLA is irrelevant.

 

As for further reading on AMT, I haven't found any, which I find puzzling.

Edited February 17, 2015 by DbPhoenix

[Gringo 10]

Now that Db is a proponent of AMT it's also turning into dying breed. It gives me hope there might be even greater gains for those who learn to use it wisely.

 

I'd like to read Steidlmayer's original work, before he becama a software king, but it's out of print and I don't want to read it badly enough to pay truckloads of money for it.

Edited February 17, 2015 by DbPhoenix

[gears 10]

12:31 - ES made a pop up - perhaps the NQ will follow suit.

[Gamera 15]

I was reviewing some of my charts and thought I would post an example of SLA and one of AMT covering the same day, I struggle real time when to differentiate one from the other as some days are less clear than others (like yesterday) I also have a tendency to scalp but I see the value in holding on and allowing AMT to work.

 

The charts are from the 4th of December and are used as they have reasonably clean PA.

 

SLA: I wont cover exits on the chart and some of my entries might be off the mark this is just my perspective and opinion and reflects my knowledge at this point, suffice to say a lot of trades are triggered around the mean.

 

AMT: PM high-low marked off, price opens at mean so it is just a case of waiting to see what it does, price breaks a little higher expanding the range, price is unable to push beyond 23 so a short would be initiated, have to sit tight on it as a tested a number of times.

 

Price drops in a climactic fashion through the mean stops and puts in a second test this push lower fails and as it creeps higher I might have exited, however we are close to the low-high MP and price fails here so if one was out at this point a short could be re-entered, price tags expanded range low (crystal ball) and there is not much to think about as price rallies to highs again.

 

30 points down 30 points up I don't think the SLA would have netted close to that.

 

Just so I am clear I was not paying attention to the range and approached this with an SLA mindset and gained an impressive 11 ticks for all my efforts. Could I have made it easier on myself? without a doubt yes.

 

Gamera.

[DbPhoenix 42]

The distinction between trending and ranging requires the trader to make important decisions regarding what he wants and how he plans to go about getting it. This is made even more difficult by the fact that most traders don't even know that there is a distinction between trending and ranging and that a decision must be made.

 

The Law of Supply and Demand is, of course, a law. Auction Market Theory is a theory. However, the longer one works with it, the more easily he begins to see that the most profitable means of trading a range is to just leave it alone and let it do what it does. Yes, one can get literal and insist that any movement up or down is a trend, and that the movements from one side of a range to the other are trends. And for an intellectual discussion, that might be good fodder. But the practical matter is that trends are limitless and ranges are not. This does not mean that trends do not pause, end, and reverse. But they do not have predetermined limits. If they did, the market would be several thousand points lower.

 

For those who love to trade and can't stop doing it, the SLA at least provides some structure for making intrarange trades. But, at the end of the session, it is rare to find that all these in-and-outs amount to more than what one would have gained by doing nothing more than entering at one end and exiting at the other, if one has any gains at all.

 

As for yesterday, it is important to note that if one had bought the DB at 0330 and ridden it to the test of the previous evening's 1130 high, he would have done quite well, even though at the time it was not yet a range. But then DBs and DTs send powerful messages, and if one zooms out on the hourly to a view that includes the10th, he can see just how important this DB was in the context of the past week's movement. Unfortunately, for the daytrader, this is largely irrelevant in terms of the account balance since few people in the States are trading at 0330. The point regarding trends and ranges, however, must be made, as well as the point regarding daytrading vs taking at least a somewhat longer view: one who had entered on the 11th wouldn't have had to concern himself with any of this.

Edited February 18, 2015 by DbPhoenix

[DbPhoenix 42]

 

0942: It is important to note how price behaved when bouncing off that 50% level. When one sees action like that, he can enter with a 1pt stop and enter sweat-free.

 

1051: I should point out these retracements. Note their depth and duration. They range from one bar to three, and the depth is relatively inconsequential. These tend to propel price higher than those which are deep and take forever to resolve themselves. This is not difficult to understand: if buyers are truly interested, they're not going to allow price to drift and stagnate.

 

1053: How price reacts to a level helps to determine/confirm that level's importance, e.g., 86.

 

1108: Trying to figure out why buyers do what they do when they do it can drive one crazy. Fortunately, it's not particularly relevant. Stuff for chat rooms. What matters is that if price can stay up here, it is more likely to go higher. That seems like a duh, but it helps to remember the obvious.

 

1111: Something else I've mentioned but I'll repeat: when the market stops you out, it's telling you something. Sometimes it's screaming at you. Pay attention. If you don't understand what it's telling you, don't be eager to jump back into the fray.

 

1121: For those who are confident in their trades, I should point out that that second rejection of 86 at 1050 sent a signal regarding the sentiment of buyers. If one had been comfortable with a stop, mental or otherwise, at the "danger point", which in this case would be around 87, he would have withstood the third test and still be in the trade.

 

However, there is a third type of risk other than information risk and price risk, and that's opportunity risk, or time risk. Just how long does the trader want to babysit the trade, particularly if it's preventing him from taking advantage of something else?

 

Something to consider.

 

1331: Apparently price has decided to convert the halfway level into a new range bottom. If this is the case, it's good news, as it puts us that much closer to the upper limit of the trend channel.

 

1430: Patience is a virtue. Here's the trade and everybody's gone

 

1433: Now we find out whether 76 is a new range bottom or not.

 

1445: Since everyone but you is gone, I'm going to take off. Hope your long works out well. You seem to have this down.

Edited February 18, 2015 by DbPhoenix

[Gamera 15]

Half an hour until open, posting a chart covering PA and what looks like being areas of importance. Using a 500 tick to squeeze the picture a little, there are a lot of HL's from the low to mid 70's to think about, range bottom at 65 range top 88-90.

