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An example of what you can do when the behavior of 5 Min bars change. Although there was no pure Double Body High between the 0725 - 0730 pair (Mountain Time Zone), the Close to Open difference was 1 tick. The 730 candle gave a good Spinning Top followed by a Lower High that failed below the 5 Min ma which resulted in a Left Translation to the 730 candle and again to the 740 candle.
Left, Right, Center Translation is an interesting and useful concept and simple to grasp. Look at any time frame candle that is in an uptrend and consider how that candle builds. In an uptrend, after the Open of the bar, price will attempt to push lower to test support and this will trigger the buyers and establish the low of the bar. Price will then rise looking for resistance to put in the High of that time period candle. Depending on what it finds and the strength of the push up, the bar may close at its High or have a pushback that establishes a wick. The important point is that the High occurs later in the life of the bar, past the center point in time of the bars duration and is seen as Right Translated.
In a downtrend the opposite behavior will typically play out. After the Open of the bar, price will attempt to push higher to test resistance and once found, the High is established and price will push lower looking for support to put in the Low of the candle. The High is made early in the life of the bar and is seen to be Left Translated.
So.. sound logical assumptions can be worked in two directions. If you are in a downtrend then bars will likely peak early in their life and be Left Translated. And. If you are in an area where you expect price to reverse lower and you see a bar Left Translate then it is likely that reversal is underway and prices will push lower with a series of Lower Highs and Lower Lows.
If you create a 15 sec chart you will see that the 0725 5 Min time block(MTZ) is extremely Right Translated while the 730 Candle, although Right Translated, found it's High earlier in the 5 Min period as the swing cycle begins its turn. The following six 5 Min Candles are all Left Translated.
To tie this all back to the original thread... if you expect resistance or support to hold and then turn the short term trend, it is far better to wait until you see the evidence that the turn is taking place than to get in front of the event and place your bets based upon assumptions that are dubious.
yesterday was a very busy day for me, so I didn't have time to update this journal. Naturally, Murphy's Law applied and it was a good day. But I am committed to reporting only trades I report beforehand, so I will leave it at that'
9:07 Entered orders to buy ES.U @ 2862.00 with stop @ 2860.00
10:09 filled on the buy.
10:18 stopped out
For some time now I have been watching something interesting about the nature of HOW the market gets to my entry prices and subsequent action. Came within an inch of canceling all orders because of those observations and will probably incorporate into trading rules soon. It may cause me to miss a few winners, but I think it will be a valuable addition. Has to do with spikes, steep moves and more gradual moves. Spikes, you can't anticipate. Steep moves are more subject to interpretation, but give a little time to cancel orders. More gradual moves seem to result in success.
That's what my volatility filters are for. Market conditions change throughout the day and I watch them closely and make adjustments, including cancellations, accordingly. But sometimes the changes happen too fast to adjust. As I recall, last Friday was one of those days. The market had been relatively quiet for about 2 hours and I had orders to go short. Suddenly the market took off like a rocket My entry orders and stops were taken out within a few seconds of each other. In the next few minutes the mkt had rallied 10-12pts. That's why I never put in an entry order without putting my stops in immediately thereafter.
I don't generally "think" the market is going to do anything. If you ever watch any of the financial networks, you often see the host ask the guest "expert" something like this: "would you buy this market?" The typical, vague answer is "I'd wait for a pullback". That's about as useful as saying "buy low and sell high". What time frame? How much of a pullback? When does a pullback become a turnaround? I have spent years of research trying to quantify the answers to those questions. Still, nothing is perfect. A pullback can be very close to a turnaround, especially in intra-day trading. Hence, the importance of the initial location of the stop price.
Good luck with the project.
Just wondering how do your current "live" results compare to if you ran the backtests again?
It seems you had some backtesting results in the opening thread,
if you reran that and compared it with your results you posted, do they still correlate?
9:05 entered sell orders for ES.U @2910.75 and stops @2912.75
9:19 filled on the sell , stops remain the same
9:36 stopped out - this trade had 2.5 profit at one time. It was tempting to take a small profit, but that's ultimately not the road to trading success
9:47 entered buys @2909.0 with stops @2907.0
10:07 filled on the buy
10.22 stopped out
it would feel great to hold a position for 30 min or more for a change
I've been trading, of course. But, for numerous reasons, haven't taken the time to update. I might start posting screenshots of the trade re-cap at the end of the day.
