TheNegotiator

Other than 1.618 and 0.618, all other ratios are derived ratios (again, apart from 50% which is a separate geometric point traders look at). I use the roots as I find they are more helpful to me. I never really liked 0.236/0.764 because they just always seem a little off to me. But then the variation is hardly monumental. My suggestion if anyone is confused here is pick 0.236/0.764 or 0.272/0.786 and stick with those consistently. Either should be reasonable to use.

Sorry what exactly are you suggesting I'm "mixing up"?

Well, so far we have not alot going on. Low volume, low range and little real attempt to go anywhere. Probably people did most of their business yesterday. Could be a break and a move later on but who knows right? We're still news driven, so anything out of Europe could tip the balance quickly.

Those are some mechanical aspects to causes of fear, but there's definitely more to it than that. Absolutely. But if you approach things in the right way, could you not? What separates the champion from anyone else? Sheer natural ability? In some cases, perhaps. But it's my contention that it is more often about mental approach than pure natural talent. Look at sportsmen. How often are the ones at the very top also the most naturally talented of the pack? Sure they have talent. But it's about how they harness that talent.

How's the week been for everyone? Finding it easy going or struggling?

Haha Siuya! That story about the Nasa pen is a funny one! But it does illustrate a good point. How traders use ratios is a point that I'd like to underline. Fibonacci ratios are effective if used appropriately. The trouble is that many traders don't know what to use them for. It's usually they draw them automaticall from highs to lows. This isn't always going to yield results. Plus, even if you are applying them correctly it doesn't always mean you should be trading at a specific level. Before I go any further I'd just like to point out that 50% is not a fibonacci ratio, yet it is very useful as many other use it (self-fulfilling prophesy yada, yada) and so I include it for my purposes. Briefly how I use ratios goes:- Close to open session gaps. This is the most useful reference within the first say 30mins or so after regular trading hours (RTH) open. Obviously this might not be as useful if you trade different products. I trade ES and so I do find it useful. I only really look at 50% and 38.2% as a measure of gap closing ability. I also use the extension ratios. I.e. (1)27.2%, (1)38.2%, (1)50%, (1)61.8% & (2)100% extensions. I'll make the point now but this applies to every ratio I use. I LOOK FOR CONFLUENCE BETWEEN THE RATIOS AND MY LEVELS. After I'm confident the initial balance (IB- the first 60mins of the RTH session) is in, I do the same on the IB. What is particularly important to me here is on breaking the IB high or low, if the market stops short of the 27.2%/38.2% extension, I am on alert if there's a subsequent break back into the IB. It suggests to me that the move wasn't strong and that there may be some work required in the opposite direction. After I have garnered any IB ratio information, I use the 50% on the day session. Not much more. Then on any strong move caused by some kind of announcement, I look at 38.2% of that move for continuation, 50% for a possible reversal of the move and 78.6% for a final reaction before a complete capitulation and break back the other side of where the move started from. I also monitor important longer term swings. This is basically how I use fibs. Sometimes I lean on them for an entry if I have confluence and sometimes they are geometric activity markers only. I have to stress that whatever you do, make sure you use them with your own structural context. Hope this helps.

Forgot to remind anyone who is trading that there's Michigan(although final) @9:55am. This could definitely provide a move if it's out of line.

Okay, so Friday before Memorial day and overnight we have little consensus on value. The profile shows this in that it's not well defined at all. People are talking about the possibility of risk aversion into long weekend as don't want to be exposed to Europe news prior to next week. Of course this is possible. I would say that I feel in this case, it's possible that we'll get a short squeeze/short covering rally too - or even as well as. I think the market moved lower very quickly and I also believe that many of these moves are happening by speculative traders rather than uber-sized funds etc. The market is pock-marked with poor highs and lows which are followed by sharp moves in the opposite direction. I think this illustrates my point. So my idea today is anything goes and we could have more big moves. Here's a quick chart to look at:-

Thanks for posting those charts bakrob. I would just point out that the white arrow is a little difficult to make out. Maybe if you could take a screen shot then annotate in paint or jing/snagit or even greenshot, then you could make the area stand out better. Thanks!

ME. When I get pissed off about this or that and I know it really doesn't matter, it annoys me. It tells me that I'm currently not in an emotionally balanced state. That's a huge red flag for my trading and something that requires my attention straight away.

