DbPhoenix

Today was an excellent example of the "challenges" facing those who want to trade AMT intraday. While yesterday was as easy as falling off a log, today one was more likely to be rolled over. The day illustrated the principles of AMT just fine. The problem was trading it. Trading the SLA is about as straightforward as it gets. One knows where to enter, where to exit, when to stop. The AMT, however, requires a sensitivity to price movement -- i.e., trader behavioir -- that is much greater than that required by the SLA. One can overcome this, however, by being stringent about the rules he follows to engage the market. For example, if one is going to trade only the extremes, which is a sound approach, what is his entry trigger going to be? What are going to be his criteria for determining whether or not the trade is successful? Where is he going to exit if those criteria aren't met? What are his expectations for the trade? Does he expect price to reach the opposite extreme? What is he going to look for to tell him that it might not? What if he's wrong? What are his criteria for re-entry? Today the initial long was rather straightforward, though taking it took a bit more confidence than the trader who is new to this might have. And given the speed of the market, getting filled might have been an issue. Even so, let's say that trader got in and wanted to ride the trade all the way to the opposite extreme. But the opposite extreme was at 60 and price turned at 59. Was this enough? What could have told you to exit the long and look for a short? Was there a fail? Was there a lower high? Where, again, would your entry trigger have to be? How much room would you have to give it? Could you tolerate the room required? Then there was the drop to the halfway level. Yesterday, price slid right through, no problem. Today it reversed. What to do? You can't go long unless you exit the short. What criteria are you going to use to exit the short? What then are the criteria you're going to use to go long instead? And what about the exit criteria? Can you be satisfied with setting a stop at breakeven, then sitting around for two or three hours waiting for your trade to go in the desired direction only to have it reverse on you unexpectedly and stop you out at breakeven? Above all, remember that the market does whatever it has to do to teach you those lessons which will lose you the most money (the market, of course, is not sentient; the games that are played and the "lessons" that are learned are games that the trader plays with himself, and the lessons are those that he convinces himself are being taught by something outside himself). No one can tell you what you should want. You may find that the easiest trades are the first one or two and that, over the long haul, it's best if you just quit (in all honesty, I would not have been here yesterday afternoon if it had not been for you guys). Or you may find that trading ranges at all is just not your cup of tea, and that you trade better by waiting for trend days (they don't take long to show themselves, after all). But whatever you decide, remember that there is a structure to this upon which you can rely. It may not accommodate your every whim, but neither is it random. Traders are looking for trades just like you are. That what you're looking for does not at the moment jibe with what they're looking for is to be expected. You do, however, have to decide just what it is you want and what you're willing to settle for. When someone starts talking about "feelings", freeze your intake valve. This isn't about feelings. It's about ranges, the medians of those ranges, and the limits of those ranges. The principles may not play out according to the book on any given day, particularly if other traders are just as confused as you are. On days like today, learn what you can from it, apply what you learn to what you already know, and to hell with the rest. If you need to tweak something here or adjust something there, try it. But don't junk your whole tactical set into the dumpster and start all over again for the sake of a day that may not reoccur for weeks. Or months. Or ever. Rather shrug your shoulders and start fresh tomorrow. And review Gamera's notes

