bakedbeans' learning journal

[bb01100100]

I've just come across Don's posts on using dot charts in his Patterns Observation thread.. /really/ like the idea of them.. I have no idea whether he eventually discards them or says "nah, just kidding!" since I haven't finished reading the thread, but it does seem to clearly show clustering and trend...

It's not clear at this point how to set stops or targets.

Here is a little comparison, 1min dots vs candles for ES this morning.. I had a go at marking up where I might have entered and exited.. the green numbers (ignore the sign) are number of ES points.

2023-08-02-ES-dots.jpg (138.49 KiB) Viewed 1242 times

What I find interesting is that we see repeated dots with the same close price.. not something I tend to notice so much with candles.

Perhaps I should think of multiple dots at same price as an indication of difficulty to move.. e.g. that grind downwards from 5:15am on the chart was arduous.. then it popped up, then it flowed more freely downward.

[Don_xyZ]

I've just come across Don's posts on using dot charts in his Patterns Observation thread.. /really/ like the idea of them.. I have no idea whether he eventually discards them or says "nah, just kidding!" since I haven't finished reading the thread, but it does seem to clearly show clustering and trend...

It's not clear at this point how to set stops or targets.

Here is a little comparison, 1min dots vs candles for ES this morning.. I had a go at marking up where I might have entered and exited.. the green numbers (ignore the sign) are number of ES points.

2023-08-02-ES-dots.jpg


What I find interesting is that we see repeated dots with the same close price.. not something I tend to notice so much with candles.

Perhaps I should think of multiple dots at same price as an indication of difficulty to move.. e.g. that grind downwards from 5:15am on the chart was arduous.. then it popped up, then it flowed more freely downward.

I still use dot chart, it's just that it's much simpler to show readers to see it in candles format because I usually show finished result and it's dang hard to show what's going on in a dot chart minutes ago using a dot chart. It's easier to show it using candles. The reason being, during a live chart, you can see the wick using a dot chart as price goes up and down but when the 1 minute is completed what people can see is only the final closing dot. A dead close price dot. Very few people are diligent enough to check the candle chart to know what I'm talking about. Thus, I only show candle on my thread Unless I use a trading method that requires the use of the extra price points.

[bb01100100]

Watching the "live dot" move about before it closed was a little unnerving.. will it return..? no, we just closed 3 points lower. Oh.

Don do you have any thoughts on the Fitch downgrade for the US? Yellen's response was quite firm, so I wonder if the real news would be if S&P also downgraded the US Govt's debt? I'm thinking of fading the pullback, since we already pushed lower after the open...

It seems like a good contrarian play, but I might be mistaking a systemic shift in sentiment!

[bb01100100]

I think my question is redundant:

• if the news is going to be ignored, price will go up - buy
• vice versa - sell
• trade what I see, not what I predict the future will do

[IgazI]

I think my question is redundant:

• if the news is going to be ignored, price will go up - buy
• vice versa - sell
• trade what I see, not what I predict the future will do

The hourly goes down for hours, and the daily goes down for days;
finding a reason to trade these charts will make navigating the M1 less of a nightmare.

Aim to do less while achieving more.

1_2_3.jpg (67.33 KiB) Viewed 1169 times

[Don_xyZ]

Watching the "live dot" move about before it closed was a little unnerving.. will it return..? no, we just closed 3 points lower. Oh.

Don do you have any thoughts on the Fitch downgrade for the US? Yellen's response was quite firm, so I wonder if the real news would be if S&P also downgraded the US Govt's debt? I'm thinking of fading the pullback, since we already pushed lower after the open...

It seems like a good contrarian play, but I might be mistaking a systemic shift in sentiment!

Downgraded or not, the U.S. is still the largest and most trusted economy in the world today.

For sure these kinds of things have impact on the market but everything you need to know is already taken into consideration and is vividly displayed via the charts.

I do watch news, macro and micro but it's nothing more than watching big charts (D1, W and MN). Another thing with macro stuff is you have an idea what is the hot item(s) at that time. Example of this is last year when Rusia first strike Ukraine, I said that WTI is the hot item because Oil is Rusia's biggest export and the price did what it did. You can read this in the first page of my Patterns Observation thread

post149356#p149356

[bb01100100]

Hello Igazi; thanks for your post - I've been thinking it over while I've been off sick with the flu: "aim to do less while achieving more".

I keep getting sucked into the individual candle action and lose sight of the bias/trend, which makes me a busy fool. Despite my best efforts, I keep losing perspective while scalping. So I'm thinking of slowing down, doing less and giving my trades more time to travel further.

To do this I'm taking a cue from some of things I've read in your posts: forming a theme based on the higher timeframes (I'm using daily as a 'big levels' reference and hourly as a 'things that are happening during my trading session' reference) and using the M1 to trade within that.

