Great post Dave

I know most of you have probably already read Dave’s most recent post, but I highly encourage you to read it again.  It’s his best post yet into how he actually thinks during the day with regards to his intraday trades.  He’s shown you some setups in the video, but what this shows you is the framework he takes the setups in.  As someone who’s worked with him closely, he always starts with the big picture and works down from there, even if it’s only a scalp.  It’s that big picture thinking that prevents him from having many major loses because he does not enter scalps in the opposite direction he thinks the intermediate direction is.

The other important thing is how he visualizes multiple possible scenarios and then waits for one of them to occur to act on.  If the result is a scenario he did not consider, he doesn’t trade.  He never tries to “predict” the next move, he just has scenarios that he thinks are likely and is prepared to place trades to profit if those scenarios begin to materialize.  In the example from the post, he had the theory about the short, but he wasn’t going to place a short until at the top of the keltner like his usual scalp entry because that was not how the possible scenario was going to play out.  Constant hitting of the upper keltner would have made it to be more likely the reverse head and shoulders he mentioned that could take everything back to the previous day high.

Congrats to Damian for figuring out the exit on my last post, although I actually didn’t implement the 10 day timeout in the version i ran for the site since I was trying to keep the line count down, but i tried it both ways and the results are almost exactly the same.  The number of times you go 10 straight days without the QQQQ’s taking out the high from two days ago is very few over the course of the 1,500+ trades in the test.  Ryan is getting close to a good entry to go with it also.

- John