Anonymous

Nice one. Spitin' out knowledge on the Virgin (untouched) POC. I like that. Mondays rally in the Euro was a move up to a Virgin POC. They work well to define the NTR (Natural Trading Range)-see Enthios.com. Again, nice work. I hope your intent is it to make better traders; because you are.

Yes. It is easy to conclude after watching Soultrader's videos that the forex spot trader is at a considerable disadvantage. Some of the most important pieces of information are being withheld from most retail traders. There is a way to read the tape in forex. We read the chart as if it were the tape. We look to the tape masters like Wyckoff, Williams, and Ney. Volume is activity. As such, tick volume can be used in place of actual contract volume. Moreover, the activity on your platform can be used as a proxy for all volume activity. 85% of all volume activity represents the activity of Professional Money. When you see a volume spike it is true that some of that represents the 'herd'-small retail trader on your platform, but WHO IS ON THE OTHER SIDE OF THE ORDER? Retail traders are buying at the top, and somebody must be selling to them. This is a zero sum game. For a trader to be let in (long), there needs to be a trader to let them in (short). More importantly, volume is the power house that drives the market. It is the main tool of the professional trader. Having said that, volume means little without looking at price spread (range) and price. The key questions are what did price do on the associated volume, and where within its range did it end up? Volume Spread Analysis attempts to read the tape by studying these key relationships. Ultimately the markets move because of supply/demand dynamics. In particular, the supply and demand from the Professional trader. And that supply, can best be seen in a simple volume histogram and price bar. Support and resistance areas become important places to look for what the Smart Money is doing. They "force" the Smart Money to show themselves in certain places. This allows the astute tape reader to "piggy back" off of their actions. It seems as if you already can see some of this going on. So, you are already tape reading as it must be practiced by the spot forex trader (of course, once you can read price and volume, you can read any market). If you really want to learn how to read a chart, go to Tradeguider.com and watch some of their free videos. I am a customer of the book and bootcamp, but not the software. I do not like the software and do not recommend it. A lot can be gain from the free stuff. Another site is Tradingmentor.net. One of the mentors was a tradeguider teacher and studied under both Tom Williams and Richard Ney. I do not recommend taking the course, as I have not done it myself. They do offer a free live demo (long distance charges may apply). Joel's ability to read the market(tape) using price and volume is second only to Tom Williams, Richard Ney and Richard Wyckoff.

Sorry Walter. I was focusing on the Volume Analysis part of the thread name. I also seem to recall a couple of posts stating that the indicators where looking at volume and not tick delta. My mistake.

Enthios.com has done extensive work on the idea that price wants to go back and revisit the previous day's POC. This fact is the basis of his Universal Method. Also the 80% rule trade (see trading naked), which states that if price exits the Value Area and then re-enters, 80% of the time it moves to the opposite side of the Value Area. This is based on yesterday's Value Area not intraday value. Although it may be true for intraday. I would start out with yesterday's levels . Of course, timeframe traded could cause a need for a more "finite" look.

I don't know if it is the same thing, but Murrey Math uses the concept of the waist. Google Murrey Math.

