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[fxpaulm 10]

You mean all this time I thought we were talking about the middle to late March and you are talking about the middle of April?:crap:

 

I somewhat explained my rational for that when I talked about the horizontal zone and how that still factors into my decision. At this moment price has broken the DL, so I would wait and then short the first ret.

[DbPhoenix 42]

 

I somewhat explained my rational for that when I talked about the horizontal zone and how that still factors into my decision. At this moment price has broken the DL, so I would wait and then short the first ret.

 

I understand that the horizontal zone factors into your decision, but that has nothing to do with following the rules of the trading plan. If you'd rather create some other trading plan, that's fine. But that has nothing to do with the subject of the thread.

 

If you need further explanation and more examples, see this thread.

[fxpaulm 10]

I'm not sure because you do mention boxes and that has played a role in my decision process and why I have the red line. It also looks like a hinge which was discussed, I was under the impression that one was to put all of that together when trading price? Not just isolate on one line, but the totality of price and its movement.

[DbPhoenix 42]

I'm not sure because you do mention boxes and that has played a role in my decision process and why I have the red line. It also looks like a hinge which was discussed, I was under the impression that one was to put all of that together when trading price? Not just isolate on one line, but the totality of price and its movement.

 

But your hinge does not come into it until long after the supply line is broken and you've taken the long trade. By that time, it's irrelevant.

 

Perhaps if you were to copy and paste the rules here, that might provide some clarity.

[fxpaulm 10]

Let's see, price has continually rejected 96.00, I saw the box of price trying to find equilibrium, one could add another DL that was broken, the latest rejection of 96 would bring the hinge into focus.

 

So looking strictly at SLA one should already be short, I'm waiting for the resolution of the hinge though because I've found that many times they try to fake traders out before the actual move starts. I've attached an updated chart.

 

"Setups": There are no "setups" in Wyckoff, at least insofar as we commonly use the term.

He did not say that if price does this, you buy and if price does that, you short. Rather he

stressed that the trader must be sensitive to imbalances in buying pressure and selling

pressure, particular at levels where these imbalances might most likely result in profit

opportunities, e.g., reversals. Therefore, the "trading signal" is not, for example, a "double

bottom" or a "higher low" or a "climax bottom"; the trading signal is provided by the

imbalances between buying pressure and selling pressure, and if one does not view price as

a continuous movement and is not sensitive to these continuous shifts in

balance/imbalance, he will not understand what it is that he's supposed to do.

[DbPhoenix 42]

Let's see, price has continually rejected 96.00, I saw the box of price trying to find equilibrium, one could add another DL that was broken, the latest rejection of 96 would bring the hinge into focus.

 

So looking strictly at SLA one should already be short, I'm waiting for the resolution of the hinge though because I've found that many times they try to fake traders out before the actual move starts. I've attached an updated chart.

 

Sorry, I have no idea what you're talking about. There is no hinge. Your supply line was broken long before any hinge might have been formed. This resulted in a long. When the DL is broken, the long is exited. You then wait for a ret to take a short. Therefore, the short has not yet been taken.

 

The rules I'm referring to are in the pdf. They are not your personal rules.

[fxpaulm 10]

I guess were even then because I've no idea what you are talking about. I was under the impression that it was SLA and AMT, but who cares. If you wanted it to be just SLA, why bother talking about AMT, Hinges, 50%, means.

 

Not sure what your issue is, but I'm not into the drama.

[papageo 10]

Niko,

 

To discuss your question in regards to fear:

 

Here's the way I see yesterday's action (granted I was trading the ES, so keep that in mind). The market was digesting a strong down move from the prior sessions. Via SLA of the 60min chart, the bias had shifted (at least momentarily) to the bulls side [sL was broken and RET triggered after rejection of the mean of the daily chart upward trend channel). In fact, a hinge formed right at a prior swing point in the prior session's down move [which broke out to the upside].

 

So here's the start of the morning session. What do we know?

 

Anyone with half a brain probably thinks there will be follow through after that strong sell off. BUT! The bias is currently bullish. The chart tells me so. [hypothetically] I'm a fearful trader and refuse to follow SLA. Even though the market is moving up I'm staying out of the long trade because I'm worried the market will fall and screw me [it's a trap!]. After all, that's what always happens. So instead, I look for a place to get short. Unfortunately, there is no clearly defined, major resistance level until higher up near the initial breakdown, so for the entire session, I have to sit and wait for a sign from the market gods to enter a short. And guess what, because there is nothing obvious to make me enter a short, I never do. For the entire session.

 

Now think of me as a composite operator for the market. How would the market behave?

 

It would float up, arguably very one-sidedly, AGAINST the directional bias of the market on low activity / low volume. You should also expect little to no downward overlap throughout the upmove since I [the composite operator] am unimpressed by your price rise and refuse to begin shorting, no matter how high your bull wave thrusts. At the open, there was some decent resistance, and so the only opportunity to short presented itself there. After the violation of that resistance, it was clear sailing up to a better shorting opportunity.

