forrestang

Thales, tell your daughter I am stealing her idea for coloring and labeling my levels. :haha: QUESTION: On my chart, I have 1507 currently as an area of potential resistance. Is this level still significant? This was formaly 1511 taken from that area circled in red on the chart. Seeing as how price went through it today without noticing it, is it still significant? Or does it make sense to adjust it, and make the 'resistance zone' wider and match it to that hicup we had today at 1507.25? NQ observations for Friday, 17July09. Price is currently at 1507.50. We had another good trend day from the open. We put in a new high today, and the only thing above the high we put in today is an UTL and potential resistance at around 1550. Other than the support and resistance areas, there do not seem to be an extreme areas of chop near where price is now that would present any problems for trading.... like the 1440-1450 area? IF ABOVE 1507 OR 1520: I will look for an opportunity to get long, targets are a bit unsure. Particularly if we break above 1520 (and depending on time of day this occurs), potential targets are 1550 and 1535. I would really like to see a break and hold above 1520 before looking to get long. IF BELOW 1507: If price opens below this area, and holds, I will look to initiate trades on either side of the extreme zones shown.

Thales, Thanks for asking! Didn't enter into anything today, but maybe posting what I was thinking might do some good. No positions today. What was planned the night before, and what was executed unfortunately were not in sync for me today. :crap: Resistance was clearly at 1500. There was a breakout that occured right below it, after one would have entered, the logical first stop is circled. This probably would have been a breakeven trade. If that second entry was taken after missing the first, maybe minus 2 points or so. Then price seemed to be coiling, and finally broke out. Right after there was a volume surge that may have been confiming the breakout. The two targets above at 1510 and 1516 would still have been good targets as well. Ok plan I suppose, but poor execution....and faked out by the subtlety the market provided today. Forrest

Shamal, I'm using the 5 tick 'breakout' chart as the chart I have been mainly trading off of lately (not to be confused with the standard 5 tic charts where each bar represents 5 trades). U'll notice a lot of gaps in the bars with this type of chart(brekaout chart). I haven't used any intervals smaller than 5min in a while. I can't say which is better, when I was setting up my charts, I pretty much just 'eyeballed' it until I found something I liked. Would up using 10K CVB and the 5 tick 'breakout' chart for NQ. On ES I like the 100KCVB and 3tick breakout chart. I might wind up changing it, but for now I like it? ------On Current Price---------- NQ is now at 1491.50, 5 min before the open. Last night, NQ found resistance at yesterday high at about 1500, it retested twice in AH, so that seems prettey significant. Seems the 1492 area is also significant support. I'm not sure how this will play out, so I'll be waiting for clarity.

NQ observations for Thursday, 16July09. Well, I think the observations for me are a bit tricky here. I think mainly because we had a mega-trend day up. Price opened way higher above resistance, tested then blasted off. Seems like strong moves often lead to consolidation, or areas of indecision or chop. Vice-versa for price being trapped in consolidation and leading to strong moves. It appears to be easier to recognize a zone of consolidation, as you know where your limits are? Price closed today @ 1497.50. As of right now, price is at 1490.00. IF IN BETWEEN 1484 - 1500: No trades. Price will need to take out previous high and last major swing low. ABOVE 1500: If price breaks above this level and holds, potential targets would be 1511 and 1516, potentially with a tight stop on 2nd half. BELOW 1484: I would not expect a freefall. Each zone represents areas where price might stop and vacilate, so will place trades accordingly. PLAN FOR TRADING: As stated above, expect conditions to not be the clearest. If we remain in the zone, no trading will take place. Even when and if a breakout occurs, I would want to see volume confirming the breakout. The clearest opportunity would be a break above 1500. 1484-1467 also may be a decent trade.... but I expect potential for a indicisive trading day.

Final update on NQ trade: As mentioned last night, if price held above the 1465 area, we would look for a breakout to get long, which is exactly what happened this morning. We got long @ 1476.50 and adjusted stop accordingly. After first target was hit, the stop on the second half was brought to breakeven. From here it was essentially a waiting game. As mentioned in post above, once price reached the 1st target a second time, I would have liked to move the stop beyond Breakeven to secure more profits. So first target yielded a total of 7.75 NQ points. The second half yielded a profit of 15.25 NQ points. This is a total of 23 NQ points! I still think this was pure luck that it worked out this way:crap:

Will update with a picture, but wanted to get the right edge read out. Trying a long @ 1476.50, with a stop 1467.00. 1st target: 1484.25 2nd target: 1491.75 --------------------------------------------------------------------------------------------- UPDATES..... 1st Update: 2nd update - a few minutes later: 1st target was hit. 2nd target, stop would be at breakeven plus a tick right now. 3rd Update: Ok, price has now gone above the first target and is at 1486, which is about a point above 1st target. Here is where I'm conflicted about how to protect profits? Since We've crossed back above, should the stop remain at BE (and hope the 2nd target gets hit), or would you now start to trail again since this is effectively a breakout? This is just a question. I would rather do the 2nd thing I suggested. BUT FOR THIS TRADE, i AM LEAVING THE STOP AT BE+1, AND TRUSTING THE INITIAL TARGET.

