The Really Useless Thread

sisse, can u pls claryfi this? where r ur statuses right now? Im trying to create mid and long term TA maps but first need to claryfi this.

What is clear is the ST neutral on US500: as for right now - its untradable as the expectations are clashing. And its gonna be super interesting - too many variables as u can see. Excited to see how it plays out.



These are just 2 of many scenarions: (now in netral - once we past 1st week of NOV most likely we go sell short term)

A: CBs match expectations (boe action etc.) and Clinton wins = Very soft relief rally before RMT grasps the market =) for RMT short term leg down (I think the leg is not in motion yet as there is too much uncertainty)
B: CBs match expectations and Trump wins = risk-off quick leg down but limited due to rate hike prices-out.

There is a lot of other scenarion in between (depending on CB action mix) so its impractical to map them all now.



And If we accept that the mid term is neutral. Its just a matter of time before we come back to mid term flip!! So the whole thing can be traded both ways! Its again nice how it folds. - unless the CBs go full monetary f*cktard with easing we will get to flip no matter what via a short term leg down.



P.S.: watch what the short term swing means on mid term (previous map) and long term (this map)


In any case. It all may be wrong. Equities are generally terrible instrument

Quickly answering your question, FED confirmation in July for Sep flop kicking the can for Dec + massive bazooka from Europe made me track back to neutral after the break because of timing reasons rather than fundamental ones (late Q3 / Q4).

Basically and to 'visualise 'from a TA/chart point of view instead of exhaustion on that break and fade, we got a soft break (thats why we have been in choppy buy mode for most of the last 4 months short term), the FED flop and CBs unlocked a 'double' zigzag (break up/retrace to break/test and breach of highs again and only then down) if that make sense to you ...

We'll talk proper details later. Let me wrap up all the pending points first in the next few posts before the open this week as we have too many of them now and everything is getting mixed up for some.

sisse

Perfect, makes sense. even the double zigzag. wanted to just clarify even though I know there is a lot of open conversations Im also tracking! we´ll discuss it further as it develops

Time to wrap up iteration 19 and a few points open for discussion. For those tracking or wanting to track back here is some bkground info:

1. Iteration 19 starts here but its part of all points made on the previous iterations. Check earlier discussion this year with IMARICH1 for more details.

2. Read this first part of the wrap up as I wont repeat all the points.

3. I will use NAMES AND CASES for those who have jumped in these discussions for the sake of conversation. These comments are not meant to reflect what those traders actually did in their live accounts but rather their public opinions on the thread. They will serve to add some context in some of the names.

4. I will go step by step wrapping up the key points in short pointers with charts attached and hopefully will trigger some final AHA moments for some that still trying to find something useful in these points.

... so here we go.

TBC.

sisse

Oh boy I'm having a Young's double chocolate stout- have two extras here for you.

What a perfect day to get my learnin' on

eagerly waiting for some real important points ....

+++ Anatomy of a Trade (Part II) +++

Iteration 19: "Retrace or Reversal PART II - Frustration, Price & Indicators"

Chapter 6 "Before and After"

+ FRIDAY 19 AUGUST 19:13:17 GMT

Iteration 19 starts here....

Before the fact chart:



...and ends up here....

+ FRIDAY 21 OCTOBER 9:43:57 GMT

After the fact chart:



Chapter 6a "Main points of the iteration"

1. The iteration aimed to show the first short term swing in a mid term move.
2. "Direction" is more important than the trigger technicalities.
3. Have a clear map before you trade
4. Manage risk before trading and managing profits.
5. Understanding the implications of Time in a mid and short term swing is one of the most complex issues in trading.
6. There is always trade offs between risk, noise and patience.
7. Knowing what to expect in terms of volatility and timing when placing a trade makes a huge difference in trading.

--> in order to avoid chewing down the trade and bias flows, targets, triggers etc I decided to take ALL TRAINING wheels from the process crowdsourcing every single part of the iteration [shout @Pharm0 ...) except one which was outside of the scope of this iteration: Short and Mid term Outlook were NEUTRAL at the start.

