MC

I'm not a coffee drinker at all, tea daily but not till after the markets closed. I find after I ride the bike and get my heart rate up I actually get into a zone which is odd. I would think being slow and calm would be better for focus but I'm the opposite. I always thrived on pressure though, and I perform best when my back is to the wall. I was a skateboarder so the pressure we put on ourselves can be immense. It's that individual sport mentality that I feel will help me succeed in something like the market where NOT fitting in is cool.

My mind races often, I can slow it down and seem to have good mental control. I can focus on one thing if I really try, it has to be something I really want to focus on like a chart. I try to feel the market participants and what they were thinking as the auction shifts its equilibrium. The more I go down the road of psychology and it's role in the markets, the more in tune I'm getting with my own psychology. This has been quite the journey for me. I'm gonna look into Holosync and some more on NLP as well since NLP has come up in my studies allot.

That is an awesome quote!

Congrats...the more lightbulb moments we have the closer we are to being consistent and making profit.

I'm newer, and like BF said...it's a stage most probably go through. I went through it not that long ago actually, so what BF is saying is fresh in my mind and 100% true. Divergence is a hindsight indicator that looks so tasty till you've tried it live. It may work for some, though I think it's a mainly a good filter for warning signs. You need a trend break or some other volume and candle signals to confirm the trigger. 1) A trend break with volume gives a good signal with a tight stop...with the stop being the trend getting re-pierced. 2) Divergence with volume backed weakness and say a doji or hammer candle is another good, maybe slightly more risky entry. Still a tight stop being just above the high of the weakness candle. I am so close to overcoming some of these last stages till I'm ready to profit, I can just feel it. Who here with a profitable track record wants to adopt me for a short time? :o This is the most challenging and at times frustrating thing to try and learn. I've grown so much mentally and emotionally from all the learning and taming of emotions that even if I wasn't to profit from the market, I'll profit from my new closer to zen like mind set.

It can be, or not. Divergence in isolation means nothing in my experience. Depending on the buying/selling pressure, sometimes divergence can help time entry/exit I suppose. I've seen divergence work with 2 waves, 3 waves, 4 waves. I've also watched it completely fail and go on to be proven wrong many times.

These deep thinking threads always make me LOL. Not that they are bad, these really get us all using our minds which is great. It's just funny to hear all the opinions fly around and sometimes the debates that ensue. I probably would not have done that post about 2 chains of S&D without this fire under me. That 2 chain theory is one I've had for awhile now and just decided to test the waters here. As for the basketball example, I have a twist that works for my view of the market... You start with a basketball from Walmart bought at the reasonable retail price of $10. At some point the owner signs the ball Michael Jordan and claims to be selling a MJ signed ball. The bidding goes up because what was worth nothing and was common, is now all the sudden deemed a rare piece of memorabilia triggering peoples emotions and greed. As the bid goes higher so does the interest in this item, it must be worth even more otherwise why would people be so interested right? The advertised price is now extreme and the original seller, knowing it was a fake, prances away with $990 in profit. Now the new owner only bought it based on his greed, so he turns around to try and sell it for $2000. Only now there is no COA (certificate of authenticity) and people are questioning the validity of the signature. Now his offers are now in the $500 range, because there's still a slight chance it's legit and greed tells bidders they could still resell for profit. Fast forward...it's been exposed a phony signature. The bid collapses and now is back to being worth $10. The owner tucks it away for a few years till he has a garage sale. There someone buys it for $20 despite being told it's a fake. The seller is just happy to get some money back, and the shady buyer knows the signature is passable. The new owner opens an auction with new naive customers who know nothing of the prior auction. What do ya know, he sells the ball for $1000 again, and the cycle repeats over and over. Of course there's allot more in the markets movement than a clear cut point A to point B. This is a simplistic look at things to say the least. One thing to take from this may be that what transpires in the middle is essentially noise and greed driven. The greed portion can linger on for quite some time as long as the hope of selling for profit is around. Now on the other hand, the extremes of the range often have quick reactions thanks to fear being the stronger of the emotions. Another reason I feel this is a fair depiction of the market is the fact that the ball holder creates the bag holder. This market is not a fair game, there is deception at work. The "smart money" in the market preys on "dumb monies" greed and fear. "Not fair" some would say, well no, but what in life is fair? :o

I didn't have time to reply yesterday, sorry. I'll say this I scaled out 1/2 and moved the stop to $39.75 on the last half. $39.26 is my cost basis. An aggressive 1st entry and then a higher scale in as planned. Like I said though...again I'm on paper guys, just to be 100% forthcoming.

