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 firewalker99 Please find the replies to your questions: 1) What is "near"? A point? Two? 5%? 10%? ...

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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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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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