 

That, to me, is the market's manifestation of fear in the form of timing - no one wants to be too early or too late. That market has already shown its hand with the strong selling spike, but now everyone that isn't already short is trying to jump in at the best possible price. Since the market opens well below any logical place for a good short, price just relentlessly rises.

[DbPhoenix 42]

I guess were even then because I've no idea what you are talking about. I was under the impression that it was SLA and AMT, but who cares. If you wanted it to be just SLA, why bother talking about AMT, Hinges, 50%, means.

 

Not sure what your issue is, but I'm not into the drama.

 

No drama. The SLA is a trading plan. It has rules. If you choose not to follow the rules, you're welcome to develop your own trading plan. But that's not the purpose of this thread.

[SunTrader 10]

First of all, thanks for participating. What I meant was that the fact why the market (NQ) did not go anywhere today could be explained via fear.

 

I mean, those who are betting on price to fall (bears) did not commit (sold) more and did not drive prices down. The question is then, why, what were they afraid of. They might be waiting for FOMC and they are not going to commit their funds until they have that information or afraid of something else, I am not sure what it was therefore the post.

 

In the other hand, those who are betting on price to rise (bulls) did not commit either, at least until 11:00, what are they afraid of, why dont they commit and join the party.

 

At 10:15 one can see a strong move to the upside when prices reach 35, what was that, why shorts just covered so fast, why buyers rushed in and paid the ask. What were they afraid of.

 

That is what the post is about.

The bears did try to take price down. Operative words did try.

 

If there were more of them or just more size behind those selling they would have succeeded. Since they didn't bulls took it as a sign of weakness or just plain bought more than the bears could sell into. Supply/demand 101.

 

10:15am did not take out previous swing low which was still 7 points higher than the previous close.

[SunTrader 10]

I very rarely trade NQ so this is all 20/20 hindsight but another explanation why price didn't go lower might become clear looking at this closing price 5min line chart:

[fxpaulm 10]

Fine, I'll post here, but for the record it doesn't look like other people posting in that thread are following the rules either. I will try to stay on script and explain what I'm looking at and how I plan to trade it.

[fxpaulm 10]

Looking at the Aud/Usd, the SL may get broken which would set up a long trade at the trough of the ret. This trade may happen late tonight or early tomorrow morning. Of course, it could also turn into nothing and the SL hold with a further drop in price.

[rplust 10]

. . . You Can Trade Successfully.

 

A Modern Adaptation of Wyckoff's Principles of Trading Price

 

 

Much nonsense has been circulated about trading over the past seventy years or so, the bulk of it since the internet made possible discount brokers, affordable charting software, real-time streaming data, chat rooms, trading rooms, trading websites, blogs, and so forth, all of which offered fertile ground to a literally endless assortment of books, DVDs, courses, seminars, "alert" services, mentors, counselors, trading software, indicators and so on, all designed to separate the beginner or struggling trader or otherwise low-hanging fruit from his money.

 

There is, however, only one essential, one lynchpin, one fundament when it comes to understanding the auction market: supply and demand and the Law thereof. Everything else – support, resistance, trend, price movement, volume – stems from the balances and imbalances between supply and demand, selling pressure and buying pressure, sellers and buyers, yet struggling traders are generally incapable of accurately assessing the state of these imbalances, i.e., determining who's in charge at any given moment or interval (some are capable but can't implement what they know, but that's another subject).

 

Trading price hinges on the ability to assess the state of these imbalances not only in the abstract but in every moment of the trading session. If one does not thoroughly understand just what it is that he's looking at, he will be lost. When trading price, the trader knows at all times who's in charge, who's dominant, who's holding the good cards. If he doesn't know this, he's just guessing, and that's not the route to consistent profits, no matter what you read on message boards.

 

Why bother? Because once you learn how to trade price, your edge* will never fail. You will understand trend and how to play it under all circumstances, including its endings and reversals. You will also learn how to distinguish between trending and ranging, the latter including "chop" which is a collection of micro-trends which generate tons of commissions and very little if any profit.

*the knowledge you gain through your research and testing that a particular market behavior offers a level of predictability that provides a consistently profitable outcome over time (from Douglas)

 

 

For the remainder, see the pdf, below:

 

Man, I fully underwrite that, from experience. Looking back at my journey of a thousand indicators, trading systems (when this line crosses that, look for the red dot...), well, it just sucked till I started looking at it from a business point of view. Supply and demand, as in any business. It's all on the chart, look to the left and it tells you what will happen to the right at a high probability, often to the tick. At least I know where I have got to pay attention and watch the panic attacks by those who follow the indicators and sell/buy right into a demand/supply level.

[fxpaulm 10]

The A/U did as expected. I did not take the trade because I was asleep. Here is updated chart.

[fxpaulm 10]

The long would have been exited with the break of the DL, now we wait for ret. to get another short entry.

[fxpaulm 10]

I have order in to short A/U at 0.93970. Attached is what I'm looking at and why the trade. It broke the DL, I waited for ret. and am now looking to short in the trough of the ret.

