DbPhoenix

Given the fact that 60 represented important S/R dating back to '05, yes.

And the SPX:

An update on the NDX channel: And a longer-term view:

While I don't want to short-circuit genuine discussion, I don't want this to become yet another shared misery thread, either. Those of you who are interested in trading by price and are further interested in the application in addition to -- or instead of -- the theory should open and maintain blogs. And by "maintain" I mean every day that you trade. Otherwise it all becomes "woe is me". If you have no idea where to start, see The Trading Journal and The Trading Log, including the linked articles. A community of bloggers, even if there are only three or four, will be able to help each other advance, even if they do no more than keep each other honest.

By Ken Wolff Recently, a couple of people I know packed up and quit trading after struggling for a long time to hold their heads above water. They didn't make it. This isn't unusual, of course. This profession has a high failure rate. But it frustrated me. It frustrated me because I could see potential in them. I don't believe you have to be particularly talented or intelligent to be a successful trader, but these people seemed to have a grasp on the market and the love of trading that's necessary. They had the tools, the knowledge, the time and the funds. It also frustrated me because I could see the pressure they were under that contributed to their failures. Most of all, though, it frustrated me because I could clearly see what they were doing wrong, but they couldn't stop repeating the same mistakes. This happens a lot. I see a lot of people making the same mistakes. So I thought I'd share my list of the seven most frustrating things that struggling traders do. 1. When people won't do their own homework. Too many people want to make money, but aren't willing to put the time in and do what it takes. I love answering questions, and I have a passion to help people learn, but when I notice someone asking the same questions over and over, and they are basic questions that anyone could Google, and gave it 30 seconds worth of effort, I know that person is lazy and probably won't make it. You want to know what makes successful traders? People who glue their butts to their chairs. Look at their computer desks and you're likely to see lots of coffee rings and crumbs. You get out of something only what you put into it. If you aren't willing to take notes, take some initiative, keep a journal and spend a lot of time watching stocks, I don't see much hope for you as a trader. 2. When people can't explain their reasoning for a trade. If your reason for entering a trade is something vague like, "I thought I saw buyers, and last week it had news, and I dunno, it just looked good," then you don't belong in that trade! People like this usually have no clearly conceived, written, organized trading strategy because they are lazy. They are doomed to failure. If you have no solid reason for a trade, you will have no confidence in it. You will wind up mistiming, misjudging, fumbling and losing. Here's a quote from my partner Phil Rosten, who is a brilliant technician: I think the most important thing to do is to develop a system that you have confidence in. You will get nowhere if you are second-guessing what you are doing. When the market is open, you need to know what you are doing, and why you are doing it, without thinking too much about it. If you start thinking too much about what you are doing or second-guessing yourself, you will quickly get taken out of the game. Believe it or not, it doesn't matter much what your reason is, as long as you are consistent with that reasoning. But you'd better have a reason. 3. When people make things more complicated than they need to be. Let me give you an example. One of the leaders in my chat room finally unveiled a new trading system he had developed after more than a year of extensive testing. The system works just as it is. It isn't perfect (no trading system will be 100%), but it is highly profitable. People's initial reactions were interesting. Instead of saying, "Wow, great. Let me give it a try," a common first response was, "I wonder if it would work even better if we changed this and that, and instead of a 15-day moving average we used a 10-day moving average," and on and on. Before they even tried or understood the system, before ever becoming profitable and successful with it, they immediately set about trying to improve it. Maybe it's human nature. We love trying to reinvent the wheel. Many of us see trading as a puzzle. If we could just find that solution or formula that no one else has thought of yet, we would be rich and happy. A lot of people think that the more indicators they pile on, the better their trading results will be. So they wind up with analysis paralysis, unprofitable and frustrated, convinced that trading is an unwinnable gamble. I can't say this enough: What matters is not the system itself, but what you do with the system -- your discipline to use it and keep stops. You won't find a system that always works, so you'd better limit those losses. Two percent of your trades can easily wipe out 98% of your gains if you can't keep stops. 4. When people enter a trade for a good reason, then lose their nerve and exit too soon. This is a lot like walking across a log over a river. If you keep focused on your goal, you will get to the other side. You know how to walk a straight line, and you would have no problems if the log was on the ground. But once you are out there, if you start second-guessing yourself and looking down at the rocks below, you will fall. Too often emotions set in and sabotage good trades. If you have a reason, stick with it. Stay in the trade until your target is reached, you have an exit signal, or the reason for your entry is no longer valid. 5. When people hesitate, or follow others, and enter a trade too late. I understand traders' lack of confidence and I can empathize because I've been there. If they don't get a grip on it, though, it will be their downfall. Calls are great and gurus are great, but if you follow, you will always be late. You need to learn to rely on your own reasoning. Otherwise you will be too slow and you'll become fish bait. Inexperience is often the reason for this, and that will take care of itself with time. That's why I recommend starting with small shares until you gain confidence in your system and your ability to keep stops. But this problem frequently has to do with deeper emotions, pressures and self-esteem problems that may not go away as easily. This is hard stuff because it's all about confidence. When you are under pressure from a spouse who disapproves of your trading, or under pressure to pay bills, etc., you are working under an enormous amount of fear and pressure. And that is automatically going to cause hesitation. I know that's a hard situation. But I tell you, if you don't get that under control and learn to trade like you don't need the money -- with control and a system, leaving out emotion -- you are not going to make it. You must find a way to ease that pressure. Get a part-time job if things are that rough and you still believe trading is the job for you. If you cut back and trade a couple of days a week without the pressure, you'll probably trade better for it and wind up making more money than you did trading five days a week under pressure. I've seen it happen many times. 6. When people will not contemplate the real reasons for their failures. I don't know how many times I have heard this: "The market was tough today. I had one good early trade and then gave it all back in the afternoon in a few bad trades." Let's be honest here. The market wasn't making you do those stupid later trades. It was you. Don't blame it on the market when in reality you were chasing longs all day when the market was tanking. Then people will say something like "I need help with risk management," "I need help learning to find good entries," "I need help learning executions" or some other topic not really related to their true mistake. What they need instead is a dose of self-restraint and some personal accountability. They need to stop making trades out of boredom, frustration, regret or any other reason other than "it met my trading criteria." They also need to be honest about these criteria and not stretch things into "well, it kind of meets my criteria -- if I look at it cross-eyed." I know this is hard. It's tough to sit there all day and stare at these numbers, especially when things are slow and there have been no good trading opportunities that day. It's like fishing. Fishing can be really boring. But if you aren't sitting there waiting with your hook in the water, you won't catch anything when the big fish come by. And it won't help if you jump in the water every time you see a ripple, trying to convince yourself you had a bite. 7. A defeatist attitude, especially in me. The potential in our lives far exceeds what we ordinarily imagine. Too often we put limitations on ourselves with Eeyore-like thinking. We say "I can't do this" or "I am just not smart enough" or "I'm just unlucky." In doing so, we fail to challenge ourselves and develop new potential because we've lost faith in ourselves. We are like circus elephants tied with small weak chains to a stake, believing we could never get free, unaware of our own strength. We possess tremendous potential, but if we develop the bad habit of convincing ourselves that our potential is limited, we will not actively challenge ourselves and grow. Like the elephant, we will be held captive by our own beliefs. If you have a defeatist attitude, you've already lost. So let's keep a positive mindset and try to see each mistake as a stepping stone to growth.

