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firewalker
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Everything posted by firewalker
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It's a level that's been important in the past: - yesterday's action primarily (230-240) - it was also the midpoint of the hinge on the 12th So it's what I like to call 'potential 'minor support'... Below 240, I have 180 as more important support, which seems to provide a more decent reversal as we speak... Edit: Hmm... I think I might be paying too much attention to those minor levels. :idea:
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Cracks in The Law of Supply and Demand?
firewalker replied to firewalker's topic in Technical Analysis
Zdo, as I'm not aware of what the content of your original post was, I can't comment on it as such, but I'd be surprised if dbphoenix didn't allow you to post unless something was offensive about the content of your post. I don't know if the whole thread is only "marginally" related to Wyckoff, but indeed the discussion about supply&demand can go in several directions, and at some point it might be further away from trading than some had hoped. But dbphoenix allowed the discussion to take place there, so that's the case now, and nobody is obliged to participate if they are not interested. I don't see the need to start a separate thread however, especially since db invited you to repost what you were about to say in the original thread. Of course without pissing people off that is... -
Perhaps, but not focusing on trend alone can cause problems too. You never know when a 'trend reversal signal' leads to a complete reversal or is only a temporary change in momentum. I know this might be too much a classic or textbook definition, but today is a typical example of how reversing your position ends up in a losing trade. Are there clues in price that the reversal is only short-lived? The easy thing to do is manage the trade, but that assumes one is already in a short position. Just for the record, all of this is hypothetical because I was neither long nor short on this instrument (YM) today (June 17). First chart: So we have (a) support, (b) at 1647 looks like a test of support on lower volume and a failure to make a lower low (potential strength), © a break of the trendline and (d) a break above the last swing. Both © and (d) could be considered as long entry signals (the blue dots). Second chart, this is what happened next: I consider the break of the demandline as a signal that price need more time to consolidate before heading up again. I think by going long at the blue dot, the trader is hoping that price will run up to resistance, but - although I've seen it happen on several occasions - the odds seem much higher that price will need some time in order for a sustainable reversal to take place. I take it that only by paying close attention to what price does and making discretionary decisions one can manage his trade to the best of his abilities... But my question to those who trade off price (of price/volume) alone, are there other elements I'm missing that help raise the odds when putting on this kind of trade?
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Would've been nice... Once the entry is in, it's basically just trade management.
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Found some very interesting statistics, with monthly correlation numbers for all the indices, going as far back at 1928 for some (DJ Transports for example)! Click month and choose the appropriate index you wish to compare with the others. http://www.econstats.com/eqty/index.htm For example, to see how the DAX relates to the S&P, Nikkei and FTSE: http://www.econstats.com/eqty/eqem_eu_3.htm
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Here are some stats about the correlation between the S&P and the FTSE. It's not about the DOW versus FTSE, but as the DOW is 95% correlated with the S&P, it's as good as... First look gives only an average correlation of 50%... http://www.econstats.com/eqty/eqem_mi_10.htm Edit: just had a closer look and there's loads of numbers there, going back as far as 1928 for some markets.
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Here are some correlations but I haven't got figures linking European indices with US indices... will have a look around.
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Here's the chart of the trades... There's obviously the context needed, and that context was what I posted this morning in this thread. The NQ finished yesterday at resistance (my horizontal lines), but the ES still had some way to go (up to 1371). The action overnight (congestions) also showed that 2000 was indeed an important level. Price opened above resistance at the NQ, but in the middle (1368) on the ES. There was no short on the ES (the rejection erie and I talked about), so I took my eye towards to NQ to see what happened there. We broke back below 2000, but instead of going short immediately, I prefer to wait for a move back which in this case I was lucky enough to have, so I could enter with a very tight stop at 2000. First red dot. The exits are my own personal preferred style, but what I wanted to illustrate was that if breakouts occur on one market, but not on the other, they tend to be less reliable. I know the NQ can have a "mind of it's own", but it's still very much correlated with the other e-minis (see correlation matrix). Note: I should point out that others might see different things when talking about rejection, breakouts and things like that. But I have my own kind of definitions and they work okay for me. (I also realize that technically the whole 2000-2006 area might be considered as resistance, and that this isn't a 'breakout' of that area).
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and again reaction off 2000...
