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Gozilla's Rough road to consistency.
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Gozilla's Rough road to consistency.

  #221 (permalink)
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Regarding your first chart, whether you exit trades due to deeper retracements will depend in part on how much faith you have in AMT and how much you want to avoid having to re-enter.

If you expect price to reach that red line and if traders have given every indication that they intend to get there, note whether these retracements come back to previous swing lows, the medians of previous ranges, or the apexes of previous hinges. All of these levels are "comfort zones" and don't necessarily spell trouble.

As to the second one, that first retracement is pretty severe. However, it doesn't come anywhere near the halfway level. Whether you want to wait and see if it gets there or exit and re-enter is your choice. But the apparent strength is illusory.

As for the "larger deviations" in the third, these generally indicate that you're nearing the end of the run. There's no guarantee. Sometimes traders are just resting. But there's little reason to exit unless you're at or near an extreme.

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  #222 (permalink)
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DbPhoenix View Post
Regarding your first chart, whether you exit trades due to deeper retracements will depend in part on how much faith you have in AMT and how much you want to avoid having to re-enter.

If you expect price to reach that red line and if traders have given every indication that they intend to get there, note whether these retracements come back to previous swing lows, the medians of previous ranges, or the apexes of previous hinges. All of these levels are "comfort zones" and don't necessarily spell trouble.

As to the second one, that first retracement is pretty severe. However, it doesn't come anywhere near the halfway level. Whether you want to wait and see if it gets there or exit and re-enter is your choice. But the apparent strength is illusory.

As for the "larger deviations" in the third, these generally indicate that you're nearing the end of the run. There's no guarantee. Sometimes traders are just resting. But there's little reason to exit unless you're at or near an extreme.

Ideally when it comes to the AMT aspect I would like to be able to hold on as long as the trade is viable, this is mainly down to a history of getting tied up in knots on re-entering and getting chewed up, however, trusting it may take some practice. I'm not using a great deal of context when it comes to looking at how the day unfolds, but, when I zoom out it often comes as no surprise that price reacts how it does at certain levels.

As you noted on the second chart, the first retrace was severe and would have been enough for me, just now, to take an exit. I checked the retrace (left it off the chart to avoid clutter) and could see in the scheme of things that it failed to make back 50% of the move, from either the start of the move or the breakout, this alone might suggest further weakness that is evident in what happened next.

I'm noticing a lot of the larger deviations that do continue trending struggle to break past the swing point that anchors the last fanning of the line.

When it comes to my plan and testing, I am really going to have to give a lot of thought as to what I can tolerate, the damaged trader in me wants to exit at any adverse action, the logical part understands that price will ebb and flow and a good understanding of this behaviour along with a plan can accommodate this.

Gozilla.

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  #223 (permalink)
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A large part of the problem with what one can tolerate stems from the number of contracts one trades. If one is going through these tests trading only one contract, then it's all or none, yes or no, in or out, and if you make the wrong decision, then you are either fussing with multiple re-entries or you're just standing aside watching price take off without you. Trading multiple contracts expands the array of choices to an extent that enables you to take risks that you might otherwise be too cautious to take.

For example, if you are trading two contracts and find yourself in the situation provided by chart 2, you can exit one at whatever level your plan so far tells you and leave the other at breakeven. Thus if price does falter and continue at or before the halfway level, you're still in with at least something. If you're trading three contracts, you can determine a reasonable target for one of them from your MFEs and continue with the other two, exiting one at a signal such as mentioned above and leaving the other at BE.

The challenge here is that entering with two or three contracts prompts a lot of the old fears. In order to do it, one must have absolute confidence in his entries and his criteria for determining the success of those entries. He must also accept the inevitability of the occasional loss. This is going to take some practice. Maybe a lot of practice. But if one has through his testing determined that there is a high degree of confidence in a successful trade that the entry must be at A and the stop must be at B, the idea of trading multiple contracts is less likely to dredge up the old fears.

If you haven't begun keeping track of your MFEs, I suggest you do so. By that I don't mean the ultimate MFE but the initial impulse or thrust, i.e., how far can you expect price to go before it backs up on you and starts threatening your entry? 3 points? 5? 7? Whatever it is, that can be the target for one contract, and, when reached, the other contract can be moved to BE. Thus the only way to lose is if you enter incorrectly and price "stops you out" before the first target is ever reached. And if this occurs only, for example, one in ten, then at least you know what to expect. And if you lose through no fault of your own, there's no reason to beat yourself up over the loss.

You're at the point where you can begin playing with this while continuing to collect data on entries and retracements and MAEs and so on. They all work together synergistically, so trying to test each of them in isolation is difficult anyway. Better to test at least two or three together making one variable independent and the rest dependent, then switching things around to view the problem from different angles.


