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10:20 This is a powerful gravity mean. :haha:

 

That sideways movement at 1010 is telling.

 

I guess is better to go back after 1:50 :)

Edited by Niko

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Against your best advise :doh: , (I am so ashamed :crap: ). I actually took a couple of shots. 2 BE and one loss.

 

1st one was a RET in the trend that formed, but after hitting the other extreme of the mean reverting area (that is how I decided to call it, but if it has another name please let me know)

 

2nd one was a REV off the mean at 50, my thinking was, they don't want it above the mean, then why not short. It ended up being a SCR.

 

3rd Given what happened at 2, I just marked the entry point and decided to watch until they proved they wanted to go out of the range.

 

4th Some buyers showed up above the OR so I decided I wanted to join also, but, they rapidly gave up and so did I.

 

If one is trading mean reversion, there was only one trade, if one doesn't mind trading toward the mean. Given that price had stretched 10pts away from the mean to the upside, one could expect it to do the same thing to the downside. One could then go long at the higher low. This would be exited around 62.

5aa7121dba3a3_NQ06-14(1Min)30_04_2014.jpg.18e66278e628cd92ea1c0d51845d4ed3.jpg

Edited by DbPhoenix

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Something to remember:

 

"RULE #3: If you've been folding a lot, for a long time in the game, and you're starting to think that maybe it's time you got in and played a few hands again – that's not a good enough reason. Keep folding."

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If one is trading mean reversion, there was only one trade, if one doesn't mind trading toward the mean. Given that price had stretched 10pts away from the mean to the upside, one could expect it to do the same thing to the downside. One could then go long at the higher low. This would be exited around 62.

 

Thank you, will take it into account for the future.

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The Importance of the Small Win:

 

I was a psychology major in college - I've always been interested in psychology and both poker and trading have given me some direction in my continued education. I've said elsewhere that I believe creating a very specific morning routine before the trading day is important. This is all about the small win.

 

The night before a game Michael Jordan would watch a tape that was prepared for him. It was clips of his opponent and their go to moves. A statistician had analyzed his opponent's tendencies and put together 10 or 20 short clips of that player making their go to move from that spot on the floor. Basically MJ did his homework.

 

On game day Michael would eat a specific breakfast. He would chose a particular car, play a particular playlist and drive a particular route to the stadium. Upon arrival he would go through his routine to prepare himself. He would change into his uniform, always wearing his UNC shorts under his Bulls uniform, always putting on his wristband up to his elbow. A few minutes on a warmup bike, followed by a specific stretching routine, followed by a shooting routine where he shot a specific number of shots for each area of the floor, working from the layups out to the 3-point line. Then he put his warmups back on and put on headphones to listen to a specific playlist. This whole routine would take around 2 hours.

 

When we think of athletes doing this kind of stuff we often call the "superstitious". What MJ and almost all successful professional athletes are actually illustrating is the power or the "small win". MJ's pattern was a habit. He had done each of these things so many times that there wasn't any need to think about them. Each step in the habit was a small win. Each small win leads to the next and on it's own seems insignificant. What each small win does is reinforce the idea of winning. MJ puts himself in the right mindset and each small win builds to the goal of playing his best that day.

 

Some researchers were interested in figuring out why some dieters repeatedly failed to lose weight. They found a bunch of failed dieters and asked them to keep a food journal - to write down when and what each of them ate each day. There was no request to diet in the study at all - it was just meant to give the researchers some data. Something far more interesting occurred. Some of the failed dieters made using the food journal into a habit. Others were only recording what they ate from time to time. After six months of journal entries they found that the dieters who had made the journal into a habit had lost a significant amount of weight whereas the other group had remained the same.

 

What caused this? First the journal acted as a tool for recognizing a pattern. The participants who used the journal regularly noticed (for example) that around 10 each day at work they would eat a doughnut. Just by making this observation they could adjust their behavior by switching out the doughnut for a healthier alternative. Once one small change was seen and recorded it gave these failed dieters a sense of accomplishment and a positive feedback loop was formed. They saw a pattern, they made a plan to change their behavior, the followed their plan and booked a small win and they recorded the results. This made them feel good about themselves for a change and many more small wins naturally followed.

