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zeon
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Everything posted by zeon
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Sorry if this is off-topic, but I don't really know where else to ask this. What do people use for continuous charts? I mean, I'm trading off the futures contracts, but my futures chart with expiration June looks different than the March contract (which expired last week). I'm using IB as a datafeed and the problem is the same in their charts as in Sierra Charts or any other application that I've tried. For example, if I plot the NQH8 (March) and the NQM8 (June) there's a noticeable difference: in the first chart, the low of January (at 1700) is only broken marginally in March (1675). In the June contact price is the same in March (1675) but the January low is at 1725 . I know there's an offset in prices with a different expiration date in the future, but the offset should be the same in terms of absolute points. It can't be bigger at one point. So the difference should be 25 points, instead it's 50. This gives a totally different picture...
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What strikes me in a lot of these posts, is that pin-pointing the entry always seems fairly easy, but determining the target is hardly ever discussed. Perhaps you could tell us also a bit about where or when you would exit your long trade? Or what signals you'd be looking for to exit that trade? Thanks in advance.
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Not sure what you mean by that, but I posted two charts to illustrate what I meant to say. I don't really have much "fixed opinions", I'm trying to improve my trading, so I'm open to suggestions... most of the things I'm posting are conclusions based on experience from lots of observations.
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Here are two examples of what I'm talking about. In the first chart, we have a series of WRBs and high volume, but support is not breached, rather the opposite. The volume is relatively high, look at the "normal" amount of contracts being traded on the right hand side of the chart. In the second chart: volume is low and eventually, support is broken and we go lower! The rectangle is where I'd take a long trade.
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Eiger, thanks for the interesting analysis! One paragraph got me thinking though. When price approaches support on increasing volume and wide spread down bars, why doesn't this mean that demand is coming in? After all, professional money stands for high volume right? I'm seen selling climaxes occur on support a lot, and in most of these cases they happened after a couple of WRB formed. And, I've also found the opposite to be true. When volume is relatively low and price bars are small, the chances seem higher for price to break support.
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CW, nice analysis since price goes eventually in the right direction, but for the same setup I could find numerous posts where price eventually continues on the way down. You're stating 'demand must have entered'. But if I'd count the times I'd seen an up-bar on low volume after a WRB down bar on high volume... This happens all the time, perhaps scalpers are trying to pick some points going against the trend there. And if you want to call it demand, for sure. It doesn't mean that price will reverse because there is demand. Usually this 'demand' leads to a temporary change in the buying and selling flow. But I can't imagine anyone wanting to go long there, unless he's talking a gamble. Sorry, just my 2c I can put up some charts if you like.
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I was under the impression yours wasn't so far off 'the VSA way' given the multiple references to volume in your posts. And even in a reply to Eiger's post, you mentioned 'absorption' as being a Wyckoff term. So you are now admitting to those who are advocating not to use a 1-minute timeframe, that VSA is seemingly "incompatible" with such a low bar interval? :\
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What criteria are those then? I'm sorry... I'm lost here. Last thing I remember is you suggesting I'd zoom in to something lower than 5-minutes, preferably 1-minute or a tick chart. Now you are saying the opposite
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Candlewhisperer, I'm not discussing whether or not 1-minute charts provide 'noise' or not, but the problem is in correctly identifying signals on such a timeframe. I think there's a much higher probability of reading the market incorrectly if you are trying to trade of such a timeframe. Here's a chart of the NQ of the 20th (last Friday), which I copied from db's blog. I've left the original lines on it: the two pink lines at 1740 and 1750 are resistance, and the red line is a trendline. Now follow me how I see this chart, reading it from left to right.: (A) = a rise in volume and price breaks out of the descending trendline. A while later I draw an upsloping trendline. (B) = 1740 was resistance and here we have a massive surge in volume and price jumps to 1745! Wow, a breakout, let's go long here! Stop set just below the pink line at 1739. © = hmm, there doesn't seem to be much follow through, perhaps we are wrong? and stopped out at 1739... (D) = Ah, another rise in volume! perhaps resistance was not at 1740 but at 1745. If that's the case, than this is the breakout, and we go long here. (E) = looks better, there's a decrease in volume, this looks like the retracement. 10 minutes later we can draw another upsloping trendline. (F) = If we are still long, we could've exited at 1745. But at 1520 price breaks above 1755 on high volume. Boom, another breakout, let's go long again! Stop just below the resistance line at 1754. And ouch, stopped out again. What I'm trying to say, is that most of these 'breakouts' B / D / F wouldn't be visible on a 5-min chart. So you wouldn't be inclined to trade them, because they just wouldn't be there.
