Real Time Price Action- Clue to Puzzle?

[DbPhoenix 42]

Thank you for a very informative post. Now you've made it clear that there is S/R all around the place on different timeframes. But this morning (and I don't know how much attention you give to premarket action) the Nasdaq has dropped below 1710. If I look back to the left of my chart, I don't find much support now... how do you determine targets for intraday trading when there is nothing but -how shall I put it- "air" in between here and much lower?

 

I'm not real good at jumping on moving trains, so I stand aside until the market has found support. But that's not for everyone.

[zeon 10]

I'm not real good at jumping on moving trains, so I stand aside until the market has found support. But that's not for everyone.

 

I see, so you are not trading today then?

[DbPhoenix 42]

I see, so you are not trading today then?

 

Not until the market tells me what to do. This chart, posted earlier, gives me a framework, but the market may find support in several places before it hits 1650. Or it may build a base here and rally. If I see a setup, I'll trade it. If I don't, I'll just watch

 

[DbPhoenix 42]

That's all very nice on the NQ, which I realise is your choice to trade. This scenario did not pan out on the YM, or ES. I was waiting for a test of R and price didn't even come close after the open. ( my problem of course ) But that's the way it goes............. Thanks for your detailed charts.

erie

 

 

Depends on where you look. Something for you to play with, anyway.

 

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R for yesterday, in other words, can be found anywhere in this zone. That's where the RT PV analysis comes into play. If P and V aren't providing any clues, then making a decision is that much more difficult. But at least one knows where to look for them.

 

 

 

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[zeon 10]

Not until the market tells me what to do. This chart, posted earlier, gives me a framework, but the market may find support in several places before it hits 1650. Or it may build a base here and rally. If I see a setup, I'll trade it. If I don't, I'll just watch

 

 

Hmm, not a bad way to trade I guess. In the past I used to think that trading was about making 10-20 trades per day minimum. After all, you read these posts from other traders who say they had "a very busy" day. But you seem to be on the opposite of the spectrum. Whatever makes money, I suppose. I can see the benefits of trading less though, less stress and more time for something else.

 

Meanwhile, while we were all looking down, the market rallied us back into yesterday's territory. Isn't that significant? It looks like some sort of false breach of support now. In other words, I'm confused.

[email 10]

Hi email, I don't think this is the right thread to be asking about bid/ask volume, so far at least it hasn't been a topic for discussion here. I will have a go at addressing your question but if posters on this thread prefer we can move the topic to a more appropriate thread OK?

 

Firstly, can I ask what instrument you are trading that is showing this behaviour, and what software platform and data feed you are using? Sometimes the data feed especially can provide suspect information. This is a starting point for looking at your question.

 

Hi mister ed,

 

Many thanks for your reply; I use sierra charts with transact futures and also recently started using Tradestation 8, I am slowly getting familiar with Tradestation so to make the switch.

Cheers,

email

[DbPhoenix 42]

Hmm, not a bad way to trade I guess. In the past I used to think that trading was about making 10-20 trades per day minimum. After all, you read these posts from other traders who say they had "a very busy" day. But you seem to be on the opposite of the spectrum. Whatever makes money, I suppose. I can see the benefits of trading less though, less stress and more time for something else.

 

Meanwhile, while we were all looking down, the market rallied us back into yesterday's territory. Isn't that significant? It looks like some sort of false breach of support now. In other words, I'm confused.

 

Do you have a setup?

[zeon 10]

Do you have a setup?

 

If by setup you mean a strategy, then yes. But I can only put it into motion when the market acts according to my scenarios. And sometimes it does, but a lot of the time it doesn't and then I need to re-think how I'm going to approach the market. Mainly I'm looking to sell resistance levels when price has failed to break through and is coming off. I like to see "shooting stars" at resistance, I know this whole concept of representing bars isn't correct because price is a continuous flow, but I'm not yet capable of identifying the dynamics behind a shooting star in real time. I tend to short on other bars too though. For example when I see an upbar on huge volume, followed by a downbar on very little volume in comparison to the previous one, it usually means price will start falling.

 

Hope all of this does not sound too ridiculous... it's been working okay for the last couple of months. I have other things which I pay attention to, especially patterns like triangles that I read about in Bulkowski's Encyclopaedia of Chart Patterns.

[DbPhoenix 42]

If by setup you mean a strategy, then yes.

 

Not exactly.

 

From "The Trading Journal" post to my Blog:

 

Therefore, focus on the setup. One setup. Determine its characteristics, find the markers of buying and selling interest, buying and selling pressure, buying and selling exhaustion. Define it so specifically and so thoroughly that you can recognize it without any doubt whatsoever in real time. Decide provisionally where best to enter, what the target ought to be, where the stop should be placed, and so on. Only after the setup is defined and tested (and it can't, ipso facto, be tested until it's been defined) can one even begin to think about trading it with real money, much less trading multiple setups. Attempting to shortcut this process merely expands the amount of time it will take to develop the necessary skills. Nothing is gained by painting the house before scraping it, cleaning it, and priming it since you'll have to do it all over again sooner rather than later.

