Well-defined diagonals for ES
Why do diagonals work better than horizontal levels?
If you're catching impulses, your job, to simplify things a bit, is to try to figure out where the stop locations are, but these tasks are only present for the inexperienced public. With respect to the placement of stops, we can divide into two groups - some participants move stops after the price (inexperienced traders), while others do not move or do not place them at all, as they hedge risks in related markets (advanced traders).
The key question here is which of these two groups of participants has a better chance of taking money out of the market?
The inexperienced trader is affected by psychological pressure caused by risk aversion. The inexperienced trader wants to protect his profit, if any, as quickly as possible and move his stop-loss to Breakeven (or cut his possible loss for fear of making a bigger one). Therefore the public (the crowd, inexperienced traders) moving stops has, on average, less psychological resilience as they succumb to the pressure of risk aversion.
Strategies involving fixed stops serve as a marker for certain psychological skills that allow a participant to leave profits "unprotected", leaving stops at a loss (in my case, I enter the market in portions and let the market "breathe", to allow me to find a reversal point, at more serious departures from the weighted average transaction price, introducing hedging). Therefore, on average, attempts to steal money from this more psychologically advanced crowd are less successful.
This is why diagonal levels are much more important for understanding where the market is heading and where it is most likely to place stops (or hedge risks).
Unfortunately, not everyone understands this, and even more so, does not realize it completely, and therein lies the lion's share of success. There is no need to tweak the market to suit you, the market has its own rhythm and you have to adjust to it, managing your capital, and, if necessary, hedging risks, instead of cutting losses after losses and saying that the market is a casino and only insiders and brokers earn there. It is far from that!
If you're catching impulses, your job, to simplify things a bit, is to try to figure out where the stop locations are, but these tasks are only present for the inexperienced public. With respect to the placement of stops, we can divide into two groups - some participants move stops after the price (inexperienced traders), while others do not move or do not place them at all, as they hedge risks in related markets (advanced traders).
The key question here is which of these two groups of participants has a better chance of taking money out of the market?
The inexperienced trader is affected by psychological pressure caused by risk aversion. The inexperienced trader wants to protect his profit, if any, as quickly as possible and move his stop-loss to Breakeven (or cut his possible loss for fear of making a bigger one). Therefore the public (the crowd, inexperienced traders) moving stops has, on average, less psychological resilience as they succumb to the pressure of risk aversion.
Strategies involving fixed stops serve as a marker for certain psychological skills that allow a participant to leave profits "unprotected", leaving stops at a loss (in my case, I enter the market in portions and let the market "breathe", to allow me to find a reversal point, at more serious departures from the weighted average transaction price, introducing hedging). Therefore, on average, attempts to steal money from this more psychologically advanced crowd are less successful.
This is why diagonal levels are much more important for understanding where the market is heading and where it is most likely to place stops (or hedge risks).
Unfortunately, not everyone understands this, and even more so, does not realize it completely, and therein lies the lion's share of success. There is no need to tweak the market to suit you, the market has its own rhythm and you have to adjust to it, managing your capital, and, if necessary, hedging risks, instead of cutting losses after losses and saying that the market is a casino and only insiders and brokers earn there. It is far from that!
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