 

If you can come up with a method to track your small wins and a morning routine to create a winning frame of mind you greatly improve you chance for success. The end of this document is especially important for this: http://cdn3.traderslaboratory.com/forums/attachments/131/38017d1398254234-developing-plan-trading-journal-developing-planwst.pdf

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Hi Guys, its Dave from Ireland. I'm here for the 2nd open as well.

My TL login has a different name to the ET one.

Have this a long time, and can't change the user name.

 

Hey Dave, whoa!! Wolfhound is much cooler :). Great to have you here.

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Hey Dave, whoa!! Wolfhound is much cooler :). Great to have you here.

 

Thanks Niko. We didn't get far with the 2nd open either. Another movement around a mean. Eventually someone will decide to make a breakout. We'll be ready for them at the extremes.

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No trades today (see above), but it does appear that traders, despite the appearance of treading water, are inching slowly but inexorably toward the upper limit of the trend channel, probably in anticipation of Friday's job numbers. If this is true, then tomorrow will likely shape up to be an extraordinarily boring day. If not . . .

Image2.png.79c994d012a6b3526a977c04923675c2.png

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wolfhounds are an amazing breed... have you owned one?

 

No, I never had one. I would need to start making a lot of points just to buy the dog food to feed one of those. I think if you don't feed them constantly, they just eat you instead,

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If one is trading mean reversion, there was only one trade, if one doesn't mind trading toward the mean. Given that price had stretched 10pts away from the mean to the upside, one could expect it to do the same thing to the downside. One could then go long at the higher low. This would be exited around 62.

 

Hi DBP,

a couple of questions that popped into my head about this quote.

 

Assuming one is happy to trade both towards the short term mean (like the rubber band approach), and also with continuations away from the short term mean (probably back toward the longer term mean when trading at the extremes - more a bouncing ball - for an analogy)

 

In your experience for the short term mean - trading toward or away from it - is one easier than the other, or occurs more than the other?....of course the short term will occur more often that the long term, but would you say that the majority of good intra-day moves are away from the intra-day/o'night mean?

 

I know often these are mutliple layered questions and I hope it makes sense but I thought it might be interesting to see if there was a particular area that you thought easier, more profitable or more reliable? Lets assume you were only given a choice between only trading toward or away from the short term mean.

 

(*I have my suspicions on what I think but I would like to hear from your experience)

thanks.

 

The best trades are at the extremes since those represent maximum fear and confusion among those who don't know that that's where they're trading. Trading around the means is always choppy. Which is why, after reversing off the lower limit of the March TC, I'd rather wait until we get to the other side.But one can trade the SLA without considering AMT. I choose to trade both whenever possible.

 

As to multiple means, I consider only two: the mean of the 2009 channel and the mean of the March channel (there is currently a confluence between the two). The little trading ranges and ultra-short-term trend channels provide clues to ultra-short-term sentiment, but they aren't anything I'd trade, particularly since hardly anyone sees them. But then I'm content not to trade until the best opportunities arise.

 

There are occasions when price launches itself off the mean after having had a lay-by for an extended period of time, but these tend to be less reliable than bounces off the mean from either extreme. One sometimes sees opportunities whereby he can enter before price reaches the mean, then hold until he determines whether or not price will pass through to the other side, as with yesterday. More often, however, again, trading around the mean tends to be choppy. I'd rather not bother. Keep in mind that this is not a mechanical approach, and I trade far less than anyone else who is attempting to implement it.

 

Thanks - I agree prime trades are probably at the extremes.....and given what you said about trading rarely, only using the 2 means and also not often using the micro channels/ means etc, I guess then its hard to tell.

 

Thinking out loud.....if you wanted to more actively trade this.

I would imagine it might be worth investigating if filters are worth it.

 

It's not a matter of "actively trading" but of locating the best opportunities and trading size. Otherwise, one is just overtrading with no particular purpose.