I really don't like indicators. I favor Price and Volume. They are real, they do not lie and the do not lag. Having said that, this thread along with another site got me thinking. Could I find an indicator that gauged buying and selling pressure in the market, while remaining true to core Price/volume/VSA beliefs? Enter what I call (at least for now) the SDI - Supply Demand Index. First, one must understand a key concept: "There are only two basic definitions for bullish and bearish volume: 1. Bullish volume is increasing volume on up-moves and decreasing volume on down-moves. 2. Bearish volume is increasing volume on down-moves and decreasing volume on up-moves. Knowing this is only a start and in many cases, not a great deal of help for trading". Tom Williams, Master The Markets, p.19. This is the basis for the tradeguider volume thermometer. The SDI tries to emulate that. It is showing the bullishness of previous volume in relation to the bearishness of previous volume. In other words, the amount of demand versus the amount of supply in the background. This indicator is looking back over time and is not simply looking at the current bar. check out the attached chart. * The blue area above the hollow area represents the amount of demand greater than the supply (hollow area). * the red area above the hollow area represents the amount of supply greater than the demand (hollow area). * Hollow bar outlined in yellow-supply equal demand. *** This is not actually intended to be used to make trading decisions. Although some may find it helpful in that vein. *** 1. First black arrow on chart. This is a Squat bar, or Volume Churn bar. The range is less than the previous bar but the volume is higher. We have Supply entering the market on this bar. That supply, is seen by the market makers and thus the range is kept narrow as they believe prices will soon fall. In this case price moves up one bar on momentum and then falls sideways. The two small blue arrows connote volume less than the previous two bars. Falling prices on less volume-Bullish. Note that the SDI is Blue during this time. The background demand is swamping the supply that entered on the squat. The yellow arrow points to narrow range bar that closes lower with volume less than previous two and closes on its low. This is a classic definition of NO Supply. With no sellers underneath, price moves up. 2. The red horizontal line is at 0300. My initial balance period is 0230-0300. Note the first bar after the open. It is a wide range bar with ultra high volume that closes up from the previous bar and closes near the middle of its range. This is very key bar in VSA. The high volume and middle close tell us that there is a transfer of ownership going on in that bar. VSA, moreover, states that markets do not like wide spread up bars on high or ultra high volume. Why? Because there could be potential selling in the bar. Clearly there was here. The SDI turns from blue to red on this new wave of Professional selling. There is a such thing as momentum, however, and price continues up. Technically, upside momentum is decaying, or, downside momentum is increasing. 3. The key bar, if you where paying attention comes where the second black arrow is. Here again we have a Squat bar. What make this one special though is that it comes as price hits the VAL. Seeing signs of Professional activity at known support/resistance areas is what we want. After the open, the pros are rejecting yesterday's value, a good sign that the day might be down. 4. The next black arrow points to a second chance entry. Note that the bar just before this Volume Churn bar has a small blue dot. The volume on this bar is less than the previous two bars. Lower volume on down-bars is bullish. With an up-close near the high on less volume , we would can this a form of a test. On the very next bar we see more supply enter as the range narrows. The test bar did not find substantial volume, but as soon as price rises, Supply was there to meet it. We thus have what Tom calls on page 155 in his book, "No result from a test". No immediate result from a previous test can show weakness is present bear market (falling market). With weakness in the background- the squat at the VAL and as seen by the SDI, it is no surprise that the test failed on the very next bar in the form of a selling Squat entering the market.

It's funny how some of the simplest things work best. Key numbers, aka floor pivots, work very well despite the fact that so many people use them. Some would say this is why they work. Yet those same people would decry the over publication of a method because over use would render its edge useless. What I like about pivots are that the create a "playing field". That is, they allow one to see where price is. More importantly, they force the Professional Money to show themselves at certain areas on the chart. Here is today's (Friday 2/2/07) action in the Euro. The thin blue line is R1 and dashed white line is Point Of Control (POC). If you can read price and volume, you can see that the Smart Money is dumping supply as price moves up towards and then thru R1. The red arrow points to an up-thrust. Note how price moves above the key level but closes on its low on volume less than the previous two bars and on a wider range. The Professionals look to suck in late longs at the "pivot" level, as they intend to take prices lower. They do.........

