Testing Times.

[zdo 20]

Gamera, Do you think dbP would also rate you at 7 (on a scale of 0 (not) to 10 (very)) on how congruently your method and trading mirrors the intended essence of the SLA method?

 

Have a great weekend all

[Gamera 15]

Took two shorts that failed to go anywhere and then sat out as there seemed to be little in the way of direction.

[Gamera 15]

Gamera, Do you think dbP would also rate you at 7 (on a scale of 0 (not) to 10 (very)) on how congruently your method and trading mirrors the intended essence of the SLA method?

 

Have a great weekend all

 

I try not to assume I know what others think, however, Db would likely agree that my execution is poor and not a true representation of the method.

[Gamera 15]

Price has broken to new highs, not much in notes as I'm trying not to set a bias for the day ahead.

[Gamera 15]

Pretty dull day that got duller as the session unfolded.

[Gamera 15]

Price continues higher as the open approaches.

[Gamera 15]

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

[Gamera 15]

PA has spent most of the night in a tight range.

[Gamera 15]

Sat out after the failure of the second trade as it seemed like a choppy day was again on the cards.

[Gamera 15]

PA has not progressed from the previous days chop.

[Gamera 15]

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

[Gamera 15]

Prep for the day ahead.

[Gamera 15]

Market heads higher but intraday PA seems choppy.

[Gamera 15]

Market still grinding higher as open approaches.

[Gamera 15]

I was had very little focus as the open came about and was unable to react to what I saw, took notes for a short period of time then quit for the day. No trades.

[Gamera 15]

Prep for the day ahead, price is still rallying to new highs.

[Gamera 15]

Upper limit of the PM range was tested with the failure just prior to open.

Edited May 4, 2017 by Gamera

[Gamera 15]

Prep for the day ahead, PA has not done much overnight and is at the MP of the range of this inactivity.

[DbPhoenix 42]

Given that you have been at this for three months now, what have you learned?

[Gamera 15]

Given that you have been at this for three months now, what have you learned?

 

I'm struggling.

 

1. I've become hesitant and often have an element of doubt around my analysis of where the opportunities lie, this often leads to me taking the second entry and puts me under pressure as I want extra confirmation.

 

2. At times I "feel" that my rules are overly rigid and pull me from the behaviour which often indicates a change before a stride break or swing point break. I've been sticking with this for the most part as I do not want to bring "I thought, I felt, I hoped" into the discussion.

 

Spent the last week or so reading through old threads and I am trying to shift focus to the behaviour.

 

3. I am uncertain that expectations are realistic, price at the minute rarely seems to go, it quite often futzes around not really rejecting or confirming the hypothesis. If I pick out the opportunities right my expectation is that it will "go".

 

I am not adapting very well to the current intraday conditions, I may need more patience as I am scratching trades that work out, but, this probably falls into expectation.

 

4. Market keeps grinding higher and is not giving much in the way of trading ops on the weekly and daily, even the hourly rarely revisits former levels, but, there is a lot of backfill and chop and generally indecisive PA around levels that meant something at some point (intraday or overnight).

 

5. My overall application is poor and my mentality has likely become slightly skewed, I'm prone to overthinking during a trade, but for the most part indifferent,I struggle with the entries at times.

 

I'm sure there's more to it but the above has been the most pressing.

[DbPhoenix 42]

Though some people might snort at this, I do try to be as non-directive as possible when people are testing and exploring as long as whatever they are doing is being done within the context of Wyckoff principles, e.g., no indicators or Fib or pitchforks. The observation and testing phases are as much a process of discovery as anything else, particularly when the individual discovers that what he thought was true isn't true at all. Granted one can be so confined by biases that he can't see the truth even when it hits him in the face, but that's where data collection and analysis can help.