Here on TL there are so many opinions and styles that we can't all agree. If someone brings good info to the table for MP for example but hates Wyckoff, and they stir the pot in that thread its a good banning tool. If they stir the pot all over though they should be banned altogether. LMAO at Ed "I'll get my coat" :o

I'm waiting for Vbulletin to create an add on that will make everybody get along and be equally mature. A bit of a pipe dream but I am a dreamer. :o Is this something only setup for admins I would presume? Have a good one James.

I can't lie...it's cracking me up that NOBODY has chosen number 3. :\

Volume was moderate on the bar so it did have some buying pressure. Time will tell, I have the stop in GTC and embrace the full risk. (It's paper but for all intents I would trade this the same live at this stage of my education)

This is a crucial distinction!!! Very well defined stuff here, good work as usual sir. We're trading/investing in a pretend slice of a company or contract with the hope that enough people will be joining us on our side of the see saw to profit. The issue with this see saw theory though, is there really are 2 supply & demand chains at work in these non tangible markets. Since there are no hard goods, the scales can be tipped or manipulated by those with deep pockets. Maybe to a lesser extent on futures with no real limitations on open interest. But certainly heavily with stocks where there's a set amount of shares to soak up before you're in relative control. So instead of this... We have this... I'm not saying it's a must we over complicate things as a daytrader or even short term swing trader. But in general it's very beneficial to learn to read the accumulation and distribution patterns of big smart money. I'm sure since this dual S&D chain is nothing I've seen talked about, many will think I'm a bit crazy. I won't argue that, but I will argue that there is absolutely 2 chains at work in the speculative markets. :o Chain 1 (Smart Money)... 1) Smart/big money accumulates low (Chain 2, step 2), in gradual increments in the downtrend (once they start to see a value imbalance and the dumb money begin to throw in the towel). 2) A large portion of the float is now in strong hands and an uptrend ensues with the occasional balancing period or correction. 3) Once they're done with the uptrend, they then distribute (Chain 2, step 1) at the top. This causes a lack of significant, sizable interest which is needed to keep the ship afloat. Chain 2 (Dumb Money)... 1) Retail/Dumb money accumulates high (Chain 1, step 2) often all at once due to the emotion of the newly advertised high prices which appears to be a big bullish push. 2) Some realize the gig is up quickly and promptly head for the exits causing a sharp move down, setting off a new downtrend. 3) The remainder become bag holders and will gradually exit until their individual pain threshold is hit and they finally begin selling to smart money (Chain 1, step 1). Rinse N' Repeat. All JMHO, but this is how I look at the market at this stage of my learning. To me thinking there is only one S&D chain is like thinking the markets operate in a vacuum and that they are tamper free and pure. I feel the better I get at reading the volume based disparities the closer I am to riding the trends on the coattails of smart money. Disclaimers: There are many additional nuances, like deep corrections with no distribution or where a breakaway gap is used to turn weak hands into strong hands, to name a few. I'm not saying all retail is "dumb money". There surely is allot of smaller traders that know how to read the writing on the wall. (Many of whom are here on TL)

I have a plan for 1 scale in and then a tight stop since I'm being aggressive on it. Lil pop on FOMC but light volume so far. Thanks for the input.

Broken head n' shoulders do the downside. Light volume on the break so do be cautious, but I'm in for a paper short on this. Weekly also seems to show rejection on the attempt at a new high. IMO of course. Thoughts?

