james_gsx

Well I'm back. I got back into trading this week and I'm 100% again. February has been one of the most stressful months I've had in a long time and I'm sure my bank account is glad I took the time off :o One of my closest friends needed my help for a very serious matter and I felt it was best to help. Unfortunately the stress that came with the situation took me out for a while. Last week we went for a long drive through Denver and someone drove into the side of my Mercedes. Somehow I managed to stay calm in the situation and everyone was fine. I was just a little irritated with the situation but over the last year I've learned that at the end of the day it's just a car. It can be fixed, and life moves on. I was also fortunate to listen to the best speech I've ever heard in my life by one of the Nordstrom executives. He basically talked about going after your passion and simply applying yourself. It was a great motivator for my trading and I'm very glad to be back. I'm in a Crude Oil position right now, and that's making me some money Hopefully everyone had a great month and I look forward to posting with everyone again.

I have had some unfortunate events happen this week so I will be out for a while. I'll trade when I can (if I have time) but I probably won't have much time to post for a few weeks (hopefully sooner). I just wanted to post this so people don't think I'm running off like some people. Wish you all well, good trading. I'll be back as soon as I can James

I don't buy it, unless I have a strange ability to read peoples emotions better than anyone I know. Maybe it's just luck. But I'd really like to see some hard evidence that even the trading doctor could confirm legit to back your claim. Sorry if I come across as a dick, I really don't intend to.

It was me, sorry I didn't mean to cause this much trouble. All that money from the candlestick thread I had to put it somewhere On a more serious note, my guess would lean towards what James originally said about a block order going through at the end. Often times a mutual fund or two will need to balance out their portfolio and build a position. So they tell the market maker they need to buy or sell x amount of shares, throughout the day the market maker will try to push those orders through and sometimes he/she is forced to do so at the end when the market is liquid enough.

Here is my mix of candlesticks and VSA, hope it's valid and I follow some of the basic rules correctly. Correct me if I am wrong though as I am still learning. This first chart is the ES daily and I highlighted the spinning tops against support. If you go back to our first two hammers with strong volume you'll see price went up to test resistance. Volume was relatively strong on the move to resistance which validates the move IMO. Price was rejected and fell back to our new support level but on low volume, which would tell me there is a lack of interest. This is where I believe it gets important, the three spinning tops also have strong volume. If you look at the chart the volume is similiar to those of wider bodies, but these bodies are smaller which in the candlestick world would give you a warning that the move is slowing down. But with the stronger volume I feel like the market maker is controlling the prices and building a position, quickly buying up shares that newbies are selling in a panic. This next chart is basically zoomed in so you can see the volume and corresponding price moves a little more clear. You'll see I outlined the bigger WRB with low volume, then the smaller candle with much higher volume. This tells me the smart money was allowing price to fall so they could continue their accumulation that was started two weeks ago. This is a weekly chart of the ES. Traditionally following basic candlesticks and seeing this chart I would say there was a doji with a WRB, followed by a bearish engulfing candle thus my bias would be bearish. But in this case, we will see that the down volume candle had more volume. If we break down the time frame and look at the daily we saw that the accumulation was at the low, thus making me bullish. If anything, we could test 1400 again and have a nice tradeable 70pt range. I'll take that. This is a long term chart with a long term trend line. The initial test to the support was on light volume, then a small body under the trend line with high volume. I'm not really sure what this means, so maybe some experienced VSA guys can shed some light. But again, as price stablized around support volume has been very high, which tells me strength. Then for the last chart. I highlighted a few key areas to combine candles with VSA. Green - candles became much smaller with tall wicks. I know this really doesn't matter to VSA but in candlestick analysis this would tell me that the market maker has complete control. Now if I went into VSA terms and combined the two I would come away believing that someone is accumulating a large position. Yellow - Price hits resistance on strong volume and a small candle, actually the doji itself is on low volume which would signal no demand. The big money isn't pushing price any higher thus it falls the next day. From there price continued to fall but the general trend of volume was down. This declining volume and declining price tells me there isn't a very strong force behind the move. Then we hit our lows with a lot more volatility, and alot of accumulation. So I would go out on a limb here and say that the professional money started accumulating in july, and continued in January. So as of right now, I would be willing to buy calls up to 1400. My stop would be just below a 50% retracement of the major wick that led to new lows, so roughly 1275. The reason for this is I wouldn't be surprised to see the smart money push price a little lower to create a little more panic in order to buy. If the general public is scared they will sell, which creates a very good opportunity for smarter traders. Please note though, I went at this with a bullish bias. So if something sticks out that I did wrong that would infact be bearish I would love to hear it. Sometimes our own bias can blind us from big opportunities. And as much as I want to say that I'm a good enough trader to not allow that to happen, it's simply not the case yet. Good trading.