I will start with a key definitional mistake most people make. Pivot Points are the lowest low in a swing move or the highest high in a swing move. That is, a swing high is a Pivot High and a swing low is a Pivot Low. When the market is making higher Pivot highs and higher Pivot lows, it is said to be in an uptrend. Conversely, when a market is making lower Pivot lows and lower Pivot highs, it is in an uptrend. Floor, or key, numbers are numbers, or areas, where price may react/stall/ or reverse. Therefore, a floor number may become an pivot area IF AND ONLY IF the market makes a Pivot High or Pivot Low at that area or number. The point here is that as traders we should be watching these areas for price to do certain things before we consider the area a Pivot area (line). Floor numbers are inferred support/resistance. That is, the numbers these lines represent are not necessarily places where the market has previously found support or resistance. Many people believe that these lines will act as support or resistance, but that believe is not grounded in the fact that the lines (areas) already have. This is what distinguishes floor numbers from Market Profile support/resistance numbers. Are you watching for expanded volume and ranges as price trades towards a key number? If the Smart Money wants to take prices through a true area of support, you will see Volume backing the move. If the range of the bars is narrowing and volume is falling off, then it is more likely that the area will hold. Which means it goes from an inferred support/resistance area into an actual support/resistance area or Pivot area.

Volume is activity. Therefore tick volume is a useable replacement for actual volume. I use VT from CMS because they offer tick volume in forex. I could not trade without it. Trading without volume is like buying a car without a gas tank. How can one judge EFFORT (volume)? And without effort, how can you measure RESULT(range)? While it is true that there is no centralized exchange in forex, it is not true that volume is not available. Years ago I used to believe that volume figures where hidden because certain people or institutions did not want to have their positions known. I did not realize the implications of this. YES certain people and institutions are keeping truths about where they believe the market will go. More exactly, where they are taking the market. Volume is the major indicator of the Professional trader. It is keep from the retail trader not because it is not necessary for the understanding of market dynamics, but because it is.

Thank you. They are there because the two bars above them do show demand in the market as denoted by either a green dot or green arrow. Since the cluster zone is where it is at, it is covering up the signs. The truth is one needs to read the bars and the volume. The "signs of strength/weakness" are not really necessary. I keep telling myself and others to remember that the end-game is reading the chart "blind".

There is no such thing as overbought or oversold. The sole purpose of the market is to find that place where there is a disagreement on value and an agreement on price. The market brings together sellers and buyers and at all prices where a trade is made there is a buyer for every seller. (We will hold off on issue of large block sellers right now-however even in this situation each single component of a large block is matched with a single component on the other side). Therefore there can't be more buyers than sellers or vise versa. Which is to say the market can't be overbought or oversold. It is very important to remember the your oscillators do not lead price. Price does not turn because some line is over or under 80/20. Learn to follow price action at various important levels like Value Area Pivot High or Low, or even floor pivots. Follow how prices acts and reacts at these levels. Watch volume at these levels. Learn to track Professional Money. Leave the indicators to the 'herd'-don't be one of the 'herd'. PRICE, VOLUME, ORDER FLOWthese are where the truth lies. And the truth is: markets move (turn) on imbalances of supply and demand.