Tape reading is nothing more than monitoring the current price action and asking: Is the price going up or down right now? Even the most novice observer has the ability to see that prices are moving higher or lower at any particular moment or, for that matter, when prices seem to be going nowhere or sideways. (Markets do not always have to be going somewhere!) It is also fairly easy to watch a price go up and then tell when it stops going up - even if it turns out to be only a momentary pause. If you can learn to follow the price action, you will be two steps ahead of the game because price is faster than any derivative. You may have heard the saying, "The only truth is the current PRICE." Your job as a trader will become ten times easier once you accept this. This means ignoring news, opinions, and personal biases. When watching price, the first thing we want to know is how fast, how far, and in which direction. It takes two points to measure these things. One will always be the current price, the other a "reference point”. "The study of responses ... is an almost unerring guide to the technical position of the market." Wyckoff The second is to watch for the market's response to a particular condition, i.e., to anticipate a particular behavior. For example, if the market has been at a very low volatility point and just begins breaking out of it's particular trading range, one might anticipate that the price would begin to accelerate in an impulsive manner and not run into immediate resistance. Or, on a directional play, if the price is moving in an impulsive manner in a trending market and then pauses to catch its breath on a mild reaction, one would expect it then to continue on in the direction of the trend. When there is a particular behavior to anticipate, it is easier to watch the price to see if it acts according to one's expectations. Tape reading is not watching every trade that passes by (a monotonous task) but rather keeping an eye out for unusual impulsive action, unusual volume, or just observing the way the price trades at significant levels. Each price swing has forecasting value as to what the next most immediate move should be. We then follow the price action to see if that move plays out. (Linda Bradford Raschke)

It's just a little something I keep for the hunting season.....

. You mean like this?

