MC

Responding to the 2 replies to my quotes... 10 YM points I would consider a realistic stop in the context of being placed outside a balancing period. When I say tight stop, I'm referring to the people that will get long at a test of the 50ma and have a 3 point stop. That kind of thing, which I've tried myself early on before I saw S&R in the right light. :crap: Now that I'm given your criteria for stops, and with my addition that one must understand how the market moves and balances. Assuming one has tuned their psych properly I would say YES the market can be very VERY predictable. Realizations I've come to, though I am still developing the psych to exploit my knowledge. 1) Big money runs the show, follow their lead. You will profit by trading with them, not against them. 2) The market moves on trending and balancing periods. Prey on the trending periods since they are fueled by emotions. Use the balancing periods to watch what's unfolding or to get an entry near the congestion lows in the direction of the prior direction (assuming there's been no trend changing professional activity).

I'm going to bow out of the discussion. I'm expending too many of my limited braincells. :o

I'm saying it's possible but it's nothing but luck if someone predicts to the tick a high or low. It's not a consistantly repeatable, bankable feat. IMO one should acknowledge what they DON'T know above all else. I think a directional bias with realistic stops is practical. I would define a realistic stop as one just outside the balancing range to allow for testing of the extremes. If you can't afford that level of stop you're not being realistic IMO. I'll be honest, I don't even remember how I answered the poll. :o Edit--- I picked number 2.

I think that's a dangerous way of thinking about the market. We all speculate and expect to win. But it's how some handle winning and losing trades that makes the difference. We will be wrong at times, it's the nature of the beast. So to think we have super human prediction powers is too cocky for my liking and would lead to stress and emotional trading IMO. In a simmilar thought, most any WRB seems at least partially driven by a squeeze of those on the wrong side of the market. There's always people on the wrong side of the market and their pain tolerance is probably defined by the balancing periods price range. I do realize they use WRB to blast through supply zones quickly and am thinking the squeeze adds to the effect. Any thoughts on this theory?

Very true, almost anyone can pick a direction correctly (though they end up making things harder than they are). And most traders with moderate screentime can even see the general S&R levels. But to expect to the tick predictions is something even pros can't provide. It's a losing concept, trying to impose your limits and expectations on millions of other market participants. You might be able to park a H1 Hummer in a 1 car garage a few times but it's not worth the stress. Don't bother trying it if you like sanity and your paint job. That's what people are doing with super tight stops. If you need to run that tight a stop you're playing outside your accounts risk tolerance and/or you don't fully accept the risk of the trade. Widen the stops and park it in a 2 car garage, it's way less stressful and surely more consistant. And driving a Hummer, with the cost of gas you can't really afford to lose money on the market. :o Really the main key is to go with the flow and don't try to out think the market. Add to that fully embracing the risk of each trade and you really shouldn't be stressed at all even if your stopped out.

Pshewww, I'm glad I'm in good company then. It feels good to finally have things click. Still lots of work to do but I'm not even in for 2 years yet so I'm an infant. Again if someone feels I'm hijacking let me know. This was my trade from yesterday, it's not the END of the trend so much as knowing when the broad trend was holding up. They were shorting rallies and this was a prime setup I took (still paper trading though I have traded live for about a year prior). Curious if anyone has feedback. Thanks again Added--- An afterthought now...I was going to say the 200ma on 5 min was going to have price gravitate and test, though I know it's all BS now after the fact. Last edit--- Of course the above is out of context, one must look at Mon-Tues like we talked about already.

I wasn't looking at yesterday for resistance so much as the weeks beginning chop. I cannot tell if your being positive or negative towards my posts quite honestly. Are you agreeing with me or correcting me? Perhaps let's move to PM if you want to advise me, I feel I'm hijacking the thread now as the trade entry wasn't trend based, though my exit will be. Thanks, MC

Simply...I try to read the psych behind the chop forming and the candles reaction to the professional volume (not retail traders) at what I defined as key resistance. It's an odds game and I can guarantee nothing just as others cannot. As good as one may be they're just a speculator along with the rest of us. Unless you control enough money to move the market that is, if not you're retail in my eyes. I had both going on, I first saw a bit of psych I thought I could exploit. Then I picked entry and stop/target orders based on what I believe should happen. Of course theres the last lot, a free trade should it do something drastic.

Based on my UVOL/DVOL setup (http://www.traderslaboratory.com/forums/f34/nyse-up-volume-uvol-down-volume-4019.html) I was pretty damn sure there would be a upside. Of course this post after the fact can be questionable. I could dig up a chat/IM with a time stamp but I have nothing to sell or prove. The above being said where I expected an upside, I'm now paper short the SPY as it seems to be getting sold at these levels. This is 1000% against what the UVOL is telling me right now but I think they are selling into the rally so their sales show as UVOL. JMHO Added--- About $123 for my cost basis in case that comes into question.

We all bring knowledge to the table, lets keep it friendly fellas.

Todays installment.

You doing any mentorships? You sound like a more seasoned version of me. I believe we make things way too hard, and I love the psych behind the markets. That's drawing me to it as much as the desire to profit is I think. Here I get to practice like a shrink but without the long ass schooling. Great post, as always bud.