Glad to see this finally come up. I've been very interested in combining other types of analysis along with candlesticks such as volume and MP. Heres one quick trend play that you could do using WRBs. As we know, typically a WRB is followed by an easy short to scalp, but if you use volume with the WRB then you could probably get some nice setups. 1 - As you can see we start off with a WRB, and lets say you want to go for a quick short at the exit OR wait for a candle to go short. For textbook style play let's just say we went short at the close of the spinning top that immediatelly followed. This is an ideal setup because the volume of the spinning top is nearly identical to that of the WRB. This will make it easier for some of the newbies. 2 - Two candles later we have a test of the WRB open or low. You can exit here for a quick profit or you could see that volume has been declining. We have smaller bodies and taller wicks, but the lack of volume would tell me theres no interest in demand as it is quickly shoved back down. So we could move our stop just above these wicks to protect our profits. Then we get a rise in volume, and a candle that breaks through those lows this would be our confirmation of a new trend. 3 - Now we get a hammer and volume as been slightly rising. Since there is a nearby support level we may be tempted to exit this trade and take the hammer. If we did that, we still have a nice profit and obviously the hammer would have failed. No big deal, thats life. OR we could have waited until something more meaningful to a trend appeared like a MA crossover, oscillator, or a hammer with STRONG volume. For the sake of hindsight and textbook style play let's say we waited. A few candles later we get a hammer with STRONG volume (similar or more to the WRB). That obvsiously screms that buyers are present. We happily exit the trade and go the other way for our hammer setup, and walk away with a new sum in our bank account. Now to be fair this isn't a setup where you see a spinning top after a WRB and assume you can nail near 20pt ES trade. BUT if you started with a simple 2pt play and closesly followed volume you could have turned that into a nice trade. For the sake of argument and realism, here are a few losers in the same day. Heres another play we could have used. 1 - Clearly defined hammer after a WRB and volume is very similar. 2 -Next we get a follow through WRB with strong volume. Typically I think we would have taken the hammer and a quick profit with the WRB and been happy. Or we could let volume tell us that buyers are still heavily present in the market and hold onto the trade from here. 3 - Our trade continues to move higher and we eventually test the long term MA. Knowing this is a counter trend play I think most would be disciplined to take their profits here. Just in case this doesn't happen the high volume inverted hammer would tell us the bears quickly counter attacked with equal force keeping price down. So you could take your profits at the close of this inverted hammer and still had a healthy trade. Or else you would have waited for the spinning top with low volume to tell you the move was over. So overall I'm starting to see a pattern of nice candlestick patterns following WRB with EQUAL OR MORE volume. How a trade could possibly setup. 1 - Reveral candle after WRB witih equal or more volume. If I'm not alread scalping for a quick reversal of the WRB then enter on the close of the reversal candle. 2 - Wait for a signal such as an oscillator, moving average, or another candle (with strong volume like the WRB) to exit my trade. I think this would be a trade that would have to materialize, I don't think you could just see it happen in real time and take it. But I do think it would go along with what you said earlier about taking a typical setup, and using volume expand on it and capturing a bigger move. I think this is a good start though. Once I feel more comfortable with my knowledge of MP I would love to start a thread combing candlesticks, volume, and market profile into one setup. I believe if we could blend a lot of these great analysis together we could have an extremely efficient trading plan and one that we could use to expand our careers. I also don't think volume is something that would complicate our plan, just compliment it

It depends on what I'm doing. Equities, I usually buy for an extended period of time. I tend to lean more towards fundamentals. For example I've started getting into some risky home builder companies and other unfavorable sectors. This requires a lot of research beyond just the company and I time my entries on TA. But for everything else, I solely base my decisions on technical analysis. Why? Because I'm good at that and I trust my analysis.

Thanks WSAM, that actually does help a lot.

I scored 126, which I think is low for me. I didn't get the full report, and I'm starting to wonder if I should have.

Oh, I knew you were joking. I just threw it up to show that if you follow your plan you can come away with good trades. It's not too difficult with options when you get volatility like this. I prefer swing trading options for two reaons: 1 - I know much I can lose, therefore I feel like I have a better control for risk management. 2 - There are several strategies that you can utilize to make the most out of a trade. I am happy with the gain, but at the end of the day it's just a winning trade. I am more proud of the fact that I was able to stay flexible and take advantage of what I saw on the charts instead of having a specific bias and missing an opportunity.

I figured you guys didn't need to know how much money I had in the trade, but here ya go

Guys, let's leave the Ronin bashing to his own journal thread. If you don't believe him, just ignore him So far my puts are up over 100%, thinking about taking a little off the top here.