 

 

The strategy is developed after you've defined and tested the setup. Otherwise, you're more likely trading via feelings.

[zeon 10]

The strategy is developed after you've defined and tested the setup. Otherwise, you're more likely trading via feelings.

 

I believe the description I gave about the setup tells is quite clear about what it is I'm looking for. The problem is, sometimes it doesn't occur whole day. Then I sit there for 6 hours in front of the screen while I have nothing to do. Your mind tends to drift and you want to put a trade on for the sake of it. But I know the exact pattern I want to see and when it does occur it often yields good profits. It's just that I feel I should be doing more instead. How do you manage to take a trade so early in the day? Sometimes the pattern I'm looking for occurs in the first 30 minutes, sometimes in the final 30 minutes. Sitting on your hands all that time can be a hard thing to do. :missy:

 

I've attached an example of today, I shorted twice. First one got stopped out, second one I am still holding as we speak. Second short was better as the volume on the following bar was significantly less in comparison to the "shooting star".

 

Edited March 7, 2008 by zeon

[DbPhoenix 42]

So why trade any further?

[zeon 10]

So why trade any further?

 

I won't after I have closed my second trade. Today I am lucky though, having two trades so early. But these days are rather rare... and like I said, my first trade was a loss, so need this to be a winner, big enough to make up for the loss.

 

There's no knowing if I'll have a trade soon or later each day, or even have a trade at all. I find it very hard to do nothing for hours to be honest. I'm wondering how other people do. As I am trading of 3-minute charts most of the time (or 5-minute) I can't really keep my eye of the screen for very long or I might miss a bar.

 

Edit: just closed my 2nd trade for 8 points.

[DbPhoenix 42]

If you're trading shooting stars off resistance, there's no need to do anything until price nears resistance. Set an alarm.

[brownsfan019 17]

If you're trading shooting stars off resistance, there's no need to do anything until price nears resistance. Set an alarm.

 

Exactly what I was thinking as well DB. As a candle trader myself, that's what I saw - some good ole shooting stars.

[AgeKay 10]

Correct, sorry I should have been more specific. The difficulty with the DAX following the ESTX50 is that many people are too slow to implement it. I trade through a fixed leased line to the Eurex, but I'm still never going to be faster than a local.

 

Anyone trading out of Europe is looking at around 300 millisecond delay on a good fast connection through TT.

 

You're right. I also tried trading this through TT, but even if you're fast enough, it's extremely difficult since you still have to pay the spread and commissions. You'd have to automate this and have a really fast connection. Forget retail brokerage...

[DbPhoenix 42]

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Did you notice this, erie? Test of previous swing low, fewer new lows, less down volume.

 

 

[heretodaygone... 10]

price action with context....sweet:thumbs up:

[erierambler 10]

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Did you notice this, erie? Test of previous swing low, fewer new lows, less down volume.

 

Yes, but ........ new lows have increased in the sectors, which gives me pause as to a rise may be suspect. Still won't change my play for the intraday term though. Looking at 1294, 1302,1315,1330 on the ES this morn. ( and lastly 1282 ) take care

erie

Edited March 10, 2008 by erierambler
forgot to add levels

[DbPhoenix 42]

A discussion with zeon on the VSA thread regarding RT decisions prompts me to post the following:

 

If one is going to make the best RT decisions, he has to prepare for them. The first of the following charts shows the prep done at the end of each trading day since the 29th. The second shows the prep for tomorrow. I don't trade the ES, but it seems to be the popular vehicle, so here it is.

 

The boxes are drawn arouind those areas where the largest number of trades have taken place. They therefore almost by definition leave out "tails". The pink lines represent potential resistance, the blue lines potential support, the black dotted lines the midpoints (not calculated, just eye-balled).

 

The significance of all of this for each subsequent day should be clear.

 

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[heretodaygone... 10]

Here's my opinion on the es tomorrow. For those that are not confident in their drawing of s/r, mp lines work quite nice.

[DbPhoenix 42]

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Given where we are with regard to past ranges, it may help to go back a bit further:

 

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[erierambler 10]

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Given where we are with regard to past ranges, it may help to go back a bit further:

 

Thanks for that analysis, it confirms my calculation of 1288 as being important tommorrow. Also 1304.

erie

[DbPhoenix 42]

Thanks for that analysis, it confirms my calculation of 1288 as being important tommorrow. Also 1304.

erie

 

Tomorrow's going to be a challenge given that there are three relatively distinct "value zones" from today. We'll see where we are at tomorrow's market open.

[erierambler 10]

Yes, but ........ new lows have increased in the sectors, which gives me pause as to a rise may be suspect. erie

 

Now there is a decrease in new lows , except for Indu, trans and a few sectors. Unfortunately I'll be away from the computer this morning and will miss the action.

erie

[zeon 10]

Tomorrow's going to be a challenge given that there are three relatively distinct "value zones" from today. We'll see where we are at tomorrow's market open.

 

 

Apparently at a very high level compared to yesterday's close:shocked:. That must have caught a few people out.