I know it must seem redundant to post these charts as they will likely all look the same, but it's a habit to acquire, like putting on one's socks before one puts on his shoes before going to work, like reviewing the weekly, daily, and hourly. Once it becomes automatic, one no longer has to think about it. 0925: I'll point out only what 40D posted in his journal, that 45 has been important ever since it printed as last Friday's high. But unless something unusual happens, I won't be entering any trades unless and until we reach one or the other of the extremes here. 30pts is a nice range, but it's still a range; we're not trending. The fact that price is hugging the upper limit of the weekly trend channel helps to account for our presence here as well as the slope of the daily highs. 0932: Given what we've settled into over the last couple of hours, 38-48 may provide some opportunities. Some of you have noted this as well. 0935: 41 people. Goodness. Maybe a good time to remind people to vote: http://www.elitetrader.com/et/index.php?threads/poll-do-you-believe-dbphoenixs-writings-can-make-you-a-profitable-trader.289851/ Down with trolls! 0944: Since the median of the pre-open range was 43 and we dropped 9pts, one can expect us to rise 9pts. That doesn't mean that price will reverse there, but it's worth keeping in mind. Oh well. I can't type this stuff fast enough. 0949: If price reaches 38, you can either exit or hold for an OS condition. Can't advise you on that. 0953: Trade the extremes or wait for price to leave the range. 1006: Most likely downside target is 30, but this isn't that mechanical. 1016: If you took the reversal off the upper limit, you're not required to have faith. If you're not happy with the mess down here and happy with what you've made, just take it. That's not fear; it's being realistic. 1020: This by the way is not something that has to be intuitive. How far above the last swing high does your trade have to go before you know that it's time to cover your short? Easy to test. 1024: Choking at midpoint of day's range 1100: I'm assuming everyone sees this hinge. 1116: Before memory fades, it's worth looking at the low. Even though we didn't reach 30, was there enough here to persuade you to go long? The series of higher lows perhaps? And where could you have entered and been safe? Can you find other instances of this dynamic? And if you were short at the time, that also has to be addressed. 1140: Not quite so easy when pace and activity are so slow. 1150: And another hinge. 1220: I hope that everyone who is left is paying close attention to how price is behaving here. 1426: Notice that price is bouncing off the MP of the broader range that topped at 61. 1432: Now bouncing off the previous MP. If it rallies from here, we may have a new range. If not . . . 1506: And price has trouble at the halfway point between 61 and 41.

So George. Are you just window-shopping? Did you ever abandon indicators? Oops, I scared him away.

With regard to my comments to Gamera four up, the "channel" that enabled me to earn so many points today will very likely have evaporated by tomorrow, so don't get too excited. Since we dropped so far below the lower limit, traders may look for value someplace else. Or they may head back to 45. Perhaps the ON will give us a clue. But we may be in the position of just having to follow their trail, which is not nearly as easy as simply buying or selling one extreme or the other. 30 was hit on Monday and tested and rejected yesterday, so maybe 30 is something to look at. Again, it depends largely on what happens ON. If price shows no interest in moving back above 42, then we may be in new territory. I find the unanswered questions interesting. Lots of people don't. But that's what makes trading fun for me, or at least engaging. I am hypothesizing that the fact we fell so hard suggests downside from here, but we may just go sideways. I'd be surprised to see us make new highs. But you never know. Judge the market by its own action. In the meantime, look both diagonally and laterally. Price can't hide for very long.

H&S for the pattern people. In the works, that is. If you don't have time to do anything about these rejections, don't feel bad. Just let it go and wait for the next op. Eventually they'll have to move. Until then, don't look for trades that aren't there. Pace and activity slowing. Note the ONH I'm fast approaching my boredom threshold. Given that this ret is pretty much invalidated, I'm going to wait for 55. 50 is becoming the new 46. If 50 is in fact the new 46, that gives us an upside target of 58-59. And here we are at 59. I see only Gamera, Schaefer, and lajax are left, which is a shame. But the downside target here is 42. (Not a shame that they're here, but that everyone else is gone.) And we're now oversold at 38. Not a bad afternoon. Next is 35, then 32. A little retrace. I'll exit at 42 if we get there since we're oversold and that was my original target anyway. And here we are at 35. If we reach and get past 32, next is 30. So 42 hasn't been tripped yet. BTW, I'm not using any lines. And 32. I'll take 30 if we get there. After that is 27, and it's just not worth it. Out at 36 for +22. Not bad. Worth the wait anyway. Wrapping it up for today. I'm hungry. Hope those who stuck around got something out of this.

While we have a minute, note how price dropped 5pts below the mean of that little range to 38, then 5pts up to 48. So in effect you have a working range of 38 to 48 If you want to go long, decide now and decide where The other averages are making this more difficult than it needs to be

A triple top and a triple bottom. There's really nothing to do until traders decide where they want to go. We had 30 people. Where did everybody go?