Last edited by DbPhoenix; May 12th, 2015 at 09:01 AM.
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  #224 (permalink)
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I've always seen trading with multiple contracts as a faster way to lose money when one is consistently losing so have never really given much thought to the benefits and flexibility that good management on an additional contract might offer, I never used to be an all in, all out trader, in the past I would add and reduce size depending on what was happening.

I have for a long time now been a 1 lot trader, if the trade is not working get flat, if it is working.... get flat. This time as a 1 lot trader has changed my thinking, its very black and white, you're in or you're out, reducing size has always felt like using a crutch, if its not working why leave some in, and if it does work you miss out on getting your size on.

There is more to it and there are threads that discuss the virtues of both in depth, but, I have to accept that I am a damaged trader that often struggles in those opening moments when price swings from positive to BE/negative or vice-versa and I will admit that I would most likely relax a little during an adverse move that I know will come if I "locked" some of the positive move in. I would consider using this tactic as a confidence building exercise.

As for the MFE, I am assessing entry criteria, I have been trailing my entry a bar behind the live bar and usually a point below/above, but, when it comes to ranges I will tag the live bar if I see the reversal in the right tick and at the extreme. I have been using the MAE tracking more for the management, in particular, management of trending days, whilst I have an idea of where and how to enter, these have been lower on the priority, I will try to track the impulse MFE on the entry leg.

Gozilla.


Last edited by Gozilla; May 12th, 2015 at 09:34 PM.
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Busy chart.

Had to chop up a chart a little to avoid cluttering it up, point A in the first chart is covered in the last chart and goes some way into explaining why price comes back on itself by as much as it does.

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EDIT: Just realised I covered this already. https://futures.io/trading-journals/27702-gozilla-s-rough-road-consistency-3.html#post403283


Last edited by Gozilla; May 12th, 2015 at 09:55 PM.
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  #226 (permalink)
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Do you see these charts in toto before you begin or do you start at the left edge without knowing what's going to happen next?

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DbPhoenix View Post
Do you see these charts in toto before you begin or do you start at the left edge without knowing what's going to happen next?

At the moment I am looking at the charts in full, once I have a good idea of what numbers to move forward with I will go left to right and see if it matches up with expectations, then I'll do replay, then if things look on track, sim. I'm trying to slow things down a bit as I all to often get ahead of myself and then get disappointed when the results don't meet expectations.

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All of which is fine, but if you're looking at the charts from beginning to end before you start, keep in mind that the figures you're coming up with will change once you begin tracking price from left to right with no idea what the outcome will be. It's easy to have faith in AMT if one knows the future. If one doesn't, the path becomes rockier.

This is not to say that this data should not be collected the way it's being collected, much less that it should not be collected at all. Everything you're doing will become valuable, even essential. Just don't be discouraged if things don't go as expected when the simtrading begins. All of this will play a part, even though it may not seem so at the time.

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Change.

I have been analysing the days as a stand alone without any context in the frame, I've just been curious as to what may have caused price to do what it does during the day, as far as the AMT goes, I think I could get myself in to a little trouble with it.

Its not difficult to see AMT at work when price is bouncing off range extremes that are clearly identifiable, at some point something changes and price moves on, if one is reliant on AMT when this change happens they might find themselves getting into trouble. Whilst I did not know about the DB at the time of analysis, if I had done I might have relied on the AMT a bit more than I should have, The question is, what would I have done if price failed to get to get to the level highlighted?

I believe most likely that I would have gotten chewed up, SLA gives one a heads up when things are changing, the size of that change which I am working on would suggest continuity or reversal. AMT is more about where that change might most likely happen.

I'll change how I assess the charts, I am not sure if I should be concerning myself with entries and exits at this point, but, I will continue to track TBC, TBR and what I consider to be entry leg MFE, I will look at context from a pre market preparation perspective and I will have only the data up to the date showing so I am not biased towards the outcome in anyway.

The other thing I will look at is the swing points in the trend and how price reacts to them should it get back that far, more specifically the swing points that lead to the fan.

Attached the 60 minute chart as I thought the most recent move was interesting, Price goes from one extreme to the other, but, it has most recently reacted to the MP and found itself trying to break out. This rejection of the MP is also evident on the weekly and daily in their respective trend channels.

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Gozilla View Post
Attached the 60 minute chart as I thought the most recent move was interesting, Price goes from one extreme to the other, but, it has most recently reacted to the MP and found itself trying to break out. This rejection of the MP is also evident on the weekly and daily in their respective trend channels.

Keep in mind that the lines are made possible by traders' behavior, not vice-versa. If they hadn't traded the way they did, the lines would not have been possible.

Also note that after your breakthru, price begins to form a range. This projected range has a median, which apparently is where the last print landed.

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