I decided to go ahead and do some more analysis tonight. Basically I went back several years and looked at old trend lines and thing's like that. I like to look at charts like this when I'm unsure of what to expect. I know I shouldn't expect anything, but I feel like I get a more clear picture of the market. One interesting thing I noticed on the ES was we touched old highs. So on a longer term timeframe it almost looks like a test of old resistance and normal rejection. If the old support trend line holds, then that would eventually lead us into a right triangle formation. Of course that would probably take another year to happen, but it's something to be aware or. First I want to look at the daily that we all see everyday. As you can see we have simple rejection at resistance but with very light volume. The 21 EMA also holds as support and the MACD crossover. So far, bullish. Now using the same chart, but dated back to mid 2003 we can see we had a very strong bull market. The trendline held very well for several years. In early January that trendline broke and basically all hell broke loose for a few days. The market rallied back to the new resistance line and thus far has been rejected. I have always said that bear markets are known for steep sell offs followed by fierce rallies. Now, slightly bearish. Now onto the weekly, I think we could call the 5% decline in January a day for price to find a low and establish a long term weekly trend line. The "shorter" term trend line was broken and is now being tested and rejected. 1,300 was tested and proved to be support, as you can see that price poing has served as support and resitance many times in the past. It almost looks like we could be setting up for a long term right triangle formation on the ES. Now onto the YM. We have the 8ema crossing over the 21 ema which is bullish. The biggest test is 12,800 as that is old support and should now be new resistance. The longer term chart says something different. The trendline was broke back in October and acted as new resistance in December. We can then take old highs and lows to make a new trend channel. Notice how volume increases dramatically as the lower trend line is tested. Also notice how we are against the trend resistance line, which also happens to be 12,800. Coincidence? Now looking at a long term weekly chart for the YM everything looks fine and dandy. So I wouldn't be surprised to see price come back and test 11,500 and possibly even 11,000 for the long term support line. Simply put this could all be price adjustment from such a long bull run. As we go further into the future more money will be made and as time tells us that moeny will find it's way into the stock market. Over the last four years we have seen a huge bull run and a lot of new millionares to follow closely behind. Eventually as we all know price gets too high and demand gets shallow thus price has to find new value. I believe that's what we are experiencing and I think it will continue for some time. I don't fall for the coming crash or any of that BS. I think I might mention that I do own DIA puts, I bought them at the open today. Short term I'm definitely cautious and leaning bearish. But for the long haul (10 years) I'm very bullish and I think now is a good time to pick up assets that have been beaten to extremes. Remember to stay flexible and don't get emotional. Don't make the same mistake I did and want the market to go a particular direction so you miss out on opportunities sitting infront of you. Hope it helps, and good trading.

So we finally got our push down today but with very little volume. I see a smaller body that would normally raise a red flag since it was at resistance, but I'm a little torn with the light volume. What do you VSA guys say? I would have used a YM chart but the candle came up weird on eSignal so I used the ES instead.

I just downloaded opera. It's pretty cool, I like the speed dial aspect. But I'm not 100% sold on it yet, I'll have to play around with it some more.

Thanks James! Your input is greatly appreciated since there is a lot of discussion around the recent rally.

:rofl::rofl::rofl::rofl::crap:

Both teams played great, no doubt about that. It was a defensive game, and I am sort of upset at the bad press the Patriots defense has received. Both teams played a great game and it came down to the last drive of the game. I hope a new rivalry was born, we already have Yankees vs Red Sox and I would love to see Giants vs Patriots.

I'm glad I stuck by my Giants.

Exactly MC, I just try to play the charts and I'm more of a short term thinker. I don't understand VSA like some do so some people will see things completely different then I am so I am all eyes and ears. For a while I have been bearish mainly because of the volume slowing on rallies and building on sell offs. But I really do think these rate cuts will help out tremendously over the long haul. I'm not calling for new highs or anything.

Heres my view. The weekly and monthly charts look bullish to at least 13,000. We had a head and shoulders or double top on the YM which made the target in the 11,500 - 11,800. Price hit those levels in the wick we had a few weeks ago, it doesn't matter if price hung around those levels or if price touched them and took off. What matters is price was ACCEPTED at those levels, then moved higher. I expect price to test the old support level (which would now be resistance) before moving lower. Volume may be drying up since the sell off, but if you look at where we've been volume is still very heavy. Looking at the INDU monthly we had a small box play, and that target was hit as well. Now we have a hammer with heavy volume which is bullish to me. Unfortunately using candlesticks we cannot come up with a price target like we could with more traditional TA. But I think it's safe to say we will at least test 13,000 before we test the old lows. Not sure if makes any difference, but gold looks a little bearish here. I think if the market sentiment was to keep falling gold would be a safe haven and would look bullish. As you can see in the chart, we had a bull flag that broke out. Once the target was hit we got a gravestone doji with strong volume, this tells me the sellers came in and price wasn't ready to continue moving higher. Dojis are powerful signals in up trending markets. Again, that's my own homework a long with some other things I've been reading. But if you do your own homework and come up with something different then trade that. Good trading!

Eva since you're trading stocks, have you thought about signing up for IBD? You might have already talked about it in a previous thread, I'm not sure. But it's definitely well worth it.

The only thing I would recommend is wait until you get a better risk/reward setup before going short or long. But if this setup was in your trading plan and you took the trade, then that's what matters. Each individual trade is irrellevent over the course of your career. Good job! :thumbs up:

So Abe, now that you've been stopped out of this trade what have you learned?

James, how would you interpret the most recent MP chart on the YM? From looking at the stock chart I would say theres a lot of buying and value is slowly rotating up. But could there be a conflict between different timeframes, say short time frames selling the market and longer time frames buying? This is just a guess...