There are a couple of ET posts that I want to copy here, partly for insurance and partly because they address topics which may be troubling to some here. First: The question was asked of 40D, "Did you see other range previous to the open? or you just take the trade at the mean of the Range (hr)? if so which was your motivation in order to take this trade, although it was located at the middle? what did you see?" I butted in with If I may, the error comes in looking at this entry as being "close to the middle of the range". However, the range that it is in the middle of is a larger, more "cosmic" range from the previous day, and that's not particularly relevant for a trading opportunity that presents itself at the beginning of the session. If all of this were taking place at a lower level, one could find a range within a range within a range, like a minnow inside a bass inside a shark inside a whale. In order to situate oneself, he must first understand what a range represents and what it's supposed to do. The task is to find "the" range, not "a" range, i.e., the range that is most likely to influence the open, and that of course will be the range that exists before the open. Whatever range may have existed prior to that range may become important soon after the open or perhaps not until later in the day, but it's not particularly relevant at 0930. 40D may disagree with me on this, but here I see two separate ranges. One is from three nights ago. This provides its own opportunities day before yesterday. But two nights ago, before yesterday's open, that entire range shifts upward, and that becomes the pertinent range for yesterday's open. Whatever synergies the previous range and the subsequent range may seem to present may be pure coincidence, but they are what they are. Traders found value at a particular level three nights ago and value at a somewhat higher level two nights ago. The market is just barely trending, so it is not unexpected that these two ranges would relate to each other to at least some degree. In any case, the value that traders found prior to yesterday's open is not likely to be the same value as that which they found the night before, and for the daytrader, it is the former value that takes precedence. The key decision here is not whether or not the range is drawn "correctly" but whether or not it presents the trader with a framework for making a trading decision. If the range is too wide, then the trader will likely spend most of the session sitting on his hands. But if he knows where traders have found value just prior to the open, a departure from that level at or soon after the open will provide a "tell" as to where traders are most likely to go. This is why I'm not so concerned with a box that's filled with price as I am with those levels up and down beyond which traders are not willing to go (the PDH and PDL provide their own "support" and "resistance" potentials). There is also this post [provided below] which more specifically addresses the "40" issue. Side note: you'll notice that 46 played an important role during the ON two nights ago and again yesterday during the NY regular session. But it also was important during last night's session and still is now. Something to watch. And the "this post" referred to just above. I'm going to post this because it's been a subject of discussion lately. I'm going to post it here because this thread is about "dbphoenix's teachings" and whether or not they're useful. Whether this post proves anything one way or the other remains to be seen, but at least it's pertinent. First, the context, from this morning. Note that the overnight range was generally 44-48 (it doesn't matter whether this is to the tick or not; it is after all a 30m bar). Just before the open, the entire range shifts, like Alaska during the earthquake, and creates a new range from 40 to 44, the lower limit of the previous range. At around 0845, price tests that old lower limit of 44 and drifts downward. At a quarter after nine, it tests the 40 level, which it had done earlier at 0745. Now we switch to the 1m. Note the 0915 test of 40 noted by the first arrow. Price then drops through 40. This is a breakout (or breakdown if you like). How one trades this or if one trades it at all is up to the trader. But whether he sold the breakdown or not, it only goes as far as 32. Not bad, but not great. Maybe he exits when price takes longer than he likes for a continuation. Maybe he notices that this level matches the previous day's afternoon low. Or maybe he sees that "spike" up through 38 and gets out then, maybe at BE or maybe with a small profit. Or loss. Then he sees price re-enter -- or try to re-enter -- 40. Maybe he tries to go long there with a tight entry trigger. Maybe he gets stopped out for a small loss. If he does, then he is not only thinking about that first trade and how much he gained or lost, but now he's also thinking about this second trade and how lucky he is that it didn't get triggered or that it did get triggered and provided him with that loss. What he isn't thinking about is the market, and the price movement, and when and how and when it's moving. And why. He is, therefore, setting himself up to miss a trade that will soon reach 54. Unless the trader can stop thinking about himself and his trades and whether he's won or lost and how much, he will not be prepared to take advantage of the opportunities that the market gives him. He will instead miss first one, then the next, then the next, all the while deepening and enriching his self-pity. This must be eliminated. The Phillips book I mentioned earlier can help. So can a trusted trading plan. But the trader must never forget that the market couldn't care less where he entered or what his stop is, if any, or what he wants or how he feels. The market doesn't even know he exists except for his infinitesimally small and trivial trade. Rather it is up to the trader to shift his attention outside himself to the market and focus on what and how much the market is willing to give him at that moment and in the moments to come.

