Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.
Head2k
-
Content Count
315 -
Joined
-
Last visited
Everything posted by Head2k
-
We are stuck between 1776 and 86. I will look for a reversal or BO at these levels. If price breaks up then 92 might serve as R, too. It provided S yesterday and also notice that ~1790 is a volume peak of the whole distribution on the chart. Then there is 1796, the midpoint of the latest marked range. The levels are quite close together, but one can judge which one is (not) important from the action when price gets there. Yesterday, for example, I thought 1802 was the upper limit, but price just crossed it without any particular effort. So I was warned that I was wrong (again). If price breaks below 1776, then there is 64 (midpoint) and ~1750 as S.
-
Yesterday's action didn't really evolve to meet my expectations. Price didn't dip after the open but headed straight up instead. Then at 1798 it looked like a rejection first but then a hinge developed below and resulted in a BO of both 1798 and 1802. But after that the power was gone. I cleaned my chart a bit for today: The current range seems to be 1786 - 1802.
-
Tdoay is interesting. We have something between a range and trend here. Yesterday price broke into the range from 11/23 - 11/25. This range is a bit complicated because there can be several inner ranges defined within. Basically the inner VA of that range is roughly between 1784-6 and 1793-5. Yesterday price played the lower limits of this inner VA before heading up, now the upper limits are in play. One option in such a complicated environment is to wait for the extremes, that is 1798-1802 and 1775-80. Another option is to try to enter off the inner levels. Given the fact that price remains comparatively strong within the inner VA I will look for a long off 1786 or even slightly higher. If price breaks below that, the comparative strength premise is invalidated and I will wait for the outer limit, that is 1775-80 zone. I can short a failure on a poke above 1795.25. Then the outer zone is 1798-1802, the next R is 1812-14. Perhaps 1804-5 or 1809 could bear some importance, but I think that if price breaks above 1802 traders should try for the very extreme zone.
-
A breakout is a breakout regardless of the method or chart used to display it. A breakout has several atributes, but none of them depends on the method or interval you choose to display the tape data. First, there must be something important to break. You can anticipate the importance because of historical action. Then the importance must be confirmed by the current action, that means traders must work hard to break the level, i.e. there must be volume suggesting that there was somthing to break. Then, the difference between a breakout and a thrust (i.e. rejection above R or below S) lies in what happens after the level is broken. Either price is rejected from the new ground or it is not. And if it is not immediatelly rejected, then the breakout either attracts a follow-through or it does not. Whatever chart you use to watch the potential breakout, you can see the level getting broken. But if you want to observe what happens immediatelly after the break, to watch the immediate response, you need a very high level of detail, even the highest one.
-
R 1766 (trend stair-step), 1771.25-72, 1775-6 S (1755), 1746, 1737-40. If 1772 is reached we will have a range with a S zone 1755-60 We hit the red range midpoint and then couldn't get over its top. So we could be heading towards its bottom. Or the broader midpoint zone can start acting like S and we will try the top again.
-
Result: I missed a short after BO of 1781. I have troubles with recognizing continuation setups on short side in real time. And it is true that I thought more “climax” in real time than “BO”. But no rejection followed and a nice continuation setup developed. I just didn't see it. Then took a long at 10:20 (68.75) and was stopped out at reduced stop (68.25). The setup occurred after a break of 68.5 S while the entry range was still wrapping around it and 72 served as R. I recognized that 72 might not be broken but I risked it. Perhaps I should have got out sooner or even SAR, since there was quite an obvious failure at the second try at 72. But SAR'ing is not a part of my plan and I used my standard stop reduction. Anyway, this scenario calls for acknowledging the SAR possibility. Price then reversed at 60, which was in tolerance of 58, but it was a V which didn't comply with my rules.
