DbPhoenix

There are lots of examples of this in the Trading By Price thread and the Support/Resistance thread. Db

Since I don't know what you were looking at or what you did, I can't answer except in a form so general it wouldn't do any good. Db

Price trends until it doesn't. When a trend hits a wall, i.e., S or R, what matters is what price then does about it. Does it bore its way thru and continue the trend, does it veer off sideways, or does it reverse? Volume can be informative, but it's the price movement that matters. Stay tuned. Db

If you're going to trade trend channels, then you have to trade the channel, i.e., sell the top and buy the bottom. The problem is deciding how to draw the channel. You've chosen to use the climax low as your starting point. One can also use the first swing low as the starting point. This can more closely hug price and give a different perspective on where we are now: The referee is the regression channel: Unfortunately, the regression channel doesn't always tell you what to do, and even if it does, its advice is not always the best. Here, of course, the stick in the spokes is the R from last April, and that trumps the "trend". Therefore, given the manner in which price is reaching for that old high, I'd focus on that rather than on the prior trend. Here also is a place where volume can be informative. I don't have it plotted, but it's relatively subdued, suggesting that sellers are allowing price to rise without too much resistance. We'll see what happens if and when they decide to start dumping their shares. Db

I'll repost here what I posted earlier in the emini thread: As for posting a chart, of course. Otherwise, no one knows what you're referring to, esp the inst. you're trading. As for demand/supply lines, see this. Db

I posted this elsewhere several years ago, but I'm reposting it here because it may help to serve an explanation of the difference between trendlines and supply/demand lines in graphic form: The job of the trendline is to show trend. The jobs of demand and supply lines are to show where demand and supply are entering the market. D&S lines can coincide with trendlines, depending on how micro one wants to get with his trendlines, but they are better used to detect changes in momentum which may lead to changes in trend. You can see here that a number of supply and demand lines can be drawn within a trend, whether it forms a channel or not. And, again, these lines can show the trader changes in momentum and provide an early warning that there might be trouble: What was notable at the time was the failure to reach what was shaping up to be a new trendline but what was at the time just a supply line. And for those who are curious, price tested the last swing low the following Monday and tried to rally, but it didn't resume its uptrend until four months later.

This is a good example of what I was trying to say earlier. For the intraday trader, the interday trend is not necessarily pertinent. Here, the trend is clearly down, until we reach support. At that level, what matters is not the trend but what traders do at that level: does it hold or not? But entering a trade until the direction is resolved is a high-risk choice. Edit: I should also point out that we've been in a TR between 7 and 11 since last nite. Taking a trade until price exits from one side or the other may not be the wisest choice.

This post and chart are only one example of many:

What you see as a hinge isn't, but that's to be expected since this is something new. After you've seen a few dozen, this won't be a problem. A hinge is created by a series of successive lower highs and higher lows that work their way toward an apex coincident with a decline in volume. It should be "filled with price" and price should exit by the time it has reached two-thirds of the distance from the base toward the apex. But this is all in this thread. What you have instead is simply a rally followed by a series of RETs. And I suggest that you change the aspect ratio of your charts somehow to something closer to 2:1. As it is, your chart is nearly too squashed for you to easily see the RETs, and that represents potential missed opportunities. If you're going to trade price action, you need to be able to see it clearly. In any case, after 3 RETs, price takes off again to the upside. At this point, you can begin fooling with a demand line. When price breaks this, exit, then observe traders to determine whether the likelihood of continuation is lesser than or greater than the likelihood of reversal. Here you have a another series of 3 RETs, the third of which is higher than the second, so you could -- if you are confident enough and willing to exit the trade rapidly if it doesn't work out -- enter a new long where I've placed the green dot. When price breaks the next demand line again, exit the trade again and resume observing traders. This time buyers lose their resolve and create a series of lower highs, conditions for a short, but all that can wait till later. By following this procedure as is, without any unnecessary complications, you stand to extract the maximum -- or close to it -- profit from the initial move. Your chief mistake was in allowing your expectations to shove aside your observational skills and better judgement, allowing hope to enter the equation. This is to be avoided at all costs, for obvious reasons. There can be no expectations or bias. Judge the market by its own action and respond accordingly. Incidentally, you needn't continue posting in this thread just because you started here. You may prefer the Trading By Price thread or the Trading Journal thread. Whatever suits your needs. Db