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Well... the NQ is back below 2000... so that does seem to confirm the 'false break' scenario... (2000 was a fair entry signal too imo)
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Oh... I see. Looks like a bit of miscommunication there I wouldn't wait for price to come back to 1366, I think 5 points is a lot to wait for. If I see price failing to go higher and reverse off resistance on decent volume, I'll usually short. If I'm right, price will usually continue lower fairly immediately, if not I can always stop myself out or wait for a re-entry (which sometimes is fairly soon there after)...
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Ehm, I'm not sure we are still talking about the same thing here :\ I don't see anything special about 1366, so I don't pay much attention to that level, hence the only rejection I would look for occurs at or near resistance.
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No, like you said, resistance at or around 1371 (depending on how you determine your levels).
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I think it's always good to be aware of potential breakouts, but what I was really trying to point out was the divergence between the ES and the NQ. Now, with about 45 minutes before the open, the ES has touched 1972 and reacted off it (albeit on news), moving about 5 points higher than yesterday's high. At the same time the NQ hasn't moved free of the resistance. So it looks like both markets are trading at or below resistance, which - at least for me - would help increase the odds of a successful short if resistance is rejected.
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well it didn't last 5 minutes out, with slippage at 43 for -13 :\
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noise news, hehe, like that I agree it looks strong, with the background and the selling climax from Thursday evening the odds favoured more upside yesterday... will be interesting in 5 minutes.
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Well it clearly wouldn't be fair towards those who do contribute, but by first impression most people who post do actually contribute in the live trading aspect. But we'll keep an eye out for any 'infractions' for that matter and everybody is free to let us know if they are issues, but perhaps best to continue the discussion in the other thread "Off, yet On topic".
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little pre-market trade DOW short 12330, stop 40.
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Well, the purpose and goal has never changed and THIS is the only thing that should be in this thread is LIVE trades (indices). There are several other threads now to discuss or comment on anything else (The Lounge, Trade Discussion & Analysis, and Off, Yet On Topic). I think most members have pretty much followed those rules, but I'll keep an eye out if there's too much chatter going on. There's nothing wrong with just a small explanation why you entered or exited. Everybody is free to report posts which they feel are inappropriate though, I can't keep an eye on everything at the same time... Good trading.
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The Unknown Future: To Predict or Not to Predict
firewalker replied to firewalker's topic in Market News & Analysis
Thanks for the contribution. It's an interesting about human behaviour... because does it imply that human behaviour hasn't changed over time? Do markets fundamentally move in the same way as they used to do? What about all the trading that's been executed through automated computer systems, without human intervention? Does it affect the way the market moves? -
No worries! Glad to have you aboard
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That's okay, I'm pretty busy studying these days. Auction market theory, behavioural economics, calendar effects,... It is time spent more useful when waiting for a trade, then trying to outsmart myself by taking more trades then necessary. The level of discussion on this website has pleasantly surprised me, which keeps me busy as well when waiting for a trade. I was just wondering why some people seem to have ceased posting live trades... I guess the weather is too nice to sit in front of the screen
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Cracks in The Law of Supply and Demand?
firewalker replied to firewalker's topic in Technical Analysis
Thanks for the contribution guys. This is a well known 'anomaly' in the classic economic theory of supply and demand though. Often the high price setting of these products is used to distinguish them from other goods which are considered to be inferior to those. By rising the price of these so-called 'Veblen goods', the status and exclusivity of these products attracts a specific sort of public. Once you start to think about it, the Veblen effect is actually not that odd. Think of some luxury cars or jewelry or fashion... people buy them because they want to be one of the few who own these goods. If price drops to a more acceptable level, these goods quickly lose their status and although this might lead to creating demand in another consumer segment, the vendor risks losing his initial targeted up-class target. For these consumers, the price tag is a reflection of the quality. The higher, the better. Another 'anomaly' are Giffen goods, where, similar to Veblen goods, the demand rises as price rises. But there's one big difference here and that is Giffen goods are inferior goods and that in large part this is due to the income effect. So, back to the markets, how does this translate into buyers and sellers of a stock? I'm not sure any of those anomalies are explanations as to why people would want to buy more when a stock is rising, as opposed to when it's falling. Stocks aren't status goods, but somehow they do seem to get more attractive after some good earnings report or good forecast report pumped it up a couple of points... -
The Unknown Future: To Predict or Not to Predict
firewalker replied to firewalker's topic in Market News & Analysis
I think those who work on predicting the future path of the market have a lot more work cut out for them, then those who just wait and anticipate with a plan in their heads. If not, you're just throwing numbers in the air. -
The other half got stopped out at breakeven. We made new highs too yesterday (almost $140 ), but it is starting to look like some distribution...