Sonic R. System

Hello everybody,

I have one question to all Sonicers and technicians - how do you guys spot market trend ? I mean looking on H4 chart how do you know it's up/ down trend ?

for me it's only SHI channel indicator (attached) shows this, but I do believe it should be better description.

Gold
after the fact but looking good


aligater

EUR USD
recent Trade


aligater

my actual entry is @ 3662 sl 3655
TP one 3734

I dont need those indi , but good for showing ,,,


aligater

Is it time to sell gold?

have some pations bro
then you might catch it
its NOT time yet

GL
aligater

OK.thanks.

When price makes higher highs and higher lows its uptrend.When price makes lower highs and lower lows its downtrend. Break of the recent low is the first indication that uptrend is turning into downtrend. Break of the recent high is the first indication that downtrend is turning into uptrend. Thats how i see it.
SHI is lagging.

got a re-entry ^ re-load if liked..


aligater

stopped - 7

switched to a sell position ...

Entry 3655 Sl 3664


aligater

closed at Be

maybe it's just me, but I can't get how your trades related to sonicr ?

Me neither, 7 or 9 pips SL, thats scalping sonicr isnt scalping really.

That's 'fun' stuff you guys been doing over the weekend - arguing over TAH's trading.

If it is any help, here is the way I see it:

It does make me wonder, why people spend so much time arguing for not sticking to the rules. And it's only because it's so damn hard. Actually, it's harder than the system itself. Having a system is a piece of cake, sticking to that system is another thing.

Here is why. Most of us hate having losses. If you love having a loss is because you are mentally challenged. That feeling of 'yep, it's going to hit my SL' is not empowering in any way. So at that time emotions come in and say 'hey man, remove your stop loss' or 'open another position'. While we are being emotional, there is no way of rationalizing that in the long run statistical probabilities of having a R:R > 1 will kick in and you will be in profit. Especially with the trend following system. So we move our stops or add to losing positions so that we would not feel wrong or bad.

Personally what I struggle with is that I emotionally attach to the amount of money I have, and if I experience a loss I feel a duty to find another trade to compensate the loss. That sometimes results in more losses, because I start chasing the market.

My friend who started scalping one year ago is still loosing money. I scalp too and scalping is the major source of my income, so I feel obliged to help him. We often sit and discuss what he has done wrong that day. He admits it and gets angry with himself for adding to losers, increasing risk, chasing the market or letting losers run. However, when I come to his house and he has a position opened, he is in some trance that he can't get out of. I say to him 'wtf are you doing! right now you are making mistake by mistake for not choking the losers off and by adding even more losers!'. He cannot hear me, he just says 'I know', but what if it reverses?' or 'Upcoming news will reverse the market to my favor'. I want to punch him to wake him up, because he starts to rationalize to himself why he should stay with losing positions and add even more! I once even slapped him - that's how hard it is for him to be disciplined. When he is not in a trade, he thinks clearly and his commitment to be disciplined is fine. But when he opens a trade and that trade goes against him, oh boy... emotions cloud his rationality and he starts making mistakes. We always begin our conversations with sentences like 'if only you have cut your loss there, you would be in profit'.

Similar situation I see with TAH. But TAH's situation is worse than my friend's. TAH has a scenario for himself which explains PA. That is the mysterious Big Boys or BBs. He has developed a story to back his mistakes. 'BBs did this, BBs did that' is a form of exporting your own responsibility for mistakes to some delusional entity. That delusional entity calms him down, because it's not TAH who could not take a loss - it's the BBs hunting for stops!

TAH asked for explanation for Friday's price action. TAH thought it was irrational to have a spike up making HH before a move down. So he questioned what ddaytrader could say about it, but ddaytrader didn't really address it so that TAH could understand. So I'll try to address it with a help of ddaytrader's emphasized supply and demand theory.

The spike up was after the news, around U.S. equity market open. So you can expect higher volatility as supply and demand changes more. You can see it this way (shown in the picture below):

A) Demand overcrowded supply.

a) The disciplined traders who had their stops above the last HH had been stopped out. So they wait or open a long.
b) The S&R traders who bought LL started taking their profits into strength.
c) The breakout traders entered.
d) Traders without positions just watch where will the price go next.

Next is what happened after the breakout.

B) Supply overcrowded demand.

a) S&R traders started to sell into strength.
b) Some breakout and S&R traders wait for the pullback to go long.
c) Some breakout scalpers are taking profit.

C) Demand overcrowded supply.

a) Pullback traders went long.
b) S&R traders went long.

D) Supply overcrowded demand.

a) There are no more buyers who want to buy at this level
b) S&R and pullback traders started to take profit.
c) Some started selling into strength hoping for LH.

E) Supply overcrowded demand.

a) Traders who had their stops placed below HL were stopped out. So they sell short or wait.
b) Breakout traders who waited for HL to be broken, entered short.

I surely have not covered all possible trade scenarios, but it should help to see that it's a never ending battle among buyers and sellers. It's all NOW, there is no scenario for the future which is certain.

So why was that spike necessary? Why at that moment buyers overcrowded sellers to make HH in order to continue the downward move?
It might have been that traders re-analyzed the news, might have been U.S. open, bond market, moment of irrationality in the market or many other things compounded. All of this does not matter, because the most important thing is that there were more traders who went short than long. Meanwhile traders who went long were stopped out and after being stopped out, they went short which escalated the downward move.

It's better not to ask questions why or find reason in the market. It's all human nature to give everything a meaning and rationalize. If you were stopped out and you end your day in a loss - so be it. But if you have removed your stop loss and/or added to the losing trade, because BBs wanted a better price to move the market south, go rethink your actions. Because even if you had taken profit in Friday by removing the stop loss, you will certainly do it again in the future and end up losing money. Whereas a disciplined trader, who was stopped out and ended a day in a loss, will continue to make money all other days, while a trader without a discipline will continue to lose it.

Try to see that PA as a test of your discipline. Say to your self: Yep, I was stopped out. But it's not the BBs trying to get rid of traders who are on the right side. It's the market trying to get rid of undisciplined traders.

Cheers

Well spoken, Domas!

Now I look for E/U -Long 1.367x when price close above Dragon.

An excellent essay, Domas. I would only add that for me, the reason to argue on behalf of the rules is that we need to set a proper path for newbies to the system. Given how hard it is to stick to a system, imagine how much more so when the system is made to look more difficult than it is and with an added level of mystery.

Thank you for taking the time to compose that post.

SonicR Trend Line:

Use it. On any TF chart it is a trend indicator. Throughout the forex market, the 89 sma (not our Trend line) is generally accepted as the boundary between bull and bear; only go long if PA is above, and only go short if PA is below. The Sonic R. System uses the 89 ema as a Trend Line. The "ema" formula has the moving average line respond more to most recent PA.

On the H4 chart you can see that the SonicR Trend Line is clearly down.

Hope this helps,
-tah

Nice post, Domas. But you misspoke about me. What you refer to as my "method" is not. It is an observation, a viewpoint on a speciific spike and not on all moves up or down. Further more, I do not use it to cover mistakes. My EU entry short, as well as my add to the short near the high of the drive up, were not mistakes.

BTW, this all started not as an argument over my trading, but as a derision of a viewpoint. Geez, how petty can some people get? Of course, somebody else decided to add their two cents and a lot of misinformation to the mix. It blew up from there. I had no alternative but to denounce the falsities being posted.

Regards,
-tah

Sorry. I removed the word method.

That's the thing. Your mistakes become your way of trading. It becomes hard to separate the two. Ask yourself when was the last time you have done a mistake or have been proven wrong.