I do the same thing on each chart, so I'm consistent in my approach to trendlines and what I call channels. To me a channel has nothing to do with a perfect parallel line or certain angle etc... I just want price to respect a range on 2 ends of the market and repeat enough to tilt odds that that range will hold up at the extreme ends of my "channel". I don't go looking to make lines fit my bias, I look for the levels where I feel most people are watching based on repeated bouncing AND closings at the same level. On macro and micro charts it's often going to appear I'm fitting when in reality its the charts shift that makes things look tweaked out. The confluent levels are the ones to pay attention to IMO. Multiple timeframes matching means more eyes on the same things. As for the hammers and candles at extremes...I find those incredibly useful on intraday. Daily at times yes, but less often. Daily and weekly I find it hard to trust the candles individually so I feel more free to improvise on them or do use groupings. I heavily rely on horizontal support and use diagonal to provide additional backing if it fits with no pressure. No square peg in a round hole for me. To expect perfect textbook examples with millions of opinions at work is forcing things IMO. I'm a simpleton, or at least I try to be. I don't want to make something thats psychology driven all about mathematical angles and parallels on the dot. I'm a rookie still so wtf do I know. BTW...nice volume kick on the DIA IB range extension. Who's ready for FOMC???

I do. If you think about it, the wicks are often noise fueled by emotion. Quite often the extremes are just the retail suckers range. P&F is based on close alone, as are line on close charts. Many people I've met look at close only based on my few years in the market. I try and mesh the 2 styles to something that fits my mentality. It's not unreasonable in the market to think outside the box or the textbook. I'm trying to feel the markets psychology when I draw lines. And because of this I often will ignore wild wicks that were irrational blips on the screen. I try to find the rational action, and then mark where it seems to almost act magnetic and suck prices to the same level over and over. It works for me, and I don't expect anyone to accept nor follow my input. I simply put my opinion out there as food for thought. All IMHO, and I'm always open to hearing any thoughts on why what I do is not a sound practice. But if it's textbook chatter I will either dispute or ignore it. I only want to discuss personal thoughts from experience, not "because I read" stuff. (I'm not saying thats what your doing FW, I want to hear more of your experiences) MC

TA is an art, not textbook. So yes I'm using my eyes and instinct to put the lines where I think they fit and where the market participants are looking. Weekly 200ma is what I use and others have as well...the market bounced there 2 times already. I use weekly as a way to filter the daily noise personally. It's worked for me many times thusfar, so I guess we'll need to wait and see.

The bigger picture, why can it be important to not solely focus on micro levels and step back sometimes? In addition to my micro level chart we can now see a more defined channel. Plus much more is visible that is acting as support now. So, we have the downtrend broken and testing (from prior chart), 200ma and a now an added swing high as support. How about a trendline from all the way back to October 2004? CHECK! This is a crucial but fairly low risk level to get long IMO. If it fails to hold though look out, we could hit 11k fairly quickly if this stuff gives way. As always JMHO.

I called for a pullback test back on April 18th. I never thought it would have went this way and taken so long, but here is our test finally. :o Macd and macd histogram divergence on last weeks close, which is lower than the prior closes. 200ma is double support backing this trendline as well. Could get interesting on any hint of a rally. JMHO

Since the YM only has 1 tick per point, I prefer to look at the relationship point for point myself. ES: $50/point, average range/day = 20 points = $1000 YM: $5/point, average range/day = 200 points = $1000 So the max gain/loss in theory would be the same on the ES and the YM using your daily range calculations. But of course that's assuming you buy/sell the daily extremes. The reality is $50 per point can chop you up quicker than $5 per point. So the ES is great additional leverage if you are a profitable trader. If you're not yet profitable and consistant the ES could chew your equity up quicker. Also I've only traded the YM live, I've heard and noticed on paper how the ES fills can be tricky at times due to the depth of market. DOM can be a double edged sword it seems. Great liquidity if people are spaced out far enough, harder to get entry or exit if everyone is in line at the same price level. Any thoughts on that fellas?

The only way to win longer term is by being consistent on YOUR execution of a legitimate edge. I'm still a rookie (less than 2 years) but that's the conclusion I've come to.

One of my heroes. Sad day, but I thank him for all he did to further free speech as well as making us laugh. RIP

http://tradersbase.com/mcs-musings/a-new-thread-to-help-usher-a-new-era-in-our-country/index.html Who wants to rant about the lending situation and/or economy? :helloooo:

Speaking of TTM...have you all seen this. The are a marketing machine, though I doubt they would sell anything that works well enough to live on. :rofl: