DbPhoenix

Yes, but it depends on how one defines "range". From a macro POV, the "range" is from 1260 to 1400. So within that context, one could look forward to a return to 1260. No particular reason not to. I was going to point out that the ES dropped out of its trend channel a couple of days ago, but I had decided to reserve the macro comments to the weekends.

Nothing new, really. Just a variation on the MP distribution, which creates it own SD lines, if one wants to draw them.

Si. Db's Cajas Famosas say that test of Caja from below is shorting opportunity.

In other words, how extended will the range extension be? I can't say. And I don't know if MP addresses this. I buy support and sell resistance. But if those trades don't work, and the price breaks out of the range instead, I'll buy the breakout if there's anything behind it. The target then becomes the extreme of the wider range, if there is one. If I can't determine the next level of S or R, I'll let the demand/supply lines and swing points guide me. When the range extensions are then established, I have benchmarks for further trading. As for the ES, it's dropped below the last "major" (to a daytrader) trading range which occupied the first two weeks of May. Below that is the range that occupied the last two weeks of April, from 1370 to 1400. Whether it reaches 1370 or not is anybody's guess, but I'd keep my eyes open for my favorite reversal signal, whatever that might be.

Correct, and, as I said, it was testing the bottom of the range. Given the time of the post, I thought it was clear that the test was coming from below. As a side note, we came within a tick of the NQ midpoint.

Depends on what one means by "great". Livermore made fortunes, but then he also lost them by not following his own rules. So is the goal to make a fortune or also to hang onto it? I suspect that one reason why novices overtrade is that they focus too much on the former and not enough on the latter.

I see no one posted a chart of the boxes for today, so the NQ range is from 1958 to 1978, with the midpoint at 1968, and the ES from 1390 to 1400 (it's already testing the bottom of this range).

Looks fine to me. The group is reasonably strong as well. Hope you're not expecting it to get back to $100 any time soon.

Sure. However, since your posts to the VSA thread show up on "new posts", they're hard to miss, and so are the responses you receive. Therefore, I know you've been investigating VSA. But since Wyckoff and VSA have fundamental differences, you may find it difficult to reconcile the two. This is not to say that you can't take bits and pieces of each, along with bits and pieces of all sorts of approaches, and put them all together into a trading strategy that's unique to you. But that's a heavy burden to place on a beginner. If you find that analyzing bars has been helpful, I suggest that you focus on VSA. I'm sure that mister ed and Sledge will continue to be helpful. On the other hand, if you view price action as a flow which bars are used only to illustrate, then you may find a better fit in the Wyckoff approach.

So does the circle indicate that you'd take the break of the TL or would you short the lower high?

Depends on how much confirmation one wants. Sperandeo's definition is perfectly serviceable, but it doesn't always result in a true reversal; price sometimes segues into a trading range or even makes another attempt at a higher high. However, for beginners who haven't the slightest idea how to define a reversal, it beats anything else I've seen. I look for reversals as a part of testing support or resistance, including an exhaustion of effort. If I've interpreted it correctly, the TL is broken. And often the SP is broken as well (if it isn't, then I was wrong). But this requires a very small-interval chart unless one is willing to employ a pretty wide stop. And it's certainly not something I'd recommend to somebody who hasn't put in a lot of screen time.

Me, too. You may also be interested in Vad Graifer's book. He includes a series of "mantras", what others have termed "self-talk". One of them has to do with what to do after a losing streak: Recovery after a Losing Streak or a Heavy Loss I am starting fresh. I know what to do to win. I am doing the right things right now, and not trying to get back my money. I am not taking revenge—there is no one to fight with. I am taking it slowly until I get a good feeling. I am not complaining about my loss. I paid money for the lesson. Now I am applying my new knowledge to my trading. I am taking only trades that match my set of rules. There is no memory of money lost—my trading account is not money. It’s a tool for making money. I am rebuilding my confidence with many small wins. They let me feel the taste of winning. I don’t let events control me. I am in control of myself. I am going to remember the feeling of every win.

Correction. "Lower high" should read "higher low".