-
R 1792.5-93.5, 1795.25, 1802, 1812-14 S 1781, (1776.5), 1868.5-72, 1758, 1747, 1737-40. If price breaks above 93.5, then 1789. Price fell into the 1768-93 range. Now it seems it is heading up before open, so I'd like to see how it behaves at 92.5-93.5, if and when it tries to escape. I won't take a breakout, only a reversal, and only if it is my setup. Then there is 95, because after a breakout of the lower range it needs to break into the upper range (95-14). If price heads lower after open instead, then I will look for a long off ~81 with target in the 89-93 zone. If 81 is broken, then I will look for a long off 68.5-72 zone. I will ignore 1776.5 unless there is a major climax.
-
I thought you want the trading to become your full time job. Anyway, good luck in any career you choose to pursuit.
-
Done for the day because I am angry at myself and that's a good time to stop. I took a trade I shouldn't have taken and didn't take a trade I should have taken. Went long off 98 but it was higher than I planned and it wasn't even my proper setup. But I remember the wrongthink which made me took it. This wasn't the first time I commited this kind of wrongthink and I have even a specific note about it in my plan. I guess I must re-read my setups before every session. Then I missed the long off 90, although it was a perfect V setup according to my plan. Why? First, my mind was too occupied by the bad trade I made earlier and second, it breached the support. But I should have remembered that a breach doesn't mean a break and that the support is the whole 89-92 zone. And I know that after such a V setup a retest is not likely... That's why it's a V setup, after all. This combination of a bad trade and a missed good trade has a negative psychological impact on me, as I tend to force trades after that, so as I said I better quit.
-
Long zone 1795-7, 1792, 1781 Short zone 1812-14, (1837-42.5) Continuation trade through 1814 possible
-
Result: The higher low I wanted to trade off occured premarket so I missed it. And it reached higher than I expected anyway. Then I took a continuation trade after a break of 1805 and it was a bad trade. I need to remember when I can take continuation trades. I can take them when a proper pullback is not expected. The move to and through 1805 was indeed quick, but it lacked volume / violence. That means 1805 was not enough of a resistance and I got stopped out by a subsequent pullback to a previous swing high. Then I was tempted to take a long off 1797 at 10:51 but I passed. Technically it wasn't my trigger, but this hesitation shows I am quite unsure of (in)validity of my triggers. Then I took a long off a higher low, which was OK, since it was my setup. Got SO at reduced stop. And eventually I took a long off a lower low a few minutes later, which was my setup incl. a proper trigger too.
-
Short zone 1812-14, 1837-42.5 Long zone ~1796, ~1792, 1781 Continuation trade through 1805 possible, if there is a strong momentum and a setup. It seems like a higher S was found at 1795-6, which could be VAL of the potential current range. The first rejection found R in 1805 midpoint and price returned to 96 again. Now we are getting a higher high again there. I will look for a trade off a higher low (expected ~97.75-98). If this fails then there is 95 and finally 92.5-89. As for R, the 1814 is within tolerance of the 15 level I had yesterday. This is where retracements went after breaking the July 2008 range, and that would suggest that I can consider it as VAL of that range. The next major R is 1837-42.5 midpoint zone.
-
I missed the 92 long because it wasn't my setup. I have a V reversal setup but it has quite strict requirements which weren't fulfilled in this case. But then I entered after the 1801.5 breakout, during the formation of springboard at 9:43. Not a big profit from that trade but at least something. I was apperently wrong with 1807, but didn't do anything there anyway.
-
Long zone 1792.5, 1781 Short zone 1801.5, (1807), (1815) Price broke above the last 3 days range, but we are at a potential R, in the space between two large historical ranges. 1801.5 is the very extreme of the lower one while 80 is the top of its value. The value area bottom of the upper range is not so easily definable, but it could be 1807 or 1815. So until we get through 15 the way up is not clear yet. 1781 is a long level for sure, I must be more careful with 1792.5. And I must be careful with all shorts, because the R is a bit unclear to me. No harm done if I just watch.
