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Today I saw an old video on youtube from the PATS channel and I realized that the lessons Mack uploaded back in the day were just as important as what he does today, so I decided to challenge myself and rewind time a little to observe past price action with the mental framework and understanding that I have today. If you don't know what I'm talking about, here you can gather some information: PATS youtube / PATS site
My goal and intent with this journal is to create a collective space where I/We can upload and compare observations with Mack's notes and videos and this way grow as much as possible as a trader. The way I intent to do this is to download past data, replay the day in the trading platform, mark the trades that I consider solid and watch the corresponding PATS lesson and post the trades and conclusions here in a simple and consistent format.
If you want to participate, that is more than welcome but what I'm asking is to keep the dates in a chronological order, so that I can come back and find if I need any data. The PATS system is good and it does provide an edge for those who put in the time and effort to develop themselves to a sufficient level. This journal is not intended to be a place for an argument for or against the system itself or technical based price action trading in general. I'm interested in learning and growing that is it. Mack is a good guy, he does most of his stuff for free and my highest gratitude toward him for this. I'm a dedicated student of his (and many other traders who are willing to share their invaluable wisdom) but I'm not affiliated with the PATS system in any business way, shape or form.
The channel starts at 1st of November 2011, so that is where this journal will be started and my initial goal is about 7.5 videos a week, meaning I want to go 1.5 speed on 5 daily videos a week he posted. My initial feeling is to start from the beginning of the channel to the end of 2015, so this will possibly be a multiple year project. In my humble opinion trading is just like any other performance sport, work ethic, effort and dedication is the differentiating factor between champions and everyone else and these public journals are a great opportunity to step up, be accountable and claim maximum efficiency.
“Happiness is the meaning and the purpose of life, the whole aim and end of human existence.” Δ
“There is no path, but only a fool wouldn’t follow it.”
Okay, lets get this rolling. I want to explain a couple things before we begin. I use very similar chart setup to Mack with the exception that I have a 6500 volume per bar data organization system, instead of the 2000 tick. Both give very similar timing and execution opportunities, using the 6.5k volume is simply my personal choice. Next to the Ema 21 that Mack has also, I use a daily mid (flat grey line) simply derived from the (daily H - daily L)/2 formula. I also have a VWAP usually to give me a heads up but most likely for data reasons it does not show up at this time, I will mark it when it comes alive, if at all. A volume profile is also present on my chart, I do watch it, I do think it is valuable information but in this thread I will be focusing on the PATS price action technique, mostly.
The blue circle is a valid long entry, the red circle is a valid short entry, the green is a higher risk, more aggressive trade that can be both long and short. Nowadays Mack uses arrows to indicate the direction and the exact trade location but back in the day he used to use circles as well. My usual daily routine is that I replay the prior days action, mark the best trade, rationalize them in my head or writing and then watch Macks daily review, so that will be the action plan I'll use here as well. Replay/Mark,Rationalize/Lesson
Notes:
The best trades are usually come from KEY AREAS where one side got run over, but has a chance to exit in a manageable fashion, many traders also look to initiate there against the side that is in pain. Also, it is becoming obvious very fast that in 2011 the market was running in one direction much more than it does recently (2017) so I believe it is advisable, and possibly easier to wait for the dominant side and stick with it until a major change has taken place. There are always good possible counter trades though, but if you look at my markings or Mack's markings it is UP initial and then DOWN later during the day as the market found committed sellers, who were willing to push prices.
My chart:
Pats chart:
If there is anything unclear feel free to ask. I've been doing this exact routine for a while and it is easy to take granted something that might not be clear for others. If you are completely new to the PATS system I suggest you go over to Mack's site, since he has everything explained from the beginning, but again I'm happy to answer any questions or challenging thoughts on why I marked a certain trade. I'm a student as well and My goal here is to learn.
“Happiness is the meaning and the purpose of life, the whole aim and end of human existence.” Δ
“There is no path, but only a fool wouldn’t follow it.”
Thanks David for the heads up. I don't know what is wrong, I do see it on my desktop but I've check it from a different computer and it didn't load for me either. A re-upload, will hopefully solve the issue. Thanks for the feedback.
My chart:
Mack's chart:
“Happiness is the meaning and the purpose of life, the whole aim and end of human existence.” Δ
“There is no path, but only a fool wouldn’t follow it.”
I'm going to give some reasoning to the trades I marked because they are not very similar to Mack's except the two last short that he marked. There is a nice quote from the end of his video 'Learn to pace yourself, not be greedy and take what the market will give you.'
My chart:
1. SEL off the prior day's high. This trade did take a lot of heat, but at the point of entry it had a good signal bar, showing buying interest at the prior high. This was also a measured leg down after an impulse move higher, so long term context wise buyers were pushing. I had this trade marked during the replay and even though it doesn't look the greatest in hindsight it made the cut and I like to see where I would have positioned myself real time. (Not all trades marked are from real time replay just to let you know)
2. FSEL - This trade is a little after Mack's 2nd trade. At this point I want to see some confirmation from buyers that they are indeed interested, after letting the prior high break.
3. FREVERSAL - Very aggressive trade, but the move higher is going full speed and shorts are in pain. It is a higher probability trade to get on with the momentum while its full on then to wait for a strong opposing force and a possible pb entry.
4. BOPBS - The market has found sellers, started ranging, broke the range to the downside and now testing the lower edge, where buyers are hoping and sellers are entering.
5. SEL off of a SR area. A lot of possible entries in this environment so it is best to wait for KEY AREAS
6. - 7. SESs as marked by Mack
8. - 10. PB entries after the impulse move after the market has found buyers, started ranging and broke and defended the range to the upside.
11. SEL off of YH, it is risky because you are taking price risk waiting for confirmation and there is a possible SR zone in the way of the target, but long term context is an impulse move higher and 2 legs down, at this point I would expect a new high, which didn't happen and that's great, the market is always right, I'm just hear to listen and learn.
Mack's chart:
So I understand there is a lot of possible terminology that you may not understand, if you have any question feel free to ask or challenge my thinking.