 

I may have missed it, but you seem not to have done much appraisal of your observation and back-testing phases, You appear instead to have assumed that your foundation was sound and that all you had to do was decide whether you wanted granite countertops or butcher block. What I wrote in January '16 seems to have been overlooked, and rather than focus on price movement and the various players determining the course of that movement, you became focused on lines. As I've pointed out, the lines aren't going to be of much help with intraday trading. The determinant of success or failure regarding intraday trading -- at least according to Wyckoff -- will depend on the trader's ability to recognize the presence of force and correctly determine its direction. Otherwise one gets trapped in chop and the commissions mount up. Intraday trading is about force, direction, pace, activity, extent, waves, and so forth, all of which I've addressed here and "elsewhere". Tick bundles and CVBs and various other ways of transforming price movement are of no value. This however must be determined through one's own experimentations; my saying so carries little if any weight. But then that to a large extent is the purpose of testing.

 

If you have substantial evidence that you are on the right course and have only to refine your protocols, then by all means continue to pursue that course. However, if you feel lost, then back up to the point where you had a solid footing. If you believe that you never had a solid footing, then re-examine your assumptions and re-analyze your observations. At the very least, if for some reason you are bound to daytrade, review your observations focusing on pace, activity, waves, etc (see the pdf) rather than lines. In fact, avoid using lines at all. Reviewing Wyckoff's Day Trader's Bible may be of help, though I suggest that you examine why you are day-trading at all.

 

As for the sort of advice one receives on trading boards, if the advisor doesn't understand what you're doing or why you're doing it or doesn't even ask what your objectives are, he will more likely be interested in persuading you to do it "his way". And this may be just what the doctor ordered IF the advisor is willing to explain exactly what it is he does, step by step, and why and how he does it, along with the statistical support for his protocols, in other words, his trading plan. Without that, all the claims may be and most likely will be little more than wishful thinking (take, for example, VWAP). Trust, if you feel compelled to do so, but also verify. Wyckoff is hardly the only approach, but there are a near-infinite number of approaches out there that are no better. The grass is not necessarily greener.

 

Db

[Gamera 15]

A bit more movement during the day.

[Gamera 15]

At the MP of the previous days low and overnight high.

[Gamera 15]

Db,

 

Observation appraisal was largely covered elsewhere as for the back-testing, briefly, Whilst my win rate was not particularly high (40%) my average win was around 2.5-3x my average loss, I had issues regarding identifying chop early and would overtrade when price was indecisive. I might not have been positive at the end of a session but by the end of the week and month things were heading up. I was catching most of the bigger moves and managing them in a way that kept me in for the duration and I was doing this consistently by following a plan.

 

Not sure exactly what Jan'16 writing you are referring to.

 

I was going well first half of '16 and felt I had a solid footing, got knocked out of action start of Q3 which took me longer than anticipated to recover from which meant I lost 6 months. Got back into things in January back-testing a months worth of PA which did not quite match earlier results but still positive before switching over to current market.

 

I feel I have regressed a bit in terms of development and while I am trying to blow out the cobwebs I have become overly mechanical (overlooking behaviour) and waiting on metrics. I am going back a step on this as I think it was a step in the wrong direction.

 

Gamera.

 

With regard to yesterday's charts, what are longer-term traders looking at?

 

Added charts regarding the weekly and daily, since the April low price has been charging higher without much pause. Prior to yesterdays open there was the hourly range that I posted and the daily high just above that covered on the hourly part of the chart.

Edited May 5, 2017 by Gamera
answering question

[Gamera 15]

Trading days for previous prep.

 

Longer-term traders aren't looking at a 1m chart. At the most, they are looking at an hourly chart. What is important about 5606 on the hourly chart?

 

5606 is the MP of the last significant rally on the hourly from the 28th April at 5572 to 2nd of May at 5642, the drop off from this rally was halted at this point and it held despite being tested twice on the 3rd of this month.

 

That makes 5606 your TO. Why would you not take it?

 

With price coming sharply back to the level I was a little wary of it (rev) and I hesitated, the ret would trigger (1m) around 11.5-12 which was getting away from me by that point.

 

Price doesn't "come back to" the level; it bounces off 06. That it does so "sharply" tells you what?

 

Sharp decline to 06 would suggest supply running over demand, no sizeable buyers were interested until price dropped to a level that represented value for them.

 

And if buyers are rushing in at 06, which one has reason to expect, why not take the trade? (Please erase all those lines)

 

I was not thinking this way at that moment in time, whilst I looked at a rev entry around 08 I hummed and hawed and that moment was over in a minute, perhaps a little fear and doubt set in when the moment arose.

