Firewalker's Journey: A path of discovery in search for enlightenment

This is a discussion on Firewalker's Journey: A path of discovery in search for enlightenment within the Trading Journals forums, part of the Reception category; Originally Posted by ymonly db, early recognition of apex bar as it closes .......is that worth pursuing? thanks Yes. The ...

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Old Aug 5, 2006, 5:10pm   #101
 
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Quote:
Originally Posted by ymonly
db, early recognition of apex bar as it closes .......is that worth pursuing? thanks
Yes. The earlier you can get in, the tighter your stop can be. However, one must study a hell of a lot of these "bars" (actually parabolic waves) in order to achieve a satisfactory -- for him -- probability of being right. He must avoid being sucked into a counter-trend trade. He should be open to the possibility of an SAR but not be tricked into exiting his original position too early.

So, whether one tries this tactic and benefits from it will depend on how much research he's willing to do.

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Old Aug 5, 2006, 5:57pm   #102
 
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Quote:
Originally Posted by dbphoenix
As for the adjustments, your lines should be consistent from left to right. You have what appears to be an important line on your first chart at 5625, but this then disappears. The adjustment I made was to 5612.5, which is echoed in the line you drew on your second chart at 5615, which seems to come out of nowhere, but is based -- or should be -- on the S/R line drawn on the first chart. As for the line drawn at 5675 on the second chart, this is drawn by you on the first one, but left off the second one, and extending that line underneath that first swing low to 5675 strengthens the potential importance of the line. 5675 is also left off your third chart, even though, again, you drew it on your first.
Db
You're absolutely right that was not consistent, but let me explain. I decided to see where I would draw S/R lines on each chart separately. Any lines I believed to be there were marked independently of what I saw on the chart of the previous week and month with the purpose to see if I'd were able to mark similar points. Apparently not... I do have however a question about consistency: 5675 seems an important level, than shouldn't the line on the monthly (first) chart to the left be situated around 5675 instead of 5662.50? Furthermore on the (third) daily chart you drew a line at 5650, although there is no reference to that on the other charts so this one does come out of nowhere?

Finally, are the grey lines meant to indicate zones or did you have something else in mind?
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Old Aug 5, 2006, 6:13pm   #103
 
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Quote:
Originally Posted by firewalker99
You're absolutely right that was not consistent, but let me explain. I decided to see where I would draw S/R lines on each chart separately. Any lines I believed to be there were marked independently of what I saw on the chart of the previous week and month with the purpose to see if I'd were able to mark similar points. Apparently not... I do have however a question about consistency: 5675 seems an important level, than shouldn't the line on the monthly (first) chart to the left be situated around 5675 instead of 5662.50? Furthermore on the (third) daily chart you drew a line at 5650, although there is no reference to that on the other charts so this one does come out of nowhere?

Finally, are the grey lines meant to indicate zones or did you have something else in mind?
The following represent what I would have done to prepare for the 4th and what I would have drawn during the trading day on the 4th. It is not THE way. It is A way. It provides me with focus but not blinders.

5650 is not drawn on the first two charts because I would have seen nothing in the first two charts to suggest that 5650 was important.

The grey lines are those that you drew which I adjusted or did not use.
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Old Aug 5, 2006, 6:26pm   #104
 
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Quote:
Originally Posted by dbphoenix
You may have the following clear in your head, but they're not clear in what you have written:
Db
Please find the replies to your questions:

1) What is "near"? A point? Two? 5%? 10%? Are you shorting all your contracts at once?
Near = exactly to that point
Entering a trade is immediately with two contracts, exiting is done following fixed targets based on ATR as described.

2) Again, retrace how close? Short more contracts? How many?
Retracement to that same level, so exactly as it reaches 5690. For the moment I'm not adding to a position nor averaging down. So if I were to be in a trade that would be one going in the right direction and I'd leave it alone. If I wasn't in a trade at that time, I'll enter now.

3) Ditto re "retrace" and "short". "Wider" than what? How many is "a lot"?
For "retrace" and taking on a position I refer to my answer on point 2.
Wider = spread at least double than the down bars before.
A lot is at least 3.
"unless you see wider spread up bars or a lot of up bars closing near the high"
should have been: "unless you see a min 3 wider spread up bars closing near the high"

Because you already found my "plan" fairly complex, I didn't want to add to that be specifying further details...

Quote:
Originally Posted by dbphoenix
If this is not clear, post your prep and charts for Monday, but give people enough time to comment. Today would be good.
Db
I'll see what I can do but my broker doesn't allow access from Saturday till Sunday evening (system updates,..)
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Old Aug 5, 2006, 6:30pm   #105
 
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Quote:
Originally Posted by dbphoenix
The grey lines are those that you drew which I adjusted or did not use.
Sorry, I knew those were mine, I just wondered if you had any special intention by putting them grey instead of removing them from the chart. No problem.
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Old Aug 5, 2006, 6:48pm   #106
 
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Quote:
Originally Posted by firewalker99
Please find the replies to your questions:

1) What is "near"? A point? Two? 5%? 10%? Are you shorting all your contracts at once?
Near = exactly to that point
Entering a trade is immediately with two contracts, exiting is done following fixed targets based on ATR as described.