-
No, I meant accepted outside the outer limits, that is above 93.5 or below 68.5. And as for acceptance vs. rejection, I judge that discretionary. I have a rule to never consider a midpoint of the current range as S/R. But if the current midpoint is a former extreme (the current range wraps around the former extreme, as in this case), and then if the current range is broken and price is accepted outside, then I consider the midpoint (= the former extreme) as S/R again.
-
Long zone 1768.5 - 72.25, preferably the top of this zone Short zone 1789.5 - 93.5 This is the current range. Price now found R in midpoint at 81. I will not consider the midpoint to be R. This range wraps around 80, the Oct high. If price is accepted outside of the current range, then I will look for a trade from 79-81 zone. No R above the current range S below the current range: 1758, (1747), 1737-40, 1730.
-
Considering that Wyckoff analyzed price waves and stride, I guess he noted whether price broke a trend line and/or the last swing high. But I am not sure whether he stressed it in the course. It is only up to you whether you require the last swing high to be broken before you start looking for an entry. Or you can define different triggers, entry points and management for cases when it is broken and when it is not. Break of a trend line and break of a swing point are different levels of confirmation. Break of a trend line tells you for sure only that the trend is slowing down. Either starting to reverse or merely having a break or pausing before resuming. Break of the last swing high gives more indication on further direction. But it's all about how aggressive you want to be, what triggers your entry and where you place it, whether, when and where you reduce your stop or bail out, etc. And that's what you need to test.
-
pinetree, unless you use a tick chart like Db does, you always analyze "bars". But there is a difference between analyzing a bar alone and analyzing price action represented by bars. Wyckoff doesn't analyze a bar. He analyzes price flow, and the bars are used only to display this flow. And it is not only price flow, it is also emotional flow. That's why you need to watch volume bars together with price bars. Only then you get a full picture of this flow... Again unless you watch a tick chart develop in real time. As for the Wyckoff's market analysis, notice that it is a hindsight analysis and that it doesn't suggest any trade which would turn into a loser or break even. In another words, the analysis and the suggested trades are a bit idealized, IMHO. Reading from left to right and given only the daily bars without a possibility to "look inside" them, I don't understand at least half of the suggested trades either. But since I am a beginner, this may be my fault. Or the case may be that Wyckoff considered the trades to be initiated using a more detailed chart or a tape. Now to your first post and the September action: My personal view is that if I didnt expect 95 to act as S even before the climactic activity, I wouldn't close the short entirely. On the other hand, a scale-out would be a good idea. The reasons behind a scale-out or even closing the short entirely are simple. The first one is that there is a significant climactic activity. The other reason is that the September decline did not form any serious horizontal areas which could provide a strong resistance in case of advance. So the exit or scale-out is a way of protection against a potential adverse move which might be as smooth as the decline. As for 22nd, the day after the climax, one can say that the selling pressure was withdrawn, but bulls didn't take advantage of that In another words, the decline obviously stopped, at least for the time being, and the pressure eased. So the sellers are having a break, but buyers are hesitant. That's why the low volume and spread, and an inside bar. Wyckoff says it is an indication of a rally, I wouldn't be so sure as I would think that it will go with the treaders who show some initiative after this pause / indecision. As for shorting the top of the technical rally, I don't get it either. As for the bias after the retest of the climax area on 25th, notice that despite a supply line was broken, the last swing high still holds (that would be the top of your red box). So technically there is no strong reason to expect a higher low. And then price can't overcome the midpoint of the developing range (between the climax and the rally top). The point is... Don't care about the entries or exits which Wyckoff suggests, but focus on the story. But remember that the story is idealized a bit and that you need to do your own research and testing. The principles are sound and simple, but the application is not as easy as in the given example. Everything only IMHO.