Very interesting chart here. First, I trade using a duel timeframe set up. The chart on the left is a 30 min and the chart on the right is a 10. Trades are made on the 10 min. Here I have replaced the 30 with another 10 min chart rather than showing a single 10 chart. When one understands price and volume, the message of the markets becomes so much more clear. On the left side. Here we see price as the market trades on Sunday into Monday. The black arrows point to Squat bars (volume churn). The small green arrows underneath some bars are No Supply bars. The red arrow points to a No Demand bar. Okay, let's tell a story: The market is trading below the narrow Value Area (t). As price trades lower it is meet with Demand (buying) at certain points. What is happening, is that there is Accumulation going on. The Professional Money is slowly, and quietly soaking up the supply in the market. This leads prices to rise up a bit to the middle of the Value Area (t). However, when price gets there we see No Demand. At that time, the Pros are still not interested in higher prices. (as we are only looking at the 10 min, we can not see that there have been NO signs of either supply or demand on the 30. Hence there is not the background strength that seems to be on the 10). Notice that price falls back down after the No demand bar. Price falls back under the Value Area(t), which is actually a cluster pivot zone in this example. Now note that price does not fall as low as it had just recently been. At the low, we get a No Supply bar. There are no sellers underneath this price. The Smart Money has soaked up the supply at these levels. With no supply in the market, price starts to head upwards. Note that the range of the bars starts to widen and volume picks up as price makes an attempt to get above the cluster zone. Price gets above it. Now we see our first red dot. This is a squat (volume churn) bar. Some of the Professional operators are selling (taking profits) at this level. But what is more likely, is that some retail traders that bought on Friday are trying to sell back at break even today. Check out the time, we are now into the open of the London session, so more players of all sizes are in the market. The bar that can barely be seen on the left, is the first bar on the right hand chart. So price does fall but finds support at the cluster zone. Resistance becomes support. The first red dot shows that there was more supply (selling) entering the market in this bar. Many people would see this up bar on higher volume as bullish. But it is not. If it were bullish, then the next bar would not be down. So this new supply cause price to fall. Price falls all the way to under the cluster zone. THIS IS THE FIRST KEY BAR: price falls but we see a No Supply bar. Note that this bar does not go as low as price traded previously. If those previous bars did indeed represent Professional Money soaking up supply, then price should not return to those levels. All the selling at those levels should be done. Price heads right back over the Pivot Area. Now we see a couple more signs of supply entering the market. However, Price responds be moving sideways more so than down. Again, we are seeing Accumulation by the Smart Money. Stealthily, they are buying into any selling by the retail traders. The two green x's are there because there are actually signs of buying (green dots ) on these bars but they are slightly obscured by the cluster zone. So we can see some of the Professional demand at these levels. At this point on the 30, we get our fist signal of Professional activity in the form of buying. THE BAR WITH THE GREEN ARROW IS THE SECOND KEY. This is a 'test'. The Pros are testing for supply underneath the market. Again note that the low is at the same level as the previous No Supply bar and not as low as price traded in the earlier hours (left side). This bar trades lower, closes on or near its highs and has volume less than the previous two bars. The low volume tells us that they did not find any supply(sellers) there. Now prices are poised to go up. On the 30, 10 minutes later, we get a Shake-out. The Pros take prices down, before closing near the high in an attempt to bring in late shorts and take out early longs. The dark green line shows the first bar after we get the Shake-out on the higher timeframe. Note that there was some supply entering on the previous bar. However, this bar is narrow and the volume has dried up-less than the previous two and less than the moving average. Coupled with what we know about the 30 min chart, we now have background strength on both timeframes. We enter on the open of the next bar.

Let's talk. As a Volume Spread Analysis user I love to talk volume and price. Volume is the power house that drives the market. Volume Churn= Bill Williams' squat. Short hand definition, according to Bill, a bar with a lesser range than the previous bar and Higher volume than previous bar. This is the definition I use. Actual technical definition is mfi less previous range and volume greater. These are telling bars. Bill's story, however, is not correct. The range is held narrow because the market makers, who can see both sides of the market, see large orders on one side of the market , for example buy orders. They know that these orders are from the Professional operators. Thus their perception of value is higher so they are willing to keep the range narrow as they sell to the herd. The unsuspecting members of the herd think they are getting a good fill on their orders, which they are. But it is because of a large supply of buy orders on the other side; and that large amount of buy orders is coming from the Smart Money-the ones who tend to be buying bottoms and selling tops. Markets move because of imbalances of supply and demand. In particular the supply and demand coming from the professional operator, or Smart Money. BT-nice site. Would love to see some more posts and charts. I have a thread on another site where I do about 99% of the posting, which is why I have not opened a volume/price thread here: I DONT WANT TO BE THE ONLY ONE POSTING. Nothing would make me happier than an interactive thread on all things volume here on the best forum.

I was about 2 seconds from opening an account with them. I wouldn't even think about a forex broker that does not have volume. Volume is activity and thus tick volume works fine. Since e-signal is a partner of MB trading and they offer volume information, why can't you get it Torero? For good and bad, I understand the importance of volume now. The good is I can track what the Smart Money is doing. The bad, I am shackled to the few brokers that are willing to lift the veil of secrecy and make the playing field more even. P.S. I don't use Time & Sales, but after seeing what it has done for Soultrader, I would love a Forex broker that had that too. Maybe the EC is the contract to trade (see other thread).