2) Again, retrace how close? Short more contracts? How many?
Retracement to that same level, so exactly as it reaches 5690. For the moment I'm not adding to a position nor averaging down. So if I were to be in a trade that would be one going in the right direction and I'd leave it alone. If I wasn't in a trade at that time, I'll enter now.

3) Ditto re "retrace" and "short". "Wider" than what? How many is "a lot"?
For "retrace" and taking on a position I refer to my answer on point 2.
Wider = spread at least double than the down bars before.
A lot is at least 3.
"unless you see wider spread up bars or a lot of up bars closing near the high"
should have been: "unless you see a min 3 wider spread up bars closing near the high"

Because you already found my "plan" fairly complex, I didn't want to add to that be specifying further details...
Better, and this stuff seems complex only because it's written down. As the weeks and months and years go by, most of it becomes automatic, like braking at a red light. (My reference to "complex" had to do with the multi-layered smorgasbord approach which you had posted earlier.)

Even so, I see nothing about longs in your plan, exc for your note about price breaking above 5710, which it never did.


Quote:
I'll see what I can do but my broker doesn't allow access from Saturday till Sunday evening (system updates,..)
You don't have access to charts except through your broker?

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Old Aug 5, 2006, 7:24pm   #107
 
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Quote:
Originally Posted by dbphoenix
You don't have acces to charts except through your broker?
Db
No, any idea on a free data provider?
I do have a tool for backtesting (Trademaven) with which I can replay days up to three months. I've found this to be quite useful as you also can fast forward throughout the day. Unfortunately it doesn't include DAX. Any views on trading a specific market in particular? Like if I'd were to be a ES trader, would I study only ES charts?

Last edited by firewalker99; Aug 5, 2006 at 7:35pm.
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Old Aug 5, 2006, 7:28pm   #108
 
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Quote:
Originally Posted by dbphoenix
Even so, I see nothing about longs in your plan, exc for your note about price breaking above 5710, which it never did.
Db
Well, I mentioned several possible entries for taking a long position in points 2 and 3 of my plan. But I think we'd better stick to the first part. For longs exactly the same is valid, it would be just in reverse (instead of resistance line, it would be a support). But otherwise all the same variables would be included with the same rules, but then upbars would be down, and so on... if you think it would be safer to write it out completely let me know.
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Old Aug 5, 2006, 8:31pm   #109
 
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Quote:
Originally Posted by firewalker99
Well, I mentioned several possible entries for taking a long position in points 2 and 3 of my plan.
I see nothing here about longs except in the asterisked portion of (2):

1. Pre-market: I attached a chart of previous month (1day bar), week (30min bar) and day (5minbar) with S/R lines.

2. After the open:
- when near 5710 short
- if price drops below previous S 5690 wait for it to retrace up to the line, then short again
- if price drops below Support 5670 wait for it to retrace, then short if selling volume was still high enough (not after probable selling climax)

* In case price breaks up through 5710 on high volume bozo, wait for next bars and try to enter long around 5710 if you see the signals as described in "1". Than wait and see what happens if it reaches previous resistance around 5737.50. Anyway, that's where points 4 & 5 come into play.

3. Stop: my stop will be placed at ATR. So depending on the volatility at the time of entry, stop can be small or large. Why? I don't want to get stopped out to early.

4. Target: if I trade two contracts the first target is 2x ATR, second is 3x ATR.
Why? I think is risk:reward of 1:2 or 1:3 is not aiming too high. If I'm unable to take small profits, I don't think I'll ever be able to take big profits.

5. Exit: After my first target is reached, I'll place my stop to breakeven. So either I'll exit on BE or on 3x ATR with second contract. If first target isn't reached, than both contracts will be out on the stoploss.


Quote:
But I think we'd better stick to the first part. For longs exactly the same is valid, it would be just in reverse (instead of resistance line, it would be a support). But otherwise all the same variables would be included with the same rules, but then upbars would be down, and so on... if you think it would be safer to write it out completely let me know.
If writing it all out before the trading day opens is not helpful, then there's no particular reason for you to do it.

So far, 95% of this has been theoretical. I suggest you spend a few weeks trying out the suggestions I and others have made in order to determine whether or not those suggestions have any effect on your success rate or not.
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Old Aug 7, 2006, 1:25am   #110
 
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August 7: Preparation before the day

firewalker99 started this thread * Changed JPEG charts into GIF for smaller file sizes.
* Added 6 month chart because no S/R lines visible above 5750 on smaller time frames.
* Removed line at 5662.50: didn't see anything at weekly chart. Not sure about 5650 either.

Note: last week price has been ranging between 5625-5725 with a peak 5750 at time of ECB interest news release.
Possible outbreak above 5750
Attached Thumbnails
dax6months.gif   daxweekly1.gif   daxmonthly1.gif  


Last edited by firewalker99; Aug 8, 2006 at 12:05am.
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