zeon

Hope you don't mind me talking out loud, but it looks like a line parallel through the one you've drawn can be constructed, beginning at K. That line seems to coincide with the point T you tested. And after that line is broken, I think bulls are definitely in control more than they were before. That and the previous chart I posted perhaps?

Interesting note there. I've experienced the previous day's high and low often to be important. But entering of them is just one thing. If you went long from 1320, would the upthrust be a decent enough signal to exit? If so, than you'd only make 3 points or so. Thanks for the tip about the book.

Would anybody see the decreasing distance between the lows as an indicator of a reversal coming? This rally seemed to come out of nowhere (unless you take the volume spikes as buying thanks Eiger)

I like the idea of giving examples of trades on charts. This is a trade I took earlier today. It seemed like a decent signal at the time. The volume on an upbar was high but the bar closed near the low. This bar also drilled into resistance, so it was something of a no brainer short for me. I set my stop at 5 points and got taken out by a single tick. What am I doing wrong this time

Focusing on fixed points have it's own problems though. I studied my favourite instrument (the ES) extensively and come up with a number of statitistics. That way I knew how much the chances were of price going (for example) 10 points in the right direction after my entry. Then I calculated the chances of price going in the right direction say 15 or 20 points (smaller odds obviously). But in the end the frustration remained because when you're in a short and price reverses a tick before your target you tend to become gutted. Or if you exit prematurely at 15 points and price goes 50 points further you go like :doh: ...

Thanks, great entries may be the case but despite that no winning trades today :doh:. Perhaps exits are more important than entries. Most of my trades actually go in the right direction rather soon after the entry. I use 1 and 5-minute charts, I like to zoom in to pick an entry, I usually take the trade on a market order. I look at volume usually on a higher timeframe though, because it seems to peak all over the place as you can see on the chart. If you zoom out a bit, it's easier to identify "special" volume peaks. I'm still learning to identify the right ones though! What I was looking for in these trades... basically I wanted to ride price down all the way to around 1325. That was a first target because I had support drawn somewhere around there. Perhaps I'm being thick, but I thought prices can plunge sharply in a bear market, but so far it seems like we've seen little of that

First arrow: I opened a short before the market opened because price was hovering around ressitance and I didn't want to wait any longer. A signal is a signal, right? That one got stopped out because the news caused price to spike up. Ok next arrow: I shorted on the first spike at resistance. I've found there's often a reversal after news, so I considered this a good signal. I could not really see a reason to exit so I moved my stop up to below the pink line after price plunged and walked away. When I came back I saw my stop hit Third arrow is another short on what looks like a head & shoulder formation. I figured this to be a pretty good opportunity to take on another short and went along, only to get stopped out with a small loss about 30 minutes later (price spike up to the pink line). The final short is one I took on the way down. I figured this time price really had to plunge hard. I moved my stop to breakeven on the next bar, I really wanted to lock in those profits this time instead of letting them fly. But 15 minutes later a spike stopped me out. So this is the story of my day... pretty decent entries in hindsight I think. But managing the trade isn't particularly easy.

First of all thanks Eiger for posting such a comprehensive review of your trades today. I'm really starting to like this forum. You guys are giving away a lot of quality information for free. I actually took three shorts today, but all of them got stopped out at breakeven. Bearbull, you are entirely right one does not need homeruns, but an exit too soon or too late nevertheless can (and often is for me) a cause of frustration. What a coincidence! I took three shorts actually, and I think one of them must have been very similar to yours (although on the ES) as I got stopped out too on the news. Unfortunately, my short from some time later didn't make much profit neither as I saw price return to my entry before I managed to take profits :doh: Now I'm looking at my chart and see all my shorts were around the high of the day, and if I left a trade open till now I'd have a nice profit. Instead I have zip for the day I'll see if I can come up with a chart to illustrate the problem. It's cool that we are all talking about today's trades.

What is the cause of these "bad ticks"? Do you mean to say that the volume from our feed isn't reliable at times? hmm how are we expect to make any reliable analysis then if we don't have a reliable source I have seen extraordinary volume spikes, like last Friday about 15 minutes or so before the close. I wonder if these are a true representation...

I hear what you're saying, but I've read the books of Tom Williams and I did read a lot of what people would call "recommended literature", but one thing hardly every is talked about: exits. All is fine in determining climatic action and then a classic test on low volume: there you have your entry signal. And all the talk about no-demand bars and so are very nice, but they usually lead to "ah this could be an entry". But what happens after that remains a mystery and how the trader manages his position is apparently a much more difficult topic to master :\ I agree with dbphoenix on this, scenario's and strategy hardly ever are a topic of discussion for VSA teachers or authors.