Below was a 5 minute chart. Walt wanted to see the 1 Minute, I can only really do 1 day to be able to keep it reasonably viewable. The 1 minute can improve your entry by showing a more granular look at just when the crossover happens. This is a simple way to do so many things. I don't care what your style is, IMO this setup can benefit your timing and overall market awareness. Let's open the floor to discussion at this time. :helloooo:

Price action always rules, but this gives a good glimpse into the health of the markets IMO. So we already know nothing but price action is always 100% correct, otherwise we'd all be rich. But if you look at UVOL/DVOL expansion or contraction in relation to each other you can often get clues on which is the right side of a trade. Background weakness/divergence combined with a crossover can be a VERY powerful tool, as can just a simple crossover though often to a lesser extent. Notice Thursday, wicked divergence, basically hidden selling. So you have UVOL smashing DVOL all day but most the day was consolidation. And it ended with a surge of UVOL but very light price action. I'd like to have more a discussion on this and have it centralized, so though I've posted these charts before on other threads, at Walt's suggestion I'm making it a dedicated thread and have brought in my prior charts.

I'm actually going to be having surgery on my arm shortly and can't commit to even that amount of work right now. When I'm all recovered depending on my work situation then I can commit more time for the effort. I will start a thread (great idea) and see what I and others can contribute. added--- http://www.traderslaboratory.com/forums/f34/nyse-up-volume-uvol-down-volume-4019.html#post39886

Here ya go Walt. 1 Minute, I can only really do 1 day to be able to keep it viewable. Hopefully this gives enough of what you were looking for.

It's NYSE advancing volume to declining volume is all I know. I presume it's volume taken and added on the advancing issues and then the volume added on declining issues which I also run a comparison for. Maybe the below link gives some insight to the uvol/dvol thing? http://finance.yahoo.com/advances No idea how it's calculated to be honest. I'm a simpleton and am trying to keep it that way. Like Walt's currency thread, I really don't care much about the why it works, only that it's working and repeatably. I suck at math and equations so I'll be of no help there.

If you're willing to share I'd be interested in the excel version as well. Thanks to all you guys for your insight.

Yep. Very good depiction of just lower volume tests not always being reliable by themselves. What do you add to the picture generally? S&R from a broad timeframe like weekly maybe?

Which BTW, your post inspired me to look back at that section and brush up some on formations.

Very true, still I myself would let the trend prove over. You might perhaps scale out some at the prior extreme with less volume, but I would still hold some unless you are up grossly in profit and you have captured the bulk of the move, especially near EOD. Range testing is very accurate, I watch for that all day long.

You're a crazy, crazy chimp Walt. You gave me the motivation to do the chart justice. Click refresh and you'll see a much better annotated chart, I should have annotated in the first place but it was late. Think or Swim is somewhat limited as is my programming knowledge. I don't see any option to make uvol all green since it's the primary ticker. Ninja or others would be simple to change over. I'd also love to see someone show the sma on the index, I have no overlay ability on subcharts.

Kind of an interesting view. On a lifetime yearly chart the last monster bull run didn't even flinch, nor did it retrace even to 50% on the Y2K "crash". I guess the question is how do fundamentals make this exponential market rise look? IS the market overbought up here, or is there still room for growth after such a big long run? We did break the range and have tested the prior swing level, though we aren't even half way through the year so the test means little till it's closed. Another thought that made me LOL was the consolidation from 1965 through about 1983. All this talk of the market returns x% per year. And the 401k hype that you put in x% of your check and you'll retire a millionaire. Who the hell are they fooling...well how about most of working class America. :crap: I mean of course it all depends on where you began investing, and where you cash out, and everything in between. But the pipe dream of the market always giving gains is anything but a guarantee, there's a 20 year span that might not have done much for your nest egg. Ask those that tried to retire after the Y2K started it's down move. How many put off retirement cause they were down so far that the simply couldn't afford to retire at that point. How many ran and sold in '87? That looks like not even a blip on this view of the market. The market is bigger than most of us think about, myself included. All it takes is a gander at something like this chart to really make you think about your daytrades or even swing trades. We get excited on some of these 50 point gaps, but in the bigger picture its a tick. You can do this on ANY timeframe, and this is why it's important to roll back and look at the bigger picture. All good traders seem to use multiple time frames, and this is partially why. This is the equivalent of living on the ground all your life, and you finally take a plane ride and see things from 10,000 feet. You realize how small a speck you and your house is, and how little your life means in the grand scheme. Enough of my ramblings, just wanted to provoke some thoughts and discussions.

For you...anytime. I believe you used to use Advance/Decline. I run that as well as the UVOL setup here. I run TRIN for the extremes and VIX for an inverse look at the markets. Price action still rules, but these give a good glimpse into the health of the markets IMO. So we can see here nothing but price action is always 100% correct, otherwise we'd all be rich. But if you look at UVOL/DVOL expansion or contraction in relation to each other you can often get clues on which is the right side of a trade. If you have a bigger chart I'm sure the moves on the indices are even more clear in relation to this. I had to have things somewhat scrunched up to get it to post and capture right. Added--- Notice Thursday. I just saw something I didn't catch before. Wicked divergence, basically hidden selling. So you have UVOL smashing DVOL all day but most the day was consolidation. And it ended with a surge of UVOL but very light price action. So there ya go, there's another use for this that I'll add to my bag o' tricks. Enjoy

I love the candlesticks and TL's section for them. My disclaimer is that a candle in isolation has never worked for me. When I add them to key levels and a sprinkle in volume they bring much more focus to the psychology behind the action.