-
A key concept of Wyckoff as well as of Auction Market Theory is that support and resistance are likely to be provided by zones where a lot of transactions took place in the past. That means zones where a lot of trading volume occurred over time. To put it simply, S/R is likely to be provided by former ranges and congestions. But that doesn't mean that the S/R must lie at the very extreme of the former range. Not much volume over time is usually built at the extremes. The S/R is more likely to be provided by such an area in the range where a bulk of trades occurs, so called Value Area. And the S/R can be provided by its edge or by its midpoint, because the midpoint is, after all, likely the place where the very most trading volume occurred. For further information study Auction Market Theory, which is the theory that Market Profile is based on.
-
It depends on how you mean that. The risk management is bound with the entry price. In another words, possible ways of your risk management are always determined by the place where you enter. This is not to say that there is only one good entry within every setup. But each entry requires different management and some may be better than others. And that also gives an answer for what to do when one misses a trade. If one is able to define subsequent possible entries within the setup, entries which allow for managable risk within one's limits, then he can look for these entries if he misses the primary one. If he is not able to define such subsequent entries, then he must give up on entering, because he has no way how to manage the risk then.
-
[site update] New Site Design Launched!
Head2k replied to Soultrader's topic in Announcements and Support
And this looks agoraphobic. I don't like unnecessary scrolling. And people spending effort on petty changes -
[site update] New Site Design Launched!
Head2k replied to Soultrader's topic in Announcements and Support
It looks better and it is faster. Nice work. -
Wyckoff himself traded stocks, not futures, and he elaborates on trading stocks thoroughly. But altough he traded stocks, the principles of his method can be applied on any auction market.
-
There is not much I can say to this. Once I thought (and wrote here) that I can't trade mechanically. That I use intuition because the market is too complex to be described mechanically. I wrote that because I wasn't able to write a precise, concrete plan. So I needed "intuition" to fill the ambiguosness of my setups or I intuitively added unwritten setups.Now I think that there is no intuition in a true sense. What one calls intuition is in fact such a small plan, a set of rules in his head. These rules are vague, otherwise he would be able to write them down. I think that rules in your head and not on a paper is the worst thing that can happen to you. Because as they are vague (and of course not tested) it is easy to tweak them if you want. Or, OTOH, to forget them if conditions of your halfway written plan are fulfilled and you want to do something despite your "intuition", that is supposedly your additional rules, tell you that this won't work. So now I am working on a plan where no intuition is allowed. Everything must be on the paper. And it is harder, of course. I was never into an excessive testing. The most important for me is to have the plan connected together with one logical thread. The plan for me doesn't mean only my way of trading, but my way of perception in the first place. And I need to define it too. Yet I realize that one needs to evolve enough to write such a plan. One must gain enough understanding to be able to join his setups under one very concrete logical concept where everything in the plan is natural within this theory and can't be written differently. But I am working on it
-
I don't believe in manipulation. The market is simply one big bazaar where auction takes place at all time frames and scales. The closer one wants to get to the extreme, the smaller auction scale he should observe. Then the only limit is tick size as a resolution, so if one is looking for some kind of a behavioral pattern or setup he needs some space for a tradable setup to form. But the tinier one wants to get the better he must understand what he is doing. The better he must know what the immediate obstacles are and what confirms or invalidates his setup on larger auction scales. If one wants to get in before the others he must be also ready to bail out quickly if they don't propel the move on a larger scale. And he must know what he is going to do well ahead of the actual moment, because taking setups and managing your stop at a 1 tick chart requires much faster reactions than waiting for a 5 min bar to form. But if one is able to do that, like Db for example, his reward is a huge reward to risk ratio, maybe accompanied by qute a lot of breakevens, but only a few full stops. And even if there are full stops, they are ridiculously small compared to that ones which one must use when trading off a 5 min chart. As for myself, I distinguish between a trade auction scale and an entry auction scale. If these two are equal I call that scalping. The greater the difference is between these two, the more obstacles and harder trade management one can have, but the sweeter is the reward related to risk.