Real Time Price Action- Clue to Puzzle?

[DbPhoenix 42]

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

 

Not if they did the prep. Price opened at the high of the range I posted above. Therefore, the initial tactic is to fade it and see what happens.

[zeon 10]

Not if they did the prep. Price opened at the high of the range I posted above. Therefore, the initial tactic is to fade it and see what happens.

 

I meant that people who didn't have a stop in place or so, must have been pretty pissed right now. Otoh, those who were long from yesterday evening had a bit of luck...

 

Anyway, I faded and shorted the ES from 1306. There was an upthrust according to my chart just before the open and I just closed out at 1297 for 9 points.

[zeon 10]

Not if they did the prep. Price opened at the high of the range I posted above. Therefore, the initial tactic is to fade it and see what happens.

 

By "see what happens" do you mean that you never have a target in mind? I closed out my short now although there wasn't really a selling climax in place. I normally exit on volume spikes or when price is bouncing off support. And it looks like it's reacting off support now. I believe I followed my plan and executed it properly. But in the end, by doing so and despite all the profitable trades, the net profit isn't that big because my losers are in comparison to my winners about half as big. You could say at least I'm making profits but over the long run it's not quite what you expect from trading. Perhaps I should be happy with whatever the market offers, but somehow I feel there's more to trading than taking 5 to 8 points on winners and lose 2 to 4 on losers. I wonder what the experience of other traders is in that aspect. Apart from some textbooks that claim your winners should always be twice as big as your losers, I wonder how it is for other trades in real life.

[DbPhoenix 42]

By "see what happens" do you mean that you never have a target in mind? I closed out my short now although there wasn't really a selling climax in place. I normally exit on volume spikes or when price is bouncing off support. And it looks like it's reacting off support now. I believe I followed my plan and executed it properly. But in the end, by doing so and despite all the profitable trades, the net profit isn't that big because my losers are in comparison to my winners about half as big. You could say at least I'm making profits but over the long run it's not quite what you expect from trading. Perhaps I should be happy with whatever the market offers, but somehow I feel there's more to trading than taking 5 to 8 points on winners and lose 2 to 4 on losers. I wonder what the experience of other traders is in that aspect. Apart from some textbooks that claim your winners should always be twice as big as your losers, I wonder how it is for other trades in real life.

 

If I'm selling R, my target is S unless there's a reversal signal in the meantime. Today, however, there are three distinct S/R zones from the previous day (and price in the NQ, at least, bounced off the first one), so the idea of reaching the bottom of yesterday's range is probably wishful thinking.

 

As to your plan and how you execute it, I can give only general advice, bumper-sticker style. If you're looking for more input into that, I suggest you open a blog and invite those whose opinions you value to follow it and perhaps post to it.

[zeon 10]

If I'm selling R, my target is S unless there's a reversal signal in the meantime. Today, however, there are three distinct S/R zones from the previous day (and price in the NQ, at least, bounced off the first one), so the idea of reaching the bottom of yesterday's range is probably wishful thinking.

Yes exactly, sometimes the next S/R is pretty close and price reacts of that. But I think today I did the sensible thing by closing my short position. Around the time ES touched support the NQ did too as you say.

 

As to your plan and how you execute it, I can give only general advice, bumper-sticker style. If you're looking for more input into that, I suggest you open a blog and invite those whose opinions you value to follow it and perhaps post to it.

 

I appreciate the input you've already given me and I'm sure others have benefit from the discussion too. Great idea about the blog, I'll think it over. Will have a look around the other blogs to see if they get some attention or not.

[heretodaygone... 10]

we seem to be testing a key accumulation area that I posted last night.

[BlowFish 10]

... but over the long run it's not quite what you expect from trading. Perhaps I should be happy with whatever the market offers....somehow I feel there's more to trading than taking 5 to 8 points on winners and lose 2 to 4 on losers. I wonder what the experience of other traders is in that aspect....

 

Assuming that the win rate is 50:50 or maybe a little better, most traders would chew off their own legs to achieve those sort of results consistently. There is no 'holy grail' where you win 85% of the time while only risking 1 to make 10.

 

All you can ever take is what the market offers, well a portion of it anyway. If you are not happy with that you will always be disappointed. To be blunt it sounds like you have un-reasonable expectations. Not sure about what your win rate is, number of trades a day you take etc but it sounds like you should be abe to pretty much generate as much return as you could possibly desire if you can do that consistantly. I guess maybe then its not about generating a return but being 'right'. That is a very dangerous malaise in trading, I know that first hand.