 

1. For the MAP we crowdsourced extremely random levels

Bottom: 1.070x from Fisher755
Top: 1.146x from goosebone
Flip: 1.080x from littleone




Is this map any good?
Does it look like yours sisse?
does it look as anybody else map?
NO so
Why use a random map? To exactly show that the only thing the matters is following a CONSISTENT PLAN with a clear path and direction. Everything else is secondary.

 

1. For the TRIGGERS we also crowdsourced them to cover almost all type of triggers available
   1. Fib/'Magic', etc etc lines trigger (second shout @Pharm0 ...again this is from traders like you that jumped in when crowdsourced ...you even contributed in the fib map for this trigger) so we choose a simple fib as example for all
   2. Indicator/Oscillator triggers so we chose a simple stochastic as an example for all
   3. Price alone triggers so we chose a simple rejection (already explained in earlier iterations) as an example for all

   
   

Are these triggers any good? Do you sisse use all these triggers? do these triggers are part of a super secret trading plan that only a few selected one know? NO NO so

Why use so many random triggers? To exactly show that the only thing the matters is following a CONSISTENT PLAN with a clear path and direction. Everything else is secondary. That way you can incorporate these basic principles in WHATEVER is your TA framework. There is no dick swing competition, neither mine is better than yours, neither sisse is forcing me to choose one and hate or its blind to mine (third shout @Pharm0)...

As we discussed on the first wrap up. All Short Triggers work almost flawlessly.

Why? Because the direction was right and thats a fact. You can spend the next 10 years looking for the Holy Grail if you are on the right side you will have a winner otherwise you will struggle a lot at best.



Before we get into the important part. Pay attention to price entry (only the first plotted) in terms of timing, drawdown and risk.

--> One important HINT here a Price based entry will be MOST of the time (if not always) the BEST potential entry in terms of triggers, risk and drawdowns.

Use a clean price action entry as benchmark of your entries. If price alone is giving you a better option in terms of entry, risk, drawdown, timing and momentum you should seriously consider your entries are prolly not good enough i the long run....

Chapter 6d "Retrace or Reversal"

Ok so nothing new so far so lets dig on the details and address the open topics during this iteration.

--> Why the Title: "Retrace or Reversal -- Frustration, Price & Indicators"

1. The first decision was rather simple. Is this a Retrace or a Reversal leg in the short term?
2. The only hard rule we had is that we were in Neutral in the mid term and the answer was simply:
   1. In neutral you trade to the middle fading the extremes as you will be getting value for risk in those areas while you AVOID fading the middle as it provide very poor value in neutral.
   2. Therefore before you even try to enter the market or look in details in the chart you know: WE WERE ON A RETRACE in the short term:

   
   

   Attached Image (click to enlarge)

   
   
   
   

Knowing/deciding this simple piece of information is the most important thing to make before you even decide to get in.
Does it matter what your super Ergodic super stochastic, volume trip, Mofu 3.0 version, etc etc is not fully pointing at shorts yet? NO ABSOLUTELY NO
Does it matter your chart bias is not fully aligned and not really pointing at shorts or etc, etc etc? NO ABSOLUTELY NO

The only thing it matter is that you are deciding DIRECTION to TRADE to one side and not the other. If your outlook is right (not the topic for this part) you will be TRADING with the path of less resistance instead of a Machine Gun Approach. Therefore minimising risk, drawdowns and maximising profit and w%.

To wrap up this initial part. If we were in neutral mid and short term and we defined that the CURRENT short term LEG is a RETRACE, the next thing we need to do is define the leg in our map and start looking for triggers ....and thats exactly what we did on the close + FRIDAY 19 AUGUST

Chapter 7 "Frustration, Price & Indicators"

...tbc

sisse

Not going to lie, struggled with EU as of late... but we are back down at march levels earlier this year... from that double bottom at 1.082ish i have 1.0851 1.0859 and 1.0869 as last chance levels...

I know your not a fan of crosses but EJ in very similar position to EU...