That attempt to rise a few minutes ago is a good example of what I mean by "intent". Just how badly do traders want to rise and how far away from this does your entry trigger have to be in order to satisfy you that you're looking at genuine intent and not just a tick burp? And another thing One of the chief advantages of observing price is to gain an understanding of what it does, where it does it, and why it does it there and not someplace else. However, once one begins backtesting and putting together a trading plan, the difficulties involved in entering a trade that might be perfect according to what one learned during observation present themselves if one already happens to be on the other side of the trade he wants to take. One then has to exit the one side before he can enter the other. Figuring out how and when to do that is challenging, and you won't be the first to be faced with this dilemma. 1241: Just about everybody's gone by now, but I want to point out to those who may review these posts later that that "intent" bar mentioned earlier did what it was supposed to do, signal that traders didn't want to go higher. Unfortunately, each swing high on the way down penetrated the previous retracement so deeply that one would either be forced to use a wide stop and hope for the best (and probably get multiply screwed before giving up) or move to BE as soon as possible after entering a short and just keep doing it over and over again until price finally breaks, if and when it ever does. The trader with staying power would then be able to catch a break something like the one ten minutes ago. Whether or not this is worth sticking around for is left up to the individual. Fact is, you just never know what the market is going to provide. 1246: The hinge that has been forming is now being tested to the upside. 1306: If it isn't obvious, I should point out that that test went to 40, which ignited the big move down this morning. The hinge was then itself tested, we broke up thru 40, and now we're forming another one. More specifically regarding the earlier hinge, price fell out of it by two pts to 36, then an equivalent amount up two pts to 40, then back to the hinge apex at 38, then up. This is typical (except for the "up" part; it could just as easily have gone down). 1411: This has all been very instructive, so I'll come back to it. Price went up, of course, and broke through 40. One could buy that and either place a tight stop or watch it test 40 5m later and sweat. If the latter, he'd sweat for 20m until the next test, then sweat some more. Or he could just exit when price choked just after the initial breakthru and watch, calmly, then buy the next test of 40, after which price rose to the upper limit of the morning's range at 48. At that point, more messages and more drama. Price had a choice of going up or not. It chose not. So one can exit just below 48 and reassess, or he can hang around and hope it reaches 54. Some might even let it come all the way back to 40 before exiting the trade. I posted this to one of the journals recently. It originally had a home here. If you're not doing this already, start today: The review has at least three elements. At the very least, the review should cover the trades that were done. The next step is to detail what should have been done. But the review is relatively pointless if there is no thought given to exactly what one can and will do during the next session to avoid taking the trades that should not be taken and to take those trades that should be taken. Fear cannot be dissolved unless and until one achieves competence. If one feels competent to solve the problem, fear becomes much less a factor, and the more competent one feels, the less influence fear has, if any. If you do not complete "proactive" reviews, you will not be much farther along in a year than you are now. If you're still hesitant about where to draw lines or how to define a "break", for example, then you are not yet at the level of competence necessary to put fear in its place. The review must provide a prescription for future trading behavior. "Just follow the rules" is not enough if one has not internalized the rules and cannot apply them without hesitation and without thought. Trading with "discipline" if one is trading a plan he doesn't trust is not productive. You cannot apply the principles of Zen until you know the game perfectly inside and out. Having the proper attitude of Zen calm and confidence does no good if you do not know the game. Zen will not make up for, or offset, incorrect play. As a result, there is a certain amount of ordinary, old-fashioned work involved in mastering the game, a certain amount of sweating the white beads before the days of tranquility come along. Good [trading] is not a "mood", it is a series of individual decisions. It does not occur by "Buddhistically" meditating ourselves into some dreamlike mental state, but rather by knowing the game well and being in synch with it -- by inserting ourselves correctly into the flow of what is going on in front of us. No Zen attitude will make up for this lack. You may be quite Zen-like and have all the attributes of Zen calm, but if you play incorrectly, the result is that you will get destroyed. Practice, and long hours at the table, are indispensable. (Larry Phillips) ​ Concentration and focus are as important as developing a robust trading plan. There is nothing casual about daytrading. It requires attention. But the attention must be of the right kind. The trader must be honest enough with himself to determine whether he's thinking about what traders are doing or about the status of his trade. If the latter, he needs to stop and pull himself together as no purpose will be served by his driving through the rest of the session. By focusing on the latter rather than the former, his results will only get worse. It is not possible to know exactly what the market will do once the opening bell rings much less what it will do once one has entered a trade. But there is a world of difference between the trader who tenses up and holds his breath while the trade unfolds -- hopefully away from his entry point -- and the trader who understands that anything can happen and anticipates the market's moves, is fully confident that he knows how to deal with those moves, and that he will act appropriately when required to act. If the focus is on these elements, there is no space for fear. It becomes an indulgence.

