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[DbPhoenix 42]

When we gather stats around the trades that we take, we are already characterizing the market to a degree. Complete characterization of the market involves a more exhaustive approach. In fact, it is because the market is dynamic, that ongoing characterization is needed. The idea to start this process from months back was only to establish some sort of base level, so that the current environment can be seen in it's proper context.

 

What hypotheses are you testing?

[game 10]

What hypotheses are you testing?

 

In a MR environment, it is profitable to take high information risk reversals off extremes without waiting for the confirmation of a ret. The extreme has to be reached through parabolic action, thereby increasing odds of at least momentary breathing room, in case the swing turns into a trend.

 

You can take high info risk Reversals off short spikes and very long climactic spikes, it's the steady medium swings that should not be Reversed without extra confirmation.

[DbPhoenix 42]

In a MR environment, it is profitable to take high information risk reversals off extremes without waiting for the confirmation of a ret. The extreme has to be reached through parabolic action, thereby increasing odds of at least momentary breathing room, in case the swing turns into a trend.

 

You can take high info risk Reversals off short spikes and very long climactic spikes, it's the steady medium swings that should not be Reversed without extra confirmation.

 

You have an awful lot of defining ahead of you.

[game 10]

You have an awful lot of defining ahead of you.

 

Taking today's Reversal at 0836 off 3714 for example, could you suggest broad areas to define?

[DbPhoenix 42]

Taking today's Reversal at 0836 off 3714 for example, could you suggest broad areas to define?

 

In order to complete the preliminary work for a testable hypothesis, you'd have to define just about every term you used in your previous post:

 

MR environment

 

profitable

 

high information risk

 

reversals

 

extremes

 

confirmation

 

ret

 

parabolic action

 

momentary breathing room

 

swing

 

trend.

 

short spikes

 

very long

 

climactic spikes

 

steady (1) medium (2) swings

 

extra confirmation

 

Defining "broad areas" isn't going to do much good at crunch time.

[eminiman414 10]

Sitting in a hinge right now. When we break I'll look for an entry unless the break isn't decisive as in seeing a lot of overlap as we open etc. The goal would be to get in and see if the area of 07 holds on the short side and 40 holds on the long side. If it does either of the trades will be exited and I would look for the opposing side. If not I am in before the break of 40 or 07. My thinking behind this is that if we do get a good entry and then either of the two breaks I'd rather be in then trying to chase a trade. I've altered waiting for 40 or 07 because we are in a hinge and if we do break we might not look back. Entries later on (the second or third ret) haven't worked too well for me so looking for the first entry after the break of the hinge seems the way to go and then trade accordingly around the extremes. That is unless this hinge breaks before the open then I will have to re-evaluate the situation but the main areas of interest right now are 36/40 and 16-14/07.

[eminiman414 10]

In thinking if we trickle out of the hinge below 20 or above 30/32 then that would cause me to go back to waiting for 40/07 since trickling out would be the opposite of breaking decisively. I am trying to get better with my planning and be more prepared for other possibilities rather than just one. As I say this we have just broken below 20.

[Wolfhound 10]

Missing for a few days due to computer issues.

 

After hitting the highs of March again a few days ago, we have had a few days wandering around a mean of about 26. We didn't get a breakout into new highs, and we didn't fall quickly either. Obviously a lot of trades are taking place around here, and when the handover ends, it will be interesting to see where the price goes.

 

At the moment we have highs to watch at the various swing highs above and also the mean of our congestion and hinges at around 26. We have lows at 16, 14, 7, and then room for a drop.

[Niko 10]

Had a family commitment in the early morning and couldnt post my prep.

 

Here are the trades:

 

1. After they definitely decided not to go any lower a strong push through all the clutter of the OR put prices a tick above ORH, then came a RET that allowed an entry.

 

2. But this long was short lived and a HL formed just above the OR, I risked the short, but as soon as it failed I decided to SCR and leave the market alone. It looked very much like yesterday and we were still below 35 so..

[DbPhoenix 42]

Had a family commitment in the early morning and couldnt post my prep.

 

Here are the trades:

 

1. After they definitely decided not to go any lower a strong push through all the clutter of the OR put prices a tick above ORH, then came a RET that allowed an entry.

 

2. But this long was short lived and a HL formed just above the OR, I risked the short, but as soon as it failed I decided to SCR and leave the market alone. It looked very much like yesterday and we were still below 35 so..

 

If you're still working through your fears, then you're doing just what you ought to be doing. However, while a defensive game will prevent you from taking heavy losses, it won't get you very far into the profit column unless you luck into an easy trend day.

 

The SLA is fine if you have nothing to guide you. But focusing on lines rather than context when context is available is self-defeating.

