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Gamera

Testing Times.

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When it comes to breaks of the DL/SL the number was 3 points, beyond that the most likely outcome would be a lower high or higher low. The runner strategy is working off this number and the AIAO is more reliant on swing point breaks.

 

In an effort to hold onto trades as long as I can I often miss the first ret after a break if the break is less than 3 points, it's noticeable on a few of the charts posted. This means I end up trading the second ret which is (if the reversal is good) several points off the ideal entry, and often a much riskier trade (5 posts up is an example)

 

I'm looking to trail breaks of less than 3 to catch a reversal should one occur, in conjunction with context and behaviour leading up to and through the break.

 

I'm spending a lot of time watching the markets live and feel a little restricted with backtesting (I cant see how the bars form like I can watching live prices), but, sticking to the plan is proving profitable so far.

 

If you're trading the 1m, I suggest you monitor the 5s alongside in order to catch the RETs. Also watch for the tells (see what I posted today at T2). The tells after REVs will also help you avoid entering "REVs" that turn out to be dogs. This is after all about changes in demand/supply balance; the lines are there only as an aid to detecting these shifts.

 

I also suggest you review your objectives in backtesting. The SLA has after all been thoroughly backtested to begin with, and to continue backtesting can become an avoidance mechanism.

 

As to the three points, remember that Livermore used 3pts above/below the last swing high/low. This is often the same as 3pts+/- a DLB or SLB but not always. Also remember that he was tape reading, as was everybody else, so a 1m chart is pushing the edges of tape reading. So if you have a move > 3pts in both the DLB/SLB and the last swing high/low, then postulate that the trend has been at least temporarily broken, get out, and re-assess for re-entry. Unless there is a continuation, you have only two choices left, a reversal and a lateral move; dogs are relatively rare in these circumstances. If there is a continuation, it will occur out of the lateral move, so exiting and re-assessing is a sort of reset. If you've made enough, you also have the option of quitting. Remember also that you're seeking to determine probability, not surety.

 

Read again "Please Sir", "What Am I Bid", "Equilibrium", "Danger Points", and "The Price of Admission". And remember that there are diminishing returns to these tasks. Some people think that they have to spend weeks staring at tick charts in order to understand continuity of price, but the point should be made in five minutes (if it isn't, then they probably won't get it and ought to move on to something else).

 

When are you going back to work?

 

I kind of forgot I was testing myself and not so much the plan, and from that point of view I'm not doing my job as best I can. As for the tells, I think its lost on me, I read through the continuity of price and the part on ticks and got a little lost, are the tells to do with the class of trader that might be involved, volume, waves or am I missing the point.

Are you using static charts or "live" charts via replay?

Edited by DbPhoenix

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Static charts scrolling bar by bar, intentions were to backtest until I'm executing plan consistently, forward test via replay, then sim.

 

Reviewing static charts bar by bar is useful for formulating and preliminary testing of hypotheses, but once one gets into actual testing and record-keeping, I suggest moving to live charts, either real-time or replay, with a display that includes at least a daily chart, an hourly chart, and whatever bar interval one is trading. If one is trading the 1m, I suggest including a 5s chart or a 1t chart. Otherwise, what I've written about the continuity of price and the various classes of traders and even demand/supply imbalances will be of little or no value.

Edited by DbPhoenix

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Both strategies had 61 trades, the runner is showing 122 as they had different exits and I was not sure how to put it together (excel noob).

 

Some thoughts for moving forward.

 

The runner strategy gets one off early which might feel good initially but, when one gets a hold of a winning trade a trader will miss it as it goes into profit.

 

Majority of my losers came from failed breakouts, whilst these often resulted in the biggest trades they also had the highest fail rate. Taking the ret after the BO would increase success rate, context adds weight to whether a BO in one direction or another will work out.

 

I tend to over think which leads to not taking valid trades, I am not 100% consistent at following the plan.

 

I'm going to play around with my charts and see if I can sync up charts for replay to track price as I do when watching live, if it is a hassle switching around time frames I'll do things in real time.

 

I am going to move forward with an all in all out approach as it is a little problematic at times tracking two strategies at the same time.

 

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After a long break I am looking to pick up from where I left off, despite the time I have been studying since the start of the year I felt a little rusty when it came to tracking the PA and I think it shows a little. This is just sim trading live markets for the time being until I see that I can do what I'm supposed to do consistently.

 

With the excuses out of the way, I'll go through my thought process as the day unfolded.

 

I did not post anything lower than a 60 minute chart for the prep as I thought it was reasonably straight forward, trade any reversals off the extremes or wait for a breakout and trade the ret. I used different intervals which may get a little confusing, sorry.

 

Trade 1: Short BO ret - 300t entry.