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OAC, you quoted db from somewhere in the beginning of this thread, but I think yours is a good question. In fact, despite several replies, I'm still not quite clear on the issue. It certainly feels safer to buy or sell retracements after a breakout, which is what you're describing if I understand correctly. Db - and I know this has been asked before - but perhaps you could spend some little more time on it to shed some clarity in the matter. The only thing you replied is that 'price reigned'. Forgive me, but that didn't exactly make me much wiser. You said you'd short at resistance if you observed buying drying up. But, apart from declining volume, how do know that buying is in fact drying up? Look again at the chart I posted from the ES. This is at it's core what we are talking about. The volume is declining and a lot of the bars fail to close above the green line on low volume. Isn't this buying drying up? So would you have taken a short here, or not? If not, I'd appreciate it if you could inform me why not.
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Db, to be honest I think what's Eiger been saying here is right and the "absorption" could well be seen in real time. Ofcourse he only brought it up after the fact, but I mean we all discuss charts after the fact. All of our strictly speaking, made 'after the fact'. But the noticeable dry-up in volume that I observed and which can be seen in the first chart from the ES I posted (which started this discussion), can all be seen in realtime. Whether one calls it absorption or something else, I don't mind much, but I think this term describes quite well what is going on. As far as I understand what Eiger's trying to say, is that whatever selling is going on, it's been absorbed because traders truly want price to go higher. You might have a better word for this, but that's like discussing semantics instead of charting and I doubt we want to go there... Anyhow, whether this or that analysis is more VSA than Wyckoff, I personally don't care. I'm just trying to absorb (sorry for the word) as much information as possible and I feel there's been a lot of talk in this thread about what is originally an idea from Wyckoff or Williams or SMI or... and all that kind of surpasses the idea of 'analysis'. No offense meant here.
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Eiger, first of all I'd like to express my gratitude for taking the time to respond in depth to my questions. This is really much appreciated. You are right, I still need to find my own way, and I'm trying to listen to different people and different opinions. All this time that I've been trading I've not exactly been losing money, but I haven't been making much neither. There are a couple on this site who really seem to know what they are talking about and I appreciate those comments. I don't mean to stir trouble between other members because of any conflicting views. I can only tell what I've experienced for my own and so far that has been that the 5-minute bar chart gave me a lot more clear volume signals than the lower timeframes. This could obviously be down to my inexperience of reading the buying and selling pressure/flow... On the other hand, I'm sure dbphoenix isn't scalping when he's trading off the 1-min chart. He seems to stay in a trade until price reaches the next support or resistance level. What I'm trying to say is, I appreciate the input from people here and I hope this thread can stay as interesting as it has been!
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Thanks, this has been most helpful. Only thing that has got me thinking now is your remark about the 5-minute chart. I've been used to trading off 5-minutes but now I'm going down to 2 or even 1-min bar charts because of the comments from dbphoenix. Another question, excuse me if I missed this, but what's your chart provider? It's nice to have a continuous flow expanding over several days.
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Let me give you a couple scenarios. How would you - in real time - identify each one of them? (a) price is rising slowly on steady but low volume ('good buying'?) (b) price is going down and the speed of the fall increases sharply on heavy volume © price is going up sharly, very parabolic rise on huge volume (d) price is going down slowly, low volume, drifting steadily lower Questions: (a) is this move running out of steam or preparing for a jump higher? absence of buying or abscence of selling pressure? (b) is professional money selling or have the already sold? if they have, what is causing price to fall so quickly? how can 'small money' move price so quickly? so it must be the absence of buying pressure right? © who's participating now? does the heavy volume mean that a lot of buying is required to push prices higher or that there's a lot of participation and willigness to bid higher? (d) is this pattern setting up for a fall of a cliff? does the lack of volume mean that the downmove has been exhausted and there is no selling left? or does it mean that the big plunge is yet to come? - What I'm trying to say is that in either of these cases I'm sure you could find arguments for both sides. Unless you bring important S/R levels into play (thus using context), I fail to see how anybody can make any sense out of this.
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Something's wrong with the link you provided. Could you perhaps let me know which post it is (just the number), that way I can look it up. All your questions depend on tactics I suppose... and you're right. It does depend on whether you are already in a trade or not. But before going there, I really wanted to know how others viewed the chart with the circled area. Is this a volume dry-up because there's no demand or because there's no supply? I like Bearbull's description of his observations. They are in line what what I observed today, but as always things have to be taken into context.
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Well, that accurately describes how I felt when I was looking at price today! However, I've also seen price turn around in a so-called 'decreasing volume top'... very little activity, tiny bars, decreasing volume... and all of a sudden there she goes. I still think it's difficult to tell which is which though...
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That's an interesting question... In fact I'm struggling with that myself. If I see volume drying up after a downmove with price on support it means (a) there is no participation from the smart money to buy here or (b) there isn't any selling pressure, so this could be a long entry. The same could be said about volume dry-up's at resistance, but the other way around. I'd like to attach a chart from 30 minutes ago. This is the ES and the horizontal lines are where I had drawn my resistance levels. There's a noticeable dry-up in volume after a peak. So is this (a) professional money sold into that peak and is know waiting to short? (b) there's no one around to sell and this can go up because there's no selling pressure. There's not much buying either. These kind of situations always confuse me... if anyone could clear this up - once and for all - I'd be most grateful.