While it is true that most people should not try and trade the news and most market moving news occurs during the US session, it is not true that it is less tradable. The news does not happen every day. And on the days that it does, one only has to "step back" as the new is released. Moreover, news related events are used by Professional money to take advantage of the herd. If you track Professional money then news events become opportunities where you can see Smart Money footprints and trade along side of them. Usually the herd will rush in on bad news and sell, while the Smart Money is buying, and then price actually turns and heads up. You can see the Smart Money setting up for the move prior to the news (hours and sometimes days ahead). Once you learn to track them, the news takes on a whole different light. You don't care what the actual news is. You don't really care how it is interpreted. But the way it is interpreted is usually opposite of the way price ends up going. " A professional trader isolates himself from the 'herd' and becomes a predator rather than a victim. He understands and recognizes the principles that drive the markets and refuses to be misled by good or bad news, tips, advice, brokers, or well-meaning friends. When the market is being shaken-out on bad news, he is in there buying. When the 'herd' is buying and the news is good, he is looking to sell".--Tom Williams, Master the Markets P.23

This is the bane of the day trader. If you position or swing trade, you do not have to win more than you lose. Suppose you have a system that wins only 4 out of 10 times, or 40%. On those winning trades you win 2000 each. Now on the other 6 times you lose 500 per.: 4 wins @ 2000=8000 6 losses@ 500=3000 net amount=+5000 You can be wrong more than you are right and still make money. Most of the "market wizards" fall into this camp. Long term position traders who don't have high winning percentages, but know how to keep losses small in comparison to winners. One thing that separates them from the newbies, and those that fail, they are willing to take that 5th signal even after the last four failed. By this time, the newbie is already looking for a new secret indicator or method to beat the market. For the day trader things are inherently more difficult. The percentage of winners needs to be higher than the percentage of losers. This is basically because the wins will tend to be smaller and the amount of trades taken will increase. Which of course really means more opportunity to put capital at risk. Successful day traders have to have a better than 50% win ratio. If you position trade, yes you could basically throw darts at a board. As long as you had the ability to cut the losses and let the profits ride (sometimes a cliché is a cliché because it's true). As a day trader that number has to be around 65-70% winners. For scalpers it is even higher. Which is why so few people make it as scalpers. While I would agree that most technical analysis does not work, I find it hard to believe that nobody can do better than 50/50. That is no better than flipping a coin. If you are a long term position trader that would be okay. Short term traders need more. That short term traders do exist and can achieve success would imply that it is possible to reach a higher percentage. 80-90%, well that's for the system vendors and holy grail hucksters..........

In a real world way, the 24 hour currency market is a myth. Some times are simply more appropriate to trade than others. Most tradable moves begin around the London session and end before the end of the New York session. Take a look at any chart with volume. You will see volume increase around 0200 EST and then dry up after 1400 EST. I used to have a real problem with this when I traded using ACD as Mark Fisher states that the domicile market open for the Euro/U.S. Dollar is at 0230 EST. I would argue that there should be two openings-one for each currency in the pair. I finally figured out why Mark uses this time: it allows him to use the same opening range number for both the London and New York session. That way if the move does not start in the London session, he can possibly catch it in the New York one. As you correctly observed, most moves start out in London. Most of the best ACD trades start out in the London session. New York, however, has the important news information. I don't know where you are, but can you name the head of the London central bank? How about the Fed? Get my point. When was the last time you stayed out of the market prior to German retail sales figures? My point, what happens in the U.S. matters. So when are the hours to trade. Well, if what happens in the U.S. matters, then we should be trading during some of the hours the S&P and NYSE are trading. But we know volume picks up noticeably when London opens. So our day needs start at 0200 EST and go until 1500. Although it is not a great idea to initiate a position after 1400 hrs. And we definitely want to be out by 1700 when interests are updated. I use a 30 min initial balance period that starts at 0230 as per Mark. So first trade can't really be before 0300. Done for the day at 1400 hrs. Longer on Fed days. Sh*8 ! I should be in bed right now.