Price broke the lower limit of the hourly range within a couple of minutes of open, the 300 tick chart showed a cleaner retrace so I used that to track an entry short. Short was triggered and trade quickly moved to profit, there were a few minor stride breaks but as I was managing on the 1m chart I was waiting for a second ret and it turned out to be relatively flat, SL was fanned as price moved lower.

 

After reaching a low at 5107.25 price retraced and made a more significant break of stride eventually triggering an exit.

 

Thoughts: Entry was straight forward, management was overly tight, there was no obvious reason to exit besides the stride break. During prep and as the trade unfolded the first bump in the road that stuck out was a confluence of the round number (100) the hourly DL and the 50% Lo-Hi. I debated leaving the exit for the swing point at 5119.50 (09:46 candle) but did not want to give back the additional 4 points (Greed).

 

Trade 2: Long SLA Rev - 1m entry.

After the break of stride price dropped off but failed to make a new low and started to rally triggering a long. Price immediately dropped as it ran into a slow SL (300t-1500v) trade was exited as price broke lower.

 

Thoughts: I was aware of the SL but was trading off the 1 minute chart, knowing the headwind the trade should have been scratched sooner when it failed so quickly.

 

Trade 3: Short BO Ret - 1m entry.

Price broke lower and retraced back above the swing low but the margin was minimal and the ret was traded as a BO, PA followed through and pushed lower, then there was a ret but it was within the SL so no problem. Price then pushes a point lower and backs up just as quick, price waffles for a couple of minutes breaking stride before breaking the previous swing point triggering an exit.

 

Thoughts: Whilst I took the trade I was a little resistant as price was getting into the previously mentioned speed bump. Exit was on a rule break but the red flag went off on the 5094.50 low (10:19) price made a weak push (DOG) before backing up fast, given the context I saw this as the point to scratch the trade and look for a long, but, I decided to back off and leave it for the stride/swing point break.

 

Trade 4: Long SLA Rev - 1500v.

Backed out onto a slower interval and waited for a higher low to form, which one eventually did when price rallied to trigger my long order, price failed to follow through and I scratched the trade.

 

Thoughts: Immediately frustrated on entry as I saw price was balancing equally around 100 and I was in the middle of it. My entry was likely too tight given the interval I was entering from. I considered holding for a DP off the daily low but opted to scratch as I was frustrated and losing focus.

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A little late but yesterdays activity including the prep.

 

Prep: Price was still lingering around the hourly DL as open approached, the previous days afternoon support and overnight low had just been broken in the minutes leading to the opening bell.

 

At open price was chewing over the overnight low not really making a clean break of it, eventually PA headed lower, but, as price was still hanging yesterdays chop I opted to wait for price to reach the previous days low and see what happen there.

 

Price broke lower and I considered an entry short but PA retraced too far, a higher low formed and price rallied back to the BO level. After a couple of attempts to go higher price moved back towards the daily low where it stopped a few ticks short. I saw this as a potential range that was wide enough to play.

 

Trade 1: Long, range reversal - 1 Minute.

Seeing a hesitation at the possible LL of a range an order was trailed that was triggered as price rallied, there was still a little hesitation in the PA as it made weak continuations and deep rets (relative to the upmoves). I was aware the the hourly DL had been broken and the most recent high may have been a ret of that break.

 

As price was hesitating and not acting like it had found an extreme I opted to scratch the trade, I hesitated as there was no specific metric for the action, the behaviour that I would expect to see given the reason for entry just was not there.

 

Thoughts: Given that price did drop off in the short term it looks like a smart decision, but if price had rallied to the UL without breaking an exit rule it would have looked very different. I have an expectation to see certain behaviours depending on the context behind the trade and this was not acting right and also PA was in conflict with the hourly DL break.

 

For a rev trade the entry was a little sluggish but I was ok on this with the slightly wider stop.

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The prep turning point at the mean of the previous range held up but, the drop from this level was a little harder to manage.

 

Trade 1: Short SLA rev - 300t.

The 1 minute chart was a little flat in tracking the price behaviour so I opted to use the 300t in its place. Price pushed beyond the level from the prep by a small margin before dropping off again and breaking stride, the ret was a little sloppy and I hesitated a touch to place the entry.

 

PA dropped off and a SL was drawn, price retraced but stayed within the SL before making another low. This new low did not go far before price backed up again (dog/failure) I was working off the previous swing high so held through the stride break, price dropped again but failed to make a new low. I tightened up the stop and a smaller lower swing high and price rallied off the low and hit the stop.

 

Thoughts: Entry was sluggish and showed a lack of conviction, as price failed on the first push lower and backed up, the high from the lower low also failed at the first swing high after entry as did the exit high, price was indecisive at that moment in time. I may have been slightly influenced by a trade going back to BE (fear).

 

Price eventually went lower meaning a new SL could be drawn, I waited for a break of the previously mentioned range bottom and a trade would be entered on a ret.