Perhaps not. I know James was having issues with it before he left, but it was still here afterward. But then I'm sure the software has improved over the years. So has the internet infrastructure. Db

Buyers and sellers do business in a variety of places. The challenge is to find those places. The further challenge is to determine the likelihood that they will do business in those places again. That's largely what auction market theory is all about. Indicators can appear to do things that they don't really do. This goes for pivot points as well as MAs, Fib, Bollinger Bands, and all the dozens of others. We want them to work for a variety of reasons, so we look for occurrences in which they do, more or less, then find ways to excuse those occurrences in which they don't. For the trader, this usually leads to a situation in which he never really fails, but he never really succeeds, either, at least to the point where he can make any real money. If one doesn't know how to locate the S&R that exist in the chart, he will naturally be drawn to something that locates them -- or appears to locate them -- for him. Once he performs the calculations. But the fact that he has to perform the calculations is the tipoff that he's applying an indicator, and that begins to separate him from the price action. If you've been clocking in a series of winning trades using pivot points, there's no reason to stop using them. Trading price action is not the ultimate goal of every trader. It's not a state of grace. But if pivot points aren't doing it for you, I suggest you move on. Ditto with the candles and the color-coding. A fundamental misunderstanding of how "indicators" are calculated and what they're supposed to do can lead to all sorts of off-task behavior. We think we see the indicators indicating something, or not, and believe we have made an important discovery. We then devote our efforts to improving the hit rate and the probability of whatever it is we think the indicator is indicating when our efforts ought to be focused on determining whether or not the indicator is actually indicating what we think it's indicating. In most if not all cases, it isn't. Consider the virgin being tossed into the volcano: sometimes it results in a great crop, sometimes it doesn't. Maybe tossing her in earlier or later will change the probability of a healthy crop. Maybe two virgins are better than one. Maybe six. Maybe tall virgins are more effective than short ones. And surely age is important. But does the robustness of the crop really have anything to do with tossing the virgin into the volcano in the first place? The money under the pillow is not evidence of the existence of the tooth fairy, and spring will arrive regardless of whether the virgin is tossed into the volcano or not. (Db)

Yes, I do. I use PaintShopPro to modify the image. You can probably use Windows Paint as well. Db

It's up to you where you post it. This isn't my thread so it's not up to me. If you're trying to learn how to trade by price, however, that might be a better venue. Consider, though, that if you're trying to learn how to trade by price, you're going to have to give up most of what you depend on: the pivot points, the color-coding, the trendlines, and anything else you're using as an indicator. That might be too much for you, or it may be too soon. As for the supply line, it starts at 92. Db Edit: This is what I'm talking about. The supply (or demand) line is a tool to be used by the trader to track the balances between supply and demand. There's nothing rigid about it. It can also serve as a trendline under some circumstances, but that's not its function. It asks whether or not the balance is changing and, if so, where and how. It's then up to the trader to decide whether or not he needs to do anything about it and, if so, what.

The trendline is irrelevant unless you bought a week ago. A rejection of 77 is a rejection of re-entering that last trading range. Db Edit: This is what I'm referring to:

Why did you not go long at 66 or short at 92? Db

Then just forget about it. If you entered the long when price hit what you thought was support but price couldn't get past 19, you should have exited. A simple supply line would have got you out at the same place. Then you'd be ready to take the short a half-hour later. I suspect you still have too much stuff on your chart. Db

When you entered, the trend was down. And where is the "trendline for additional support"? Trendlines don't provide support. Db

