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Hey KP, sorry for the late reply, I will start posting as soon as I have something to post about, so far I have found that some of my hypotheses where wrong and that was leading me in the wrong path, but finding that has opened a lot of new things that I am implementing in the plan, not sure how others do it, but is taking more time that I initially expected, but that is OK, I will get there some time, thanks for the Douglas book again it has been a great read.

 

You're very welcome Niko. I feel as if I should be reading it over and over again every week... but I think the lessons are finally sinking in.

 

Its no problem that you're taking your time. I have spent this time forward testing and taking wild trades, and hence my account is down almost $2,000, so taking time off would have been good for me as well and quite profitable! :haha:

 

This has been good for me though. Its made me see that what I was doing isn't working, its given me experience with how my emotions play a major role in my decisions to enter and exit, and by using real money, it has really forced me to see with eyes wide open. I'm just about to finish putting something together as well... something solid this time. I think they say September has even more volatility than the summer months, so it will be great to be ready for this! (but I can't complain about all the opportunities that have been presented in the past few weeks)

 

You did an excellent job of seeing that the environment that you started trading in during May was I think not representative of the environment that you were simming in during the winter and spring months. Since you have been back testing from 2010, have you seen a major change going into September and the fall?

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Since you have been back testing from 2010, have you seen a major change going into September and the fall?

 

So far I have found that 60% of the days in september are opening ranges that extend until 11:00 AM, almost all of them between 10 and 14 pts, not easy to trade, the other days (40%) offer trend opportunities between 10 and 30 pts, there are 50 to 100 pts days, but they are scarce.

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So far I have found that 60% of the days in september are opening ranges that extend until 11:00 AM, almost all of them between 10 and 14 pts, not easy to trade, the other days (40%) offer trend opportunities between 10 and 30 pts, there are 50 to 100 pts days, but they are scarce.

 

Sorry Niko, forgot to reply after I read this. Thanks for this info, and clearly, on its on, this is therefore not all that useful. Once I plot all the important levels going into each day though, I'm sure I will see plenty of opportunity, now that I'm focusing down on what I should be looking at and where I should be trading!

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So far I have found that 60% of the days in september are opening ranges that extend until 11:00 AM, almost all of them between 10 and 14 pts, not easy to trade, the other days (40%) offer trend opportunities between 10 and 30 pts, there are 50 to 100 pts days, but they are scarce.

 

Hey Niko,

 

I have obtain similar results, not just for Sept. but for most months where there is generally 8-10 "trending" opportunities per month. About 70% of these moves get going within the first 15 minutes and of the moves that get going within the first 15 minutes 77% of them start from an extreme (whether reversing or breaking etc.) This was in 2013.

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Taking a break from SLA and getting into Wyckoff I came across this EUR/CAD chart. Price has rejected the 1.4450 area and the last swing made a new high. As long as price does not break the low, I would think that the path of least resistance is up. Today price again tested the 1.4450 area and stayed above the lowest low. I believe the pair is in Position 1 and should go up, plus the R:R looks favorable to the long side.

 

I would be interested to read what some Wyckoff traders think of the chart.

ec.thumb.jpg.cb4d8bf11c6f9040d57eb9704a1772ba.jpg

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One of the benefits of trading higher time-frame is the time it gives one to really try and understand what price is doing. Looking at the pound/yen chart it is clear that this is not a hinge, if it is, it is not a very good one. The main reason is the dynamics do not align with what you would expect if it were a hinge. Knowing that sheds more light on exactly what price is doing. For instance, price is approaching a resistance area that it has been unable to break, but the thing to notice is that price is making higher lows. maybe it will reject again or maybe this time it will break through, but one thing is for sure price is telling us what it wants to do.

gj.thumb.jpg.9d0b3780b3ee713a81fa2660bdd0c893.jpg

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The pound has been in a tight consolidation for 7 days. It has broken some TL and has been making higher lows. The new highs have not been very substantive and the recent decline has been decent at a little over 4 cents. Problem is that long term it can fall much further. The trend is down on the daily, but this may be a moderate correction starting. I'm waiting to see how it reacts off of the TL.

gu.thumb.jpg.36b14f1c6be103a68e059092049941cc.jpg

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They haven't been discontinued. Most have been abandoned. A couple have moved to ET.

 

Those who find success with the SLA stop posting (why should they continue?). Those who don't find success with it stop posting because they don't find success with it and are exploring alternatives.

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Hi DBPhoenix,

 

Thanks for all your great work. I have one question at the moment that my board+pdf search could not answer for me. I hope I did not miss anything. My question is: do you use a linear or log price chart? why or why not?

 

I always used linear myself for drawing lines and channels, but at some times I noticed that a certain market/stock works better with a log scale for price when drawing the lines/channels. So does it come down to who is the institution that is investing/trading that stock and what they prefer?

 

Thanks Much

TR

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Hi DBPhoenix,

 

Thanks for all your great work. I have one question at the moment that my board+pdf search could not answer for me. I hope I did not miss anything. My question is: do you use a linear or log price chart? why or why not?

 

I always used linear myself for drawing lines and channels, but at some times I noticed that a certain market/stock works better with a log scale for price when drawing the lines/channels. So does it come down to who is the institution that is investing/trading that stock and what they prefer?

 

Thanks Much

TR

 

I had gone through this issue with him a long time ago and avoiding log price chart was the advice I had received. I don't remember the reason now. I'm guessing it was something to do with rate of price increases (or speed) due to it being log based.

 

Gringo

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Hi DBPhoenix,

 

Thanks for all your great work. I have one question at the moment that my board+pdf search could not answer for me. I hope I did not miss anything. My question is: do you use a linear or log price chart? why or why not?

