DbPhoenix

You bet. Db ...........

For the benefit of those who read this thread but don't have a whole lot of experience in trading, the following may be of interest. The hourly shows what had been resistance at 1404 and the first two failed efforts to break through it. These attempts created a lot of "overhead resistance" between 1404 and 1408. For price to make any progress, it had to work its way through all this. The 1m shows how price hit 1408 today, banged against it for a full half hour before breaking through 1408, then bouncing against that from the upside for another 20m before resuming its advance. These are called "springboards", preparations for a further advance, and they are very reliable. And if there's any doubt as to whether or not the supposed overhead resistance was in fact resistance, note how effortlessly price rises once it leaves this OR behind.

Once you have a plan, emotions will no longer play a "huge role". In fact, they may not play a role at all. Db

You'll have no lack of people who will tell you that you can't do this, but I won't be one of them. I'm used to all the detractors who insist that it can't be done for no other reason than that they can't do it. They don't bother me anymore. If you wind up not being able to do it, you and your family are the only losers, so what the hell business is it of anyone else's? Since you have found at least one soulmate in Wyckoff, you're welcome to make use of whatever resources are available in the Wyckoff Forum, including Wyckoff's course. Since W's focus was on stocks, you may find more of value in it than those of us who try to apply his principles to futures trading. You may also learn something from the experiences of others who've posted their work there. Db

I didn't follow anyone's trades today, so whatever is included here is not intended as anything passive-aggressive. Even if you're daytrading, you have to consider context. Note here that there is a very powerful range preceding today's activity. Yes, it was interrupted by that burp above 1404 yesterday, but the range that's outlined has a hell of a lot more muscle. Note also that the midpoint of that range is where we spent the overnite, setting the pre-market conditions. That brings the trader to this morning. Now price could go either way. The trader might say to himself that if price were going to fall, traders had all night to do it, and doing it in the middle of the night is a lot easier than in the middle of the trading day. Even so, the trader has to be prepared for a breakout from either side. As it happened (and, yes, this is all hindsight, but the drill is the drill, so whether it's hindsight or not is pretty much beside the point), price broke out to the upside at the open. The drill? Go long on the first RET, though one must use no more than a 1m bar interval to see the op, which is around 1400.50. But now what? 02 is a potential S/R level. It was tested once yesterday morning. But 04 is a far more solid and probable level. So is that a reasonable target? Yes. On the other hand, the probability that one can slog through all the overhead that was created from the 13th to the 14th is slim, so 08 is not a reasonable target. Why is it necessary to distinguish between reasonable and unreasonable targets? Because a reasonable target might actually be reached with little or no resistance. An unreasonable target can be reached only with difficulty, and will likely not be reached at all. So the trader goes long at 1400.5 and reaches 1404. What then? He can simply exit and look for an op to re-enter on one side or the other, or he can wait for either his demand line or his trendline (in this case, the same) to be broken, at which point he exits and looks for an op to re-enter on one side or the other. Moving stops is not part of the procedure. If the trader needs to exit, he exits. And tries not to forget to cancel the stop. All of this can be and should be part of the plan. As for those re-entry ops, they're there, both short and long, but they are largely unforeseeable so they're not part of the plan. The trader who's still in the learning phase, therefore, SHOULD STOP HERE and do no more than observe the rest of the morning, or day if he can stand it. He should not trade in any way or form as he has not planned for it and is not yet ready to plan on the fly. Whatever he learns from observation can be applied to the next time. I realize that most beginners just can't stand not trading, but there's nothing I can do about that beyond cautioning them to resist. There's much to learn, but the degree of difficulty one has in learning it is in direct proportion to his inability to avoid jumping into unplanned trades, sim or otherwise. Db

None of the above. At the risk of sounding harsh (that's the second time I've said that today), why do you set targets that you have no intention of staying in the trade long enough to reach? The trading plan is not just busywork; it is something to be followed, religiously. Therefore, write a plan that you can follow. If you can't follow it, write another one. Then another. Then another. If you're going to exit the trade at the break of a trendline or an S/D line, then make that part of your plan. If your plan is to re-enter after that break, then detail the conditions under which you'll do so. Otherwise, there's really no point in putting together a plan at all. I know that's not what you wanted to hear, but there it is. Db

You don't say anything about your stats other than that you lack sufficient data, but perhaps this isn't the place to go into it. But you do appear to have at least put some thought into it, and that's a good start. I don't want to hijack the thread, but I do hope you've done your homework on gaps. It's been years since I traded stocks, but I remember that there are a number of different types, e.g., continuation, exhaustion, breakaway, island reversal, and possibly some others. Nowadays there's Google, which saves having to buy expensive books that are often of questionable value. There's also the library. As for small samples and lack of data, find something with replay so that you can compact the experience you need into days and weeks instead of months and years. I'm not even going to try to make suggestions because its been a dozen years since I lived in that world, but surely there's something available at little or no cost. Good luck. Db