I'd like to remind everyone who's trading and watching that none of this has anything to do with the SLA (see the Trading the SLA Intraday thread). This is purely AMT. And while the SLA protects one from more than trivial losses, trading ranges via AMT definitely does not. DBs, DTs, HLs, LHs etc are not guarantees. Therefore, rather than fuck yourselves up and set yourselves back, just give it up if you've been losing and spend the session observing. If you can't get over a loss, deal with that rather than make things worse. I'd also like to remind those in particular who are new to this that if your approach to it is generally profitable not to fuck around with it for the sole purpose of avoiding losses. Losses are unavoidable. If one attempts to avoid them, it's a short hop to cutting all your profits short because you don't want them to turn into losses. Which puts you back where you started. Losing days happen. One just has to accept that and get over it. 1140: For those who are still around, I should point out as well that the move above 48 was the place to switch to the SLA. Sorry for the delay.

By the way, don't forget: vote early, vote often. Poll: Do you believe DBPhoenix's writings can make you a profitable trader? | Page 4 | Elite Trader 1045: This is probably a good day to remind everyone that this approach must be traded fearlessly, logically. If one cannot trade without obsessing over a previous loss and/or for some reason cannot trade logically, he should stop. To grab onto a few points here or there just to reach some daily profit target is self-sabotaging.

Focus on extremes........... 0952: Tried entering at 34 off that bounce and lost a point. Then tried again a few minutes later at 35 and that held. If instead I had been thinking about the first trade and the loss, much less "making up" for the loss, it is unlikely that I would have even tried the second. Focus on price, not your trades. 1036: If your lines are confusing you, take all of them off.

In order to keep these threads as short as possible while enabling posters to post as much as they like, I should point out that TL provides a very long "open" time. I don't know exactly how long, but apparently it lasts at least as long as the session. So rather than begin a new post for each additional comment, one can just add to whatever he's already posted.

Today's posts have been moved to a new thread and this one closed.

.............................................

Note: Until you guys have five posts, I have to approve them. So be patient and don't repost what you've already posted. I'll get to them as quickly as I can.

