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DbPhoenix
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Everything posted by DbPhoenix
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This is largely or entirely due to the fact that your objectives are incompatible. You're trying to trade the SLA under different conditions while also trying to juggle multiple contracts. Before going live, regardless of the number of contracts, you must be able to trade the SLA emotionlessly, without hesitation. If you can't do that, then trading multiple contracts will only set you back. You are no doubt aware of one member who appeared to be ready to go live but fell apart due to overthinking and overtinkering, like Victor Frankenstein. This is not uncommon, but each must make his own mistakes and find his own way.
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You have three objectives here, and they are not necessarily compatible. To begin with, are the market conditions now the same as they were when you were simtrading?
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People in the mathematical-mechanical group rarely if ever post trades in advance, and they never post trading plans. Therefore, though the gullible often buy into all this in that gee-whillikers way that they have, and none of their claims can be investigated independently, they can be pretty much dismissed. When deciding how many contracts to trade and whether to scale in or out, the market environment must be considered, and the environment over the last month -- ever since we got into this mean thing -- has been challenging. In such circumstances, it is wise either to reduce the number of contracts traded or scale in or both and strictly adhere to the rules rather than trade bunnies. If one reviews these days, he'll find that they are characterized by rapid moves up or down at the opening bell which settle into ever-tighter swings that form coils. But that is often as far as they go. The exits from the coils, if any, don't go anywhere, at least until the next session. So the trader arrives, all prepped-up, with no place to go. He tries to make the best of a poor situation by trying to make the most of what's available rather than sitting it out, and he finds, looking back over his trades of the past hour or so, that he's been trading inside a hinge. This environment will not last. Nor will the trader who does not recognize it for what it is and adapt. It is up to him to be available to whatever the market is willing to give while avoiding the impulse to force the market into giving something it doesn't want to give. I strongly suggest that those who are not already doing so review the "patience" rules both during prep and during review. Embracing these will go a long way toward solving these problems.
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This morning's SLA trades:
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IOW, judge the market by its own action. The prep is necessary, but the market doesn't care about your prep. When the opening bell rings, only one of you can be right. Given a pre-mkt range of 10-16, price appeared to reject the mean at the open and plunged through the lower limit to 7. It then rallied to the mean and rejected it again, dropping ten points. It did not cluster around the mean. Price then rallied directly to the top of this range and a short there would have been appropriate. But price moved too fast for the short to be filled and dropped all the way to the bottom of the range (which is after all only six points). It then bounced off that and headed straight for 20, passing right through the mean. This suggests that whatever use the mean may have had pre-mkt has expired. From at least that point forward, if not before, the SLA provides better ops than AMT.
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SLA trades so far today:
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If there are any questions about today's chart, they can be posted here.
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You may also want to look at the midpoint between the mean of the 5yr channel, which is currently at 3400, and the high, 3740, i.e., 3400 + 170 = 3570. In what way has 3570 been important over the past week?
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FWIW, the chart on the left above is the end product. The following are "work product" that helped get me to that point:
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Means were again the dominant influence today:
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This business of settling into the mean of the day's range by the end of the NY session has become a pattern. AMT at work. Reminds me of '99. So, again, we wait for the market to tell us what to do via its response to these tight trading ranges/consolidations. I've also provided an updated March TC. There are of course tradeable trends within these daily ranges, but, given the back-and-forth, AMT becomes much more important than the SLA (see yesterday's chart). Good practice for trading Dogs. Images 2 and 3 are a before-and-after. Post-session: This was primarily a day of means, though the SLA and AMT kept handing the ball off to each other all morning long, so being comfortable with only one or the other would have presented problems. The fourth chart is an extension of chart 3.
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Yes, it is. ..............
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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.
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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 . . .
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There's very little difference between this morning's chart and yesterday's, though the market is providing a good example of the difference between the median and the mean. Usually these two align, more or less, but the median of the trend channel, at about 30, is below the level where traders have decided to set up camp, 20pts higher at about 50. Therefore, the "middle" of the trend channel will not necessarily provide fireworks if and when price declines to that point. What will be more important this morning is how traders behave around 50. The upper limit as of this morning is around 90, so one would be well-advised to let traders work all this out and wait for a test of 90 or thereabouts rather than get entangled in the trading activity around the "mean" at 50.
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There's very little difference between this morning's chart and yesterday's, though the market is providing a good example of the difference between the median and the mean. Usually these two align, more or less, but the median of the trend channel, at about 30, is below the level where traders have decided to set up camp, 20pts higher at about 50. Therefore, the "middle" of the trend channel will not necessarily provide fireworks if and when price declines to that point. What will be more important this morning is how traders behave around 50. The upper limit as of this morning is around 90, so one would be well-advised to let traders work all this out and wait for a test of 90 or thereabouts rather than get entangled in the trading activity around the "mean" at 50. For those who prefer to cut to the chase, the charts I've posted to this thread along with subsequent charts may be found here, without discussion.
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For today. Given that we bounced off the LL and have passed through the mean, the next stop is most likely the UL. 0910: Traders are unable to find trades above the same level as yesterday. 1100: Only two trades by 1100, both scratches. Not unexpected given where we are.
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For today. Given that we bounced off the LL and have passed through the mean, the next stop is most likely the UL. 0910: Traders are unable to find trades above the same level as yesterday. 1100: Only two trades by 1100, both scratches. Not unexpected given where we are.
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This appears to be pertinent and may be helpful: I am sick of hearing people say that 90% of traders lose because the market chews them up or the system doesn't work or whatever. That is just BS. The problem is those traders spend all their time playing with indicator values or analyzing timeframes or whatever and they miss the whole point of what they are doing here. This is a MARKET. All markets have buyers and sellers. I don't know why everyone can be experts on value when they look at items in a store or a piece of real estate or whatever but not in the market. If you wanted to sell your house for 500k and you had nobody even look at it in a booming market what would that tell you? The price was too high. Would you then raise the price of the house the next day? Of course not, you drop your offer if you wanted to sell it. You see what I mean? Markets make sense when we are talking about real estate or whatever, but people just blindly look at indicators and follow systems even in the face of obvious current price information. Example: in the last 5 minutes price has had a high failure at 1350 three times and is currently trading at 1348. Do you take a long setup here because a momentum indicator is above zero and the 9 day moving average just crossed over and above the 20 day? Why not, don't we always have to stick to our trading plan blah, blah, blah? That is a great example of how traders follow systems to the letter and then scratch their heads because they can't figure out why they are losing. Into the 90% pile they go. This isn't a ridiculous example either. This scenario repeats itself about once every 10 minutes on most days in any market. Anon
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The first three charts cover the period up to 1100. The fourth and fifth cover the period after 1100.
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The first three charts cover the period up to 1100. The fourth and fifth cover the period after 1100.
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Ultimately, the effort to win is sustained by a desire to know. Excellent traders are always keeping score: they want to know what they’ve done right or wrong, and what’s making and losing them money. They are always working on themselves and their trading. I’ve met far too many “breakeven” traders who, upon inspection, have been losing money consistently. It’s not that they’re lying; they simply don’t want to know the truth. Thus, they avoid it. It is simply too painful to look at the money and opportunities lost. BS