Because of lack of words, I just say: Thanks so much Sisse!

Yes this 19 really made the point crystal. Those entries were goofy. And worked. That Frankenmap was exceptionally fubar. And worked. Nice to see the summation and conclusion of all of it.
Appreciate the time it's taken for sisse to do it in real time and to put it together at the end here. Really helping me look at things from a new, simpler no bullshit angle.
This will be the sword that I finally slay my inner chicken with. I will make a necklace from its beak and wear it around my neck for the rest of my trading life as a constant reminder.
Thank you sisse as always. Looking forward to more.

Chapter 7 "Frustration, Price & Indicators"

During the last 20 iterations some very few have really have some AHA moments and are very thankful, some others have seen some sense and general ideas to take but still struggling to implement them without training wheels or hints, others just follow for the fun as they are fully aware and clear on their trading plan, a lot have abandoned ship in frustration and even some few other ended up hating and ignoring sisse forever given the lack of results in the short term.

However, If we have seen something during this iteration among almost every single participant, lurker, cheerleader, hater and etc is FRUSTRATION.

I honestly anticipated it and thats why i put in in the title of the iteration. I have the feeling in the next few points some will find a LOT of answers as we are going to analyse backwards some of the decisions made.

It all began in here ... after holding a dud for longer than we can remember the initiator of all the iteration IMARICH1, finally decided to clear one of the most painful trades we have witnessed in this thread. The point here is not trashing and analysing IMARICH1 trade in detail so lets just said it was a painful mid term swing short that became a turd cause of poor trade and timing management....

The lesson to be learn here is not about clearing a bad trade (he knows that he should have done it months before) but he chose to clear it the day we got the ultimate high in that leg ...



Although he was relief because he finally killed the turd you could feel his frustration. After months patiently holding a losing position, the day after he closed, markets mark a mid term high. This is the definition of Frustration and thats how market Kill a lot of traders.

I call it market exercising 'maximum pain' until it break up your patience and pain threshold and end up getting either caught in the wrong side again (for those that swapped longs there) or holding nothing if trade pans out to the short side.

The only way to avoid falling trap of markets behaviour is:

 

1. NEVER EVER hold a turd without a plan. Take the damn loss with a stop and move on !!!! and
2. Map your chart so you know what area of the map you are trading in terms of volatility, noise and risk.

If IMARICH1 would have plot the short term map, would have never ever close that trade in that area but neither would have expected to have a runner straight away either. Why?

Because in neutral you trade to the inside with cheaper tickets at the extremes.

So even if the stop would have been higher if he was wrong and market moved up, that is the proper risk profile for that trade and he didn't follow it closing the trade but rather closed out of pain and frustration of holding a bad trade for so long....

The most important lesson in all this journey is don't let your emotion take over your decisions.

--> Frustration was all over the place especially when we got in the consolidation area @DexterMorgan, PAStalker, hoom NorthTrader, primejarvis, Earleone, Fadhl

,

RoelsMajor, Pharm0r, Vorex and chester123 from the ones I have bookmarked (there are only few others that sat tight without flipping and countless other that they just abandoned ship in look for a Holy Grall somewhere elsE) lose faith in the process and got frustrated one way or another for the inability to break down.




I am not going to go in each case so I will only choose 3 cases that I think show and answer most of the doubts and question:

Chapter 7.1 "More Frustration"

The main doubts come from 2 fronts: Volatility and Time.

One of the first posts in these iterations was about TIME. Time is one of the hardest think to understand in trading, especially when swinging. Human brain is not naturally wire to understand the implications of time in a 2 dimensional chart.

Lets see the trade from a few other angles:

--> What happens if we put the trade in a weekly chart:



Suddenly the chart looks clearer and is a handful of very manageable bars leaving very little room to even considering having doubt

--> What happens if we zoom out even one more level in a monthly chart:



Suddenly the trade look so simple and even obvious with minimum effort and pans out after one miserable bar.

--> Now lets look to the other side. What happens if we instead we zoom in to M30



...well as you can see it took 1804 bars !!! to finally break ...GL not getting lose in translation with 1000 doubts on each side with that....