 

09:29 Price has DB'd off the 50% of range and off of an area that supported price yesterday.

 

09:33 Price halted halfway from ON high to low.

 

Not much to do until price gets to upper or lower extreme.

 

09:38 Price dropped off opening rally and made a deep pull back to lows but it made a higher low, ret confirmed.

 

09:40 Price running up quick.

 

09:42 Ret underway, I'll be watching this closely.

 

09:48 look like the ret might be a rev.

 

09:50 Not following through to the downside yet.

 

09:53 Price is trying to push lower but not making much progress, reminiscent of yesterdays action at 71.

 

09:57 84 has stuck for the last 10 minutes, price now breaking higher.

 

10:01 Price failed to follow through to the upside, LH followed by an LL.

 

10:05 Price still unable to make much progress to the downside.

 

10:07 Price equals previous high and gets rejected almost instantly. see if it tries again without dropping.

 

10:10 Price did not drop off too far and it took another stab getting a tick higher this time but it was rejected again.

 

10:11 Now we get follow through to the downside.

 

10:12 85-86 seems important.

 

10:13 LL.

 

10:14 Looks like a small downward channel has formed with the LL's and LH's, just a thought.

 

10:16 Price breaking towards range mean.

 

10:17 Possible DB.

 

10:21 Secondary reaction at lows?

 

10:23 Long triggered and exited on breakdown -2.5

 

10:25 Breakdown retracing to support levels at 76.5

 

10:28 Price re-entered range but looks to be dropping out.

 

10:32 Price has rallied back into the range, will be interesting to see if it can make it's way as far as 85-86 and how it will react there.

 

10:36 Price returning to to the range (76.5-88) would have merited a long as per AMT

 

10:39 Ret confirmed, now to see if 85 will get surpassed.

 

10:40 A rapid move up into range highs from the lows, price being held at earlier highs.

 

10:44 From an intraday perspective 85-86 is acting like a range top with the lows in the mid 70's?

 

10:45 Ret or rev?

 

10:48 Rev it is,

 

10:52 No follow through to the downside price breaks higher, rejected quick at 86.5.

 

10:52 Price currently in a sideways motion, testing down and up. About 4 points in it.

 

11:05 Price breaks lower, as DBpheonix suggested if buyers were interested price would not procrastinate like it is, buyers are not coming in behind the up thrusts to 86 to help propel prices higher.

 

11:18 Price is drifting lower.

 

11:26 Regarding my earlier stop out, I was about a point worse off on entry than I should have been, the second test was a higher low so I had that going for me, price broke support and at the time I do not know if this is a breakdown or a shakeout. Having read a little more of Wyckoff I think he wrote about price being in an obvious place where strong hands would be interested, but in order to load up for the mark up they would drop the price a little to shake out the weak hands that were reliant on support maintaining.

 

11:33 I forgot to add, I am not sure if "strong hands" would be that concerned with the happenings on a 1 minute chart, just a thought though.

 

11:38 While price rallied from the drift it got as far as 85 before dropping back a little, we'll see if price can move higher.

 

11:42 DT at 85 and subsequent drop.

 

12:07 I have a commitment to attend so I will be gone for an hour.

 

13:11 I see we have had another test of 76, price seems to have not done anything with this so far.

 

14:02 FOMC price rallies into 88 ret underway.

 

14:05 Possible second reaction?

 

14:09 Ret confirmed price breaks higher but is stopped at 89.

 

14:14 Price is putting in another ret, I would be interested to see if this ret fails making a lower high.

 

14:18 LH has formed.

 

14:19 Previous swing low taken out.

 

14:23 Price on a drop 76 is first hurdle.

 

14:29 Price has blown past 76 but seems to be rejecting this move lower.

 

14:33 Long triggered.

 

14:34 Price formed an HL at support.

 

14:37 Ret or Rev?

 

14:38 14:36 low is a little quick to be moving my stop, until price pushes higher I will track on the 76.5 low.

 

14:42 82 is the high-low MP.

 

14:44 Feels like a grind but it is behaving as traded.

 

14:45 Will still be keeping an eye on 86 though despite the previous high.

 

14:47 Old habits trying to kick in on this ret.

 

Thanks DB.

 

14:51 Price testing MP from above.

 

14:55 83.75 seems like a roadblock.

 

14:57 Trade exited. +3.75.

 

14:58 LH followed by a LL, I gave it time but it stopped me out.

 

15:01 Now we hit highs, where was this rally 5 minutes ago, joking aside I stand by my action, it is a reflection of my application of knowledge, skill and psychology at this moment of time.

 

15:04 Rallied hard into limit and stopped, DT?

 

15:07 BO to ATH.

 

15:09 We had a 1 bar pullback then a break higher.

 

15:10 Another RET, ideally I would like to see it come back a little closer to the BO level.

 

15:14 Highs being tested as resistance, either we go up or fall back into the range.

 

15:17 Long triggered, will have to see if it follows through to the upside.

 

15:19 A note of caution price has created a lower high... broken as I type.

 

15:22 This latest high has halted 2 ticks shy of ATH 15 minutes earlier, I think I am too focused on the little things now.

 

15:26 No real follow through to the upside yet, if this is a BO where are those buyers at?

 

15:33 Long exited as price is not behaving like a BO should.

 

15:35 A DL drawn from BO was broken we had a pull back that was halted at the BO the retrace from this low was confirmed when price re-entered the earlier range. AMT takes over again. I am on A self imposed cool down from last trade.

 

I am done for the day 3 trades 2 losers 1 winner for BE.

 

15:46 it is interesting to sit back and watch it unfold without concerning oneself with entries and stops.

 

Gamera.

Edited February 18, 2015 by Gamera