 

Cheers.

[AgeKay 10]

I second BlowFish. The market doesn't care how you feel or how much you want to make. Make the best of what it gives you.

[DbPhoenix 42]

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For tomorrow:

 

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[erierambler 10]

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For tomorrow:

 

On the ES , I'm looking at 1338, 1319, and 1309. I'm going to be away from my home computer for the rest of the week, will only be able to check in from a remote computer in the early mornings. Back on the weekend. Good trading all..... will be following along....

erie

[heretodaygone... 10]

On the ES , I'm looking at 1338, 1319, and 1309. I'm going to be away from my home computer for the rest of the week, will only be able to check in from a remote computer in the early mornings. Back on the weekend. Good trading all..... will be following along....

erie

 

I have 1328,1335 as resistance, also a squeeze zone between 1315-1318 so I don't anticipate that to be key support. Key support imo, should come in around 1306-07 with major support at 1300-01

[DbPhoenix 42]

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A quickie chart of the ES:

 

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[zeon 10]

Question here, one of the last posts before I open a blog - promise.

 

Support drawn = pink line.

Price is breaking below support, volume retraces on the way back up and forms an upthrust. I shorted (bar in yellow rectangle)! The volume seemed okay and the bar closed off the highs, suggesting supply is coming into the market.

 

This is kind of my problem, despite how much time I spend analyzing the market in real time I'm often confronted with something that happens that's not "according to plan".

 

Sorry for the crappy chart, Bigcharts doesn't show premarket data.

A similar situation is visible on the Nasdaq.

 

Got me here:confused:

[zdo 20]

volume seemed okay and the bar closed off the highs, suggesting supply is coming into the market.

 

... despite how much time I spend analyzing the market in real time I'm often confronted with something that happens that's not "according to plan".

 

zeon,

 

Think fast - I’m going to sling some Mark Douglas at you :idea:

“Anything can happen” and

“What happens if you take this setup 30 times?”

 

…same applies to the ‘frustrating’ trade you posted the other day (over in VSA2 I think)

 

zdo

[brownsfan019 17]

zeon,

 

Think fast - I’m going to sling some Mark Douglas at you :idea:

“Anything can happen” and

“What happens if you take this setup 30 times?”

 

…same applies to the ‘frustrating’ trade you posted the other day (over in VSA2 I think)

 

zdo

 

Well said.

Just b/c a setup failed once, means nothing. Any type of trading requires hours and hours of screen time and testing to validate any statistical reference.

 

0 for 1 is nothing.

[zeon 10]

Well said.

Just b/c a setup failed once, means nothing. Any type of trading requires hours and hours of screen time and testing to validate any statistical reference.

 

,

“Anything can happen” and

“What happens if you take this setup 30 times?”

zdo

 

Yes guys I'm aware of this. But I had always assumed this to be more valid of the mechnical approach. Not that I'm striving for 80-90% win rate or so, but I thought that by correctly learning to analyze the market, I'd be in better shape to understand these things.

 

So everybody agrees that on what I observed? Perhaps I can take comfort in that, but sometimes these things just sweep my off my feet and I'm like "eh, how could this happen?!"

[DbPhoenix 42]

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First chart provides context. Each of the next two shows the first and last half of the day.

 

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[heretodaygone... 10]

"Believe nothing just because a so-called wise person said it. Believe nothing just because a belief is generally held. Believe nothing just because it is said in ancient books. Believe nothing just because it is said to be of divine origin. Believe nothing just because someone else believes it. Believe only what you yourself test and judge to be true." - Buddha

[DbPhoenix 42]

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For today.

 

I keep looking for ways to make this clear to others, but perhaps there's no substitute for multiple examples.

 

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[zeon 10]

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For today.

 

I keep looking for ways to make this clear to others, but perhaps there's no substitute for multiple examples.

 

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I don't think I quite understand your chart though. If I am understanding this right, there is no support below 1720?

 

I took a trade on the ES today, but because your chart was the NQ so I'll post the setup here too. The same thing occurred on the NQ anyway so it's all the same. Your last rectangle was 1700-1710. I had support around 1707 actually, so around the mid of that. Then almost exactly one hour into the session price went down on heavy volume (see qqqq chart) and broke that support. The next bars were all small and on low volume, a retracement right? So why does price rise then? I fear I am losing touch with reality here.

[Nvesta81 10]

I don't think I quite understand your chart though. If I am understanding this right, there is no support below 1720?