Gameplan for NQ tommorrow. Today price closed at the 1447 area. And I just noticed (after doing a screen capture) that after hours has brought a move up to 1475. The areas of consolidation are clear. ABOVE 1447: We have 1465-1492. There is also 1453 to 1465 for a possible target. Green area. The 1453 - 1465 area looks ok for trades as well, green area. BELOW 1447: We have 1402-1427. Good area to look for trades (Green Arrow). IF BETWEEN 1446-1453 This area seems to be one of consolidation, expect price to vacilate in this area looking for it's value. Trading is not good in this area (red X). There is also an opening betwen 27-37. A move and hold below 1437, could have a short with a quick target to 27 as this area is rather 'open.' Orange area. PLAN OF ACTION TOMMORROW: If price holds above the 1465 level, look for a retest of 1465 to get long. It seems it would be reasonable to expect the possibility of a trend day after today's range with good targets up to the top of the range tommorrow.

Thanks for the encouragement Thales, I appreciate it! I have an appointment in the early morning so I will miss the a.m. action. But here are muy comments and observations. Please point out any shortfalls or things I'm bringing up that may be off. For NQ tommorrow: We closed at 1441, AFTER reaching the 1446 level that was noticed yesterday. The two purple arrows are the areas price will travel to reach the next level of S/R, potential profit targets. So depending on where the open is, if we get a breakout opportunity, to either side of that green line, we would expect price to potentially reach 1466 to the upside or 1427 to the downside. IF ABOVE THE 1446 AREA: This seems to have more potential to move, as price has not established as much consolidation as the downside, and a move towards 1496 seems more likely to happen. Once a breakout occurs above 1466, a move to 1485 seems likely. IF BELOW THE 1446 AREA: Price should move towards Support at 1427. If a breakout occurs below 1427, expect price to vacilate within the consolidation area as price attempts to find it's fair value. As mentioned yesterday, fades of the extremes could be profitable?

Never mind. .......................................

Target hit. Probably a crappy trade, only approx 10 NQ points which is barely a scalp. Hopefully this will make more sense to me shortly.

THings changed as I was typping this. Rushing to get this chart in. I saw resistance at about 1400.00, where price started to make HH and HL. Took the breakout anotated on the chart...... I AM NOT TRADING THIS. But this is my right edge read. As I was annotating chart, things picked up, stop not adjusted yet. But target is right in front of 1420.00 -------EDIT------- Didn't want to clutter up the thread with another post. But here is the latest developement with a slightly better chart. Stop adjusted twice so far on two swing lows. Currently two points from target.

No Problem. I think the only chart that is needed for what I was trying to illustrate was the CVB chart which is attached by it's lonesome now. The other two were just captures of a 5min and 5tick breakout chart with no notations on them. Here are the comments again for each scenario:

Some things I was looking at. No urgency here, just throwing ideas I have into the conversation. Will post charts of the NQ. I was just playing around with some playback files trying to trade breakouts. Didn't do so well. But I was pretty much looking to take a trade anywhere, no matter if it occured near significant S/R or not. So stepping back looking at a time frame with less noise, i.e. the 10K CVB chart. You can see I've got 3 charts to look at, 5 min, 5tick breakout chart and a 10K CVB chart. Not sure which chart between the breakout chart and the 5min chart as to which will make the best chart for intraday candidates? Looking for areas of congestion/consolidation and S/R on the 10K chart. Right now, price closed Friday right in the middle of that box shown. Seems like good trading conditions will occur at the extremes of the box. Will look for opportunities, which ever way they begin to develop at those extremes? So in my mind, there seems to be 3 clear opportunities..... IF PRICE REMAINS INSIDE THE RANGE: There will probably be opportunities to fade the range as price finds its value vascilating in between. IF PRICE BREAKS ABOVE: If price approaches that 1427 area, and breaks above, can expect move towards the next resistance area @ 1446. IF PRICE BREAKS BELOW: If price goes below, the short term support area is 1392 (which really isn't much room to move). Below that is resistance of 1388, from the 27th of may. Below that is 1377 from the 25th of May. Below even farther is 1341 found around that same time frame in May. I will try to catch this real time and post whilst trading if any of these conditions unfold. BTW...this logic could be completely wrong, but I am just throwing ideas out there. Forrest

What are you looking to see? The High/Low Count? Entries, 3 Pushes, what to look for for trend change, M2S/M2B? More specifics please. Might help if we knew what you were looking to see? Did you mark it up at all yet?

I've often fantasized about having the ability to help others more often than I do. I think it's great to have disposable income to be able to donate to causes one would see fit. I also think it would be awesome to be able to teach someone so inclined to trade how to become profitable. Friends, family even people you meet online. It's nice to have something to pass on. Imagine being able to teach you children how to trade, so even if your kid tells you he/she wants to be an anthropologist..... you know they have a skill they can use to be financially secure while doing other things that may be less profitable but that they enjoy.