I'm also attempting to use dot charts for M1 in order to reduce the cognitive load.. because of that I'm dropping back to using micros instead of mini ES contracts so that I can use wider stops while setting targets based on the hourly levels, thus aiming for much better RR.

Attached screenshot is my attempt to trade the theme - market moving to first blue horizontal line (target on the hourly) while taking some scalps at stall points on the way up.

2023-08-04-MES-dots-fills.jpg (169.59 KiB) Viewed 1080 times

By seeing the higher closes on the dot chart and believing that price really can move up to a higher timeframe level, I was able to work with the money and do more with less.

I'd like to continue developing this kind of approach - I can't be present for a lot of the session action, but if I can "position scalp" (?) my entries within a larger context then I might find a viable way to work with the markets, avoiding getting churned and burned.

Posts from you and Don have helped to cement the idea of risking a little and letting it run over time.

[bb01100100]

One for Kiwiarian if he passes by: is your avatar the “good night kiwi” that played at the end of TV transmission in NZ from a few years *cough* decades *cough* ago…? I kept wondering what it was and finally zoomed in a bit and thought “hey wow!”

[IgazI]

Hello Igazi; thanks for your post - I've been thinking it over while I've been off sick with the flu: "aim to do less while achieving more".

I keep getting sucked into the individual candle action and lose sight of the bias/trend, which makes me a busy fool. Despite my best efforts, I keep losing perspective while scalping. So I'm thinking of slowing down, doing less and giving my trades more time to travel further.

To do this I'm taking a cue from some of things I've read in your posts: forming a theme based on the higher timeframes (I'm using daily as a 'big levels' reference and hourly as a 'things that are happening during my trading session' reference) and using the M1 to trade within that.

I'm also attempting to use dot charts for M1 in order to reduce the cognitive load.. because of that I'm dropping back to using micros instead of mini ES contracts so that I can use wider stops while setting targets based on the hourly levels, thus aiming for much better RR.

Attached screenshot is my attempt to trade the theme - market moving to first blue horizontal line (target on the hourly) while taking some scalps at stall points on the way up.

2023-08-04-MES-dots-fills.jpg

By seeing the higher closes on the dot chart and believing that price really can move up to a higher timeframe level, I was able to work with the money and do more with less.

I'd like to continue developing this kind of approach - I can't be present for a lot of the session action, but if I can "position scalp" (?) my entries within a larger context then I might find a viable way to work with the markets, avoiding getting churned and burned.

Posts from you and Don have helped to cement the idea of risking a little and letting it run over time.

Someone once said, "price moves hundreds of pips; so why aren't you making hundreds of pips?"

You have to find a way to move from minutes to hours before you can trade for days; it's not something that just happens, you have to wake up every day knowing that is exactly what you are trying to accomplish;

you can't trade for 5 and 50, it just doesn't work like that.

[bb01100100]

Hello; I'm still chipping away at a few things:

• Looking at three hour charts of the fx majors and some fx crosses (aud/jpy, eur/jpy, gbp/jpy) and looking for obvious "patterns" - looking to trade the movement away from the pattern. Rather than guess the future, I just set a modest take profit based on a zline, etc for half the position and something larger for the other half.
• I've noticed my pattern recognition is better on higher time frames - less emotional involvement I think. I let trades work and get on with my day, checking in periodically.
• For ES, I'm looking at some evening trading for my timezone, pre-market for Eastern Time. Same approach as before: 1m charts and looking for one or two good scalps. Still need to practice sitting on my hands.

I expended a fair amount of mental energy on the weekend thinking about how people say the markets are fractal and wondered whether they actually are - not anecdotally, but provably via some form of model.

That led me down the rabbit hole of thinking about higher time frame patterns and breakouts and successively lower timeframe patterns and breakouts and whether there is some form of (presumably random, not forecastable) symmetry, and, and and.. then I remembered what Igazi said:

Patterns. Breakouts.

I tend to want science behind me so that I can feel better about the random outcome of placing a trade.. if I had a model (unclouded judgement), if I had more statistics (confidence), etc. I've been itching to return to algorithmic trading because it can capture price action when the market is busiest and I'm not awake, but I feel in doing that I'm not addressing what I need to address in order to be a "robust" trader.

So instead I made a conscious choice to accept that the patterns I see are "good enough" and that I can wait for movement away from those patterns and I can place trades. I can stop making it so technical and start making it more "conditional": if/then, over and over again.

Putting that in to practice has been positive:

• Placed some H3 FX cross trades yesterday; won some, lost some and accepted the outcome, moved on to the next opportunity and finished a respectable 2.8% up (sadly only on a ctrader demo account.. was looking at it for an FTMO swing account where I can potentially run longer term trades on FX pairs, including crosses).
• Saw a good short this morning on ES during early asia; hourly timeframe; had a selling zone in mind and sold, held, added in the zone as price retraced up and held until it hit my first target; finished 13% up (RR was 1.4:1). This was on my small live account.