Ahh the Bitter Sweet Taste of Irony...

[wasp 10]

When it comes to the markets, I am a firm believer of 3 things.

 

1: Support and resistance

2: Trends

3: Each moment is unique and should be treated as such

 

The problem is, I cannot practise what I preach.

 

Up until a month ago, I used S/R on the 240m charts and it worked well... It worked well for some time and thus, I really felt confident in my view of the market and fullfilled my 3 rules.

 

On the huge drop, I misdrew the important levels and took a beating and thus, I went to the drawing board as one does, and looked at filtering my reversals with trends. Great it looked. Buying S and selling R as is on its own is not enough and this was the perfect filter. It met all 3 of my rules nicely and stopped me catching falling knives.

 

Over the last 2 weeks, what would have been perfect in my old ways has been ruined with my trend filter.........

 

Arghhhhhhhhhhhhh!

 

So my dilemma continues.....

 

On the one hand, I go back to S/R alone which, looking over the last 4 months, would ave done me proud and utilizing my 3 rules well (although 2 would just be - not drawn in)...

 

On the other, I continue using a filter in order to not catch the knives...

 

Both do act per Rule 3, but the first can be slightly misdrawn and the latter, useless in fast turning markets......

 

Hmmmmm :missy:

 

Am I fulfilling rule 3 properly? Am I really watching and analysing or am I no better than any other system trader? IS my plan too rigid or is it just?

 

Should my chart be blank each AM and I guage each candle with current S/R (or further back if in no mans land) or should I stick with what I have?

 

Should I just go down the pub and come back next week fresh and ready and stick to the normal plan?!!!

 

Decisions..........

 

I think partly what has really pissed me off is that S has become R so perfectly and I expect it to break...... damn experience ruining confidence.

[firewalker 10]

I guess it depends on what you want out of it.

What market circumstances do you prefer? If you know you'll have trouble in huge drops that show very little pressure from the buying side, you can decide to stay out and wait for other conditions. Or you can adjust. I think if you're going to have very rigid rules, you're bound to experience problems in one or another market condition...

[wasp 10]

I don't want to profitable in certain market conditions and not others. EVERY condition offers profit, there is no such thing as noise and a good trader should be succesful in any condition not just one. Reading the markets and knowing how it reacts and making sure you are all good for any condition is vital IMO.

 

As shown though in the thread yesterday... patience is the key and 9/10, S does make it back to R, I just lost faith.....

[firewalker 10]

"...a good trader should be succesful in any condition not just one."

 

Well I guess you can say that, but how many of us are that good that they can trade anything the market throws at them? I know I can't. If I see price making higher lows and lower highs, converging into a point, I stay out. There's no point trying to trade a range that's becoming ever smaller and where the size of your stop does not warrant the potential for profit.

 

I think what differentiates good traders from average traders is that they sense what condition the market is in and they have the patience to sit it out, until a better opportunity comes around the corner.

[zdo 20]

When it comes to the markets, I am a firm believer of 3 things.

 

1: Support and resistance

2: Trends

3: Each moment is unique and should be treated as such

 

The problem is, I cannot practise what I preach

.

 

… not saying to denounce these beliefs, but I am recommending you do some deep questioning of those 3 beliefs and how they fit into your own ‘knowing when to do what’

 

For example, I personally have worked with all three of these and

I no longer ‘believe’ in support and resistance, (even though I incessantly use middle of past congestions as a lazy shortcut for determining order points for entries and exits in position trades.)

I do ‘believe’ in many simultaneous, variable trends, but I do not ‘believe’ in Trend. This complicates the hell out of things.)

I do believe that “each moment is unique” but I do not believe each moment should be treated as such. I 'believe' market moments do not repeat, but they do always rhyme and resonate with patterns past. (Are you accentuating that belief because of past results so you no longer trust your work with the ‘rhymings’?)

 

More bs re this at

http://www.traderslaboratory.com/forums/trading-psychology/10205-i-m-so-mutable-i-have.html

 

all the best.

[Tradewinds 12]

When it comes to the markets, I am a firm believer of 3 things.

 

1: Support and resistance

2: Trends

3: Each moment is unique and should be treated as such

 

I'm a firm believer in these also, but I don't apply trends to price. I apply trends to market internals. The trend of the market internals determines what I think the price will do. The other thing I would add is momentum. Without a way to determine the momentum and the strength of underlying price influences, I feel, that I would be trading "blind".

 

The nice, easy, predictable trends aren't the problem. The problems are:

 

• Reversal Failure
  
• Failure to Trend
  

 

Those two things are what cause the problems. I have defined what my indicators MUST do when I expect a reversal, and I need to see those requirement happen within a minute, two at the most, or I'm out. I need confirmation very, very soon. Otherwise, I assume that the market pressures are just not ready to turn the price around. And that happens quite often.

[Logic 10]

When it comes to the markets, I am a firm believer of 3 things.

 

1: Support and resistance

2: Trends

3: Each moment is unique and should be treated as such

 

The problem is, I cannot practise what I preach.

 

Up until a month ago, I used S/R on the 240m charts and it worked well... It worked well for some time and thus, I really felt confident in my view of the market and fullfilled my 3 rules.

 

IMHO -

 

Your 3 rules are perfect.

 

1. Support and Resistance are a couple of the only perfectly perpetual indicators a well constructed chart gives us. The problem is that you are constructing your chart using time bars that are inherently unreliable and inconsistent. Since I began using Constant Volume BarsTM (where each bar is a specific number of contracts or shares traded) all of the inconsistencies of my charts disappeared. The reason your "240 minute chart" edge disappeared was that whatever "edge" you discovered changed due to liquidity & volatility. Since minute charts can only display bars with shares or contracts displayed based on liquidity, as liquidity rises or falls, this isn't directly or specifically reflected in the bar weight. The edge disappears because the liquidity that was present when your "edge" was created changed over time. This usually occurs moving from high liquidity times from September through May and going into low liquidity times from May through August. (All markets liquidity and volitility varies throughout each year.)

 

Price moves the same regardless of the chart, creating support & resistance at extreme leaves and minor levels. Whatever you use on Gold chart should work on a Soybean chart or a Cotton chart or the Apple stock chart. And it shouldn't ever "stop" working. Since I switched, I proved this to myself.

 

2. Trends are unique & ONLY exist on each chart we trade, specifically. Remember to objectively define them based on your support and resistance levels. Also remember that once you have defined and determined the trend of a particular chart, not to "trade the trend". That sounds odd but let me explain. You trade the support & resistance oscillation tops and bottoms inside your objectively defined trends.

 

Example: You primarily buy support oscillation bottoms in an objectively defined Bull Trend. You primarily sell resistance oscillation tops in an objectively defined Bear Trend.

 

3. Each moment is unique and should be treated that way - Perfectly stated!! Because each moment is unique one must find a way to view this uniqueness in a consistent way. This is what Constant Volume BarsTM do for you.

 

 

Your 3 steps are a great way to view price direction and trend. You just need to smooth out the volume that is displayed on your chart. Next look for a way to view "directional strength" on your chart. I discovered that incrementally slowing down the volume using a second feed on the chart gave me this tool.

 

You are on the right track. Keep up the good work.