You're still not listening. Your objectives in "watching the market" are inappropriate to your stage of development. Therefore, however much time you spend doing so is largely wasted, as is the amount of time you spend in replay. Develop a set of goals that are appropriate to your stage of development. These will NOT include concerning yourself with how to trade what you're studying. Since you do not yet understand the nature of price movement and how it relates to volume, I suggest you begin there.

You're not listening. Your objectives in "watching the market" are inappropriate to your stage of development. Therefore, however much time you spend doing so is largely wasted, as is the amount of time you spend in replay. You are not yet in a position to decide what are or are not "dull times". But if you find the work boring, consider that that may account for your lack of progress.

Nothing wrong with seeking help from "the outside". But one must first begin to do the work. Otherwise he ends up asking the same questions again and again. If you don't want to do the work, that's up to you. But don't shrug off the value of screen time if you're "studying" an entire day in 30 minutes.

Then I suggest you re-examine your approach. If you're trying to locate support and resistance without understanding price movement and volume and the relationship between the two, then you will fail. If you're trying to understand price movement and volume and the relationship between the two by fast-forwarding through the day, then you will fail. If you're trying to understand price movement and volume and the relationship between the two by reading message board posts, then you will also fail. You are not yet at the stage where you are ready to test a strategy through replay since you do not yet understand price movement and its relationship to volume. First study price movement and develop an understanding of that movement. Without replay, this will take six months to a year (100 to 200 trading days). With replay, if used correctly, this amount of time can be cut in half. You can continue to focus on trading rather than understanding, in which case you will likely be at the same place in a year -- or five -- that you are right now, replay or no replay. Or you can forget about trading and focus on understanding, in which case you will discover that everything you need to know is in the charts, and you won't have to ask questions like why Wyckoff thought that Dow was an idiot.

And do you believe that going through an entire day in 30 minutes is telling you everything you need to know and understand regarding the movement of price and volume and the relationship between the two over the course of the trading session?

All right, let me put it another way. How many days do you replay in the evenings and on weekends?

And how much time do you spend replaying charts in the evenings and on weekends?

What charting program are you currently using?

Nope. I don't see the point (no pun intended).

I thought The Visual Investor was a good introduction as well, until I was introduced to Wyckoff, who approaches charts the same way, without the indicators. Having gone through and past my indicator period, I'd suggest Schabacker.

I'd say no. The balance of volume appears to push price higher. However, the price has advanced 40% from the bottom and this is the third of these consolidations. If you're trading one lot, consider moving your stop up below this TR. You do know you entered 4pts too late, don't you?

The Trading Journal post to my Blog may also be of help: The Trading Journal. And while I agree that learning to read charts is essential, I do NOT recommend that any beginner get into Murphy (by the way, stockcharts does not belong to Murphy; it belongs to Chip Anderson ). Indicators are a detour to learning how to read price action, and it can take years to find one's way back to the main road. (Also avoid Elder, Pring, Farley, and the rest of the usual suspects.) I suggest beginning at the beginning, with the nature of demand and supply and of buying and selling. The Wyckoff material posted to my Blog is one place. If the trader doesn't understand demand and supply, the rest of it will be a mystery.

The "spring", however, appears to have created the profile. If you were using the profile to find support, what would the profile look like prior to the test's having occurred?

Okay, that's enough of that.

Given that the thread is in the candlestick forum, a more appropriate focus might be how candles would have prompted a trader to buy the reversal in March. BF revitalized the thread at that time by noting the test, but there seemed to have been a concern about all the resistance. Of course, there's also a lot of resistance facing anyone wanting to trade any sort of BO of this range, and failure is much more likely not only because of all the overhead but also because those who bought the reversal will be scaling out. There was also a concern about holding overnight, but this will all happen again, so I suggest for the future that anyone trading the ES consider buying SPY alongside in order to take advantage of those opportunities which he might otherwise feel forced to pass by from a daytrading perspective.

Well, like I said, I just eyeball it. I see two clusters, the first from 0930 to 1010 and the second from 1015 to noon. I find it useful to make those distinctions because price may find resistance in places that would otherwise be unexpected. For instance, in this case, price may be finding resistance toward the end of the day at the top of that first cluster, whereas otherwise it looks like it's free and clear above the longer one. Try ignoring all the tails. That may give you a sense of where the action is. For example: Click the image to open it up to it full size and you'll see the R line off the second box.

Thanks, Tannis. My study of springboards over the past few months (or, more accurately, renewed study) has been of great benefit. Unfortunately (or fortunately, depending on how one trades), I've found the best springboards on 1m and sub-1m charts (where all the "noise" is ). Today, for example, the springboard for the NQ took place between 1336 and 1339 at 1901.25. Not visible on a 5m chart, but there it is. And of course if one doesn't "believe" in support and resistance, that complicates matters further.....