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; Possible trades after opening: * Entries long after retrace (cfr. plan) above 5720, 5750, 5800 * Entries short after retrace ...

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Old Aug 7, 2006, 1:45am   #111
 
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August 7 plan

firewalker99 started this thread Possible trades after opening:
* Entries long after retrace (cfr. plan) above 5720, 5750, 5800
* Entries short after retrace (cfr. plan) below 5675, 5625, 5612.50, 5600

Conditions to enter short: previous posts
Conditions to enter long:
Look for outbreak through previous resistance level (in this case 5750) on WRB which closes above middle (preferably marubozu). Wait for price to retrace to that same point. Pattern down should be less pronounced than breakthrough and should not be a bounce off another higher resistance level (5800) which could indicate reversal. After first trade was successfully closed, check if market is trending (higher highs + higher lows or opposite) or ranging (hi/lo remaining within specific boundaries) and look for possible entry around 5750/5800 levels.

No change in rules for position sizing, risk/reward, exit, stoploss.

Last edited by firewalker99; Aug 8, 2006 at 12:05am.
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Old Aug 8, 2006, 12:12am   #112
 
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August 7 Trades

firewalker99 started this thread No entries.
Red lines indicate S/R lines previous to opening, blue lines added throughout the day

Signal 1: 1100hr, breakthrough S 5650 on WBR
Seems like bounce off on 5635 however, so in doubt => not a retracement
"when in doubt, stay out" -> did not short at return to 5650
another counterindicating signal: WRB at 1145hr

Signal 2: 1700hr, again breakthrough S 5650 on WBR
contra-indicating signals: WRB around 1730
+ looks like reversal and bounce off 5635 once again

no clear breakthroughs on upper R level
strategy needed for reversals
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Old Aug 8, 2006, 12:19am   #113
 
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August 8 preparation

firewalker99 started this thread * Same charts and S/R lines as August 7
* Note hinge?
* Possibility for slow moving day within small range 5650-5675? pretty small range...
* More likely: outbreak, perhaps surrounding 2015 local time (FOMC Interest Rate Statement)
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Last edited by firewalker99; Aug 8, 2006 at 2:18pm.
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Old Aug 9, 2006, 12:07am   #114
 
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August 8 Summary

firewalker99 started this thread * Only one possible entry according to plan: after breakthrough at 1430 waited for retracement back to 5675 which happened at 1600. "Retracement" however happened at multiple WRB which was a counterindicator, so didn't take the trade.

* Did no more trading after 2000 local time (FOMC Interest Rate Statement)

* Added S/R lines from previous day @ 5635
* New R at 5695? (already occured at intraday chart couple of days ago)
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Last edited by firewalker99; Aug 9, 2006 at 12:17am.
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Old Aug 9, 2006, 4:03pm   #115
 
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Quote:
Originally Posted by firewalker99
* Only one possible entry according to plan: after breakthrough at 1430 waited for retracement back to 5675 which happened at 1600. "Retracement" however happened at multiple WRB which was a counterindicator, so didn't take the trade.

* Did no more trading after 2000 local time (FOMC Interest Rate Statement)

* Added S/R lines from previous day @ 5635
* New R at 5695? (already occured at intraday chart couple of days ago)
I see nothing here about multiple WRBs being a counterindicator. How do you know that that's true?

Ok, I'll share some essentials of my trading plan for taking an entry.
They are however based on S/R lines or trendlines; that's where I fail to make it. Often in hindsight I see other points that indicate a better support zone, and if I'd taken my entry conform strategywise that would have been a possible profitable trade. This part doesn't say anything about position sizing, risk reward, profit/loss, fixed or variable target, stoploss, etc. If you'd want me to add let me know but perhaps it's better to take it one step at a time.