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Thank you. I'd be interested to hear if others agree or disagree. I have looked at overnight action and found that this sometimes comes into play during the first hour of the opening of the session. Especially if price consolidated somewhere. Yesterday I noticed a bounce on the ES seemingly in mid-air 1-hour into the session. This happened exactly at a level where price formed a congestion area premarket, so it looks like I wasn't the only one paying attention at that The amount... that's a difficult question... In the past I used to think of each swing point as support or resistance. But nowadays I think the sharper the less potential, because they don't make up as many trades. However, at other times it does proof to be support, so I haven't quite decided on this yet. As for news, that's usually all around the place, so no. But again, sometimes the spikes on news hit important S/R levels and bounce off those. It's not that I could trade off them, but sometimes the spikes confirm the S/R zones if you know what I mean...
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I think there might be several ways of defining S/R but there is only one place where 'true' S/R resides, and that's the price level/zone/area where most of the action took place. For me, this usually means a congestion area of some kind, although it's not always that visible. I used to think S/R can be found in calculated pivot points or levels from the previous day, like the high and the low. Basically I spent a whole lot of time studying charts and noticed some peculiar reactions to those price levels. But perhaps they were only coincidential? I have also observed price bouncing off a trendline, but dbphoenix' point of view I believe is that trendlines don't provide S/R. Yours is apparently yet another way of viewing this concept. I'm sure a lot of traders will say "whatever works for you". But why would a WRB be any more significant than a not so wide body? Forgive me for saying, but when I see WRB and price is rapidly falling or rising, its my impression that there is a LACK of S/R in that area. Price seems to move from one area to another and these areas in between where price plunges or skyrockets don't provide any S/R for the reason that there's nothing but "air" in between. This is my view, don't shoot me now please I'm just stating my opinion and although I thought I had a good feeling in trading (based on my results last year), since this bear market started I'm kinda lost... so perhaps I got it wrong after all. Comments appreciated! PS: Oh and sorry if all of this is off-topic, but I'm just replying to another post. Seems like a whole lot is off-topic so perhaps we need to (a) change the name of the topic or (b) start a new thread?
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I depends what you call 'big stops'... your zones are 6-10 points wide, so suppose you see price entering the zone and then a spike on high volume pushes prices back below. This happens on the lower end of your zone. You take a short entry for several reasons (I don't know your exact setup but let's hypothesize). Next thing price jumps up 10 points and does the same on the upper boundary of your zone. Meanwhile you are 10 points offside. Price then breaks resistance by 2-3 points, only to come back right into your zone in the next 5 or 10 minutes. So either you have a superb ability of calling the entry right, or you need stops like 10-15 points. And that is huge to me. If I may ask what are your targets then, if you use stops like that?
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Those are pretty big levels, 6 to 10 points wide. How can you trade off them unless you use huge stops? These are my levels for today, based on the price action of last two days. Obviously on a hourly chart these levels aren't so small... 1340-1342.50 1320-1322.50 1305-1307 1287.50-1290
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Thanks, but I think somebody already directed me towards this site. I've also come to realize that the biggest rallies appear to happen in bear markets! Although this is only interesting from a purely statistical point of view. I can't see how anybody would take a trade based on this information...
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Actually, I'm quite disappointed. The above level 1333-1336 was apparently incorrect, as price found resistance at 1340-1342. The middle zone was closer, although 1322-1325 was where price consolidated pre-market and again later in the day before continuining on the way down. As 1300-1302... that would've been a nice target for shorts, if the trader would still be in by that time.
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I'll have a go it at myself, for today I'll be paying close attention to what price does at these levels: 1332-1336 1318-1322 1300-1303 I noted two numbers each time, because I see support as an area rather than a fixed line. Let's see how things go today...
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As the topic of discussion in the last couple of posts has shifted a bit, I feel it's appropriate to ask a relevant question here. Db, I've taken your suggestion for using tick charts and looked at price the last couple of days with Sierra Charts. You said I'd be "perpetually perplexed" if I kept focusing on bars instead of price flow. I've tried doing this now but at at 5 second or 1 minute chart I've found it incredible hard to notice anything that jumps out from the rest. I've payed close attention to see where price reacts and I've written down when high volume suddenly comes in and price seems to hit something and suddenly reverses, like a hot stove where you put your hand on. But a lot of these times, I was wrong and the 'reversal' only happened for a couple of minutes. I've found it very difficult to analyze which volume peaks are important and which ones not, despite focusing only on those that are in the vicinity of important S/R levels. If I compare to my 5-minute bar interval, I usually have a couple of volume peaks that are clearly distinguishable from the rest. But on a 1-min bar interval, there are loads and if I were to trade off those, I'd be getting a lot of false signals...