[fxpaulm 10]

I'm short at 0.9397 and thought it would be time to post a longer term chart of the pair, so here is the daily. Price reached the upper channel line on both the daily and weekly. Trade is still based on the hourly and now just need to manage it. Also, obviously if price breaks the SL the trade is exited, but I also have a stop at 0.9430 just in case my computer blows-up or I lose connection.

[DbPhoenix 42]

Where we are.

 

At what point can one say that the "overbought" ship has sailed?

[DbPhoenix 42]

Where we are.

 

At what point can one say that the "overbought" ship has sailed?

[Fluke 10]

Introduction

 

For several years, I have maintained a previously public and currently private blog journaling my operations in the spot currency and futures markets. Recently, I have decided to more actively participate in the public forums to perpetuate the abundance of good information that has been provided by a certain member/moderator of this forum as well as continue to advance my own understanding of the workings of a market and how to profit from them.

 

I now trade only the NQ futures and this journal will focus on trading using price, volume, and time in the context of an auction market, both in its lateral and diagonal sense of movement. I never hold a trade over night and rarely will hold beyond the first 90 minutes of the RTH session. I use a combination of bar intervals to monitor the NQ's trend, traders' current location within that trend, my entry location, and the management of my position. These include but are not limited to (from longest interval to shortest) the weekly, daily, 4H, 60M, 30M, 2500 Tick, 10M, 5M, 1M, 15 second.

 

The basics of my entry plan are that of the Straight Line Approach (SLA) - I use supply and demand lines (SL/DL) to track the intensity and determination of buyers and sellers, as well as to alert me of changes in the stride and/or direction of the market and trade retracements (RET) should the change in stride be significant enough to warrant the entry and/or the location be "important" enough to warrant an entry. I will on occasion take reversal (REV) entries from the extremes of lateral and/or diagonal ranges at areas of lateral support or resistance as determined by my current read of the auction's state (AMT), given circumstances that are favorable for a more aggressive entry. I do not trade breakouts of anything, but instead will wait for a breakout and retracement prior to entering (B&RET).

 

My plan for this journal is to provide, at a minimum, 11 posts per week. Sunday night's post will be an update of the larger bar intervals, weekly and daily charts, so as to provide context for the upcoming week. I may also at times reference daily charts during the course of the week in my morning prep.

 

Monday through Friday, prior to the RTH open, or my first trade of the day should that occur prior to the RTH open, I will post my "pre-trade" analysis - this includes typically one of the longer bar intervals (Daily, 4HR, 1HR) which mostly easily depicts the current trend of the market, and one or two of the medium bar intervals (30M, 2500 tick, 10M) which most easily depicts the market's current location in that trend. [it is most certainly not mutually exclusive, but I find that applying diagonal ranges (trend channels) to the larger bar intervals, and lateral ranges (boxes) to the medium intervals has "clicked" the best for me.]

 

At the conclusion of my trading for the day, I will follow up with a 1M and, on occasion, a 15 second chart, showing actual trades placed and managed during the course of my session, and any accompanying discussion I find appropriate.

 

Do I make mistakes, in entry, exit or both? Yes, I do.

Do I misread the market? Yes, I do.

Do I suffer from bouts of irrational fears that cause deviations from my plan? Yes, I do.

Do I have an ego that can cause more trouble than its worth? Yes, I do.

 

This is why I continue to and will always journal - and in moving to a more public setting than my current arrangement, perhaps more errors will be brought to my attention. But perhaps, also, my detailing of my trading will help something "click" with someone. And helping is better than hiding, and can often turn into the best "therapy" the helper could ever receive.

 

So enough of this - it's time to get started.

[DbPhoenix 42]

Looking forward to it.

[fxpaulm 10]

Here is how the A/U trade ended up. A break of the SL and exit at 0.9380.

[DbPhoenix 42]

I point out in the SLA-AMT (first post) that it is important to prepare for the day rather than arise bright-eyed and bushy-tailed, prepared only to spring into the unknown at the opening bell.

 

In that vein, I posted the first two charts to ET in order to show what I'd be looking at and for when the NQ reopened yesterday evening. Pay particular attention to the minimalism.

 

The next four were posted beginning yesterday evening. This is a somewhat more immersive preparation for the opening session than drawing traditional support and resistance lines.

 

The rules in the first chart posted yesterday evening are from the SLA-AMT pdf.

 

The mean of the daily downtrend channel is around 3500.

Edited April 14, 2014 by DbPhoenix

[DbPhoenix 42]

I point out in the SLA-AMT (first post) that it is important to prepare for the day rather than arise bright-eyed and bushy-tailed, prepared only to spring into the unknown at the opening bell.

 

In that vein, I posted the first two charts to ET in order to show what I'd be looking at and for when the NQ reopened yesterday evening. Pay particular attention to the minimalism.

 

The next four were posted beginning yesterday evening. This is a somewhat more immersive preparation for the opening session than drawing traditional support and resistance lines.

 

The rules in the first chart posted yesterday evening are from the SLA-AMT pdf.

 

The mean of the daily downtrend channel is around 3500.