And it fails. Too bad we don't have a chat room anymore. Db

A RET for the giddy. Db

NQ makes a new high. Let's see how many buyers there are up here. Db

Knock off the snark and I'll be happy to be more specific. Db

OK, I pulled up a larger chart. I don't know the details of your plan, but, for the most part, you're doing the right things: you're doing what you say you're going to do and you're not letting your ego get in the way of managing the trade, therefore, no fear. You don't say what time you enter at 28.63, but since you say that it was halfway between the low and the high of the session at that point, you must have entered quite late. This is fine if you have reasons for doing so, but it can create problems when you're buying something that is in a downtrend and that gaps up. If you bought at bar 18 on a 1m chart, that's a nice buy, but risky since you have no way of knowing that the opportunity will present itself and you've already let three ops go by. Price could well have just taken off without you. You have at least one strike against you in that the instrument is in a downtrend, and has been for months. This accounts for the less-than-impressive performance to the upside after the gap (I'll assume the reverse pattern occurs in its long-side counterpart). This is not necessarily a criterion for not taking the trade at all. You never know what gaps will achieve. But you do have to be aware of all that can go wrong, just as you have to be aware of everything around you when you drive. Therefore, if you're going to play gaps, you'll have to be aggressive. You can't wait around for multiple confirmations. In this case, consider an entry on the fourth bar (1m chart). You have enough bars after the gap to form a resistance level, a springboard if you will. By placing a buystop above these bars, or above each successive bar if they're declining, you're in if and when the inst. comes back in your direction. If you use a buystoplimit, you're guaranteed the price you want. This avoids slippage. A potential downside of entering this early is that you must understand that the open will be tested, and you have to decide in advance what you're going to do about it so that you don't freak. When and where are you going to exit? Or are you going to let price fall all the way back to the bottom of the gap? Can you stay calm and re-enter? What will be the criteria for re-entry? The fear that most beginners feel has to do with fear of losing money, fear of being wrong, fear of not knowing what to do because they have no plan. You can avoid all of that. The next op comes at the RET (retracement), the 9th bar, entering on the 10th. However, this can be quite late, and unless price is really aggressive, this can reverse on you almost immediately. The next op after that comes on the test, the 16th bar, entering on the 17th. But this is so late that you're not even buying the gap anymore. Then there's the RET of that, the 24th bar, entering on the 25th. But by this point, the other traders have settled into a routine, and you no longer have the advantage of benefiting from their confusion and their emotional responses. Then there's the exit from the hinge, the break above the last swing high, and so on. And, yes, it is a hinge, which is a type of springboard, which you ought to read up on as well, particularly considering the strategy you've adopted: gaps are especially prone to provide springboards. And, no, the volume is not a big deal unless you're at an inflection point of some sort: S, R, an exit from congestion, a climax of some sort. When you put the gas to a car, you don't keep it there without relief. Once you've achieved the velocity you want, you ease up and let kinetics take over. When price changes course, however, particularly when volume begins to pick up, you want to do something about that. I suggest, for beginners at least, that you use a demand or supply line to trigger an exit. If an op comes up later for re-entry, fine. But, in the meantime, you're out, and usually with the maximum profit, at which point, if you like, you can exit the game. Such a line here would get you out at around 10:27 or 28 EST, at around the price you got. At this point or shortly thereafter, you could consider a short, but that's not part of your plan, and shouldn't be until you're easy with what you've got going at this stage. For now, congratulations for getting out without a lot of unnecessary hand-wringing. Definitely. This hinge doesn't last long, but it does what it's supposed to do. Gaps and hinges are supposed to release a force (effort and result). If they don't, then there's something wrong and you need to get out. You can worry about what it is that's wrong later. There are also other threads which will be of interest to you, such as the springboard thread. I suggest that you also Ctrl+F the course for references to springboards. You'll be using these a lot.

Your chart is posted too small for me to see the prices, and the volume bars seem to be cut off at the bottom. What stock is this? Db

What demand line are you referring to? Today's was broken several hours ago. Not that that's a requirement for exiting. Just don't hold on for the wrong reason. Db

I hope you guys examine your emotional responses and your trading plans today (not necessarily here and not necessarily in public). They seem to be tangled. Db