More correctly – it is a mechanism to clear up clutter…, and draw in & focus one’s attention on – thus accentuating – PA ============ It contextualizes the overall – all the way too…, and through – the subtle nuances It accurately reflects (when correctly drawn) buyers & sellers interactions Reflects momentum / volatility / control / pressure / direction/ potentially forming – moves/ pullbacks/ retracements / reversals / ranges / breakouts/ false breakouts Where / when a trade stops working iow - it contextualizes and illuminates all the components of PA – again – when the lines are drawn correctly ==================== The two (imo) glaring omissions unfortunately; The experience one needs to appreciate the simplicity – which, once one has the experience – away goes the need for (most) lines Plus – one still needs the ability to execute effortlessly…; enter when appropriate – exit losers while still small – let working trades alone – sit on hand as necessary - appreciate uncertainty and (trading) probabilities Easy as Pie Btw.., not knockin it… just sayin (at times.., that which appears simple…, may involve quite a bit of underlying intricacy) jmo RN
Unfortunately, simple and easy aren't the same thing. For one thing, you've got all those pesky motives of millions of traders . . .
Thanks RN and Db for your observations. I re-read the ATM posts. The visuals from the video somehow did and do help me, along with the kids youthful optimism. But I'm not going to trade with profiles on my charts. Or sit there and think about R:R. Or 'all that money'. Once I saw the profiles, I can get that from just looking at the chart. One argument here is that indicators might give you the same thing but exact to several decimal places. But that is a crutch, a distraction. It doesn't develop your eye and you can do it by eye quicker as you practice it. And I don't think trading is an exact to several decimal places kind of thing. When I was considering Sierra charts, youtube had one by a guy "Moo Trader" called 'how I market replay with sierra chart'. It's about 35 min play time. Turns out he is using a straight line method. Which he explains quite nicely. It's worth a watch. But he used stops and put them in by 'this is how much I'm willing to lose'. What we are learning with you Db is how to scratch and why. Which is an essential skill. It is developing my confidence much greater than when I traded with stops at how much I was willing to lose... which is a losing position to start with.
Care must be taken when exploring methods which may not be what they claim to be, such as those that claim to "trade Wyckoff" or "trade price" or "trade AMT". AMT, for example, must have something to do with volume as must any approach to trading since trading requires transactions and volume is a measure of transactions. However, the volume that makes up the basis of Market Profile is only tangentially related to AMT. There is no law that says that there must be more transactions at the mean than at the extremes. If there are, you get the tongue-shaped volume profile. But the volume can also be evenly-distributed from top to bottom, resulting in a piston-shaped profile. There is also the problem that these profiles may not even shape up until the trade is long gone. The best trades in AMT are found at the extremes not because of a profile but because that's where traders have the most trouble finding each other. If sellers can't find buyers at the upper limit, price reverses until those buyers are found. The opposite is found at the bottom. Price may also bounce at the mean of the range, but that has more to do with rejection than with a volume profile. Then of course there are trend channels, which are diagonal (technically, a lateral trading range is also a trend channel, but they're called "trading ranges" in order to distinguish the lateral from the diagonal, and that works for me). If you're emptying your head of nonessential information, take care not to fill it with a different set of nonessential information. What is or is not essential, of course, is determined by the testing you do regarding your own particular trading plan.
A guiding idea is that trading is about size. I've talked to people who are profitable, but still have difficulty trading size. The way we are considering scratching gives me confidence towards trading size. Getting rid of indicator distractions, simplicity goes towards trading size. Looking at PA and behavior goes towards trading size. Having an open target... etc. etc. So it is not the short term profits that interest me. I've had lots of profitable days in the past I couldn't repeat.
SlaPa ZenPa? releasing the unessential. I think I see better from your explanation of what AMT is and isn't.
Along with everything everyone else seems to be experiencing as a trader I have the experience of being profitable for days, weeks, a month or two and then getting off track. I believe my plan(s) were overly complex. That or in other ways not sustainable. The straight line approach has an elegant simplicity. It seems to be working for me. I'll have to do it for some time tho to prove myself with this. I have another issue. Like Geo Soros who I understand doesn't trade when his back pains him, I have days when I just shouldn't trade but do, at least for awhile. So some days you will see me just lose it.
One of the more memorable days from grad school was when the prof spent the whole lecture hour giving us a problem concerning toxicity. He outlined it and had us each spend 5 min coming up with a plan to work with the problem. This is agricultural pathology. Very down to earth professors. As a grad student my thesis was with recombinant nucleic acid using electrophoresis primarily. Another student was using an electonmicroscope, another mostly worked with gas chromatography. Each of us addressed the problem by the tool we were used to using. I of course came up with a way to solve the problem using electrophoresis. Then the prof has us defend our approach compared to the others. Which gave the most likely accurate results? Which cost the most or least to do in money, energy and time? We each totaled the costs and man hours and time to come to a conclusive answer. (Continued next post)