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Depending on what you're looking at, I don't think that would be overkill, but it certainly would never show up on my 1m chart. Think of it this way: if that chart was a daily, those "stalking" lines could possibly be trend lines for the intraday traders. It all depends on what you care to pay attention to.

 

The purpose of trend and s/d lines (imho) is to keep you on the right side of a trend (however big or small it is, you pick). If you're trading the squiggle, your "stalking" lines may help, and once broken, may provide a countertrend long. However, if you're not looking for those kinds of moves, then you wouldn't benefit that much from using those tight lines.

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The purpose of trend and s/d lines (imho) is to keep you on the right side of a trend (however big or small it is, you pick). If you're trading the squiggle, your "stalking" lines may help, and once broken, may provide a countertrend long. However, if you're not looking for those kinds of moves, then you wouldn't benefit that much from using those tight lines.

 

I would not use them to provide possible countertrend longs. However, at the moment price starts to fall, you have no other option then to draw a supplyline which is similar to the first one, it's only after another swing and a new low and the bigger lines can come into play. But at the time of trade, you don't know if there'll be a new low. So, on your 5s chart, would you not have scaled out at the break of the first of my stalking lines?

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Personally, I wouldn't have, as I give a little more room for retraces. For those kinds of moves, my stops and scale outs are on broken S/R (so just horizontal stepping).

 

I'm absent from chat today due to a hectic schedule, I'll see you guys tomorrow.

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In lieu of a working history, Db wanted to see Jw's and mine morning conversation. It strongly refers to Hlm's and mine from yesterday, which you guys will probably hear more of soon.

 

-----------

 

[08:40:26] That One Guy: i was pissed i missed you and hlms conversation

[08:40:34] atto: heh, yeah

[08:40:41] That One Guy: arguments of the trading elites

[08:40:58] atto: Well, I'm digging into the *why* behind his concept. Why a swing vwap would coincide with s/r

[08:41:03] atto: Which it appears it does.

[08:41:11] That One Guy: yeah

[08:41:16] That One Guy: very often

[08:41:44] atto: But it's not that the vwap causes s/r, or gives s/r. It coincides, because s/r is only given by traders protecting prices

[08:41:56] atto: So the question behind it is why they would value that calculated value.

[08:42:04] That One Guy: yeah

[08:42:08] atto: The same questions can be applied to any s/r methodology

[08:42:15] That One Guy: why does sup and res form anyway

[08:42:24] That One Guy: if its done by bigger traders

[08:42:28] atto: Which is truely interesting by itself.

[08:42:28] That One Guy: why do that value that area?

[08:42:43] That One Guy: to i say f**k why

[08:42:54] That One Guy: if i can find it consitient

[08:42:59] atto: For instance, the Wyckoff form of s/r I use is based on areas traders see value in (which isn't too far from the concept of vwaps)

[08:43:13] atto: Prices where sellers and buyers have entered.

[08:43:19] That One Guy: yeah

[08:43:30] atto: So, it logically follows that those prices are important to some people. Hence horizontal s/r.

[08:43:39] That One Guy: i veiw vwap as just the most general area where traders are involved

[08:43:41] atto: Which is why Db doesn't like to call trendlines and the such as s/r

[08:43:42] That One Guy: dpending on the tf

[08:43:59] System: dadacomputers has entered the room Trading Room

[08:44:04] That One Guy: im finding things like flips

[08:44:20] That One Guy: with horizontal s/r

[08:44:21] atto: My real question, regarding vwaps, is why would a lot of traders (sufficient to turn price) be interested in that price. It's the net average, sure. But there isn't a large group of traders that entered at that price anyways.

[08:44:28] That One Guy: sometimes we never reach the flip point

[08:44:39] That One Guy: and it often coincides with the vwap flip

[08:45:06] That One Guy: yeah i see what you are saying

[08:45:08] atto: But that's something we'll work through.

[08:45:19] atto: Hlm wanted me to detail the truths I believe behind my method.

[08:45:59] atto: I'm of the belief that all successful methodologies based on price have some fundamental truth that exists outside of price. Example: the concepts of support/resistance

[08:46:02] atto: Protecting prices

[08:46:07] atto: "Value" (however you define that)

[08:46:22] atto: Etc

[08:46:27] That One Guy: yeah

[08:46:40] atto: Generally, these truths are the same thing, from different views

[08:46:42] System: DbPhoenix has entered the room Trading Room

[08:46:52] atto: However, one must understand them before moving on.

[08:47:11] atto: Which is why I'm more interested in the *why* than *how*. The *how* becomes trivial if the why is understood.

[08:47:18] System: jasont has entered the room Trading Room

[08:47:23] atto: Err, possibly not trivial, but much simpler.

[08:47:27] DbPhoenix: Hey, atto

[08:47:29] That One Guy: yeah i see

[08:47:29] atto: Hey

[08:47:44] atto: So I'm just digging as to what that is.. what causes it to work.

[08:47:48] DbPhoenix: Does the history not exist for those who've just logged on?

[08:47:57] atto: Db, unfortunately, history is bugged

[08:48:06] That One Guy: i say form your own ideas behind why

[08:48:11] atto: I'll copy this mornings, but it's basically just about yesterday afternoons.

[08:48:18] That One Guy: if it makes you confident

[08:48:21] That One Guy: in what you see

[08:48:23] DbPhoenix: Too bad. Sounds like an interesting conversation. But don't repeat it all.

[08:48:24] atto: Jw, yeah. He wanted me to detail mine, and he'll relate to it.