 

I always used linear myself for drawing lines and channels, but at some times I noticed that a certain market/stock works better with a log scale for price when drawing the lines/channels. So does it come down to who is the institution that is investing/trading that stock and what they prefer?

 

Thanks Much

TR

 

I've never used them partly because they "scrunch" the data and partly because I've never seen any advantage to them. But then whatever advantage may or may not exist will depend on what you're trying to do with them. I'd have to see examples, keeping in mind that these "lines" of whatever sort do not provide support nor resistance.

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Well, not exactly new. I've revised the SLA/AMT to include a chart example of a range in the AMT section, added an appendix on fear (Appendix F), and added an Afterword to emphasize a few things that appear to have been overlooked by casual readers.

 

I've also uploaded a separate pdf of "The Mind Game". This is something I wrote sixteen years ago or so and I've always liked it, which sounds odd, but there it is. It is so very applicable to the new Appendix F in particular but also the SLA/AMT in general that I've posted it along with the SLA/AMT pdf in the stickies. I hope both will be of benefit.

Edited by DbPhoenix

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This is about subjects for testing.

 

Not "I think that . . . "

 

Not "In my opinion . . . "

 

Not "I'll bet that . . . "

 

upload_2015-5-19_22-25-54-png.152903

 

What are the odds that this will fall? Rise?

 

One finds out not by guessing but by finding examples of this and not only tabulating successes and failures but the reasons for each. This is how one develops a robust trading protocol. This is how one is able to take trades without thinking about them.

 

I hope ND won't object to my copying a post she made recently as the point of this thread is of course to highlight "setups" that occur regularly, if not frequently, and are easy to find and easy to test. Once one has done so, there is no need to guess.

 

Note that the reason for my posting this here is to provide an example of how to go about -- or at least to begin to go about -- testing a setup. The particular setup she's addressing is not particularly important to this investigation.

 

This is not the only protocol, of course, but it's an excellent start:

 

Q: How do you predict the odds of a favorable price move on each trade?

 

A: First I select a setup using eyeball analysis. A setup is a price behavior pattern (for example, in a non-trending environment, price came from a swing low, tested the previous swing high, and turned without breaking through that high). I've noticed over time that when this occurs price has a strong tendency to find support at the swing low and make another attempt to visit the high.

 

I now examine every appearance of this setup with a specific instrument during my selected trading hours and I note in a spreadsheet the results: How often does the support hold and how often does it break down? If it breaks down by less than N ticks, how often does price revisit the high? If it breaks down my more than N ticks how often is it possible to exit at break even before the risk:reward ratio becomes negative?

 

Eventually this sort of study leads to a positive expectancy result based on rules. An example might be that if the support level holds or breaks down by less than 4 ticks, a 12 tick profit is possible 61% of the time. If the support level breaks down by more than 8 ticks, an adverse excursion of more than 12 ticks occurs 63% of the time. If the level breaks down by more than 3 ticks, but less than 9 ticks a break even exit is possible 73% of the time.

 

So now I can create a set of rules based on this price behavior in this defined price environment and then apply the rules to 100 consecutive appearances of the setup and see how close to my original study the results are. If I find the result to be very close to the original study, I have a positive expectancy trade setup to add to my arsenal as follows:

 

In a non-trending environment, price comes off a swing low to test a previous swing high and turns back down off that level.

 

1. Place a limit order to buy 1 tick above the previous swing low.

2. If filled, place a stop loss of 12 ticks and a profit target of 12 ticks.

3. If price breaks through the swing low by more than 3 ticks, move the profit limit order to the entry price.

 

--NoDoji

Edited by DbPhoenix

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And before this particular setup resolves itself, those who've followed my threads know how important context is to me. So . . .

 

upload_2015-5-20_5-35-14-png.152910

 

upload_2015-5-20_5-38-18-png.152911

 

And for those who are familiar with mean reversion:

 

upload_2015-5-20_6-11-31-png.152912

 

TMI?

 

Looking at a chart on which no trendlines of any sort have been drawn is sort of like the burglary movies where the guy is trying to steal the big diamond that's sitting on a big pedestal in the middle of the room. He knows that there is an alarm which is triggered by the interruption of one or more of a series of laser beams which criss-cross the room. Unfortunately, he doesn't know where those laser beams are because they're invisible to the naked eye. So what does he do? He blows smoke into the room so that the beams become visible. Knowing where they are enables him to miss them and avoid setting off the alarm. Similarly, there are a variety of trendlines on your chart, even though you may not be able to see them. Blowing smoke on your chart will be of no help, however, so you'll have to be satisfied with a less-dramatic straightedge and pencil.

 

--Db

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I realize that the only people who are going to see these are insomniacs, dairy farmers, and Europeans, but . . .

 

upload_2015-5-20_6-36-15-png.152914

 

The primary way I've learned to trade is to study market behavior and build an understanding of it. If you're not distracting yourself from that goal, over time the mind will start to build an rough, intuitive grasp of basic market characteristics. At the same time, we can work consciously to find parameters to define what we think we know and test them to see if they are consistent with the reality.

 

After enough time, one can build a model of certain market behavior, and then create a system or routine by which to partner with the market and be on the right side of it.

 

I have a conception of what I understand a trend to be. I have a conception of what they do when they are ending, and at those points in time I can trade in the direction of the sentiment of the next trend. I compare what I see unfolding before me to what I anticipate things will do if my hypothesis is correct. If there is inconsistency between the two, I will exit. If there is consistency, I continue to hold the trade as the market goes through the sequences I expect.

 

--llIHeroic

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