 

Here, you had a rejection of 14. This rejection took you all the way through the pre-mkt congestion and a break of the SL to a ret above all of this, and this you took. However, the next "extreme" was not due until 32, then 34, and finally 40. Therefore, if you can shift toward how price behaves when it reaches each of these extremes, e.g., how far it retraces, whether it threatens the last swing low, whether it's a short, sharp ret or a sideways congestion, rather than whether or not price breaks a line, you may then find no reason to exit until price reaches the last extreme, which in this case is 42. Even then you may elect to stay in since price shows no inclination toward failure.

 

I should also point out that it is necessary to habituate determining (1) what could or should have been done to improve the day's trading and (2) what can and should be done to improve one's trading during the next session.

Edited June 4, 2014 by DbPhoenix

[eminiman414 10]

Had an appointment to get to by 12 and I should have canceled it boo. Anyways I've attached proposed SLA trades and I suppose one could have just entered the first long and tried to hold out until 36 was tested since we were playing the range game btw 14 and 36. I did not post any other entries after 11 since I wasn't there so it would be strictly hindsight.

 

In looking at my planning, my price levels are fine but what I do with them isn't. Yesterday and today had very similar behaviors within the first 30 minutes or so. At the open we tried up, came down tested 14, came back up to the opening high, had the RET and then continued up. Today the difference was we kept going up. My issues were entering within the middle of everything which I suppose is because I have been anticipating getting chopped up around the middle. Yesterday and today's first longs were also almost at the same price. 14 being rejected was telling and I suppose I should be entering these trades and then letting the market tell me it's chopping and not assume just because we are in the middle we are going to bounce around. Obviously I can not say for certain whether I would have held on to the first long, but eventually even straight SLAing gets you back into the flow and back in long at 31.75 if the first long was exited before getting to 36. A lot has been learned the last two days so it's not a complete loss and I collected almost 45 points on Monday so maybe that has something to do with being a bit more selective, but my reasons for not entering are because of what might be as opposed to what is and there is no way to really know until it happens.

 

Combining SLA and AMT, well 14 (AMT) was rejected we took off to the upside had our break and RET (SLA). Can't get much better than that. Moving forward I need to enter and if we chop we chop, reverse then so be it, continue on so be it.

 

An SLA long above 40 could have been entered at 42 and would have amounted for about 5 or so points if exited on the DL break. Now we are starting to continue higher back to 49.

 

Holding on to the first long there wasn't anything too serious that could have created a situation to exit before 36 since we were in the range. Price was making HHs and HLs. If one held after the test of 26 the ticker pace slowed and there was no real threat.

 

Lots learned these last two days.

Edited June 4, 2014 by eminiman414

[k p 10]

Holding on to the first long there wasn't anything too serious that could have created a situation to exit before 36 since we were in the range. Price was making HHs and HLs. If one held after the test of 26 the ticker pace slowed and there was no real threat.

 

I found this quote curious emini. I say this because although you point out a bit of trouble at 26, you conclude that there was no reason to exit before 36. The thing though is that your chart shows two possible shorts. So at the time, you were thinking to go short, never mind about just exiting a long, you were thinking to even short! It is true that looking at this chart at the end of the day, getting to 36 wasn't that hard, but in the moment, I'm sure it looked different as evidenced by your chart. Don't worry, I second guess everything myself!

 

Edit: Perhaps those red squares are exits though and not shorts? It sure looks like they are retracements below the crest after a line break though, the classic SLA setup for a short.

[eminiman414 10]

I found this quote curious emini. I say this because although you point out a bit of trouble at 26, you conclude that there was no reason to exit before 36. The thing though is that your chart shows two possible shorts. So at the time, you were thinking to go short, never mind about just exiting a long, you were thinking to even short! It is true that looking at this chart at the end of the day, getting to 36 wasn't that hard, but in the moment, I'm sure it looked different as evidenced by your chart. Don't worry, I second guess everything myself!

 

Edit: Perhaps those red squares are exits though and not shorts? It sure looks like they are retracements below the crest after a line break though, the classic SLA setup for a short.

 

I was just acknowledging what I saw to be SLA trades not necessarily that I thought of taking them because I had not planned on taking any of them. Just did that to sort of follow along and keep myself sharp.

[k p 10]

I was just acknowledging what I saw to be SLA trades not necessarily that I thought of taking them because I had not planned on taking any of them. Just did that to sort of follow along and keep myself sharp.

 

Gotcha.. thanks for the explanation though. So let me ask you this, what makes you not take a classic SLA trade then? How do you enter a long on an SLA trade, your first one, but then not exit or enter the subsequent short if you are using the rules of SLA? I realize of course that you're just marking the stuff in to follow it, but in real time, will you be taking some SLA trades but skipping others?

