DbPhoenix

And there they are, better late than never. But meeting R at 50. 1035 PS. By the time I got this posted, they'd made it through 50 but found R at the next level, 52.

The point of a retracement is to give new buyers the opportunity to jump in, which propels the price forward. If they're not jumping in, and you're already in, what are you doing just sitting there? If they don't jump in, then you've got a hinge, and you don't want to be sitting inside one of those, either.

The point of a retracement is to give new buyers the opportunity to jump in, which propels the price forward. If they're not jumping in, and you're already in, what are you doing just sitting there? If they don't jump in, then you've got a hinge, and you don't want to be sitting inside one of those, either.

Haven't had a news-driven open in a while.

Haven't had a news-driven open in a while.

Don't know what you mean by "link". It's Section 15 of the course, p. 5. If you have not yet downloaded the course, see the Stickies.

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You may have to choose between oil and the NQ until you get this down. If whatever market is twisting and turning, you really have to focus on the price movements. If your attention turns to the bars, you will easily get lost.

The chief purpose of these lines is to identify the relative strengths of supply and demand. If buying pressure is greater, the demand line will track the stride (/). If selling pressure is greater, the supply line will track the stride (\). If either line is broken, the break may signify an oversold or overbought condition or the break may signify a change in stride, even a turning point. The trader has to be ready for either. As for secondary reactions, one line or the other will of course be broken since the secondary reaction is a reversal. Wyckoff called them Support, Supply, Overbought, and Oversold lines (see Section 15). I've simplified them a bit and use only Supply line and Demand line.

These will probably be the last of this series:

These will probably be the last of this series:

I always get a kick out of these labels that proclaim "organic sugar" . . .

Why not? Traders have made good money in insurance stocks, big box home improvement stocks, and commodities, for example, when natural disasters provide the opportunity.

I don't know if the OP will be back or not, but for some reason this thread interests me, and I've reviewed his posts. While his story is hardly unique, the posts present what to some would be a fascinating look at how and when and where and why a journey goes wrong. If all beginners were to read it, they could very well save themselves a ton of money and time. While some would claim that the problem lies within his brain stem, I suggest as always that the problem lies instead in the desire to trade somebody else's system in general and the lack of a trading plan in particular (and, no, trading somebody else's system is not a plan, at least a plan which will guide one toward success). And since developing and testing a plan is faster and cheaper than surgery or therapy, I suggest the plan route.

Simple Greed? Or A More Complicated — and More Dangerous — Fear? Posted on March 30, 2013 by jcoumarianos When people talk about “fear and greed” in the markets, they usually mean fear of loss by “fear.” However, often a stronger fear is fear is missing upside. Listen to Jeremy Grantham talk about how many clients he lost in the late 1990s for his conservative posture, or note that Steve Romick lost 90% of his investors during the same period for his, and you’ll understand that more subtle, but no less insidious, portfolio-damaging, fear. This is a kind of strange fear mixed with, not opposed to, greed. I suppose one could call it greed, but it doesn’t seem that simple. It turns out, investors tolerate losses reasonably well as long as everyone else is losing. It’s kind of the investment version of misery loves company. Lose your clients’ money when everyone else is losing, and you’ll very likely keep your job. Lag a roaring market, however, and you’ll get dropped in a hurry. This weekend the WSJ has a story about a couple, both physicians, who have re-entered the market after losing half their savings in the crash of 2008-2009, and parking their money in a bank account until now. The article notes [t]his week, as the Dow Jones Industrial Average and Standard and Poor’s 500-stock index pushed to record highs, Ms. White and her husband hired a financial adviser and took the plunge back into the market. The following graph shows what the physician couple missed by selling stock and moving to a bank account at the market’s nadir. So many questions arise from this couple’s actions: Why do they like stocks now better than they did when stocks were at half the price they are now? Do they think profits have increased so much to make valuations more compelling now? (They have since 2008-2009, but the Shiller P/E — taking the past 10-years’ average earnings – touched 13 in early 2009, and is at 23 now.) Are they even thinking of profits and fundamental valuations? And who is this advisor who has taken them on, and is letting them get into the market now? Who calls the shots in an advisor-client relationship? How many advisors will turn down clients who show an obvious propensity for bad timing and emotional reactions to price movements? And have the clients unconsciously hired the advisor so that if things go badly they can blame him and fire him? Here is a key quote is from the wife, Ms. White, What really tipped our hand was to see our cash not doing anything while the S&P was going up. . . .[w]e just didn’t want to be left on the sidelines. Memo to Ms. White: You’ve already been left on the sidelines to the tune of a 100+% gain off the 2009 bottom. And you haven’t been earning interest on savings for years. Her reply: We have better advice, we’re better diversified, and I feel like we can tolerate a little risk. I don’t know if I should wish their advisor luck, or petition the SEC or the state regulatory board that governs him to sanction him for malpractice. Of course, these are two physicians, which means they have the economic and intellectual heft to intimidate most advisors, even if they are completely governed by their emotions when it comes to their money. For Ms. White and Mr. Villa, a dermatologist and reconstructive surgeon, respectively, perhaps a few visits to a psychiatrist may be in order more than a relationship with a financial advisor. .

Altho it's not just a matter of lines. If, for example, buyers keep reaching and can't make any progress or hold onto their gains, the probabilities shift toward the downside. This was particularly true today. Failure to make a higher high, failure to follow through. This is why the trader must watch price moving and not just sit around waiting for some bar to "close" or "change color".

If there's something obvious, I can plot it ahead of time. More often I'll see price choking at a certain level and I'll swing to the left to see if there's something that might be responsible. I don't draw a line; I just look. But when preparing these charts for posting, I have to draw the lines. Otherwise, almost no one will understand why I did what I did when I did it where I did it. Nor do I draw any of the other lines. But I've been doing this for a long time.

If you're pursuing the wrong markets in the wrong way with the wrong objectives, digging in probably won't help much, not after four years. Perhaps you should ask yourself why you got into trading in the first place. Are you interested in pursuing a strategy that isn't automated? Or even mechanical? Are you interested in pursuing some other market, something that you actually know something about (assuming you're not a banker or some other sort of currency specialist)? Ordinarily I'd read somebody's past posts to get an idea of who they are and what they want, but you've got 119 of them, so forgive me if I don't take that time. But if your objectives and desires have changed, they may not be pertinent anyway other than to remind you of your regrets. If you want to pursue a different course, you can put all that behind you. But you must first determine just what it is you've learned, if anything, from the experience. A losing trader can do little to transform himself into a winning trader. A losing trader is not going to want to transform himself. That’s the kind of thing winning traders do. -- Ed Seykota

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Yes, except that your upper line starts where you have your circle. It does not extend to the left.

This is essentially what Auction Market Theory is all about. What "mean reversion" players often don't understand is that mean is dynamic. There is a mean even in a trend. The extremes are determined in large part by the inability of traders to find trades.

Since the OP has made only one post, and that was six months ago, we are all most likely just talking to ourselves. But his central problem is contained in this sentence: " I learned a price action method for day trading the e-minis a few weeks ago." If one buys or borrows or steals somebody else's system, he will either quickly or eventually have problems. If he doesn't develop the system (or method or whatever) himself, he won't completely trust it. If he doesn't trust it, he will second-guess it, he won't take the signals, he will wander off into the weeds and into blind alleys. Typically he will complain that the system "doesn't work". And then he'll move on to another system that he had no part in developing. And another. And another. How does one develop his own system? The Trading Journal (more).