Not a particularly difficult range to locate: 10pts from 34 to 44, with a mean at 39. Now one has to decide exactly what he's going to do when price exits one side or the other: where he's going to buy or short, what criteria he's going to use to determine whether or not the trade is doing what's expected, how long he's going to give the trade to show its hand, how fast and according to what criteria he's going to bail, how soon he's going to put a stop at BE if the trade works out and if he's going to place a stop at all, and so on. 0932: I should also point out that the 50% level of this upmove is at 20. 0936: A fundamental decision which must be made which I believe we've already addressed is whether one wants to trade the range, or try to, or wait until price exits the range. 0946: 4pts down, 4pts up, and back to center. 1005: This will resolve itself eventually. 1009: The ES is absolutely stuck. 1037: Sorry I can't provide you with a more exciting day. I had a feeling it would be like this. Caca pasa. 1048; The temptation is strong to have some other instrument waiting in the wings to trade when these situations arise. And there's nothing wrong with that. HOWEVER, it is ABSOLUTELY ESSENTIAL that you have your process NAILED DOWN in every corner before putting more on your plate. Otherwise you'll just lose twice the money twice as fast. 1113: Forming a hinge. I doubt it means much considering where it's forming, but you never know. 1120: Pace is extremely slow. Unless one just loves doing this, it's perfectly okay to say fuck it and come back some other time. There's a danger in hanging around long enough to see trades that aren't really there. 1141: Approaching the upper limit of the range. But pace remains slow and activity is zip. 1540: I should probably make clear if I haven't already that I don't trade these little ranges They bore me to tears. There was a good entry off that test of the high at 1425, but by then I'd already quit. OTOH, 40D seems to get off on them and he has a nice explanation of what he did and why in his journal at ET. I suggest you give it a look.

Something to chew on before the open:

I suggest that those who want to participate in this post their charts of the ranges by 0915 so that you can discuss them with each other. If necessary, I'll post mine before the open, though not if mine is the same as someone/everybody else's. Those who just want to watch others are doing themselves a disservice.

For those who don't follow my ET journal, I no longer provide any analysis unless asked because it gets repetitive very quickly and it gets the trolls excited. Therefore, I provide only a weekly chart to show where we are, though by now anybody who's interested ought to be able to do it for themselves. Even so, it's appropriate to post it here as well since intraday trading begins in the same place as any other sort: the weekly chart: And speaking of doing it for oneself, I may as well post these here as well:

My charts are posted two up.

Greece is 7 hrs ahead. The meeting is in Brussels, which is five hours ahead.

0947: Watch for 00 ----- The takeaway here is not what one looks at in order to enter the trade but whether or not he entered the trade at all. In this case, the mkt provided the trader with both a breakout and a ret. ----- If price has been consolidating for two days and breaks out to the upside and your target is the upper limit of the trend channel, 50pts away, don't be too eager to exit the trade, much less to short. 1020: If using a DL, the drop at 1000 should obviously be ignored. ----- Stay in the trade if at all possible. This is a good example of when and how the SLA and AMT work together. ----- I should point out that XOM is a big drag on the ES, but eventually the NQ and ES will decouple. 1033: DL break 1037: Fan the line. The line now pretty much includes that 1000 drop. 1045: DL breaking again. Breaking at this level indicates that traders are "taking a break" (no pun intended). That doesn't necessarily mean it's all over. 1050: Now you have a line in the sand. 1056: That swing low to 07 is a sentiment indicator. Are you going to use it to determine whether or not you should exit the trade and if so how? 1120: Looking at potential BO through 10. ----- Remember that a retracement in an uptrend is a test of buying interest. 1126: Looks like just about everybody is gone. ?

Indeed. There was little to nothing for me to say since he was pretty much saying what I would have (except for the trades ). I hadn't planned on conducting a class. When so many people said that they traded this intraday, I thought they'd like to have an opportunity to talk to each other. Doing it here meant that they could do it free from trolls. But Gamera is pretty much carrying the load by himself. He and you and whoever else are welcome to continue posting here and I will guard the entrance, but no one learns this simply by reading somebody else's posts. One must grapple with it and trade it and come to some sort of accommodation between what he wants and what the market is willing to give him. Those who have been struggling with it for so long never made any progress until they put the pedal to the metal.