Personally I do not trade stocks and do not really know why a retail trader would want to. Especially if you are short term trader (read day trader). The account requirements are excessive, the tax implications are worse than futures (taxed at a higher rate), and you can't short on a down tick. Having said that, I do understand that many people fear the futures markets. Even today, young traders , or new older ones, are warned to stay away from futures or, "you may end up with a dump truck full of corn on your front lawn". The idea of not being out by expiration and having to deliver, or take delivery of some product still worries many people. As far as Market Profile goes, it should work in any freely traded market. I would be a little skeptical of some penny stocks, because of over-manipulation related to illiquidity issues. BTW, the inherent nature of the stock market is to rise. This goes a long way for those who want to be optimistic and don't understand selling something they don't own in the first place. Before you ask, here are some reasons: 1. Companies use the stock market to raise capital. They use stock as defacto currency in acquisitions. Hence they need prices to go up. 2. Because stocks do have a monetary value, they need to keep pace with any rise in inflation. (yes, I know that inflation is nothing more than an increase in the money supply, but most people get this wrong. And assume rising prices is inflation. In truth it is not. Inflation may bring rising prices but it doesn't have too). 3. The role that mutual funds pay in a persons ability to retire at a certain predefined age is such that mutual funds need higher prices. The companies that do not pay workers past retirement, want those higher prices. This allows older workers (the ones that have higher salaries0 to retire, and they can higher younger workers at less cost. Government, which only want to provide the smallest "safety net" needs prices to rise so retirees need less subsidies. 4. Foreign capital seeks the highest rate of return. Rising stock market makes for attractive capital. The dollar is strong therefore as foreign capital enters an buys dollars to buy stocks. Strong dollar less inflationary. See 1 and 2. There are more reasons but you get my point. As far as I am concerned, this is the reason to invest in the stock market and trade the futures market.

Absence of proof, is not proof of absence. Chaos Theory is a large field. It has various branches and sub-sets. To say that it can not have any relevance in the market seems a bit too much of a jump. Chaos theory seeks to find order in randomness. If you are a trend trader, then you believe that underneath the market's seemingly random nature there is an order (trend component). If you use Market Profile, you too believe that the market is not purely random. The Bell curve model is predicated on the existence of order. Order then leads to pattern. That the markets are fractal is not of any debate. The branch of Chaos Theory called Fractal Geometry studies the fractal nature of many things that occur in many places. Fractal Geometry as a field of study, would be applicable to financial markets. Behavioral finance is often considered a branch of Chaos Theory. The markets are nothing if not behavioral. That is, the markets are made up of humans and humans are guided by emotions. We all know markets are driven by fear and greed. As VSA puts it: ".....They also understand human psychology. They know most traders are controlled in varying degrees by the TWO FEARS: the fear of missing out and the fear of losses.. The market seen as a composite of human beings and thus human emotions can be quantified and qualified in human terms. This is in part what Behavioral finance seeks to do. So what's the rub? If your goal is academic, then Chaos Theory is applicable for creating theories and testing hypotheses. But If your goal is to trade the markets, Chaos Theory is nothing more than gobbledy gook. Trading the markets is simple, but not easy. It has everything to do with what the Big money players are doing. It has to do with price action and support/resistance areas. Trading is not about prediction. Traders seek to create an edge through high probability set-up, as defined by their trading methodology. Then they execute, not because they believe they can predict the future, but because they trust the set-up. There is a lot less to trading than most people think. Tape reading works because it focuses on what is real-price. Most indicators "fail" because they are complicate things. First, they are derivatives of price and hence have inherent lag. Next they use price as an input to predict price. Using variable A to predict variable A has some logical deficiencies. But predictions should not really be a trader's goal. "Predictions are great, but when predictions and reality diverge, we must always go with reality. Analysis is great, but when analysis and reality diverge, we must always go with reality. Knowledge is great, but when knowledge and reality diverge, we must always go with reality. And what is reality? Price is reality."---Adam theory of Markets. Chaos Theory is viable in the academic study of markets. It may have a real application in trading the market for some. But it is not necessary. Moreover, even if it is applicable, it moves the trader away from the essence: price and volume. You want to be a tader. Learn to read the tape (price action). Learn to track the Big Boys and follow in their wake. You want to write papers and win Nobel Prizes............... BTW Bill William's Squat indicator, which is a way of looking at price range and volume is viable because it focuses on price and volume. Of course, whether or not one considers Bill Williams' work, Chaos Theory is another question altogether.