 

1. The first point is not that larger TF are 'cleaner' to the eye but about TIME and HOW LONG it take for a swing to pan out. Our brain can easily digest analysing 2 or a handful of bars without much doubt however understanding that it take over a month for that to pan out in reality is a whole different beast especially because lots around here are also tracking micro TFs....
2. The second point is about VOLATILITY.

-->Pay attention to how many bars it took in the previous few short term legs.
--> We were in neutral in both short and mid term what makes you think price will fly non stop
--> We were in the doldrums of the summer in all neutral what makes you think a major will just fly out of nothing.
--> and more importantly is about how markets flow work and how to manage position and risk (check back posts for reference) but that is for the next post in which will use @hoom @Pharm0 cases to make and wrap up this points

...tbc

sisse

A joy to read and absorb every time you share sisse. With the upkeep and continued input to this forum.....makes "for myself " the most valuable spot on the net to keep learning.

On 19 ........ the weekly chart helped me stay through till the end ....and confirmation from the slow stoch together with my rsi and cci .

Again I bow

7b "More Frustration...a second case of maximum 'pain'

This is the second case of maximum pain in this iteration. This time @hoom as in the last case with Imarich1 gets caught on the day we mark the ultimate high on the current leg.



+ FRIDAY 28 Sept 15:45:01 GMT

Again the main point is not trashing hoom or analysing in detail his call but rather point to what when wrong. This time the answer is falling to recognise market dynamics. Not only we changed short term outlook to sell via FED but the weekend after the UK and DB trigger a change of mid term outlook also to sell.

After nearly 3 months we suddenly have both sides in shorts outlook which clearly is pointing a stronger momentum legs to the down side rather than the choppy neutral/neutral environment.

A couple of simple points to show how important is to be sit in the right side:

--> When you are right in direction you are trading the path of least resistance for the move. In this case, a simple price notion that seems to be forgotten by many around. Price is making LL and LH as its expected when we are looking for shorts only both in neutral (top of the range) and especially after with both in sell.



Why is this important?

1. Because the fact you are trading only shorts and price is making LH guarantee your stops will hold and get better on each mini wave so even the poor entries can be held as the stops are very clear and defined...
2. While those who are fading the legs down, will have to gamble the stops and hope that the breach of lows doesnt become a break and neither the a breach is too deep to stop them out. But more importantly the swing highs will get shallower and shallower making a cluster fck of blind entries to to get in and try to run as fast as possible with TP as price will fail every time to get higher ....

Can you spot the problem for CONSISTENCY in a series of trades? ....


Chapter 7c "Frustration & Indicators overruling direction"

One of the most inexplicable calls in the iteration come from @Pharm0 but highlight one of the most important problems in trading.

A bit of background

--> He was one of the strongest and more convinced bear during this iteration, he even provide us with the Fibs for a potential entry short for the iteration...and at the ended up clearing for crumbs and swapping incredible to the other side when we finally got a FRESH break (a real one not some pussy soft one) and all FA was pointing to the other side ...



Again the point is not trashing Pharm0r neither analysing how he traded in his live account but in understanding WHY he changed for one map to the other the minute his first map just break out to confirm his original move...



--> The main issue that lots of traders around these iterations have done it is: Trading triggers instead of trading direction.

In order to be consistent the next point to wrap up is to be Proactive in defining direction but passive in your triggers otherwise you end up Chart Fitting your trades.

--> Chart fitting trades is one of the most common problems for Fib/Dow/Murray, etc traders. Basically you draw and connect swings until you find one that satisfy and justify the current levels. It most of the time ends with blind entries for 'just in case' justify under is 'just a few ticks' if wrong approach. Nothing wrong with risking little for a potential good return but the damage of trading triggers instead of maps and direction have a very heavy and killer toll in consistency for most.

--> If you are sharp enough you notice that all the 'mistakes' and doubts come from being in the wrong side rather than the TA on the background. However. we never changed the direction of the trades in all the iteration (we were looking for shorts in neutral [top of the range] and after short in sell).

