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gaelgss
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This is my reading of the behaviour of price around the 2516 R area, I am simply trying to put into practice the little kwnoledge I have aquired from this message board and Wyckoffs word. Hopefully one of those things I will look back in the future and think: Shit, what the F**k was I thinking... At point 0 the market is in an uptrend and retraces on descending volume, a bullish sign. At point 1 there is another retracement, also on descending volume. At this point there is nothing in the chart that makes me expect a reversal. Between points 1 and 2,on the wave chart, we can notice the upward waves are becoming shorter, showing a clear increase in selling pressure, but still no climatic action. At point 2 there is another retracement, this time lasting longer in time and of greater magnitude, however, there are still no clues from volume. At point 3, buyers step in again (or sellers give up) and price starts ascending. As prices moves higher, volume decreases for the first time, showing less efort from the part of the buyers and a bearish sign. At point 4, buyers are exhausted and price makes a Lower High and reverses on realtively low volume, however, price finds support again at around 2510. Is it worth going short on that lower High? I don't care as it depends entirely on the individual traders strategy, I am interested in the analysis of the relationship between price and volume at this potential resistance level, as it is independent of strategy. After this, price drifts for a while and eventually breakouts but It would be good to read other traders views on this.
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So we are looking for shorts until we reach the potential Support level, around 2400 right? Which levels should the nasdaq daytrader anticipate for tomorrow? The following 15 and 60 minute charts show the most recent action in the NQ. I have identified a Resistance area between 2515-2521, are there any other areas that shoul be taken into consideration for NQ daytraders?
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I thought that the support provided by a trendline is coincidental, since TL are drawn by traders and don't represent a large number of trades? If this is the case, would you look for long trades at the TL or only if it coincides with a previous swing low?
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So even though the 60 min chart shows a series of higher highs and higher lows, starting from the 9th of May, you don't consider this an uptrend? Answering your questions: 1- The probabilities for the upside remain as long as there is a succesfull test of the last swing at 5480, can you quantify the exact probabilities for the upside? 2- I would say a long trade has a higher probability of success because the market is making higher highs and higher lows, although another thought I have is; There hasent been a considerable number of trades in this area to provide sufficient support, so we could anticipate a further test of the last swing low. If there was stronger support, provided by a larger number of trades in this area, I would be more biased towards the long-side. 3- When looking for long trades, I look for climatic action, and signs of selling exhaustion at a pre defined level of support. My problem here? I have no predifined level of support. 4- In order to avoid being surprised, I should anticipate the different scenarios that I foresee at this, still unidentified, Support level and have a plain for each one. My main issue here is following the wyckoff methods first step The first step for a trader is to determine the current trend of the market.
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One question for the experts... When trading the wyckoff way, the first step is to identify the current trade and then establish ones place in the trend. The following image shows a 60 minute and 5 minute chart of the ftsee futures, before the opening. By looking at the charts, is it correct to say that we are in an uptrend, although the 5 minute chart shows an obvious downtrend? In this situation, would Wyckoff look for long setups? Cheers.
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If this is the case, is it fair to say that traders need 2 completely different strategies? 1 for imbalanced markets, based on retracements. 1 fo balanced markets based on reversals.
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Ok so assuming my strategy generates 10 trades a week on average and all variables are mantained, how many trades would be necessary? I think I remember Mark Douglas suggesting a minimum of 20 trades but I'd like to know your opinion on this. Cheers.
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How many trades are necessary to backtest a setup and get an idea of its probabilities of success? Many thanks again.
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Today I mantained the same levels as yesterday, but I included the midpoint of the trading range from the 18th to the 20th, which coincided with the midpoint of the 11th-13th trading range. The level also coincided with a recent swing low, at 2710. The attached 60 min chart shows this. Just now I was replaying the market and noticed how price bounced of 2710 violently, giving me no chance to enter the trade on the 1 min chart. I looked at the "anatomy" of this reversal on the tick chart and noticed a double bottom that could've given me a nice entry. Attached you can find the 60 min chart (macro), the 1 min chart where I was looking for the entry and the 1 tick chart, that shows the reversal in detail. What do you think of this Db, I am on the right track toward developing an edge? At the moment I am contemplating two entry setups; 1- Test of support on lower volume, as explained in my previous chart using a 1 min chart. 2- A double bottom on a 1 tick chart at a support line. I know that there is a lot to this such as stop loss distance, proffit target, and I will need to spend a lot of time testing the setup on historical charts but is this a good foundation? Once I have defined the setup I can go into improving it and doing the possibility mapping right? Thanks a lot for your advice. Edit= THis was a very nice long, I just replayed the rest of the market and it went up to resistance at 2045, a 35 point move
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No I didn't enter the trade because I haven't yet defined my entry setup.. I am simply observing how price behaves as it approaches the pre-defined S/R levels in order to identify a pattern. Yesterday, the market tested the 2725 level succesfully twice, the second time on lower volume, indicating lower selling interest at this level. What this be a valid setup to enter the trade? Is this an entry thats worth working on? Attached Is a 1 min chart with the setup identified.
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The 2725 level posted yesterday turned out to be important. It acted as support at the beginning of the session and then as resistance for the channel developed during the trading day. Any thoughts on this?
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Thanks DB, I dont feel confident enough to do this but lets give it a go... From the macro, I ha plotted the S/R lines on a 60 minute chart. Since the trend is obviously upwards, I would be looking at going long at a test of support or a a breakout of Resistance that turns into support. In the following 60 min chart, I would be looking at: 1- Going long at support around the 2725 area 2- Going long on a breakout and test of the 2750 area I would consider the Resistance line at 2775 a potential target, in the charts the green eplipses represent Long entries. I look forward to reading other peoples views on this as I am pretty sure mine are very poor...
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I have read this thread entirely and I believe your answer to this has been. " You should only plot the S/R lines that are more likely to affect current price action, these are the lines that are closer to the current price" I have added S/R lines to your chart, assuming the market opens close to the 2741. I would appreciate some feedback regarding my lines, are they enough or to many? Are they drawn in the correct area? (I am aware that this is not a pin pointing exercise) Blue lines are support and red lines are resistance. Cheers. Edit= Do you consider 2650 as support simply because it acted as resistance on the 29th feb and on the 9th of March and resistance becomes support or other other reasons?
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I Hello Db, In this chart you have identified 3 "cajas famosas". Which of these levels would you identify as S/R for the next trading day? Presumably you don't take the top/bottom and midpoint of each range as S/R as there would be way to many lines on the chart right?
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One question about your method of trading. without getting into specifics; Do you still trade the first 90 minutes from the opening of the NQ futures? How many trade setups do you normally find in a day? Is it feassible for a newbie to try and trade in this period? thanks a lot again.