 

Db has of course been taking about a bit about context today, so I'm just wondering how you are differentiating.

[eminiman414 10]

Gotcha.. thanks for the explanation though. So let me ask you this, what makes you not take a classic SLA trade then? How do you enter a long on an SLA trade, your first one, but then not exit or enter the subsequent short if you are using the rules of SLA? I realize of course that you're just marking the stuff in to follow it, but in real time, will you be taking some SLA trades but skipping others?

 

Db has of course been taking about a bit about context today, so I'm just wondering how you are differentiating.

 

Well the first long I didn't enter, again just marked it off. I was waiting to see 36/40 once we started trading back up and would have saw what happened at those levels. Had I taken the first long live it's hard for me to say what I would have done because I wasn't in. I don't necessarily have a hard rule like exiting on the line break etc. I do look at the "line" but also look at how it breaks (a poke, shooting thru etc) , where it breaks in terms of the context (minor swing, major extreme etc), how far into the trade we've gone before seeing certain types of actions, if there is a longer term line drawn, are we making HHs/HLs, was a swing low or high violated, how was it violated and also the type of day. If we are waving up and down with not a ton of direction and I am SLAing away I would most likely play it tighter with exits on line breaks like we had last week. If looking at monday I let it ride until we got to 07 then took the exit on the fanned SL because we bounced from 07. It may sound like trading on a whim but I know for the most part what I am looking for.

 

Also if I was long and had stayed in today then obviously the shorts would have been skipped. The SLA gets you into waves and if the sell waves aren't panning out or you sit through and hold on through one sell wave that could tell you still who has more control. If you look at the move up after the first long contained by the line, the next move down contained by the line, and continue that you'll notice that only the second sell wave down breached 50% of the previous buy wave taking more time to do so, but also did not trade down toward the previous swing low and nor toward 50% of the fanned DL. Obviously this is now a hindsight analysis but this is what I have been trying to look at while we are in motion during the day to help me stay in. Monday wasn't too difficult to hold on although there were a couple of hmms should I exit. Still a learning process.

 

Hope that helps lol?

Edited June 4, 2014 by eminiman414

[k p 10]

Awesome.. thanks! For sure each moment is different so its hard to say, and especially what you will do in the moment with real money on the line is hard to predict as well. Your Monday was incredible.. keep it up!

[Niko 10]

If you're still working through your fears, then you're doing just what you ought to be doing.

 

I am trying to reach the point of emotionless when placing the trades, so far these RETs have been pretty easy on the emotional side, although I am aware that the trading session is not being efficiently traded.

 

However, while a defensive game will prevent you from taking heavy losses, it won't get you very far into the profit column unless you luck into an easy trend day.

 

Thanks, I am aware of these, after last week I started this week very defensive. I will comment more on this on a later post, as I don't have access to charts at this time.

 

The SLA is fine if you have nothing to guide you. But focusing on lines rather than context when context is available is self-defeating.

 

Yes, I also realized this today when the HL at 14 showed up even before the line was broken. But for now, my interest is to execute flawlessly the low emotion trades so I can upgrade 1 setup at the time.

 

Here, you had a rejection of 14. This rejection took you all the way through the pre-mkt congestion and a break of the SL to a ret above all of this, and this you took. However, the next "extreme" was not due until 32, then 34, and finally 40. Therefore, if you can shift toward how price behaves when it reaches each of these extremes, e.g., how far it retraces, whether it threatens the last swing low, whether it's a short, sharp ret or a sideways congestion, rather than whether or not price breaks a line, you may then find no reason to exit until price reaches the last extreme, which in this case is 42. Even then you may elect to stay in since price shows no inclination toward failure.

 

I am gonna give this a deeper look, as in most of the extremes, selling was strong enough to create LHs. I am still confused on when to rely on AMT and when to rely on SLA, is easy in hindsight but in RT this morning looked very much like yesterday´s morning hence pushing me towards closing the long.

 

 

I should also point out that it is necessary to habituate determining (1) what could or should have been done to improve the day's trading and (2) what can and should be done to improve one's trading during the next session.

 

 

Yes, this past week schedule has not been the best for me, but I will squeeze these activities into my must do for everyday so that I don't miss this important part of the review.

[DbPhoenix 42]

I am gonna give this a deeper look, as in most of the extremes, selling was strong enough to create LHs. I am still confused on when to rely on AMT and when to rely on SLA, is easy in hindsight but in RT this morning looked very much like yesterday´s morning hence pushing me towards closing the long.

 

One can accept intellectually that he should trade the extremes, but this does no good unless he actually does it.

