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firewalker

Market Wizard
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Everything posted by firewalker

  1. anybody a clue why it hasn't really moved a lot? last time FOMC was quite some volume/volatility... this seems like nothing compared to your normal action
  2. and me too but not much to trade out there! If I were in a long, I'd definitely hold on, it looks rather bullish today, but well, anything can happen...
  3. Thanks for explaining. However the support was from way back in March and I couldn't exactly pinpoint it to the exact tick... it's more of a zone obviously. And I agree, the best entry is often the most aggressive one
  4. I understand your point. Basically I draw my trendlines through price extremes, like Sperandeo (sorry, textbook reference!). Empirically I've found this is the best way to draw them too -for me- because price bars crossing a diagonal line don't necessarily mean something. When drawing horizontal lines (support and resistance) I look where the majority of price action takes place and if those are large spikes I don't consider them to have much importance. However those lines have a different function for me, since I trade off them and I don't trade off those diagonal ones. I agree with your comment about the rational action, however spikes are often effective to see whether your interpretation of the chart is correct. If it is, you'll often see tests (as we are in the candlestick corner I can say "shooting star" or "hammer") near or on those levels. To be honest, whatever works for you is fine... I wasn't so much commenting on the way you draw your lines, than on the fact that you weren't consistent in your approach. If you use the bodies all the time, that's fine. Who am I to say that is not "sound practice"? But if you switch between one method and the other, to "fit" the chart, I think you risk "creating" elements which might make you see things that aren't really there. And thàt is not sound practice, all in my very humble opinion obviously
  5. that didn't do much... looks like zzzz... till FOMC
  6. You mean you draw your lines where the bodies of the candles close instead of the spikes?
  7. I could copy and post several definitions here from various sources or books, but there's not much point in doing that, since you all know how to google... I'll try and formulate these things in my own words instead (beware that this is a simplification): The 'law' determines price and quantity sold in a market, and is fundamental to developing further theories and models in micro-economics. It states that: (a) the higher the price of a good, the lesser people will want to buy it (the law of demand) (b) the higher the price of a good, the more manufacturers will produce, because selling at higher prices means more revenues and profits (the law of supply) © the point of equilibrium (where demandline and supplyline intersect, in a price-quantity graph) represents the price level where buyers and sellers agree upon price (d) if demand outweighs supply -> price will need to rise to form a new equilibrium (otherwise there can't be a transaction) (e) if supply outweighs demand -> price will need to drop in order to form a new equilibrium point (f) there are several determinants that influence the quantity of goods/services demanded/provided, but none of these change the fact that consumers and producers (buyers & sellers) strive towards utility maximization Price behaves in this way because buyers and sellers act rationally and want to obtain the best price possibly. Micro-economic theory says that, given any set of goods, each participant in the economic process/system will try its best to obtain the best point of equilibrium which means that the consumer will strive towards utility maximization, by acting rationally (this is where it gets problematic, since reality seems to prove otherwise at times). I'm leaving out a lot here (shifts of demand/supply curves, elasticity, inverse curves, the slope of the curves, aggregate demand/supply, etc, etc), so keep in mind this is a serious simplification. I've given plenty examples in this thread about 'anomalies' (or cracks) in the law of supply & demand, so I'm not going to repeat these here. Perhaps we could move along by asking in what cases (or why) the 'law of supply and demand' does (or does not) hold up in the stock market? Take (a) for example, is this the case in the financial markets? Because volume is the highest near the end of a bull market when prices rise the fastest and the greatest number of people are attract to buying... so despite the high prices of stocks, more and more people want to buy. Some might say this demand is not 'real' because the smart money isn't playing along. But does it matter? That is a valid point, but you are describing the process of a transaction. It goes without saying that for each buyer there needs to be a seller...
  8. Are you being ironic? If not, do you have anything to substantiate those claims?
  9. No problem at all. Who am I to say this or that one is better, since I don't use MA's, other than just glance at them occasionally. But even if you just use your eyes, I think you need to be consistent in the way you draw your lines. You can't define a channel and then have the lines not parallel next to each other... that's all I'm saying. If you draw a trendline different on the big picture than on the micro-level, it's more likely you are looking for price bars to touch your line and support your hypothesis, rather than let price prove you right... I make mistakes too in these things, being to sloppy, especially if they are hand-drawn lines. But it's just something I thought was worth pointing out.
  10. I'm not into the conspiracy PPT thing, it seems more logical to assume the buying occurred because there was support there
  11. Thanks for the comment. It was indeed the typical 'herd getting caught on the wrong side of the move'... would you consider the close of the first bar sufficient enough reason to go long immediately? It was only because there was potential support around that level that I would feel confident enough to do so. But you're right, it clearly showed how strong demand came in.
  12. firewalker