You're making some assumptions, though, that are not borne out by the OP and the original question. I answer what has been asked. If the asker hasn't provided whatever information is required for a different answer, then the process can go on from there. He may well have been in the soup for months, or longer, and wants to know if P/V can be the way to go. Yes, it can. One can also load up his chart with all sorts of indicators and channels and bands and zones and so forth and go from there, but that wasn't the question that was asked. Exploration impulses are fine, and I include them in my trading journal "template". But they needn't go on and on. And finding one's own best way to approach trading may be completely irrelevant to what the market demands, as well as taking a considerable amount of time, which may account for all those who've been at this for years yet still can't trade. It takes a bit of focus to avoid mixing up this thread with the thread on how long it takes to learn how to trade. Odd that they should both be popular at the same time. But there's no need for me to post in this one anymore since I appear to have taken the OP at face value and shouldn't have. Best of luck to everyone concerned. Db

Well thank you, Bob. May the road rise to meet you and the wind be at your back. Db

There's not much I can add to zdo's post, but you've taken quite a turn here. First the question was whether or not the price:volume relationship was all one really needed to trade, and I replied that yes, it was. But now we're into multiple bar intervals, multiple indicators (which appear not to be fully understood), Forex (which doesn't have volume) and so forth and so on. What started out as simple has become unnecessarily complex. No one can stop you from pursuing this course, but I suggest that you stop and think very carefully before embarking on it about what you really want and if this is the best way for you to reach your objectives. Otherwise you'll end up in the same soup as nearly everybody else. Db

What procedures do you follow to find these stocks? What patterns are you using make these determinations? What statistics have you compiled to tell you whether or not these procedures and determinations are helping you to reach your objectives? Not intending to be harsh, but feelings don't have anything to do with it. What data -- including statistics -- do you have to show that your plan is "solid"? What exactly is your trading plan? Db

When trading a range, you have to be prepared to sell resistance and buy support as you will be unlikely to get second chances. The range you were attempting to trade was only two pts wide (it was also clustered around the midpoint of the wider range that's been in effect for a week). Your target, therefore, was 1398, not 1392. Two points isn't much of a range, even for a scalper. Therefore, wait for the range to resolve itself and trade the breakout, whether up or down. Sorry if this is off topic. Db

I'd ask to be put on your list but, unfortunately, these accounts and lists always end up being more or less the same, since losers make the same mistakes over and over again, and have for centuries. And they will likely continue to do so for centuries more. If we last that long. I've encountered this problem repeatedly: The typical trader will do most anything to avoid creating definition and rules because he does not want to take responsibility for the results of his trading. If he knows exactly what he is going to do and under what conditions, then he would have something by which to measure his performance, thus making himself accountable to himself. This is exactly what most traders don't want to do, preferring instead to keep their relationship with the market somewhat mysterious. This creates a real psychological paradox for traders, because the only way to learn how to trade effectively is to make oneself accountable by creating structure: but, with accountability comes responsibility. (Mark Douglas) Db

I was going to include moving averages, but that would really rattle some slats. And take the thread off into a far tangent. Suffice it to say that the object of all this is the price, not a line drawn on the chart by the trader. If one focuses on the line rather than on what price is doing, he should probably get rid of the line, at least until he can put it in perspective. Db

To what purpose? What were your objectives when you studied these charts? What did you learn from the exercise? Unless you have a well-tested and consistently profitable trading plan, you should stop immediately. Otherwise you will likely only waste the next five months. Db

I don't use any. Just support/resistance, price/volume, trend/range. No insight here. I just don't see the point of them since they don't tell me anything I don't already know from following price. This is largely an outgrowth of auction market theory, which predates Market Profile, which is, I believe, what Colonel B is referring to. Click the link if you're interested. You'll also learn how to find the "VPOC" easily, without incurring any expense. Db

Last question first, yes. However, your long is too early. If you're going long on a retracement, that doesn't occur until five bars later, though I prefer to enter coming out of the RET, which would be one more bar. If this is followed, the short should also be one bar later. Make the market come to you. Db

As long as trades of the instrument are governed by demand and supply, then they are all traded the same way. However, the price action itself may be very different. The ES can often seem like a '64 Lincoln Continental whereas the NQ is more like a Mazda Miata. Other instruments just lie there, comatose. Still others might ricochet around like an assault weapon on Auto. You have to decide what best suits your personality. But the ultimate objective is the same: to make money with as little risk as possible. As for what to call the setups, again, it doesn't matter what you call them. If you like, read what other Wyckoff traders say when they talk about their trades. They're concerned about the process, not about what to call it. Db