This is a copy of a post I made to the original Wyckoff thread. I'm providing here partly because it's likely to be missed by newcomers, partly because it's pertinent, and partly because I spent so much time working on it. Note here that when volume comes in at 0948, price is pulled down. But even though price continues its slide, volume breaks off dramatically, then works its way higher until 0952. All this appears to favor the short side. But look at effort and result. As volume rises, the bars get shorter, and when volume peaks at 0952, price closes well off the low, and buyers are able to push price higher in the next bar with much less effort; hence the lower volume. Therefore, throughout this "downmove", buyers are coming into the market, supporting the price, and even pushing price higher. Volume then dries up considerably during the upswing after moving price to 1892. The big volume comes at 1000 and pulls price down almost to 1886. This appears, again, to support the short side, particularly since sellers are able to move price with little resistance from buyers (low volume, except for 1000). Buyers and sellers then go back and forth, and volume does pick up during this exchange. However, the biggest volume is unable to pull price lower, and the end result is a draw. This is not good for the short side. At 1008, buyers are then able to push price higher with very little effort (again, low volume) suggesting that selling pressure is much less than it had been. During the next segment, buyers are able to keep sellers at bay with relatively little effort (again, low volume). Next, buyers are able to push price all the way back above 1891, and though the volume is higher, suggesting that they had to work a little harder, it is not unusually high. During the last segment, price drifts back a bit, but volume practically disappears, suggesting that sellers are done, and it's up to the buyers (note how easily buyers push price higher at 1019). This is only about bars, however, if one can't see them move. If one watches them move in real time or via replay, he can detect the waves easily. Note here how price dips into each trough, then rises back out of it, crests, then repeats the cycle again and again, gathering strength along the way. If sellers had the upper hand, price would not repeatedly recover in this way. Unlike my earlier post, this provides an example -- like James' example -- of a reversal that takes place off a lower low rather than a lower high.

Viewing volume this way ought to help the trader to avoid looking at it as an indicator. And I suppose that one could argue that this is what Market Profile does, or my boxes: relating volume to price in a way other than "bars".

Here's one of the charts referred to above. Note that whether or not one considers the first bar to be "climactic", the volume on the test is considerably less. Resistance is at or about 1420.

Volume is largely irrelevant unless one is at a point where it becomes relevant, i.e., an important test of some sort. What is more important is the movement of price. Price can move dramatically either up or down on very little volume at all, so avoiding a trade just because volume is "low" is unjustified. Note that it's important to place this within the context of what's being traded. If one is "trading" a largecap fund favorite over the longer term, the volume differences may be so minute as to be almost undetectable. And yet the stock moves. At a snail's pace, maybe, but it moves. But an intraday trade of something illiquid will provide a different picture. Then there are futures. And forex. And ETFs. Much is written about volume that is misleading. This arises out of seeing volume as an indicator, which in turn is the result of plotting it as a bar. But volume simply tracks trader behavior (which is why I'm more interested in the volume of advancers v the volume of decliners in the indices rather than "volume" in them as a whole). Focusing on that will help the trader put it in its place.

I used to attach a lot more importance to trendlines (or demand/supply lines) than I do now since so many good reversals occur before the trendline break. And if I wait for the break, the odds of a test that will take out my stop increase (unless I have a wide stop, which I avoid). On the other hand, I've learned to attach far more importance to support and resistance. The "selling climax rally retest" pattern occurs in meaningless forms far too often, and one can easily end up making countertrend trades a habit (ditto with "hammers"). But if this occur at S/R, the odds of success increase dramatically. Yesterday, for example, the ES and NQ hit resistance almost to the tick, and the rest was just management. Without the test at that particular level, who knows?

Regarding posts 2 and 4 here, yesterday was another day that was easily managed all the way to the end using trendlines (or supply lines) and swing points IF the trader was willing to allow price to come back to him -- after his short of the test of resistance -- in order to arrive at that first swing point, and that would require him to trust the resistance. These trend days are management "by the numbers", and I don't see the point of posting example after example. But others may require these examples. So if anyone wants me to post yesterday's example, I'll be happy to do so. Otherwise, I'll assume that everyone gets this.

That's us. And it doesn't seem inappropriate. But what point are you making? Are you asking about the relationship between volume and trend?

If nothing else, they force the trader to look to the left, like he's supposed to, and see where support and resistance actually lie. And why.

You have the right idea, though I'd add a box around 2001. The problem with this kind of activity is that the volume is spread pretty much throughout the range, so price could stop at any one of those swing points. Of course, it all depends on what you mean by "position". If you don't plan on keeping it so long that you've forgotten you have it, you may want to look at something else. OTOH, that rise up was pretty dramatic, and perhaps a large part of it could be retraced, or at least enough to make the trade worthwhile.

Here's a good overview of auction market theory from three years ago: AMT

The nice thing about maintaining these boxes is that nobody can hurl accusations of hindsight analysis. This is more like foresight analysis. Note that neither could get back to the midpoint of the downmove in each. You can see where each found resistance. You can also see the ranges they slid through and where each wound up. I went ahead and drew a box around the activity in the bottom of the NQ since it appeared to be "congestive". I hadn't expected this thread to get so many views. So I'll likely keep it up until people are able to do it themselves. However, I don't see any point in posting a macro more often than the weekend. And I'll try to keep the "theory" part to the S&R thread.

Depends partly on whether or not the trader has accepted the fact of loss, regardless of how well he follows his plan, assuming that that plan is based on a consistently profitable strategy. If it isn't, and he doesn't, and he hasn't, then he isn't going to learn much if anything from his mistakes. This is why I like Wyckoff's approach: gathering data, weighing the evidence, making the best decision one can based on that evidence, understanding that things don't always work out the way they're "supposed" to, regardless of how diligent one is. T