    Busy Day Tomorrow

    How's that? Do you feel market participants act differently during summer months? You know I'm not that familiar with currency pairs, but last year indices had decent volume & volatility...
  13. Good review Soultrader. "When everybody thinks alike, Everyone is likely to be wrong." reminds me of another aphorism: "When everybody is thinking the same, nobody is thinking much." I was wondering if it would not be useful for others (who read the book) to add their votes as well? That way we could have an individual score, but also something of a 'general consensus'?
  14. Hi MC, this is not an attack, just some healthy criticism, but... (a) your channel lines aren't exactly parallel, you seem to adjust the lines to fit price (b) why October 2004 and not -for example- October 2005? you seem to pick the level where to draw line looking for the right of the chart back to the left instead of the other way around © yes the downtrendline is broken, but the line should not cross price if you connect the first two swings high. In fact, you are drawing another diagonal line on this chart than you did on the previous chart posted. (d) I see you opted to use the weekly 200 SMA instead of the more frequently used daily one... the daily one paints another picture though: I'm not discounting the fact that this level might provide support. But if it does, it will be more likely because of the March lows then because of a subjective line... There are just some inconsistencies in your charts. All imho obviously and no offense meant
  15. "Obama also would ask the Commodity Futures Trading Commission to consider whether traders should be subject to higher margin requirements."
  16. That's odd... well we all try our best in posting all of our trades live, but that's not always possible I guess. I hope you had couple of good ones too. I did found out something rather peculiar. Trades I don't post here (there aren't many, but sometimes I'm too late to make it a fair "live" trade), are mostly losers. Perhaps subconsciously those trades where I feel 200% confident in entering are the ones I post and are usually winners too...
  17. I stopped watching the market at lunchtime time, but I just wanted to put closure on this this trade: it obviously stopped itself out, that was the final 1/3rd of the short, and worth +40 I'm glad I shorted early today, but there were very nice opportunities to both sides today imo.
  18. ... one perfect example of how the smart money bought into the bad news. Consumer confidence came in at 50.4, much lower than forecast, (apparently the lowest level since 1992). Following is what happened next. Price fell on the news, but immediately buying came in and pushed price back up. After a period of consolidation, we turned higher. Volume was key. Since I was short from the moment the markets opened, I didn't go long but the initial volume on support was enough to close out my position partially.
  19. Thanks and good question. I'm looking at the September futures contract, and 809 is the low of yesterday, but the majority of the lows of the price bars - or whatever representation you use - seems to be contained between 810 and 820. There was no way of being 'certain', these are just odds. But most of the time price will just move outside of the comfort zone (whether this is to stop people out or not is debatable). I had my stop at 830 but if I did get stopped out on a larger spike and price moved lower afterwards, I'd re-shorted. If it only went to 800 I would not have taken it and skipped the trade. I'd rather be wishing I was in, then wishing I was out... I don't trade the morning sessions anymore. I used to sit in front of the screen all day trying to look for a trade, now I prefer to do some other things and just focus on the US session. There's more liquidity and (most of the time) price moves around a lot faster. Plus, sitting on my b**t all day isn't good to keep in shape Good trading! PS: If you didn't short at the open straight away, there was another opportunity just 7 minutes later.
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