 

eg; if longer term mean is trending down, and you are at the upper trend channel, then only take SLA shorts, if longer term mean is up, only take longs at the lower channel.

If at the mean - take both but realise you are at the mean and maybe be extra vigilant at exiting.

 

This might be overkill, but hence my question - do you see better moves away from the over night means, as opposed to reverting back toward them when at the extremes?

 

This is part of characterizing one's market. But as for overnight means and moves and so forth, I'm first interested in where traders have been unable to find trades, up and down. Whether or not they will continue to have these difficulties after the NY open gives me a clue as to the direction for the day. If both sides open up, as has often been the case recently, this presents additional challenges and difficulties. Being alert and decisive and quick matter more than being thoughtful and philosophical and what iffy.

 

Also - I hope these questions are not too repetative and part of the 1000s of posts. I hope instead they may be more of a QandA above and beyond simply 'how do you draw a line?".

 

Let me know it they are repeats.

thanks

 

(I like this editing format - good one TL)

Edited by DbPhoenix

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No need to post another chart since nothing has changed other than price got within a few points of the upper limit of the March trend channel overnight. This is too soon given that the jobs reports aren't out until tomorrow morning. However, the SLA/AMT is about trading extremes, not news. Therefore, it's business as usual.

 

For those trading pre-market, the DL was broken several hours ago and a retracement occurred shortly after 0700. Whether the SL holds or not remains to be seen.

 

0900: SL was tested at 0830 and held, providing another opportunity to short.

 

Post 1100: Tons of double bottoms, double tops, Dogs. Difficult to stay on track and pay close attention to the Dogs. Without the Dogs, this would have been quite a bit worse.

 

12pts of the "win", of course, was one trade.

Image1.png.084986d84fd81299f9aa94db2176d6d4.png

Edited by DbPhoenix

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.... I trade far less than anyone else who is attempting to implement it.

 

Thank you, I am trying to trade less and less as well. :)

Edited by Niko

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9:24 Seems like we formed a TR between 78-80.

 

BTW, is there a way to move my journal to the W forum, is not like it has an audience where it is.:haha:

 

I don't have moderator privileges outside this forum. However, if you want to open up a journal here, I can move your "trading posts" from here to there. I'd like to keep this thread as brief as possible. I'm sort of done with thousand-post threads.

 

Thank you. I have already opened my journal. Will only post daily analysis here then.

 

It would be best if you were to post that in your journal. Otherwise we end up with another thousand-post thread that nobody reads.

Edited by DbPhoenix

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This is the journal where I will post my prep-work and my after market analysis. Is called SLAAMT because it is based in that and it is called ZEN because what I believe I lack the most is patience.

 

Given that chat is gone, and that I enjoy writing what I am thinking during the day, I will write here whatever I think is important when I am in the market.

Edited by Niko

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9:59 Seems like the same drill from the last two days. the mean is at 79, they tried down and couldn't find any counterparts below PML and then tried up and couldn't find any buyers above PMH.. Now they seem to be struggling around 83, but this just seems like chop to me.

 

10:03 LLs and LHs, this is a trend, not that it is tradable, but it is a trend nonetheless.

 

10:09 Still no buyers above 88, and the SL was pierced. Two choices here, If the manage to rally to 87 take a long ignoring 88 or wait for 88 to be take out. Lets see.

 

10:12 88 held

 

10:15 Looks like sellers finally realized they were not gonna get better bids and just decided to dump their contracts, lets see if there is still any relevant demand at the mean

 

10:16 No demand and looks like the last ones in the boat are dumping their contracts. Now, will this have enough strength to beat the gravity of 79?

Edited by Niko

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Given that chat is gone, and that I enjoy writing what I am thinking during the day, I will write here whatever I think is important when I am in the market.

 

Hooti, Bon and myself are keeping it alive today!!!

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Hooti, Bon and myself are keeping it alive today!!!

 

Ok, didn't know that. I realized that as most chat members just stopped posting. Sorry.

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10:28 Still in the same mess. And within the boundaries of the opening range

10:36 Attempt to BO we either go above 90 or we fall back inside the TR.

Edited by Niko

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