So what can we look at? 1) Who are you? What is your personality and what are your strengths/weaknesses? Take a look at the Van Tharp trader personality test here is possibly a good start. Identifying exactly why you want to trade is another aspect to consider. Are you in it for the glory or do you have a great passion for trading? Having a good driver behind your will to succeed is perhaps the most important skill a new trader can have, because like it or not you will fail over and over again along the way. 2) I find that the most revealing interaction I have with the markets is in the heat of the trading day. Those actions that you are almost compelled to do by some higher force. Why don’t you take a stop? Why do you take those half-baked spur of the moment trades? Why can’t you stop yourself doing them. Emotions are a powerful thing. Usually these particular ideas come down to fear. But fear can be a subtle thing, creeping up on you until the crescendo of the actual trades you take. 3) What tend to be more subtle about fear are the passive actions you take. I’m not really talking about the trades you pass on. I’m more interested in everything you do (or don’t) in support to the actual trading. Journaling, making a good risk plan and preparing thoroughly for the day are some of these. Part of how “the fear” affects humans is not only seen in how they react in certain situations, but also an avoidance of situations which might present opportunity to be wrong, to lose out or to have that fragile ego bruised. So what can we do to work on these particular points? 1) Understand there are things you will be fearful of or uncomfortable with. Think of situations in the past where you felt like this and the outcome was good. Maybe you went for an interview and in spite of being very nervous and worried, you got the job. Use this experience and accept that you are going to feel fear and discomfort in trading. This way, at least when it rears its ugly head, you aren’t taken by surprise. 2) Analyze where you believe the problems caused by emotions lie and explore them thoroughly. Try to trace a route back as far as you can. The first step to fixing the problem is fully identifying why it is happening. 3) Create a plan of how to deal with certain situations which are a result of the problem. A method of centering or rebalancing is perhaps a particularly helpful idea to explore. Meditation is something which may be of help, although again this is something which takes practice. 4) Journaling and collection of stats coupled with periodic review, is important to gauge progress and motivate you to improve more. It can also help uncover other issues and areas in which you excel. 5) Embrace failures as a vessel of learning. Mistakes cost $, so make sure those lessons are learned and you aren’t the student who has to keep paying for the same lessons over and over again. Finally, fear is about not trusting yourself to do the right thing in something you either aren’t experienced in or are just not very good at. Think about when you learned to ride a bike. How nervous and worried and even fearful were you at first? In any way, do you feel the same emotions now when you ride your bike? In any way, have the intrinsic risks of riding a bike changed between when you couldn’t ride it and now? The change is you. You are the risk.

One thing that really gets me is when people say that a trader should spend the majority of their time working on themself and their own psychology. However, the common ambiguity of such a statement leaves those who are new or fairly new to trading not knowing where to start. It's equivalent to saying you should spend your time on technical analysis. How though?!?!? What in particular is a useful way to go about "spending your time concentrating on yourself"? I’d like us to explore specifics of how someone might work on their psychology.

Any views out there on the markets so far or has everyone gone home for the holiday weekend already?!

So yesterday we thoroughly explored the singles areas from Monday and then shot up higher. Again, overnight we've tested lower and then pushed on up. The 26.50 Tuesday high was not good and is well within reach again coming into open. The thing is, we are still quite news driven and the market seems to have an itchy trigger finger right now. Great if you're trading well and take your profits when you should without being too greedy, but awful if you hang on thinking it'll carry on after a turn has already shown itself. Here's a chart:-

Thought i'd post the completed session chart. No notes, just there to ponder...

Good idea about camtasia. It'll have to wait for the minute though as I'm considering a reinstall of windows and still not certain which ssd to get(). Just using Session Statistics right? Either way it'd be great if you could post how you track it.

I'll have to think about how to do something. The problem is, you see stuff like this all over the internet and without knowing any background my levels are no better than any others on the net (good or bad ones). Unless I go into thorough reasoning each day as to why each and every level hold significance and how I would be expecting it to trade, then how do I show that? There is no quick and simple way I can see at the minute. Anyway.

Here's a quick update chart:- Couldn't really get going on way up and until last low 1295.75 we had been in a fairly tight downward selling channel. Fairly decent range already. That could mean either 1)we're going to back off selling for now 2)if the balance low (1289.75) is taken out we could end up having a really big down day. We are currently in balance, but balance becomes imbalanced before price breaks out of balance lol. Interestingly, Monday's high was 10.50 which is the same day the current balance low was made.

True. But then again I am wary of just posting a bunch of levels every day. Just because a price has been important before doesn't mean the market will reverse there again and if it doesn't, it also doesn't mean that it's no longer important. So I don't people who don't know how to use levels to see them and just trade them. I don't think that's especially constructive for anyone. If you said, "let's talk about why specific levels may or may not be important" that would be a different thing. Plus, you could always post what you feel to be useful and why...

Btw, if anyone was wondering, 3.25 was where the singles from monday begin.

Not really, no. This isn't about saying "I will do this here". I outline areas I feel are particularly important to the current auction and part of my trading approach may be taking a trade in or around those areas if I see what I'm looking for. Other trades are purely based on intraday developments. Telling people where I am going to trade is not useful to them (unless they want to give me their money and have me trade for them(and no I don't do this)). Talk to me about possible trades and why you might take them and what you want to see and then we can explore together(that goes for anyone). The intent of the thread is to discuss the e-minis not to state what my personal trades will be.

So what I said about it breaking higher was thrown out of the window, at least for yesterday! The high was not a good one but we did end up dropping hard before recovering some into close. Actually, that was a pretty decent rejection of the low yet overnight we have slipped through it. Looking at the last 4-days to try to get an idea of "value" within the balance, there's not much to see. The main thing is there's not a strong concensus on value and the VPOC comes in near that 1304.75 at 1305.00. I think that the selloff through the open and back could be key to explore again today.

and of course for the 4 days prior to today, we've been in uni-directional, day tf trending mode.

The 1325.25 level is important, but the manner of approach has me thinking we might break at some point. Had we a pretty strong open after an initial test lower had been completed. Past 19.50, the biggest counter move all the way up has been 2.25 pts (although we just got 2.50 as I am typing). The other point is that instead of "reaching" for the 25.25, we slowed down and pushed higher bit by bit, taking a little more ground each time and then not really doing anything significant on the move back. Of course, the move could be temporarily running out of steam and require a deeper counter-rotation to bring in more buyers. However, there has been no strong rejection of the area which has previously been a rejection zone. It was also where we tested on 5/17 before two big down days. Let's see. I'm not saying "do this" or "do that" but just be aware of the logic.

Just want to make a quick point about approach here while it's happening.