Let me first say thank you for taking the time to reply to all my questions. I am definitely learning along the way. What you're saying about there being no noise in the markets is definitely making me think. For instance if price reverses, it usually does not do in mid-air. It's like the market is one big seemingly random chaos but once you find the key to decrypt that information everything becomes clear (or at least that's what we hope). But does this lead to believing that everything that happens in the markets happens for a reason? I particularly like your analogy to Star Trek, being a trekkie myself And that's where my problem lies. How do I identify important support or resistance levels intraday? I often have no problem identifying support on a higher timeframe, but these "zones" are too wide to trade of really. Like you show on your chart in the PDF files there are macro levels which are relatively easy to identify. But these zones are extremely wide when you plot these lines on an intraday chart. I don't know about the NQ but on the ES for example I see zones as wide as 7 points that offer support. Often I see price reacting to these levels during the day, but sometimes it's on the upper boundary of the zone, other times it's on the lower boundary. But using stops that are wide enough to compensate (> 7 points, so around 10 points) on the ES isn't very useful when the market on a daily basis moves around 20 points. What happens to me a lot is that I take a long trade from support on decent volume, only to get taken out because price finds support 15 minutes later 3 points lower and then reverses. Other times it looks as if I got the entry near-perfect on the lower boundary of a support zone, but price breaks support and immediately travels back into the range. A false break in a matter of speaking. When I look on a higher timeframe (30minutes or so) then I see a nice hammer-like formation forming. But on a 3 or 5-minute timeframe (which are the ones I use most of the time) this isn't visible, let alone on a 1-minute timeframe. If you plot these three different kinds of S/R, don't you have lines drawn all over your chart? :\ In some of your earlier posts on ET you had charts with "important" levels such as the previous day high, low and close... If I understand correctly you've changed your stand on some things you posted in the past. Does this include things like PDH? In my own trading, I used to draw lines around the PDH and PDL ànd use S/R from a higher time frame, say an hourly chart. Sometimes I'd get really nice trades off these levels from the previous day, but my frustration comes from not knowing what or how to do when I have a line drawn on say 1358 from the previous day but also two lines that identify support between 1345 and 1355 where important support is. You're hitting the nail on the head here. S/R is all over the place all the time, and that's exactly what's causing me a lot of frustration. :doh: No one knows when what level will be important. Price seems to "forget" about support too a lot of the time. I think I've come to understand the basics after studying charts for a couple of years, but despite some occasional success in my trading, I have yet to get consistent in my results. I'm not particulary interested in FX, but I do want to know what I can do to understand the people who are trading an instrument. What do you mean by that? Getting to know actual traders? Are people that trade the ES different than those who trade the NQ like yourself? I don't know if I understand your analogy completely. With an old lady do you mean it moves slowly? Because when I look at charts, there seems to be a striking similarity between the ES and the YM a whole lot of the time. The NQ and Russell seem to follow a path of their own. Anyway, I've focused my efforts on the S&P, but I take it you see the market a trader picks irrelevant as the same principles would be valid amongst all markets, right? Isn't that an emotional reaction to trading? You say the trade would be valid but you didn't take it because you were tired. I'm convinced you know what you are doing, but how does a trader know when to quit? Should he quit after the first winning trade? The next three days he might have all losing trades. If you can make it a winner the first trade of the day, than that's fine I guess. But most of us probably don't manage to do that. Yet again, a long post and I hope you don't mind all these questions. It just looks as if there's a new door opening and I've found some new motivation at exactly the right time to continue my quest in becoming a better trader.

Hello and thank you for the quick reply. For some reason my posts don't come up anymore though: they need to be approved :\ Anyway, if you or someone else knows how to move my post, please do so. I didn't know about the other thread, will have a look now. As for Tradeguider, I don't know much about that, so my mind probably isn't as polluted yet.

Hi everybody. I've been an old ET member, but somebody told me there's a lot of VSA talk going on here lately. I took the time to digest the latest 100 posts or so and have some questions. I've read the Tom Williams books but they seem somewhat different than what is being told here. In 'undeclared secrets of the stock market' there is a lot of focus on single bars and this always gets me on the wrong side of the market when trading for real. It's easy to say that this or that bar is "no demand" or a "test" in hindsight. But when the market is open there can be conflicting signals and I don't yet completely understand how a trader can identify the right spikes in volume as demand/supply/etc, especially on such a low timeframe as the 1-min charts that have been posted here. I hope people don't mind me asking, but several things are unclear... Thanks to everybody for providing such a decent thread, I really hope to make 'the next step' in my trading here. I'm sorry if this goes back a bit, there sure is a lot posting going on here and I prefer to read everything first and then launch a number of questions. Most of this is directed at dbphoenix. However, I decided not to post this to his blog as mister_ed said we could ask anything we wanted and some of my questions are directed at other people, but it made sense to bundle them together. In you chart from post #138, could you not draw resistance at 1778? It looks like there was a slight volume spike around 13:09 immediately followed by a downbar, isn't this a rejection? It looks like price found resistance on the previous day there too. And it is around that 'special' 1780 level that you've talked about too... But how do you know if support from a previous day or week will still be important? If you look at a chart and you can point out where support is, do you take note of that level? I mean the next day it might be breached and so you think it's incorrect. But the day after that it may be tested. Is support from two weeks ago as important as from two days ago? I find it hard to reconciliate all these different support levels from various days and various different timeframes... It looks like support (or resistance) is all over the place all of the time :\ So are you saying that FX moves are less "clean" than those in futures? May I ask if there is any reason in particular you are trading the Nasdaq? Over at ET a lot of people are trading the S&P. Do you think the Nasdaq is less choppier? A final question, I looked at your "recommended literature", but there seems to be nothing relating to Wyckoff about it. I have already read the Day Traders Bible in the past, but to be honest it didn't really help me understand the markets better, there are little charts in it too. So perhaps somebody could point me in the right direction and tell me where to find all these Wyckoff gems? Sorry for my lack of understanding Tasuki, but what do you mean with "the auctioning process"? I thought the "smart" money - or whatever you want to call it - is that part of the market participants that are able to move price. We, all miniature puppets, are unable to do anything than just ride that momentum until it runs out of steam. You've also mentioned the taking out of stops as something that's not manipulated. So are you saying it isn't true that the professionals are able to see where the stops are placed then? I read about these things in several books and one thing always came back: that they can and will take your stop out. It certainly "looks" simple and easy, but one man's exit signal can be another man's entry signal. I mean why did you not go long where you closed out? You said support was at 1800, so would this not be a valid entry then? Could you also point me towards your homepage? The link provided in your profile doesn't redirect properly. I'm sorry for this rather longish post If you have some time to reply to all my questions, I'd be very thankful. Thanks in advance for all the insightful posts. Definitely a lot to ponder about. Zeon.