I have a few questions. I would appreciate comments from anyone. 1) How does a trader pick the bias for going long or short....as someone mentioned in the other thread, I sometimes feel like I'm guessing? 2) Is it ever useful to place orders on both sides of the area of consolidation? 3) The actual zone to trade the breakout, does it actually have to be a rectangle of some sort? 4) Do you collect your levels, or do you just basically trade what you see on the screen? 5) Stops - do we just look for some sort of swing high or low to define these 'natural' stops? 6) Are breakout charts more useful than a time based charts? Again, I am in agreement with Blow and Morgan, that this is an extremely useful and PRACTICAL thread. So if ANYONE has insights into the above questions, please post. Forrest

Just found this, this is a great thread Thales, very practical!!! Will read it.

That's a double edged sword. Trading Brooks way is a scalping technique. It is VERY different than swing trading (although some swing some of their trade). Scalping and swinging are different. Both have the upsides and downsides. Sometimes the math is against you scalping when you're risking more than you are going to make on a trade. These are two totally different methods of trading. And everybody has different personalities and goals that are going to suit different ways of trading. It seems like the concept of this being a thread mainly about 'scalping' for tics here, maybe a few points there has been lost in the forest.

Oh boy....:crap: The picture that you see is truncated. It does not contain the entire picture that was in the post. I literally just used snagit to capture a picture of what I was doing (just now to explain it to you). I was not able to capture the entire picture. So let me explain....... I created a post, on that forum, where we could all post our significant levels, and WHY we thought they were significant. Each day it was updated. So what you saw was the latest levels that I had either added, or dismissed, FOR THAT DAY.... 4-11-09. I.e. if I had a level that I explained from a week ago, it was STILL level, I didn't re-explain it if nothing had changed. ----edit---- The Picture that you see, usually was only relevant to the new levels. So if I had levels from weeks back, and price was waaay away from it, I wouldn't try to fit levels in the picture that had already been explained, that's just not reasonable and it's too time consuming. But if for example I had a new level from the day prior, I would post a picture of what price had done in that area, and add it to the levels. Does that make sense?

I suppose seeing ANY chart in hindsight is simply how someone would have allegedly traded something? That's just a variable we can't control. But seeing these actual examples is what I think will help those of us interested in the topic. As I mentioned earlier, a complete picture of the logic behind a trade would be helpful. For example, when I was trying to trade mainly based off S/R (this was on another forum), I would post the levels I had on my chart BEFOREHAND(see two pictures below, these are old levels so ignore the actual numbers), so all my levels were always cataloged. When I would post my examples, I would base my trades off these levels, and explain my rationale behind entry and exit for example. So it's not that I have not attempted to trade this way before, its simply that I wasn't able to make sense of HOW to properly trade this way. I think examples of HOW others that are successful at this would be helpful to those interested in it.

Just as a note, I wasn't trying to be cute, I was serious and I would personally LOVE to see such a thread! I would subscribe and participate in it. It would be great if the thread was along the lines of this here Al Brooks thread, and contains real world practical examples day to day that everyone can relate to.

What would be great and beneficial to many (myself included) would be for someone with knowledge on the subject to post a thread about how to trade Support and Resistance. There are plenty of threads here on the subject, but they are all mostly academic. I have searched for one for some time that is packed full of actual, trades taken based on S/R. They are sprinkled throughout, but there really isn't one EXCELLENT thread about it with many ACTUAL REAL EXAMPLES. Like a good book, the posts could have a beginning, a middle and a end. Like, "I picked this support level from (insert time) because I saw (insert rationale here), I then saw price approach this level, and entered (insert entry criteria here and price upon entry) here, and I exited because of (insert exit criteria here)." I'm sure there are many that could post actual daily charts on WHY they found various levels significant, and WHY they entered trades based upon them, and more specifically HOW they entered the trade. Similar to this thread where there are charts posted everyday, which is probably why it has gotten so much attention?

No, I will usually try to wait for a second entry. Other than the am breakout type deals, I usually will wait, I guess that's why I always have so fewer trades than everyone else during chat? The L3 to me is not a second entry. It's an entry AFTER the second entry, once that rolls by, I look for the second entry OF the second entry which is an L4. So I'm usually excited about the L2 and L4s. Obviously sometimes this works both ways though.

Actually, starting on page 61 is the section about S/R. Starting on Page 55-70 is the chapter on areas of conviction. The problem here is what is being presented in the thread, which has left a lot out as many are still learning. For whatever reason nobody has really spoken of it. If you notice, most of the trades in the material are trades that at least 'base' at some prior S/R level. What is not done in the book is going out on say a 100K CVB chart, and looking for levels. I guess he may have found that complicated his trading at some point, which is one of the problems I have had, but it is a learning process so maybe eventually it will add to my trading?

Trades and observations on the day for me.