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I usually start to think about BE exiting if the price doesn't move for long time more than I expected, as I did in this particular trade. And I'd like to talk about how I should see this case.
It depends on your personality, your patience and if your premise is still valid. Everyone is different and see the current situation from the own perspective. You should define what it's mean for you, when you are saying "...for long time more..." from there you can evaluate if that should be bar wise or time wise, depending on your TF.
What is it and why you are wanting to act, if your premise is still valid could be a question at this point. What expectations you have when deciding to change your mind and act at that point? Do I have a rule which let me take only one trade at a time so I have to decide if to get out to wait for a better trade than I'm in right now? Am I able to make quick decisions based on the current situation and act on those?
All these are possible questions to answer honestly for yourself. Try to act even if the outcome doesn't match your expectations, in the long run we have to learn to act as clear and calm as possible on every bar.
If it goes sideways longer than expected, means probability is more likely to be around 50%. If so, I have to REEVALUATE as the my 40% entry with counterintuitive logic.
Yes, as Carpet wrote already. Al is mentioning this but I do not remember if in course or in the Trading Range book, or even in both.
So I’d love to know how I am misunderstanding / making wrong assumption / or just market can do very counter intuitive trick like this.
Be prepared that market is always doing what it wants and your assumption have only a probability of X % so you have to accept to get different outcomes than expected.
Sorry, I should've found some examples of this earlier. In video 9C 04:16 Slide 5 for pullbacks: "If grows to 20 or more bars, it is an Endless PB. Odds of bear BO fall to about same as for bull BO (50% for each)."
Thank you guys for the replies. I seriously learned a lot from this thread.
And I appreciate the video reference, Mr Carpet. I really enjoyed that video. I didn’t see this TTR I mention in the first post as a endless PB so this gives me a good sight for the PA.
Then I read the "Glossary of terms for price action trading" again, then I realized Al has never mentioned about the type of probability I’m talking in this thread. The probability of reaching its TP before the SL of an entry. But only "probability of success" or "directional probability". I think it's because he manages trades. Simple.
What I have always been concerned about since the beginning of this thread is how the directional probability affects the TP/SL probability. However, I really should care about is the effects on the "probability of success". Even though you use "TP/SL probability" for TE with "probability of success" at the entry. Now it seems mathematically WRONG.
I must rewatch the Trader's Equation video as well.
P.S. I was just writing down what I had learned from this thread and I realized it was never-ending, with new questions arising constantly. I hope to organize my thoughts well and post new topics in the near future.
Quick thanks here.