1) If a break through a previous resistance level should occur on a wide range body (closing above middle, this does not necessarily imply one bar try to "blend" bars), check if volume is equal or higher than the previous upswing. If it is (but not extremely high because that would indicate too much supply), than wait for a retracement (lower volume, small spread) to touch the resistance line. If it waffles around or slightly above the line for a minimum of three bars on lower volume (possibly dry-up), than take an entry. Also check for support to the left of the weekly/monthly chart if the marubozu upbar didn't create an air pocket without support.
In case of a support line -> similar situation but turn everything around

2) After a potential selling climax (of course easy to say in hindsight, although I have described some elements where too look for), look for a high volume wide spread hammer that closes above the low of the previous wide spread down bar (sometimes you'll have to "blend" two bars to see it). If price slowly starts to move up than wait for it to go back very near or to the lowest point of the SC. On that point if you see three bars that have an end above the middle, place your long entry.

3) Once you see a triangle (coil, hinge,...) developing check what happened before. This should be a low volume move converging into a point in the future. If after a selling climax, enter long on one of the lowest points, then if a false outbreak would occur you'd still be breakeven. If price has been ranging before, then if price > opening price => go long on lower boundary, otherwise short on upper side
.

Are you not trading today?

Db
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Old Aug 9, 2006, 4:52pm   #116
 
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Quote:
Originally Posted by dbphoenix
I see nothing here about multiple WRBs being a counterindicator. How do you know that that's true?

Are you not trading today?

Db
That's from post #107 where you asked me to specify some points:

3) "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"


In this particular case I saw 3 wide spread upbars, of which two about 10 points in size and closing on the high or very near to it. I don't know if that's true, but for me that would look more like a reversal instead of a retracement, especially as it went all the way back to S/R in only three bars...

No, not trading "as usual" today, as for now I fail to see what good it's going to do be analyzing the chart in real time. By the end of the day I'll review it and scroll "bar-by-bar"...
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Old Aug 9, 2006, 5:08pm   #117
 
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Quote:
Originally Posted by firewalker99
That's from post #107 where you asked me to specify some points:

3) "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"


In this particular case I saw 3 wide spread upbars, of which two about 10 points in size and closing on the high or very near to it. I don't know if that's true, but for me that would look more like a reversal instead of a retracement, especially as it went all the way back to S/R in only three bars...

No, not trading "as usual" today, as for now I fail to see what good it's going to do be analyzing the chart in real time. By the end of the day I'll review it and scroll "bar-by-bar"...
As you say, "I don't know if that's true". If you had tested the setup, you would know whether it's true or not. But you can't test the setup until you define it clearly enough to recognize it when you see it.

And, no, given the above circumstances, it's not going to do you much good to analyze the chart in real time. However, waiting for the EOD to review it is the equivalent of bailing out a sinking ship with a teaspoon. There are millions of old charts available. Why are you not looking for your setup in those charts in order to determine whether or not it is a winning setup?

Db
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Old Aug 9, 2006, 5:15pm   #118
 
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Quote:
Originally Posted by dbphoenix
As you say, "I don't know if that's true". If you had tested the setup, you would know whether it's true or not. But you can't test the setup until you define it clearly enough to recognize it when you see it.

And, no, given the above circumstances, it's not going to do you much good to analyze the chart in real time. However, waiting for the EOD to review it is the equivalent of bailing out a sinking ship with a teaspoon. There are millions of old charts available. Why are you not looking for your setup in those charts in order to determine whether or not it is a winning setup?

Db
I thought I was in the process of testing it? None of the things I've written are "true" or "false" as it's the first time I'm testing this particular setup using S/R lines from the previous week/month on the chart of the day as you recommended.

Before I only tested with S/R lines of the previous day. I've used Trademaven on ER2 to check and see if there was something in it, going back couple of months with replay function. Most of the time I didn't find usefuls setups, as seems to be the case here again. When I did found one either my stop was triggered or the trade never reached my target before turning back to breakeven. Of course there were succesful ones also, but you could count them on one hand.

I'm looking for something which would allow me 3 to 5 trades a day instead of 3 to 5 a week. I don't have access to intraday DAX charts of previous days (unless for the ones I've saved myself) unfortunately...
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Old Aug 9, 2006, 5:24pm   #119
 
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Quote:
Originally Posted by firewalker99
I don't have access to intraday DAX charts of previous days (unless for the ones I've saved myself) unfortunately...
Why not?
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Old Aug 9, 2006, 5:29pm   #120
 
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Quote:
Originally Posted by dbphoenix
Why not?
Well eh, because my broker has no backfill and I don't have a free data provider...
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