[08:48:26] That One Guy: who cares how true it is

[08:48:32] atto: Db, I'll copy it to a file and send it to you

[08:48:43] DbPhoenix: ok

[08:48:48] DbPhoenix: Or maybe to the group.

[08:48:49] That One Guy: thats what i dont understand about many experience traders are the arguments that happen

[08:48:51] atto: Well, truth matters. Else, you run into problems of hoping in something that has no base.

[08:48:53] atto: Db, k

[08:49:01] That One Guy: people make money in so many different ways

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Db, if you have some time, could you post a 5 sec chart of your entry yesterday on NQ? Thanks in advance.

 

Crappy weather, lots of time.

 

This is hard to explain to a beginner, and I'm not going to try, mostly because explaining off a static, hindsight chart is nowhere near sufficient. But you're not a beginner, and this is just the sort of trade that you or atto might like.

 

Given the support level, my reasons for entering should be clear. Or maybe not. But my reasons for staying in had to do with the volume price indications arrowed (and, in case anybody is wondering, this has nothing to do with matching a particular volume bar with a particular price bar; it has rather to do with the movements of each and all in tandem as they form in real time, just as a snapshot of Fred and Ginger is only marginally related to what they're doing throughout the entire dance routine).

 

 

 

attachment.php?attachmentid=9220&stc=1&d=1232810737

 

 

Edit: You've given me an idea regarding beginners and this chart. We'll see what happens.:)

Image1a.gif.2b6ed7d3c5c110e3e3a79e629f95d5de.gif

Edited by DbPhoenix

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Given the support level, my reasons for entering should be clear. Or maybe not. But my reasons for staying in had to do with the volume price indications arrowed (and, in case anybody is wondering, this has nothing to do with matching a particular volume bar with a particular price bar; it has rather to do with the movements of each and all in tandem as they form in real time, just as a snapshot of Fred and Ginger is only marginally related to what they're doing throughout the entire dance routine).

 

Thanks, I appreciate the effort.

 

True, the reasons for entering off that level are obvious. I was looking for the same thing (40-42 support zone), but didn't want to jump in straight away. There's a fine line between actually pulling the trade and having a small hesitation, in this case I think my bias "blocked" me from taking a long. And like you said in the room, the trade was only there for a dozen of seconds. But that's outside of the market, and the volume was there...

 

What I found particularly nice on the 5sec chart is the sharp entry. 1 minute people entered around 45-46 and 5 minute people, well... they were definitely far behind in the queue. It's also a nice illustration of how entering on a smaller bar interval doesn't mean you can't stay in. On the tick chart the highest volume is actually just at the lowest point of the day.

 

After that, I found 52-53 to be a safe (but already 9 points later) entry (at demandline + volume + higher low), after breaking higher to 60 first.

 

Imho first 15 minutes of the day definitely worth watching in replay...

nq_tick.thumb.GIF.8e9ed9c9200b8219d35b524676bfd9e1.GIF

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Thanks, I appreciate the effort.

 

True, the reasons for entering off that level are obvious. I was looking for the same thing (40-42 support zone), but didn't want to jump in straight away. There's a fine line between actually pulling the trade and having a small hesitation, in this case I think my bias "blocked" me from taking a long. And like you said in the room, the trade was only there for a dozen of seconds. But that's outside of the market, and the volume was there...

 

What I found particularly nice on the 5sec chart is the sharp entry. 1 minute people entered around 45-46 and 5 minute people, well... they were definitely far behind in the queue. It's also a nice illustration of how entering on a smaller bar interval doesn't mean you can't stay in. On the tick chart the highest volume is actually just at the lowest point of the day.

 

After that, I found 52-53 to be a safe (but already 9 points later) entry (at demandline + volume + higher low), after breaking higher to 60 first.

 

Imho first 15 minutes of the day definitely worth watching in replay...

 

What tipped the scale was the first two arrowed volume bars. If there hadn't been an indication of strong preliminary support, I probably would have passed. But that, followed by the lower bar at the test, nudged me into the trade.

 

However, that little hesitation you refer to is also an example of the "deep breath before the plunge" that I've referred to. One could also have entered just above that, but he would have been sweating a bit when price came back to 45 at 0947. Granted all the "bullish" indications shown by the double arrows might have persuaded him to stay put, or at least keep his initial stop where it was rather than move to BE too quickly. But entering even higher would probably have necessitated an exit (and possible re-entry). An argument can be made then for just taking the risk at what is often the best time. After all, the extent of what one had to lose at a 44 entry was almost trivial.

 

As for replay, the difficulty here is knowing what happened next. But there's no alternative other than time machine, and mine's in the shop.

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I guess we can use here for discussion when chat's down. I don't feel like dealing with it anymore, so we'll just let Soul get it fixed. Looking on short side as well.

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Since the chat room isn't working again, I'll state here that I'm looking at 70 to 95 and to short at 95 where possible.

 

hmm, I missed yesterday and Friday so don't know what's been said or posted in the room, but what's at 95?

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Here all of us were right and no way to prove it

 

Oh well :)

 

 

Here's where the 95 business came from. Let's hope the chart doesn't disappear.

 

 

attachment.php?attachmentid=9241&stc=1&d=1233069198

Edited by DbPhoenix

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What a great U-turn day. And no chat room :(

 

kind of caught me by surprise. But it's clear I'm looking at the wrong things...

Chatroom would've been great help today.

 

The turning point happens to be in the middle of that '70 and 95' you mentioned...

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