 

Trade 2: Short BO ret - 300t

Entered on a retrace of the break out, price made a push lower but stalled out again before backing up, then there was another HSL and price drifted back to the range low. My danger point was above the swing high of the ret and on a range re-entry stop which were the same. Price continued drifting higher before eventually it met the criteria for an exit.

 

Thoughts: Having seen the way the first trade PB had played out I was aware that this might be doing the same thing, I considered moving to a stride break, but, how far do I let it slide before I act. The little DL drawn was broken and there was a ret, but I saw this as being within the chop and passed.

 

Stuck to the rules in terms of management was a little sluggish on the entries, after trade two I sat out as I "felt" that I was not seeing the picture.

nq01022017300t.thumb.png.db4ce824bf8ef1b923ec297e5430542b.png

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Mixed day with sloppy prep or lack of attention made the work a little harder than it needed to be.

 

Trade 1: Short SLA rev - 1m entry.

Price broke stride at the former LL and fired in a quick ret on the 300t, this was right on the open so I waited for a ret on the 1 minute chart which came a few minutes later. Price pushed a little lower after triggering the short but was unable to follow through and reversed breaking stride where an exit was taken (300t).

 

Thoughts: I was aware that the price was getting into the PDL and ONL which was problematic for taking a short, but my prep was overly focused on the earlier range which price had been spending more of its time outwith.

 

Trade 2: Long SLA rev - 300t.

After reversing near the earlier mentioned lows and breaking the SL a ret occurred that led to a long being taken, at this point I was looking up to the previous highs from the last session. PA maintained stride and rallied for 10 minutes, price broke stride (red line) and retraced slightly before heading lower which triggered an exit.

 

Thoughts: Not much to think about from the entry, straight forward with the PA largely expected. This break in itself was not enough to trigger an exit which is why I held but looking at a potential exit and short one would track the ret to catch a further drop off, my problem is I tracked way to tight which triggered an exit.

 

I was influenced by the first trade loser and this trade having a nice profit so wanted to be ahead (P&L fixation) when trade closed out, if I had followed rule there would have been no exit.

 

No short was taken as a flip as I knew at the time a was slightly tilted.

 

Trade 3: Short SLA rev - 300t.

Price had reached into the area of the previous days afternoon high and I saw what looked like a descending channel (1500v), there was a reversal off this UL and price broke stride and retraced leading to a short trigger. There was not much in the way of follow through before price turned up breaking the SL and triggering an exit.

 

Thoughts: A DP off the most recent swing high was a little wide for me, and I was chasing bunnies with the channel so opted to keep the trade on a tight leash.

 

After this trade failed I watched the small range this created before I saw the range that is posted on the charts now with a LL in the low 20's and a UL in the mid 50's.

 

Trade 4: Short UL rev - 300t.

Price had gotten close enough to the upper limit of the newly realised range to short any weakness. Price reached 5157.50 before dropping off and creating a LH which was a trigger. I sat the DP on a BO rule, PA did not initially seem to get far before backing up but each high was lower or equal to the last. Eventually price made a more substantial move and dropped to 5132.25 where it formed a another lower high, once this lower high was breached the trade was exited.

 

Thoughts: As price flopped around entry I briefly considered scratching the trade as I was impatient for the trade to get moving. I set a stop and got away from the desk, could still see the charts etc but the distance alleviated some of those concerns. Once price got moving it was just a case of tracking the swing highs and waiting for a break, unless it hit the LL of the range.

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Edited by Gamera
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Price movement was limited for the last trading day of the week and after a couple of hours of not much happening I sat out.

 

Trade 1: Short UL rev - 1m entry.

At open price opened and reached for the UL before stalling and dropping back, price then spent the opening hour chopping about creating a hinge. Almost an hour into the session and price broke from hinge and headed for the UL breaking out by 4 points, plan was to wait for a ret and enter if price rallied again. PA dropped back into the range by enough of a margin to invalidate the BO and spiked to the UL a second time failing to break the upper limit.

 

Short was triggered and price followed through heading lower where it choked on the apex of the hinge, price chopped at this level for several minutes during which I tightened up the DP on the swing high. Price started heading higher meaning an exit was taken.

 

Thoughts: PA had spent the opening hour near the UL and was indecisive in direction. Though price was still in the range and a DP could be set via a BO rule the indecisive open, the hinge, and the failure on the test of the hinge lead me to see this whole area as chop.

 

I briefly considered a re-short on the second test of the UL but by this time I was not wanting to babysit a trade through what I suspected as chop through the lunch session. There is a chance this is an oversight as one never knows what will happen next but I don't have high expectations with that time of day.

nq030220171min.thumb.png.ba7c5553852b8a372afc8f1077ec8371.png

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