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DbPhoenix

Market Wizard
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Everything posted by DbPhoenix

  1. DbPhoenix
    And the definition of Fundamental Analysis, also from Investopedia: A method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security's current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short). This method of security analysis is considered to be the opposite of technical analysis.
  2. DbPhoenix
    Why? Db .........................
  3. DbPhoenix
    I don't suppose there's any point in my saying this again, but charts are not TA. Charts are a tool. TA existed long before charts. The videos you've posted show guys following price in the context of demand and supply. That's basic TA. Your choosing to define it some other way doesn't make your definition true. At most, it makes your definition one of at least three, one of which you find useless. And, yes, it's either TA or FA, even if one is following one or the other by proxy, such as a newsletter. If you've found some other way of assessing the market, please explain. Db
  4. DbPhoenix
    I agree. Making posts every three minutes is just another form of spam, particularly when they're mostly copy-and-paste. Db
  5. DbPhoenix
    Actually, I've never said that. It's much too sophisticated for how I trade. Db
  6. DbPhoenix
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  7. DbPhoenix
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  8. DbPhoenix
    That's one type. Another, which predates Schabacker, Edwards, and Magee, focuses on the imbalances between demand and supply as reflected in price movement, which is itself determined by transactions among buyers and sellers. A third, post-1950, focuses on "indicators". To state, then, that TA "works" or "doesn't work" means little unless one (a) defines what he means by "TA" and (b) explains just what it is that he expects TA to do. If for example he expects TA of one sort or another to "pick tops and bottoms", he will most likely be disappointed. But then he will also likely be disappointed if he expects the same thing of fundamental analysis. The point of trading is to make money. One can make money through the appropriate use of the appropriate form of TA. But then he can also do that through the appropriate use of FA. What is more important is whether or not he knows how to use the tools that are available to him. If he doesn't, and doesn't care to learn, then neither TA nor FA will "work" for him. Db
  9. DbPhoenix
    These debates about TA have been going on for decades, but unless participants defined just what it is they mean by "technical analysis", the exchanges don't amount to much more than Emily Litella's rants about violins on television. Db
  10. DbPhoenix
  11. DbPhoenix
    See my response re these lines in the Daily thread. As for your charts, once you've uploaded the image, right-click the link and click "Copy Link Location". Then plant your cursor in the message body wherever you want the image to be and left-click the image icon (the postcard). You'll get a pop-up with "http://" highlighted. Right-click this and paste your image link. Make sure you don't have two "http://"s. Click "OK". Db
  12. DbPhoenix
    The distinctions among DLs, SLs, and TLs continues to elude a number of people, probably because I'm just not explaining it very well, so if I continue to point out inaccuracies, no one should take it personally. The task of Demand and Supply Lines is to track demand and supply. They may also show trend, but that is not their function. Because they are charged with tracking demand and supply, they must, when price takes off on a new tangent, follow price. Here, for example, when price alters course in August and continues on its new angle to September, a new demand line must be drawn to follow it. Otherwise, it has no purpose. Such a demand line would be broken at the end of September and the break would be telling you that the balance bet demand and supply is changing. A trendline, which is what you have, would eventually tell you the same thing, but a month later. All these lines are tools. They are electives, not requireds. If the trader can't tell up from down without them, he should probably go into another line of work. Certainly he ought to at least be able to tell whether or not a move is in trouble without resorting to them. But this is not a problem for you. Take care, however, that you focus primarily on price and not whatever lines you've drawn. In order to avoid being manipulated by them, take them all off when you do a review and look at the chart "clean". You may then be better able to see where the demand/supply balance lies. Db
  13. DbPhoenix
    You left off the end of it: If the trend reverses and makes a U-turn, clearly the trader doesn't sit there like a deer in headlights and watch price come all the way back to his entry, Remember that price is always either trending or ranging. Each state is played differently. Db
