Price Action Trading (PAT) performance log

3/1/13

P/L = $123.00

One trade taken. One win. Trading station snapshot reflects only trade taken.

Thoughts:

Felt good taking this trade. The set-up was clear and I did not second guess myself. My job is to identify and take every valid set-up. After that, "whatever happens will be".

Hello.

Exits

I don't scale into a position. But I do scale out of one.

A full position, 3 lots for example, would be taken after the signal. The first Pt (Profit target) would then be the first WRB (Wide Range Body) that appeared in the direction of the trade. In other words, if the trade were a short trade, it would be the first dark (open>close) WRB. On the other hand, if the trade were a long, I would be looking for a white (open<close) WRB. The other requirement would be that this first WRB must appear when the trade is in profit.

The next Pt would be the next WRB in the direction of the trade that closes higher or lower than the close of the first WRB Pt. It is possible to have many WRBs appear after the first Pt that do not close higher/lower. These would not constitute Pts.

The third Pt follows the same idea of the second. The only difference is that this third Pt needs to be higher/lower than the previous WRB Pt (2).
This is the "basic" method.

A more advanced method is to wait for the WRBs to be WRB Hidden Gaps. This requires waiting for the interval after the WRB. In the basic method one waits for the close of the WRB and then exits. Another option, by the way, is to exit as soon as the interval meets the definition of a WRB.

A note of caution:

Under this method, one cannot think in terms of "Risk/Reward". There is no way to define the "Reward". The market determines when a WRB will appear. The market determines where the WRB will appear in respect to your entry. And the market determines the relative size of the WRB.
Suppose one wanted to use a 30 pip stop loss. There is no way of knowing that there will not be 3 qualifying WRB Pts that appear prior to the market moving 30 (R:R = 1:1) pips from entry.

Contingency Plan

I employ a specific contingency plan, that allows me to do one "stop and reverse". More on this as examples present themselves.

Add Ons

Of course once price leaves a Supply/Demand Delta Zone there would be no valid additional entry signals. If I am going to add to the initial position, I would want to be in profit (although not necessarily having taken any Pts), rather than at a loss. Regardless of the amount of additional entry signals that appear, I only add on once and I add on for less than the original amount. Suppose I entered long 60 lots on a FVB signal. I would add on 30 lots on the Fakey signal. Now instead of exiting 20 lots at a time (1/3*60), I would exit with 30 lots at a time (1/3*90).

Affirmation:

" I totally understand that consistency is more important than being 'right.' Having the desire to be 'right' is for amateurs and making money consistently is what the real professionals do. I am striving to be a real pro every day by focusing on what is proven to really work -- a method that produces steady profits while protecting me if I am wrong."

hi HG , what do u mean my SD delta zone ? i know the ordinary SD but not familiar with this lingo ...

A Supply/Demand Delta Zone is technically not the same thing as traditional SD Zones.

A Supply/Demand Delta Zone comes from Wide Range Body (WRB) Analysis. Rather than use the term WRB zone, I adopted the term Supply/Demand Delta Zone when SD analysis was just becoming all the rage.

But seriously, a zone represents an area on the price chart where there has been a key change (delta means change) in the Supply/Demand Dynamic in the market. If a zone is created by a dark (Open>Close) WRB, then it represents supply. I would therefore only be looking to take shorts when price moves back into the zone from below. If a zone is created by a white (Open<Close) WRB, then it represents demand. I would therefore only be looking to take longs when price moves back into the zone from above.

Another name I use for these zones is "Entry Signal Zone". There are two important things to note here.

1. Traditional WRB Analysis would take any trade signal long or short when it comes within this zone. The term "Entry Signal Zone" does not have a bias to direction. What matters is an entry signal, not the direction of the signal. However, as stated above, I do make a distinction between zones for longs and zone for shorts.

2. This is really the more important point. Unlike with traditional SD zones a la Sam Siedon (SP?), WRB Analysis does not believe the zone is a trade signal in and of itself. Therefore there is no setting of limit orders and expecting a bounce when the zone is reached. Simply, one needs a method of entry once price does get to the zone. If price gets to a zone and blow through it as if it is not even there, no harm no foul. If price bounces off the zone after a simple touch, still no harm no foul. Although this does make one feel a little better about the "power" of the zones.

Hello HiddenGap,

First thank you for your posts. I have been studing WRB analysis for couple of years now and yours posts are really helping me. Especially this threat is really very practical.

I did study tactics by wrbtrader a lot in the past so I am very familiar with the setups you are using. However I am still not profitable to trade them, so if possible, could you give me some tips on following questions?

1) Trade Management and entry. While exiting on 1st WRB I do fight with overall low RRR. I am just taking too risk for too little profits. It seems to me that you are “fishing” for limit entries. Is that right? Do you also entry on close of signal bars? Where do you usually place your stops?

