humble

I have seen several references to this type of thing recently and was wondering if someone could maybe clarify what is meant by this and how do you go about determining that shorts or longs have "washed out"?

Your reality or mine? To each our own, I presume. Cheers

I don't think that this is true at all. I believe it is very possible to have a high win/loss ratio with high win amounts. In fact, it is the one thing that I continually strive for on an ongoing basis. Have I achieved it yet with total consistency? No. Do I believe that I will get there eventually? Absolutely! I'm curious what math you are using to arrive at this self-limiting conclusion?

Hi John, How do you go about "seeing" this washout of momentum?

Well I am glad to see that this discussion is gaining some more participants, although it seems to be straying slightly off topic. I agree with you that this is what is at the heart of what johnw was describing in his earlier post, i.e. how to measure/identify changes (delta) in the speed (momentum) of the bars, and therefore spot potential reversals, and that it indeed could present a fruitful discussion. So how about we put the focus back onto the topic and see where this goes? In my mind the question becomes, how do we measure/quantify the change in momentum? Johnw, perhaps if you could clarify what you meant by "imagine the surprise of the guys from the bottom of the bar when they go hurtling past ... unless something is done quickly to remedy this situation, price will enter into a spin much like a car would when it's rear end is traveling faster than it's front end"?

I would have thought that this topic would have garnered more interest as it is, well, interesting...at least I think it is. Being able to identify clues to changes in momentum that lead to price reversals would seem to be quite a useful tool. In any case, I look forward to hearing more of the OP's thoughts on the topic.

Hi johnw, Interesting analogy. Would you care to expand on this a little bit more, as I'm having trouble visualizing what is being described in the highlighted wording? What are you using to measure the speeds [momentum]?

I would make of it that price is rejecting the downside and is likely to push higher.

Hi Urma, I'm not sure I know exaclty what I'm looking at with most of these colored squiggly lines (although I must admit they are pretty), but I think I get the concept you described regarding the "trade velocity" and can see the velocity spikes your are referring to on your charts, which leads to my question... On the last chart, there appear to be two distinct velocity spikes, one at 7:17 and one at 7:24. If these spikes are only created by machine placed orders that are larger than the market itself, and are indicative of large traders who want to turn the market, why did the spike at 7:17 fail? And what about the turns that occur in the market without a velocity spike? Who is behind those reversals?

Interesting questions. I don't know what the difference is in the mentoring, but obviously the results being offered are worlds apart. I would question the ability of the first mentor because if their method is sound and can get you to a level of living comfortably, then getting to a level of 100k/day should simply be a matter of scaling up size, assuming of course a sufficiently liquid instrument is being traded. Since that is not being offered then my assumption is that there is some flaw in the method or the mentor is not willing to share everything. After all, we should not be in this game just to be living comfortably. Then again, if the 2nd mentor is offering the opportunity of 100k/day I would question their motive for sharing such a method. While it is not something that I am yet capable of, it is something that I do believe is very possible, but why would someone just give that away? That being said, my first reaction...Sign me up for the 100k/day!!

My interest is not so much in why prices turn where they do, as much as it is in how it is achieved. In other words, what are the mechanics of how larger traders create a turn or reversal? And by the nature of having to turn a large number of contracts, are there footprints of it left behind that give clues as to when this is happening?

Yes, I understand that very basic part of it, I'm looking more for how a large trader or group of large traders makes this happen. What sequence of events must occur at, just prior to, and soon after these reversal points?

Each day the ES market creates several reversal points, where price turns as buyers step in and take control from sellers and vice versa. What are the mechanics behind how these reversal points occur? I assume that they are created by large traders who have the deep pockets to change the direction of price, but what, specifically, must happen at these points in order for prices to reverse?