  14. DbPhoenix
    I'll assume that's the flu talking. Db
  15. DbPhoenix
    Hey, you know how to spell "lose". That beats most people who live here. Db
  16. DbPhoenix
    It may also be worth noting that while the NDX has pulled back slightly more than 50% from the previous rally, it pulled back to the same extent in June and rallied from there just fine. And the SPX and Dow are well above their respective 50% correction levels. This is not to say that it can't all fall apart, but, if buyers can get their stuff together, the short-covering could propel the NDX higher quite nicely. The 60ish level is still worth watching. Db
  17. DbPhoenix
    First, having many lines can paradoxically impede your ability to detect S/R as you may be so focused on the lines that you pay less attention to the dynamics of price movement: the waves, the contractions and expansions, the hesitations, etc. There is also a substantial difference in remembering an S/R level because one has traded through it several times and remembering it -- or trying to -- because one just plotted it that morning. Trading only one instrument also greatly enhances one's ability to understand how it "behaves", and the better one understands that behavior, the better able he is to anticipate changes in that behavior. Second, the answer isn't so much yes as it depends. More recent trades tend to confirm rather than provide anything genuinely new. But confirmation is a plus as well: the more often price finds S or R at a given level, the more confident one can be that price will find S or R there the next time, assuming that one is defining S/R by trades and not by geometry or mathematics. As to what I use, I include whatever is necessary to give me a frame or a context. Very occasionally I may have to use a daily. If so, I will not likely have to look at it during the day (the less, the better). More likely I'll have to use an hourly or a five-hourly, depending on what I need to include whatever I need into one window. But, again, unless the day turns out to be wide-ranging, I may not have to look at this more than once, and then before the open. What I will use more often will be a 15m, 5m, and 1m. And, yes, one can use a 13m or 17m or 3m or 5.5m or whatever, but so what? If one has learned to view price movement as continous, then the objective is to fit whatever one needs into a window rather than get cute with peculiar bar intervals. The more important consideration in daytrading is speed, and if the defaults provide what one needs, then the defaults are fine. Yesterday, my frame was what I posted in the TIF thread, but that was a pretty big frame. Nonetheless, it provided a context and a focus, thus the market became just a bit more predictable rather than completely wild and crazy. The R in the 54-56 area was comfortable as it's become an old friend over the past week. Therefore, it was not unreasonable to expect it to provide R yet again, which it did. But then it double-bottomed just a few minutes later at 47, and price blasted right through it. So, at the same time I'm looking for contraction in the waves, or bar, I'm looking to the left to see where price has found S/R in the past. I look for those levels where price has been repeatedly thwarted from its course, including those occasions when it has hugged or straddled a particular level. If and when price approaches that level, as with 65-66 yesterday, all I have to do is wait rather than guess. And when price stutters in its effort to make a new high, I wait for an LH to short. When price then makes its way to the OH, I look for signs that it's going to find S there. When it does and then makes an LH, there's another short. When it returns to the OH, though, it doesn't find S again; it drops into the opening TR. Weakness. However, it stops before it reaches the MP. Strength. But then a poke to the upside 15m later that goes nowhere suggests that the resolution of this little consolidation will be down. But where is it going to stop? 35 seems to be the most logical because of the overnight rally. But, instead, it finds S at 40. Why? This seemed to come out of nowhere, but if one can clear away the extraneous, it's not difficult to locate the most likely sources of unanticipated S/R. Here one can see that price has found S and R at 40 and has even snuggled up to it. One needn't know the reason why, only that it has done so. One can even detect the reasons for the hesitation at 45 on the way down: the little pullback at 45 a hour before the open and the bottom of the TR created midday on Thursday. If one can draw lines at and around all this and lock in to what is likely to be most important in the midst of all the action, then lines would be beneficial. But when push comes to shove and one is wondering where the hell am I, then monitoring several windows, or flipping back and forth through two or three tabs, may maintain or at least restore the calm one needs to trade confidently. Db .