I must admit that I am not aware of Texas and his/her levels. However there may be a forex broker issue to consider. Prices will vary plus or minus a few pips from broker to broker. Of course this is mainly due to the difference in spreads each broker charges. Hence, if you are not using the same broker, your high, low, and close will vary slightly from someone on another platform with a different broker. This brings up another important point: pivot levels should not be seen as specific price levels where price will find support/resistance so much as specific price zones or areas. If price move 5 pips above you pivot level and then reverses, would you say the pivot level did not hold? Or what if it only comes with 3 pip on the downside before reversing and heading higher? To be sure, we all like to see those "to the pip" hits on the pivot lines, but in reality how price acts around the level is as important as how it acts exactly at that level. That the whole idea behind cluster zones. Plus we are really only talking about a few pips either way I would think. If yours vary more than that, maybe Texas is doing something completely different. BTW I use 1700 as my day, as that is what my broker uses. Mark Fisher uses 1500-1500 as a day in spot. I believe the close is used to coincide with the close of the CME currency futures pit. I like 1700 also because this is about the time that interests are updated by most brokers. Thus it is a natural time for short term traders to get out. If they haven't already when the natural slow period begins at 1300.

Very Nice. Thanks for the detailed post. I'm a bit surpirsed to see MAs and indicators on your chart. I guess I'm just biased against them. Never the less, keep up the good work. Learning a lot.

Brilliant. Nice work. I guess I have some thinking to do. Here's a quick question for you torero; What if the reason for the trade remains valid? More over, suppose you are in tune with the market and the trade is going your way. Now the power in your city goes down due to a totally localized situation (heat index over 110 and everybody has the air on), would your goal be to get flat? Wouldn't an automatic trailing stop be better?

computer is acting whacky. Here's the pic:

Interesting. Here's my take. First, it should be noted that you do not use the "traditional" S3 and R3 levels. Nor do I. I found the "traditional levels to be a bit far away and the levels produced similar to your way to be too close. Therefore, I use M3 (midpoint of the two) for my S3 and R3 levels. Pivot points are what I call inferred support/resistance. That is, these lines are not generally placed in areas where price was previously supported or resisted. They are based on the mathematical phenomenon of "regression to the mean". That is of course, couple with "self fulfilling prophecy" as so many traders use them. From the perspective, S3 and S4 are key levels; the further one gets from the mean, the likely price is to stall/regress back towards it. Check out the chart below. The black arrows on the 30 min point to two Up-thrusts (VSA term) that occur at R3. These same points can be seen on the 10 min. They are also up-thrusts on the 10. Because the end-game is reading the chart, not all up-thrusts have a small red arrow above. Here, only the second one on the 10 does. An up-thrust is a money making opportunity for the Professional Money. They drive prices up to encourage new longs and to scare out early shorts. Price then closes on or near the low of the bars, which is the direction price is actually headed-lower.

If you build it, they will come. Sorry :o . I love this site. The layout is nice and the current member base is both knowledgeable and considerate. Torero's idea about a news alert is way cool. I really appreciate the video section. If you included an youtube-esque video section that would be wonderful. There are plenty of traders here with nuggets to share. I don't know if you want to be the biggest, but I hope you want to continue to be the best. Thanks again for your labor of love.