Don't worry about what to call it. Only vendors like to hand out lots of cute names. This is simply a failure of price to hold above resistance. Also, don't get carried away with the lines. Supply and demand lines do not provide S or R. Neither do trendlines. Their value lies in doing their job, i.e., telling you where the balance between demand and supply is changing and telling you where the trend is changing. That's it. You then have to decide what to do with that information. S&R, however, are something else. These levels and points are created by price, not by the trader, whereas the trader has at least some latitude in where to draw S/D lines and trendlines, even to the extent of not drawing them at all. In this case, 1404 represents resistance because traders can't keep price above it and have failed to do so repeatedly. Otherwise, it wouldn't be resistance. Granted they tried for an entire day, but, ultimately, 1404 won. Therefore, you are shorting the failure of traders to keep price above 1404. This doesn't have much if anything to do with lines. It's interesting but probably coincidental that your short entry coincides with touching your trendline. Some people see this as a stronger signal than shorting a lower high, but since one can't predict the future, it's not something to wait for. An earlier and better entry is at 1010 or even 1035 on your chart, at around 1406 or 1405. If taken, then whatever happens with the waffling around 1404 doesn't really matter because you're already in. So what you're shorting is failure and you're entering on the first retracement thereafter. You could just jump in anywhere, but you have no way of knowing when the failure will occur. It may make a series of higher highs and you get dragged along with it. Wait for the lower high, then enter inside the first retracement. You could wait for price to drop below 1404 and short the test of it, but there might not be one -- price might just plunge through, and there you are watching it fall way from you. So I suggest you forget about what to call it and just do it. Db

Before you become wedded to the ES, you might also look at the NQ: more movement, faster, more opportunities, cleaner. Db

While TRO and I don't exactly see eye to eye on the indicator thing, I find it hard to disagree with anything in the first post to his thread. Practical advice is hard to come by on message boards, while theory abounds. TRO is a nice counterpoint to all the hemming and hawing and waffling, even if you don't buy into the indicators. You might also be interested in the Reading Charts in Real Time thread, another no-bullshit contribution. Db

Yes, you drew them correctly, though they'd be easier to see without all the other stuff:) The problem here is that the short entry takes place immediately upon the break of the demand line. It takes balls of a certain size to take a short at that point. If yours aren't big enough yet, just let it go. Another opportunity arose a little later, 15m after you printed your chart. Later you may have more confidence in your ability to manage the earlier trade. As for the difference between S/D lines and trendlines, they have different functions. The supply line, for example, shows where and when supply overwhelms demand. The trendline shows trend. These often follow the same course, but whereas price can leave the trendline to some degree, it can't leave the S/D lines. If it does, they have to be redrawn. Otherwise, they serve no purpose. Db

It's the old Dog That Didn't Bark. We expect price to do something after we transmit the order. If it doesn't do what we expect it to do, then Hope is triggered. And Fear is triggered so soon thereafter that they might as well be simultaneous. How much more productive is it to think Well, price isn't doing what I thought it would do when I entered this trade so maybe we ought to lighten up a bit... But traders don't do this because transmitting an order is equivalent to putting it all on black and spinning the wheel. Bingo! It can never be mechanical because there are so many possible routes and outcomes, but one must be and can be open to dealing with all of them. That's what trade management is all about, not entering a trade and hoping for the best. Db

Nobody lives forever. And I've been a teacher for more than 40yrs. What motivates anybody to do what they do? And teaching this is no skin off my nose. The idea that enabling somebody else's success somehow inhibits my own is idiotic (I always get a kick out of those who refuse to share their strategies and tactics because then they won't be worth anything anymore). I still get thanks from people who got out of the market in 2000 before it collapsed. I may have had it easier than most because I learned to trade before the internet and before candlesticks and, to a large extent, before indicators.The first book I read was How To Make Money In Stocks, most of which was "borrowed" from Wyckoff and Schabacker thru Neill and Edwards. Therefore, I had very little to unlearn. I sympathize with those who are trying to learn to trade these days because they think that the way things are are the way they've always been. They can't imagine trading without indicators and candles and "the book" and all the rest of it. The idea of trading from a chart with nothing on it but price is close to terrifying. But it helps to get to the central question: why does price go up and down? There's no shortage of message-board traders who've been at this for years who can't answer that question. And a not insignificant number of them are vendors:) And it doesn't matter if it's ES or NQ or oil or copper or Forex or ETFs or whatever as long as the movement is determined by the balance between demand and supply. Unfortunately, few people understand how to determine this. So they fail. And with all the indicators and the internet and the software and discount brokers and so on, the failure rate now is pretty much the same as its always been (I'm sure you've noticed the bitterness and anger that too often characterize message boards; why would successful people behave that way?). But there are still those few out of a hundred who will get it. Db

Yes and no. It "exited" the channel, but the breakout was weak. And you'll notice that by 0900 the buying and selling waves were pretty much equal. This suggests that at least for the time being, traders are looking for or creating a new range. Until that's established or exited, I'd rather just stand aside. Db