  18. DbPhoenix
    I was asked today in chat how I saw what I saw. This is next to impossible to get into in chat, even with charts, which I never have time to post. And it doesn't do much good posting this stuff in the Forum since the background and context lend clarity. So this is directed to those who were there today. We all knew that 56-58 had provided both S and R for quite some time. As I posted earlier, elsewhere, this level went back to July. And the day started with 54-55 having been tested just before the open. So one could expect a short op at or just above that level. However, price sailed right through all this without a stutter, so the chief task became finding the next potential R level. For that, I looked to the left for the first "trading zone". As I pointed out in chat (again), support and resistance are created not by geometry or mathematics but by trades. Look for levels where traders are trading like busy little bees. Look for levels or points where traders are turned back. Look for levels or points where traders keep trying to break through. Look for levels where traders sit and twiddle their thumbs. This is where you'll find support and resistance. In this case, I saw that price had attempted to get through 64-65 twice the previous evening. It then did so, then glided back to that level and rested, satisfied with itself, so comfortable that it stayed there for hours. Even though that time of night may not be terribly busy, trades are trades, and the more time is spent at a given level, the more trades there are. The more trades there are, the more potential support or resistance. As we were fast approaching this level, it made sense to look for any hesitation or lack of ability to find a trade. This occurred at 65, when price pulled back to 61. The drill, then, is to wait for a LH. If that doesn't occur, then perhaps price can make it all the way to 72. Instead, price made a marginal HH, though it was a strain (in RT). Thus when price plunged back below 65, there was a short op for a return trip back to 54, which is where we started. There were other questions about how I found S and R, but I don't recall exactly what they were. If someone wants to jog my memory, I'll post more explanatory charts. Db .
  19. DbPhoenix
    Glad to hear it. And as for your analysis being "too long", it will be as long as you need it to be. As this becomes second nature, more and more will become internalized, and your notes will be far briefer. Eventually you may stop making them at all until you get into trouble, then you'll begin doing it again. Db
  20. DbPhoenix
    About these reviews. The reviews benefit each of you individually. Reliving the day cements what you learned, even if what you learned is still in the Tentative tray. Therefore, how you choose to display it, or whether or not you choose to display it at all, is entirely up to the individual. However, if one is attempting to communicate something to somebody else, the display should meet that objective. What I'm most concerned about is that each of you is learning to follow price. Whether you do it with a tick chart or a wave chart or a bar chart or whatever isn't important. What matters is that the review be an opportunity to enhance what's being learned, not that it be a chore. Db
  21. DbPhoenix
    That's strange in this day and age. With SC I could expand and contract each window on both axes as much as I liked. Oh well. Db
  22. DbPhoenix
    Can you expand your window vertically so that your price plot isn't so much of a line? Thx Db
  23. DbPhoenix
    Something to consider: .
  24. DbPhoenix
    You will likely have another opportunity to dwell on this tomorrow. Given that price penetrated so far into the next TR, look for R at 58 and another trip to the midpoint of that range at 2590. It all depends on the buyers. Given the action today, price may just sit and catch its breath. Either way, be prepared. Db
  25. DbPhoenix
    Depends on how you look at it. When I reviewed the chart this morning, I saw a downdraft from 95 to 48, a rally to 82, then a sideways move which eventually became a TR between 58 and 82, more or less, with a midpoint of 70 (keeping in mind that these numbers and lines are exact for the sake of efficiency in posting and discussion but are actually somewhat flexible). When the downdraft continued to 48, this was a "matching move" to the move from 95 to the TR. The midpoint of the complete downmove and the midpoint of the TR within are therefore the same: 70 (this was also the mp of the hinge from Tuesday). That, then is what you have to work with. There is a decline from 95 to 48. Price may hit the top of that decline and fall or it may hit the bottom of it and rally. Or it may move within the TR between 58 and 82, finding R at 82 or S at 58. By the time the market opened, however, price was still futzing around the midpoint. I said in chat that bounces off midpoints from the extremes are generally more successful than trades that start there, partly because the midpoint represents a 50% pullback from either extreme and partly because failure to get through it has more effect than failure to get through any other level besides the extremes. However, given the fact that buyers were trying so hard and having so little success in moving price past the midpoint, one could, if he understood and was willing to assume the risk, short that second effort. This would have taken him to S at 58, a decent trade. Note, however, that the result of a short off the second attempt to get through the midpoint at 1022 makes the earlier move from 72 to 58 look downright pitiful. This is not to say that one could predict the extent of this later move down (though the midpoint of the next TR down is 2590), but the effect of the failure to cross the midpoint when coming from the S extreme of the TR is considerably greater, carrying you at least to the bottom of that original downmove at 48, before plunging further. The macro TR, then, acts as your frame, and you will trade much more calmly if you work within that frame. There may be little consolidations and congestions and feeble efforts at rallies and corrections along the way, but the S and R and MP remain until they are decisively violated, and even then they may re-exert their influence. Note, for example, how price finds R at 58 after it's dropped through, then eventually makes its way to 48. Once there, if there's no selling climax, you have a new ballgame and must improvise. Db
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