 

I took a trade on the ES today, but because your chart was the NQ so I'll post the setup here too. The same thing occurred on the NQ anyway so it's all the same. Your last rectangle was 1700-1710. I had support around 1707 actually, so around the mid of that. Then almost exactly one hour into the session price went down on heavy volume (see qqqq chart) and broke that support. The next bars were all small and on low volume, a retracement right? So why does price rise then? I fear I am losing touch with reality here.

 

From my perspective prices were marked down to test the supply early in the day. They then hovered just below a key support area and because there was little volume below it (no supply), it was the go-ahead for the smart money to markup prices after they accumulated on YOUR and everyone else's selling hoping for a continuation of the down move. (not meant to pick on you, I got burned like this before). Basically you got caught in a trap. There was a spring just below that support zone that gave away the strenght if you missed it.

edit : chart times are an hour ahead of ET.

Edited March 13, 2008 by Nvesta81

[DbPhoenix 42]

An interesting contrast to yesterday.

 

Here we fell entirely out of the previous day's value range and price range. Gapped, as a matter of fact (though technically the futures don't "gap"). Not only that, we dropped below the midpoint of the entire range that began two weeks ago and came to rest at the midpoint of the heaviest volume range for this this week. All relevant lines from previous days are extended with dashes to act as potential levels of S or R or both.

 

One might expect traders to fill that gap, or at least move toward it. Absent that, a continued move down. Instead, they form a hinge. At 1000, price falls out of it but reverses before it makes much progress, perhaps finding S at the same level that the opening low did. A test. Then it takes off in the opposite direction, back toward that longer-term midpoint and the opening high. Another test. Having tested both ends, traders take price down to the low of that same volume concentration (the blue line). This price is rejected rapidly and forcefully, leading one to expect that the countermove will be as forceful, particularly given the TICKQ divergence. Instead, price waffles around for 20m before finally advancing.

 

And here's where it gets interesting.

 

Ordinarily, one would expect price to travel to R, at which point one could reverse or cash in and go home. But where's R? First price stops at the midpoint. But rather than bust through like it did yesterday, it falls back 10pts. Then it futzes around here for half an hour, finally moving on to the next level of "resistance", the previous day's low, filling the gap. Then to the previous day's close. THEN ALL THE WAY BACK TO THE OPENING HIGH before taking off yet again for the top of the previous day's volume range.

 

Anyone trading one contract must have been driven crazy trying to figure out what to do, but even those trading multiple contracts would have had to be on their toes. The most logical place to exit would be a point equal to the distance between the midpoint of the opening range and the initial range extension to 1700, i.e., 1730. This point would also serve to fill the gap, more or less. But the only way to rack up those extra 30pts without getting tossed around would be to leave at least one of multiple contracts back where it was bought at 1700 or thereabouts and just leave it the hell alone.

 

Therefore, the only "error" today was not to have taken the long at 1700. Given the number of resistance levels along the way to 1760, one could have been forgiven for taking profits just about anywhere.

 

And incidentally, zeon, you're not going to get any comments to your Blog unless you allow comments to be made. See your Blog Control Panel.

 

Brun, hope you're still getting something out of these.

 

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[zeon 10]

Therefore, the only "error" today was not to have taken the long at 1700. Given the number of resistance levels along the way to 1760, one could have been forgiven for taking profits just about anywhere.

 

And incidentally, zeon, you're not going to get any comments to your Blog unless you allow comments to be made. See your Blog Control Panel.

 

I believe I switched it on though. If somebody has trouble posting to it, please PM me.

 

As for errors... I make them a lot and not taking a long today was indeed one of them. But if you weren't long - like I - isn't it normal you would expect to take a short at each resistance level on the way up? At least that's what I did, figuring this is a bear market and shorting on rallies is the thing to do right?

 

Final question: how does all this pan out with the hinge formation you posted couple of days ago. You said the break lower wasn't a good sign. But since that 'break' we've seen nothing but massive buying, on Tuesday and again today.

[heretodaygone... 10]

 

Final question: how does all this pan out with the hinge formation you posted couple of days ago. You said the break lower wasn't a good sign. But since that 'break' we've seen nothing but massive buying, on Tuesday and again today.

 

 

Prolly broke a support line from the year 2000. hehe:rofl:

[DbPhoenix 42]

Prolly broke a support line from the year 2000. hehe:rofl:

 

If you want me to stop posting charts, I'll be happy to do so. They do take time, and I don't like wasting it.