2) Do you use intermarket correlation with your analysis? Or do you just trade price action on one market?

Thank you very much.

3/4/13

P/L = -$100.00

Three trades taken. One win. Two losses.


Thoughts:

Today was a great trading day. I planned my trades and traded my plan. Sometimes when you do everything according to your rules, you will still have a losing day. That does not mean there is something wrong with the rules. More importantly, that does not mean there is something wrong with you.

As Hanover says, "Losses are not mistakes; they are the occasional and inevitable consequence of exposing oneself to risk".

3/5/13

P/L = $50.40

One trade taken. One win. Trading station snap shot reflects all trades taken.

Thoughts:

Slow day. Did not have many opportunities. Being out of the market is a valid position. Felt good taking this trade. Did not feel "gun shy" due to yesterday's loss. This trade took a long time to develop. Felt very comfortable being in the market while waiting for the conclusion of the trade. Did not "add on" at the FVB because the position was at a loss at the time. If you want to change the rules PRIOR to taking a trade that is one thing. But you do not change the rules once in a trade.

Price did make its way to the Supply/Demand Delta Zone above... I do want to find a way to let the last partial "run".

Since you never know when the first WRB will appear, there are a few things you can do. You can set an amount of pips (or profit) the trade must reach before you take the first WRB profit signal. For example, you can choose not to take any profit until the trade has covered the spread + 10 pips.

You could take this idea one step further and not take a WRB pt until until the trade has reached the same level as your stop (risk). So if you are placing your stop 20 pips from your entry, then the first WRB pt you would consider must come after the trade is 20 pips to the good.

I enter on the close of the signal bar/open of the next interval. Sometimes I wait for price to move back into the range of the entry signal.

I do not. Currently I am trying to keep it simple and not focus on too many things.

3/6/13

P/L = $0.00

Zero trades taken.

Thoughts:

"Right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when price were at the very level which should show the greatest profit. And their experience invariably matched mine- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains then cannot sit tight......." . Jesse Livermore, Reminiscences of a Stock Operator, pg 68-69.

First, I want to thank all who embarked on this journey with me. I appreciate your support.

I have decided to close this journal.

Let me make clear it has nothing to do with the viability of WRB Analysis or the Price Action Analysis used. If you look at the day by day records you can clearly see it was profitable. Add a zero on the end of the P/L s and now we're talking "real money".

My personal struggle started with the last trade. Not that it matters, but it was a winner. What matters is that I was comfortable being in the market yet I got out according to my rules only to see the market continue in my trades direction. Now, I do not want to be greedy, but I can not escape the words of Jesse Livermore,

"Right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when price were at the very level which should show the greatest profit. And their experience invariably matched mine- that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains then cannot sit tight......." . Jesse Livermore, Reminiscences of a Stock Operator, pg 68-69.

So I want to be able to take advantage of trend. The propensity of the currency markets to trend is one of the reasons I was attracted to them in the first place. But if I am going to put so much emphasis on trend, how can I trade a method that is by definition counter-trend trading? I can not juxtapose this duality.

I find myself, therefore, looking back to trend trading with Volume Spread Analysis (VSA). So rather than continue this journal with a new method, I think it's best to end this one and start another. Whether I end up using VSA or another Price Action (with indicators) method, the new journal will be an honest account of the trials and tribulations along this wondrous path we call trading. I hope to see you there............

Hi hiddengap, i understand your point of view, and i am very sorry because i enjoyed looking at the photo of your trades. But I do not totally agree with you. I think a trader should be able to think in long term trades or trend trades, and in a short term ones, against the trend. I trade both of them, and sometimes they are mixed. I mean that some times a fake signal is the beggining of a trend. As an example my today trades:



The three trades are in a square. The fist one, fake to asian support. Hit stop loss.

The second one, fake to yesterday's low, with another signal that was the higher volumen. This was a fake that started the trend of this day.

The third one, fake to weekly pivot. I has taken TP1 en double zero(+20 pips), and still open two parts of the trade.


What i mean with all this, is that i like to be able to trade little short term trades, against the primary trend, and sometimes longer trend trades. Off course, it is difficult to mix two thinkings.

Hope i can read you soon.

PD:sorry for my bad english.

Hello HiddenGap

Nice idea for trading but where is the indicator of hidden sup/dem delta zone !!
Also what is the FVB setup!!


Thanks in advance

I've always been fascinated with the PA that occurs around WRB's ever since HiddenGap brought it up in the VSA thread. I tend to always look for WRB's only on my H4 chart to make sure I'm always mindful of them whenever I'm looking to make trades. As a trend trader it's definitely something important that I keep in my trading tool box and I have HiddenGap to thank for that...

please, can you share your chart indicator link it looks awesome

There is no indicator on these charts. The Zones are drawn by hand.

I really like your thread here HiddenGap