Well I guess you're referring to the entry to the last swing demand line not drawn. I've used one chart for all time frames, so there are Daily, 15minute and 5min lines shown... convenience. I just changed the periodicity on this same chart. According to your instructions there should only be a demand line(s) (and fans), but there's also a range and coil (2 lines each). Just tracking supply and demand without erasing the lines. Works for me cause I need practice identifying all the areas where buyers and sellers are active, at least in the beginning
Well, no. But perhaps you haven't got to the AMT part yet.
What you want to focus on is implied by "2. When price takes off in one direction or the other, wait for a retracement", as all trends begin with ranges, and expressed in the AMT section by "first, find a range, preferably one with an easily determinable upper and lower limit." Once you've finished both sections, the SLA and AMT, this should all become clearer.
In the meantime, as the suspense is palpable, you again don't need any of the lines you've drawn. All you need is one, at 1264.5. Granted the lower limit of this is crap, but you could serve lunch on 1264.5. Aside from the fact that this level is repeatedly tested, the nature of the break just a few minutes before 1200 tells you this is important. They're not futzing around here. They're running for daylight. And when they back up to pick up those passengers they left behind, they do so at 1264.5. All this confirms that you have a winner on your hands. For six points anyway. Which may not seem like much (I have no idea where this eventually went), but having confidence in the trade enables you to trade size, which is where the money is.
Don't trade lines. Trade price. Try to see where demand and supply interact to hand off the ball to each other. See where the blockades are. Look at pace and activity and extent. The lines are there only to keep you on the path. If you're focused on them instead, your trades will be gone before you even know they were there.
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Regarding the above post, I provided a link to The Foresight Thread in post #10, but it's a long post and the link is easily missed, so I've provided it again. I can't guarantee that it will be helpful, but at least it demonstrates how to approach the day.
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Thanks for the link @DbPhoenix, I did see it and planned to spend some time on it this weekend. Here's my take on SLA/AMT for TF this morning. Comments welcome. The 60 min chart of course was key demand/supply.
Last edited by wilson619; April 24th, 2015 at 11:09 AM.
Reason: forgot chart
Yep, a lot less clutter. Use only what you need. And clearly you're in a big middle. I haven't characterized this market, but your choices are limited: trade reversals off the limits or enter upside or downside breakouts. If you don't like trading reversals, then I hope you have a good book at hand because you have nothing else to do but wait.
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As to your first question, if you were following lines only without regard for context, and some people need to do that then, yes, it could be a long entry. But remember that the lines are merely an aid to following price, not the other way around. One won't damage himself by just following the lines. Here, for example, a long entry would be exited almost immediately.
However, once one becomes sensitive to price movement, he'll see that price has made a lower high and a lower low, and there's nothing in the daily chart to suggest a climax. And although price does "break" the line, it does so casually, showing no inclination to reverse but rather to move sideways. Compare this to the next break, eleven bars later. This one is far more forceful and more likely to prompt an exit than the previous one.
There are only three strategies but a limitless number of tactical sets. What tactics one employs depend on a number of criteria, one of which is fear. If one chooses to exit immediately when a line is broken, there's nothing to stop him from doing so. But, after a while, one learns that not all breaks are created equal. Some breaks precede a sideways movement that can last for minutes or hours. Others are the result of price taking off in the opposite direction. Some go quite far. Some sputter out quickly.
The fact is that even in downtrends -- in this case -- the countermoves can be pretty damaging, and to hang on just because one "believes" that the downtrend will reassert itself eventually is not a wise course to follow. To exit a position just because price appears to be reversing but doesn't actually get anywhere is annoying, but that's it. As long as one remains calm and sees that price can't get more than halfway back through this downmove, he can if he chooses to do so enter another short at about the same level that he exited the first one, no harm done.
I would suggest to someone who's become afraid to take legitimate trades to exit this immediately at the break of the first line. If he decides to go long and his long is triggered, he'll be out of it almost immediately, so that's not a problem. The plus is that there are now only two directions price can go: sideways and down. How long it will go sideways is anybody's guess, so I'd suggest a sell stop below this sideways movement. When it triggers, watch it closely until it makes a lower low, at which point the SL can be fanned. When this line is broken, again, exit the trade immediately, though this time with a few points in the bank. Then, instead of assuming that it's all over, watch to see how far price can rally. If it can't rally more than halfway, try another short.
It's all a matter of watching price, not lines. One could make all of these decisions without having drawn any lines at all. However, many traders just can't follow price without some sort of visual aid. They get lost. Like a whiteout. And they can no longer distinguish between up and down, and end up trading tiny little trends and making tiny little profits and tiny little losses and racking up big commissions. If nothing else, these lines may help the trader to assume and maintain an attitude of calm that will enable him to assess price movement and potential trading opportunities rather than struggle with a perpetual state of anxiety and fear.
As for your second question, daily charts are fine. However, in order to become something other than a theoretical exercise, one who trades these charts must be very clear about how and where and when he's going to enter these charts and how much risk he's willing to assume with regard to recoil. We all like to see price plunge the instant we transmit our short, but what if it doesn't? How many points is the trader willing to let travel into the red before his bowels loosen? One of the chief advantages of futures is that they trade 24/5, and the trader can place a protective stop anywhere and at any time he chooses. But first he must make that entry, and he must write in detail just what he's going to look for to tell him that he was right and what he's going to look for to tell him he was wrong, then adhere to those criteria without question and without hesitation
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I have been following along as best I can and continue to appreciate the effort you are putting into answering the questions regarding the material.
I also agree with @damnpenguins about that thread on ET getting a little out of hand, that kind of behaviour put me off getting involved sooner and opening up a journal when I was looking for somewhere to start documenting my efforts.
I don't like Ignore lists. They're childish. And they shouldn't be necessary. But they're the only way of negotiating certain sites. I finally gave up the other day and resorted to one, and it does definitely keep one on task. It's not unlike being in a dysfunctional family with a great many small children. There is TL, of course, but it has become a ghost town. If one is looking for a mountain cabin with the nearest neighbor miles away, tho, it may be just the ticket. Otherwise, futures.io (formerly BMT) may be the better choice. Let me know what you decide to do. Without journals, it's really all just a bunch of pseudo-intellectual gurubabble. Note, however, that I'm not an elite member, so if you want my comments, you'll have to open it up in the general population forum. If issues arise, it can always be moved to TL.
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I've been maintaining a journal here for a while now, graph icon bottom left of this post should take you there. (it's not pretty) the exposure to other traders is a bonus even though I largely keep myself to myself as I feel I am not really able to add much to the conversation or offer advice.
I got ahead of myself last time home, so, inspired by lajax I am backtracking back to backtesting and taking my time with it, (I think it is the fastest way forward for me as I am still battling old habits) then forward testing and then if I get as far as sim trading I may look to continue my notes similar to the observation notes I made at TL, but, I will continue to use my journal for reviews, thoughts and ideas.
Last edited by Gozilla; April 30th, 2015 at 07:21 PM.