Discussion in ' Strategy Development ' started by eminiman , Sep 17, Log in or Sign up. I am looking to trade only around those two points for the time being.
I have my reasons but we don't need to get into those. My issue is I am struggling to figure out exactly how I want to go about it. I am interested in the excursions around these two levels. I am interested in more of a "flow based approach" around these levels sorta like an SLA type of deal I know trading these two points only will already reduce the number of trades which I like and filtering it further with a pattern I'm assuming there wouldn't be enough to go around, again an assumption.
I guess you can say well just test the SLA or whatever flow based approach around those areas, kind of a duh, but I am also interested in let's say Do we hold and drop off the PDH? If so by how much? If we then cross the PDH how far do we trade above it? Do we cross back down essentially now chopping around the PDH?
Maybe I'm trying to do too much with my former tests of different ideas? I can go on but hopefully you got the gist of it. Mainly I want to wake up every day and for the most part know exactly what I am going to do and where I am going to do it. Do I have rules? Sort of but not really. I am pretty open to any type of trade based on what's happening in front of me and that behavior is taking place.
I've been live on and off for the last 3 months and I've definitely traded breakouts, reversals, and retracements. I've traded shakeouts and BOPBs. Essentially I "follow the waves" until something jumps out at me and I roll with it.
Seems crazy and it's totally a very loose strategy but I'm up 6k in those 3 months not live everyday either and I am trying not to use the PnL as an indication of skill level. I've done between replay sessions per week since January of this year. Of course some days I missed due to illness or vacation or just tired eyes lol, but for the most part I've hit btw sessions most weeks.
This is trading only the first 90 minutes and at times speeding the replay up so it's not terribly bad going thru all of that. I've been thru all of twice via replay. I'm only saying this because I've done work, it just hasn't been very statistical other than what my platform keeps for me.
I kind of have a fuck it attitude. I know this double bottom my fail I know it may work. Do I need a statistic to tell me what I already know? I'd rather see these things happen in real time then get a probability of it's success rate. The issue with what I am doing now is I'm stressed everyday I guess in a way without having that stat or that set in stone way to trade. While I am pleased with being profitable, I'm feeling my quality of life is being affected almost by not having a set in stone plan.
In a way that's just in too. I don't want to feel anything and I know I shouldn't. This game needs to be business as usually and everyday I just don't know what kind of business I'm going to get myself into and that's what I am trying to eliminate. Any other profession I've had I never used money as how successful I am so seeing that positive PnL is almost making me feel lucky lol. It was more this client did this or that blah blah.
One last thing I'd like to say is about risk. I'm starting to feel this is all very user defined. Sure you can use the danger point, or another price level or a line break, but what's the risk? I'd like to make it about the market and not about me but what's the true risk the market is showing me? It's all very interesting to me and I'm just venting and overthinking now but just wanted to let it out hahaha. So yea, making a short story longer This is my kind of trading Here is the thing that I've noticed though First you have to figure out what exactly is the high.
I have my charts set up so that the open happens at 6pm ET. Now is the high, a high that is reached during the overnight session, or is the high that is reached during the to session? I see that often times, tracking both of these points can produce reversal trades where price hits this level within 4 ticks but can't go higher, but sometimes is the high reached during the previous RTH session, and sometimes its the ultimate high, even if that high occurred at some late hour.
Now if you take your stats of 6k in 3 months, that means per week, which would be 25 NQ points, so roughly 5 points per day.
Obviously since you don't trade every day this number probably varies widely, but its a good general number. I think with these very good stats, you almost don't need anyone else to tell you what to do.
Honestly, I don't think anyone else here is trading like you, so you may not find the answers you seek. Will you take this every time, regardless of how you see price moving? If you are watching price move and how it moves is affecting your decision, then any stats you might develop will not take this variable into account. I think that guys only trading 1 minute or higher bars can use statistics, but if you're watching price move and following a fast chart, there get to be too many variables.
Perhaps everything you're also talking about has to do with the fact that you can't believe you're profitable, that it can be relatively this easy, and you're looking for something on the horizon that you missed which might make you fall flat on your face one day. I honestly think it can be this easy once you've worked out most of the variables and there isn't much else to do but follow the bouncing ball where ever it leads. I spent months trying to figure out what it means to follow behavior and watching price move and how this fits into the whole statistical analysis of "setups", and not one person could provide an answer that was sufficient.
Why are you stressed if you're up 6k in 3 months? I think finding the answer to this would be much better than finding out if you need more statistical analysis in your method. As an illustration, I start by plotting my overnight levels and previous day levels on my 5 min chart that then transfer down to my faster charts. But would you really trade a statistical analysis of these levels by just seeing how far penetrations happen, if it penetrates? The fact that sometimes price comes within 3 or 4 ticks but doesn't even touch the level is a problem because now you can't have a standing limit order at the level which could fill.
So any statistical model with have you buying too soon, to make sure you're able to enter the trade, and then possibly taking on too much risk to have the stop beyond the danger point. And since you already know that its about how price moves as it approaches this level, I'm not sure if a statistical model can be built around how price moves, other than the intuition that comes from how price moves.
A statistical model would I think be "price gets to with x ticks of the a level, doesn't penetrate by more than y ticks, trade is entered z ticks away, etc. Intuitively you know how price should behave during a rejection or penetration of the level, but how you build this into a statistical model I have no idea. I'm not NoDoji, but perhaps my ramblings will help bring your thread to the front of the list so she sees it! Essentially the goal is simplicity.
I'm not necessarily committed to keeping my current style. There's even indicator that plots it for you lol. It to me is the most objective levels to trade or trade around. I'm looking initially just to do a study. Not so much defining the exact plan to enter and exit and all that jazz.
Oh and price must touch the level exactly. At least that's what I'm going to work w initially. Again simple and objective. Price either touches the level or it doesn't. It's also not about the money. Sometimes I overtrade, sometimes I under trade, sometimes I don't trade at all, and sometimes it's just right. Yes I'm up but at what costs internally. Again it's a study. To see if it will just make my trading world "easier". There's also the target aspect. I'd rather trade less risk a little more to catch 50 points than enter 8 times in 90 minutes and net 10 points.
Lots of guys over the years seem to say that after a while, they switch to trading a longer bar interval for less stress and more time off. This I think only comes from having developed the skill to backtest a strategy and have the balls to stick with the plan.
When you got multiple contracts on the line and price drops 10 points, you might be sweating buckets, but knowing that you're going for a 50 point move anyway, this might all be with the risk parameters of the plan.
More work to be done. Yesterday's high or low was never matched the following day with it being the current day's highest high or lowest low. I did track the extents of the breaks and some other things but still working. I stared to watch a random video on statistics, and just fast forwarding through, and I notice that in this video, he is showing an example with exporting data into excel to try and answer the question "How often does the day session equal or exceed the overnight low or high in the ES.
Not sure if there is any good stuff in the beginning cause I'm just scanning it, but when I saw this bit of info, I thought it was very much in line with what this thread was about. Hope you find it helpful. Thanks for the post. I've watch all his videos.More...