 

Price must fall in order to reach a lower limit. This action can prompt a short bias. But even if one is trading the short side via the SLA, at some point the SL must be broken, as it was this morning. The difference is that the trader who ignores the extremes will keep hammering away at the short side due to the bias he's adopted instead of recognizing that he ought to be focused on the opposite side. In this case, the trader should have gone long when and where you did. But there was no reason to exit thereafter. Price didn't even drop more than two points below the last swing low until 1420.

 

Instead of focusing on lines, I suggest you focus on what you're thinking and feeling at the time these trading ops present themselves. Whether or not price breaks a line is not nearly so important as how that break makes you feel. If one wants to further characterize a particular market, this is one avenue of exploration that might lead to clarity, e.g., how exactly does price behave when it reaches what has been thought an extreme.

[DbPhoenix 42]

I suggest that those who are still dealing with fear, which is nearly everybody, focus on recording their thoughts and feelings when they are faced with what they perceive to be a entry or exit signal rather than lines and pokes and LSLs and boxes and any other graphic.

 

As I've said more than once, the SLA is not therapy. It can keep you from absorbing losses, but it can't put you in the profit column unless you just happen upon a trend day, and even then, if you focus on lines rather than the demand/supply balance, the latter of which is after all the whole point of the SLA, you will most likely be tossed out before the trend ever really gets started.

 

You guys have to take these fears seriously and deal with them in a serious manner. If you don't, whatever approach you take, even if purely mechanical, won't matter.

Edited June 5, 2014 by DbPhoenix

[k p 10]

By that time, you're in a range, so it's not a short that I would take.

 

My apologies.. I didn't see this reply earlier since I don't get an email when you edit a post, just when a new post is added. I knew there had to be a reason for why it didn't look so good, so thank-you for the answer.

[Niko 10]

One can accept intellectually that he should trade the extremes, but this does no good unless he actually does it.

 

Yes, I know I am not trading the extremes just yet. I wanted to be able to trade SLA with real money without too much of an emotional response. I think I am getting there and I will feel far more comfortable adding new elements as I move forward.

 

Price must fall in order to reach a lower limit. This action can prompt a short bias. But even if one is trading the short side via the SLA, at some point the SL must be broken, as it was this morning. The difference is that the trader who ignores the extremes will keep hammering away at the short side due to the bias he's adopted instead of recognizing that he ought to be focused on the opposite side. In this case, the trader should have gone long when and where you did. But there was no reason to exit thereafter. Price didn't even drop more than two points below the last swing low until 1420.

 

I have tried the two approaches: 1) The stay in the trade and 2) Pure SLA, results will of course vary depending in what kind of day I end up finding. But I think is my current disregard of the extremes what is keeping me away from being profitable, and what ultimately makes the difference, as it did yesterday.

 

Instead of focusing on lines, I suggest you focus on what you're thinking and feeling at the time these trading ops present themselves. Whether or not price breaks a line is not nearly so important as how that break makes you feel. If one wants to further characterize a particular market, this is one avenue of exploration that might lead to clarity, e.g., how exactly does price behave when it reaches what has been thought an extreme.

 

Ok I will focus on my feelings as I see the opps unfold. And I will work on characterization.

[eminiman414 10]

57 and 40 are the current limits.

[Wolfhound 10]

For most of the morning we stayed within yesterday's highs and lows. I only took one trade which stopped out. Not a busy day.

 

 

1. At the open we moved downwards to the yesterday's low of 14 where we turned back up. There is a retracement for a long here if desired. I didn't take it.

 

2. We tried to down out of the hinge and failed, so the next thing was an attempt to break above the long term hourly hinge. This didn't get far before it broke the demand line and a retracement, I put in a short which I exited when it went nowhere for a number of minutes.

 

I didn't take any more trades for the rest of the day.

[Niko 10]

So after yesterday´s trend day traders finally stopped at 50 and then tested selling interest around 40 four times before realizing nobody wanted to sell and therefore taking prices higher, the 8:30 report seemed to have helped allowing some interest around 58, but there it stalled.

 

At the moment, traders are around the 50% from 40 to 58 and so far the SH at 45 seemed to have provided buying changing the stride of the immediate trend.

 

So, at this moment barriers to overcome are 40 and 58, we are currently in an uptrend so watch out for the DL.

 

If we go above 58 there is nothing significant from the past to stop us and we will have to rely on PA alone. If the uptrend ends, then 40 could be important, then 35, 25 and 15.

[Wolfhound 10]

Yesterday we tested below the hinge, failed, and then broke out above it. We moved above the March highs during the afternoon, and then fell back before the close.

 

We were in a really tight range for most of the night, and then moved up to a high just below 58 before the open. We have fallen back in the last hour. A breakout above 58 puts us into clear territory, while below 40 we move back into the congested area, and have to watch for previous levels.