Tag Archives: Captain jack

Captain’s chest and PA trading

Finished the Hopwood PA thread. Interesting read. I think it was personally beneficial to me because PA was one of the areas of trading that I never put too much screen time into, but I think is something that every new trader attempts early in their career and fail because of a lack of understanding of the proper context. All the numbers, statistics, models, are really just aimed at that: context. There’s nothing wrong with trading pinbars and breaks and the most obvious patterns that everyone knows, as long as one can tell where to expect it to occur, and how far it can be expected to travel.

The whole “market makers are out to get me” is another interesting corner of the trading world. I don’t like to believe in these things because it’s very difficult to prove to myself, however I think there’s a benefit to explaining things this way as it provides an easy way to offer a different perspective of what’s happening in decision spots. MMs, banks, institutions, the simple majority, does it really matter who is “moving” the market? At the end of the day, “their” direction is the correct direction, and nothing matters as long as you can predict what direction that is.

A few take away points I got from the thread:

  1. The complete cycle, or simple Elliot move, is made of: push-push-push-pause, push-push-push-pause, erratic movement, end of wave. Or, as it’s called in the thread, 123 L1, 123 L2, SH, 3. This “stop hunting” or weird movement at the end of the complete wave is probably why finding the end of the 3 leg proves to be so difficult. (*heh*)
  2. If you’re going to subscribe to the MM belief, I think the safest/easiest/most practical way to implement this in your trading is to believe that MMs control the beginning and the end of the wave. This means that if you’re lost in your count or wave leg, using the nearest high volume high range bar on the chart (most simple on 1hr I think) can be used as a guide.
  3. Making counter trend trades at extremes like this is actually not as risky as it may seem. The BARF pattern is a mean reverting trade and is pretty accurate. Using double tops or pairs of wicks, etc, turns out to be pretty good, even in a discretionary setting.

The thread is a large advocate of a lot of screen time on a lot of pairs, something that I think is very productive when you know what to look for. I think it’s worthwhile to go back and try to pair some of my wave move and timing concepts into these “obvious” counts and see if I can get them to mingle a little.