 

You've made no comments about volume. What is it telling you during this interval? (And note that your two 1m charts for this interval don't match; the one you posted today shows price bouncing off 04; that is incorrect.)

 

Are we talking about the 09:39 low at 06 or the 12:19 low at 06? Price broke 06 at 09:54 reaching 03.75 and retraced back above 06 a minute later, both charts in this post are the same except for the lines and text.

 

The chart you uploaded to post 176 has no date. If the chart you're posting here is not the same, then, yes, 3.75 is correct. Nonetheless, what is volume telling you regarding the trading at 3.75 at 09:54?

 

Sorry, #176 was from trading on the 3rd, as for the volume on the charts here (4th), price broke lower on a volume spike (force) then rallied on a drop of volume (decreasing selling pressure) retraced towards the LL (very shallow ret on even lower volume, buyers holding up to light pressure) then rallied higher on increased volume, expansion of price with expansion of volume.

 

All correct. Now apply this mode of thinking to the 3rd. You say that you weren't "thinking this way". But thinking this way is critical to trading price in this manner. So go back to your chart for the 3rd and re-evaluate the PA while thinking this way (I won't be able to spend much more time on this, so the sooner you can reply, the better).

 

Its a little cluttered, posted to charts.

 

It's easy to get sidetracked by hindsight. If you're not careful, it can set you back weeks, if not months. There is no support here at 06, at least not yet. What goes on here suggests support for the following day, but not this one. Here all you have going for you is "force" and "lack of force", or what I've called "intent", and the general middle of the rally from 4/28.

 

Note first that the midpoint of the PDH/PDL is 5630. This presents a potential TO given that price has been ranging all nite. Price tests this level pre-mkt just after 0900. If you don't want to take this, price drifts down and RETs to 28.75 at 0920. If you don't want to take this either, note that price tests 28.75 at the open. If you don't want to trade the open, there is a RET two minutes later at 24.75, all of which is long before what you see as your first TO at 1009, none of which is meant as a criticism but rather an acknowledgement of the fact that this is what you have to do if you're going to trade this intraday. Over-waiting for confirmations nearly always means that you'll be entering near the end of the "run".

 

Price then bounces off 16.25, the PDL. Whether or not the trader exits on this bounce is up to him, but either way he notices that price reaches no higher than 22.5 before falling back into a test of 16.25. This time the bounce is weak, and if he's still in, there's no reason to exit.

 

Price then provides a selling climax at 1009, and the TO becomes the RET after the test, if there is a RET, if there is a test. But whether these present themselves or not, at least you know what to look for. In this case, the "test" winds up being a VREV that takes price back up to 21.5 where it makes a double top (look at the volume: lack of force, withdrawal of demand) and drops to 06.

 

Note that none of this has anything to do with lines. It has instead to do with buying force and selling force and how far each can take you before running out of steam (volume). If you are unable to view price movement in this way, I strongly suggest that you avoid daytrading. If you're not trading with longer-term traders, you're trading with scalpers and HFTs, and they aren't trading off 1m charts.

 

All of this is in the book, by the way, including Appendix D. I suggest you look again at Appendix D in particular. And get rid of the lines.

 

Thanks for taking the time to go over this, realised that 06 was not tested at this point after I posted it but I was still looking at the MP. I've been reading and re-reading the Wyckoff material but most of the threads I've been going over in terms of intraday trading (ET) have not discussed volume in detail so much. I have been looking at it more and more but those spasmodic spikes can throw me at times.

 

It is unlikely that either Wyckoff or ET will be of much help here, if any, at least with regard to daytrading (except of course for Wyckoff's Daytrader's Bible). You can't trade what you can't see, and the information you need to trade intraday is in a much smaller interval than 1m. Not that you can't continue to try and not that you can't make a few bucks, but the fact is that you're outclassed by those traders who are better prepared and outfitted than you are. Gain competence with this through trading daily charts. Only at that point should you even consider trying to employ this in daytrading.

Edited May 6, 2017 by DbPhoenix