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; You may have the following clear in your head, but they're not clear in what you have written: Originally Posted ...

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Old Aug 5, 2006, 3:20pm   #97
 
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You may have the following clear in your head, but they're not clear in what you have written:

Quote:
Originally Posted by firewalker99
2. After the open:
- when near 5710 short
What is "near"? A point? Two? 5%? 10%? Are you shorting all your contracts at once?

Quote:
- if price drops below previous S 5690 wait for it to retrace up to the line, then short again
Again, retrace how close? Short more contracts? How many?

Quote:
- if price drops below Support 5670 wait for it to retrace, then short unless you see wider spread up bars or a lot of up bars closing near the high
Ditto re "retrace" and "short". "Wider" than what? How many is "a lot"?

And so on, but I hope you get the idea. Questions you ask yourself during the prep phase are questions you won't have to ask yourself when you're trading and have to make an immediate decision.

If this is not clear, post your prep and charts for Monday, but give people enough time to comment. Today would be good.

Db
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Old Aug 5, 2006, 3:38pm   #98
 
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Quote:
Originally Posted by firewalker99
Although you call them "minor" adjustments, drawing the line 5 points higher or lower could mean the difference between a profitable trade and a stoploss trigger because my stoploss is normally less than 5 (ATR).

Do you look at the outer edges to draw a line? In many cases I've read it's safer to draw a line within a "congestion zone" instead of the point where it spikes. Do you take in account the wicks, bodies, or say for instance it's more probably to have a zone around 5650 than around 5645 because it's a "round number"... Take a look at post #87, not so long ago, I'd probably drawn S/R on those points.

Take for instance the lower line at 5625, could have drawn it at 5620 or at 5630, I intuitively choose 5625 but if I were to defend my position I could also argue in favour of 5620-5630. I know you say the lines are often more "zones" but trading a zone of a mere 10 points is a too big for me.
Regardless of what you've read and what I or anyone else has said, you have to determine through your own experience where it's "safer" to draw a line. Keep in mind, however, that price is outside of you, as are the levels of S/R. They exist independent of you, though in the case of S/R levels, you may not place them correctly. Your triggers, though, and your stops, are entirely within you. They are your choice. Those choices may be made according to what's on the chart, but whatever connections there may be are in your head. The market, in other words, couldn't care less what you're comfortable with. If you can't find an S/R level that provides you with a trigger that's tight enough for you with a stop that's tight enough for you, then leave that particular level alone.

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
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Old Aug 5, 2006, 3:39pm   #99
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db, early recognition of apex bar as it closes .......is that worth pursuing? thanks
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Old Aug 5, 2006, 3:53pm   #100
Joined Nov 2005
apology

firewalker,

Please excuse the db question from me.......i didn't mean to be rude interruptor ...just a stop loss setting remark triggered by the death by a thousand cuts response..too close to home for me...I believe stop settings are very critical to trading success.... ..the loose stop/trailing stop being set just to "get out of the way" is just as dangerous as the tight stop or the mental stop for any but the few...i am not one of the few...all remarks IMHO.. best wishes .ymonly
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Old Aug 5, 2006, 4:10pm   #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.

Db
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Old Aug 5, 2006, 4:57pm   #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, 5:13pm   #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, 5:26pm   #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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