 

1. While the ones who successfully swing it, were taking profits when the struggling ones were buying and when the struggling ones were loading aiming to the moon, the one on the right side were fading and trapping them every single time....
2. In simple words, successful and consistent trading comes from been very active defining direction and outlooks but very patience and passive on the triggers which is exactly the opposite of what happened in these 2 last examples.

So your TA can give you 10000 triggers or your mofu, fib ,etc can be given you a 'just in case' opposite trade....if those signals are against your direction and outlook DONT EVEN bother wasting your time LOOKING and ANALYSING them as you will end up lost in translation, frustrated and more than prolly clean your account in the long term....

....

Chapter 8 "Flows and Price"

The final points from iteration 19 come from the actual Technicalities of how did you define the flow and how did you recognise some of the TA traps and mini shifts before it happened....thats for later ...for now we need to open iteration 20e....

sisse

We are reaching the end of the game.

Only one iteration open and 12 traders left. As you know this iteration is about fast reactions on direction and analysis and always being on the market until the last trader is left not about r:r or anything else. We cleared 1.088x on Friday. Today we opened at 1.088x...

Euro in full momentum in trending mode. FED rates are coming by default, Brexit is getting worst by the day and more importantly for the short term US election around the corner so

--> How would you trade the next leg? Fadhl nutts primejarvis goosebone CommercialB Grinsakh clayjay hoom Vorex RoelsMajor ptoftangency mayafx

+++++ OPENING TABLE for Iteration 20E +++++

Currently Euro trading @ 1.088x

"Survival of the fittest | Winners take all"

-> LMT BUY 1.081x -> TP1 => 1.091x -> | STP > 1.075x

-> LMT SELL 1.091x -> TP1 => 1.081x -> | STP > 1.097x

If you don't take a side is assume you stay short (as that was the last call)...standing table update after this leg...

sisse

Limit sell for me!
Rationale: Price move LHLL and Sell Outlooks for short and mid term.

Ha ha I sense a trap here sisse but I again must go short ..LMT SELL 1.091x -> TP1 => 1.081x -> | STP > 1.097x

BIG thanks again for your incredible analysis time & effort ..I'd even lost track of my own iterations so how you can keep track of them all and regurgitate again much later with such clarity is beyond me ...teaching and trading your own book at the same time too ...AMAZING!

Sell..... staying with direction and momentum for a small risk towards M roll.

Ok Ill sell please. I would not be surprised if we visit 097 again soon but given where we are mid term I guess I like the idea of 081x before we do. This point of entry makes no sense to me on a short term map. The buy makes no sense to me on any map. Given the choices, that's mine. I'm seeing it like this MT and ST:

You are 100% right, before you even wrapped up your long winded explanation I saw the error...I realized I mapped out a great short trigger, and a target that was inline with 1.08xx, and then at the last moment I was swayed to try and catch both sides because I felt that a bounce should happen before target.

In essence, I did exactly what you said towards the end of your write-up
I placed my faith in mofu more than direction- and I knew better than to do it, yet fell on bad habits. Thanks for your post! Invaluable.

BUT

That leaves one burning question....at what point does the EU switch back to neutral? Now that we've achieved target, is it considered neutral or do we need some type of confirmation via outstanding economic prints or FED wiffs or?? I think the fear Im facing, is getting caught on the wrong side, so I prematurely took the long before outlook changed. Hoping in essence to outsmart the market (which we all know is a dumbass idea). I think for this case specifically- my success in trading thus far has lead me to trust TA instincts before FA...which for the purpose of my new "fundamental awakening" if you will, has bit me in the ass.

Looking back as well, from the start to the finish I have only taken shorts and one long (remember when I posted I was 30+) trades up? Because I was on the right side....even when we swung up, I resisted taking the long because we weren't in a "buy outlook", and if it went bad- I simply waited (130 pips has been the max DD)....which ended up paying me every single time....

The moment I went against outlook/direction- bam smacked on the hand (and quite publicly I might add hehe).